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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

            Wednesday, July 30, 2008, Vol. 9, No. 150

                            Headlines


A R G E N T I N A

DANA CORP: Visteon Insists on US$9.8MM Claim for Product Recall
NORTHWEST AIRLINES: S&P Trims Rating to 'B' on Expected Losses
TYSON FOODS: Earns US$38 Million in 2008 Third Quarter 2008
WENDY'S INT'L: Changes Executives Related to Triarc Cos. Merger
W.R. GRACE: Equity Committee Refuses JP Morgan's Interest Hike

W.R. GRACE: Gets Court Nod to Use US$59M From Insurance Policies


B E R M U D A

CENTRAL EUROPEAN: To Acquire Bulgarian TV Stations for US$172MM
FOSTER WHEELER: UK Subsidiary Bags Contract From Nghi Son
SECURITY CAPITAL: Reaches Deal with XL Capital & Merrill Lynch
XL CAPITAL: Earns US$237.9 Mil. in Second Quarter Ended June 30
XL CAPITAL: Plans to Offer US$2.5 Bln of Shares & Security Units

XL CAPITAL: Prices Issue of Shares and Equity Security Units
XL CAPITAL: Reaches Accord to Pay Security Capital for US$1.8BB
XL CAPITAL: Reports US$449.7MM Net Income in First Half of 2008
XL CAPITAL: Signs Master Agreement with Security Capital
XL CAPITAL: Will Axe Jobs to Reduce Operating Costs


B R A Z I L

AMERICAN AXLE: Posts US$644.3 Mil. Net Loss in 2nd Quarter 2008
AMR CORP: S&P Cuts Ratings on Neg. Cash Flow; Outlook Negative
BANCO DO BRASIL: Forms Alliance With FirstRand for Car Loans
BANCO FIBRA: Increases Capital by BRL275 Million
DELPHI CORP: Appaloosa Balks at GM Engaging in Adversary Suit

DELPHI CORP: Allowed to Pursue US$2.55 Fraud Claim vs. Appaloosa
DELPHI CORP: Negotiating New or Amended Plan with GM and Panel
DELPHI CORP: WTC, Panel Want Plan Confirmation Order Revoked
DELPHI CORP: Wants Plan-Filing Deadline Extended to October 31
EMBRATEL PARTICIPACOES: Income Drops 77% to BRL115MM in 2nd Qtr.

GENERAL MOTORS: To Offer Discounts on Sales Until July 31
GENERAL MOTORS: To Cut Production at Four Plants on September 29
GENERAL MOTORS: Appaloosa Balks at Participation on Delphi Suit
GENERAL MOTORS: Negotiating New or Amended Plan for Delphi Corp.
PERDIGAO SA: Adjusted Net Income Grows to BRL102.5MM in 2nd Qtr.

REVLON INC: Selling Non-Core Brazilian Brands for US$104 Million
SPECTRUM BRANDS: Moody's Renews B1 Rating to US$50MM LC Facility
UAL CORP: Shares Up 2-Year High as US$2.7BB Loss Beats Estimates
UAL CORP: Expected Heavy Losses Cue S&P to Cut Ratings to B-
USINAS SIDERURGICAS: To Boost Iron Ore Output Capacity by 480%


C A Y M A N  I S L A N D S

ALL POINTS: Deadline for Proofs of Claim Filing Is Aug. 1
CLEAR SPRINGS: Proofs of Claim Filing Deadline Is Aug. 1
CLEAR SPRINGS ACQUISITION: Claims Filing Deadline Is Aug. 1
CLEAR SPRINGS EQUITY: Proofs of Claim Filing Deadline Is Aug. 1
CLEAR SPRINGS HOLDINGS: Deadline for Claims Filing Is Aug. 1

DIVERSIFIED EQUITY: Proofs of Claim Filing Deadline Is Aug. 1
IJARA EQUITY: Deadline for Proofs of Claim Filing Is Aug. 1
QPM QUORUM: Deadline for Proofs of Claim Filing Is Aug. 1
SEDGEWOOD EQUITY: Proofs of Claim Filing Deadline Is Aug. 1
SEDGEWOOD INVESTMENTS: Deadline for Claims Filing Is Aug. 1

TRUE NORTH: Proofs of Claim Filing Deadline Is Until Aug. 1


G R E N A D A

OLINT CORP: Grenadan Gov't Monitoring Dev't of Firm's Case
SGL HOLDINGS: Grenadan Gov't Monitoring Dev't of Olint's Case


J A M A I C A

AIR JAMAICA: Several Companies Eye Buying Airline, Ministry Says
NATIONAL COMMERCIAL: Court Denies Firm's Application for Leave
SUGAR COMPANY: Jamaica to Divest Assets to Infinity Bio-Energy


M E X I C O

FRONTIER AIRLINES: Gets US$75MM DIP Financing Offer from Perseus
GRUPO CASA: Reports MXN210.09 Mln Net Profit in Second Quarter
GRUPO TMM: Posts US$14.7 Mil. Net Loss in Quarter Ended June 30
PORTOLA PACKAGING: Will Restructure by Pre-Package Chapter 11
PORTOLA PACKAGING: Bankruptcy Filing Cues Moody's to Junk Rating

SEMGROUP ENERGY: March 31 Balance Sheet Upside-Down by US$54.6MM
SEMGROUP LP: Has About US$13 Million Payable to Hiland Holdings
SEMGROUP LP: Seeks Schedules and Statements Filing Extension
SEMGROUP LP: Various Entities Discloses Financial Exposure
SENSATA TECH: Moody's Puts Caa2 to US$2.8BB Subordinated Notes


P E R U

INTERPUBLIC GROUP: S&P Puts 'B+' Rtg. on US$335M Credit Facility


T R I N I D A D  &  T O B A G O

HINDU CREDIT: Chaguanas Borough to Kick Firm Out of Car Park
HINDU CREDIT: Forms HCU Depositors & Shareholders Group
HINDU CREDIT: Sanatan Dharma to Probe Firm's Costa Rican Links
HINDU CREDIT: Workers Hold Demonstrations Against Firm


V E N E Z U E L A

CHRYSLER LLC: Arm Halts Lease Operations; To Cut 1,000 Employees
PETROLEOS DE VENEZUELA: JV Gets Three Bids for Argentine Project
PETROLEOS DE VENEZUELA: To Sell Oil to Spain for US$100/Barrel

* VENEZUELA: US$1.5B Debt Buyback Not Yet Ready, Says Rodriguez


                         - - - - -


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

DANA CORP: Visteon Insists on US$9.8MM Claim for Product Recall
---------------------------------------------------------------
Visteon Corporation insists that it is entitled to the payment
of US$9,800,000 as a result of the 2003 product recall of
vehicles manufactured by Ford Motor Company, which contained air
filters produced by Dana Corp. and its debtor-affiliates.

As disclosed in the Troubled Company Reporter on July 4, 2008,
the Reorganized Debtors ask the U.S. Bankruptcy Court for the
Southern District of New York to disallow Visteon Corporation's
Claim No. 15037, asserting a US$9,800,000 reimbursement for
Visteon's purported losses related to a vehicle recall by Ford.

Michael C. Hammer, Esq., at Dickinson Wright PLLC, in Ann Arbor,
Michigan, asserts that further evidence will show that Visteon
suffered damages aggregating US$9,800,000 as a result of the
unauthorized change in the properties used in the manufacture of
the air filters, which lead to the recall.

Mr. Hammer relates that from 2002 to 2004, one of the
Reorganized Debtors' affiliate, Wix-Helsa Filtration
Technologies, Inc., sold to Visteon engine air filters treated
with a proprietary resin compound coating for use in certain of
Visteon's air induction systems supplied to Ford.  In 2004, Wix-
Helsa was sold to AAG OPCO Corp., which later became Affinia
Group.  The Affinia Entities assumed the obligations and
liabilities of the Reorganized Debtors with respect to the
contracts with Visteon.

According to Mr. Hammer, the contracts prohibited the Debtors
from making any change in the design and processing of the air
filters unless otherwise instructed by Visteon.  The contracts
also required the Debtors to conform to the quality control
standards and inspection system at the time of sale and
delivery, which Visteon and its customer Ford have established.
However, Mr. Hammer relates that the Debtors changed the
production process, materials and performance characteristics of
the air filters without notice or approval by Visteon.  Sometime
in 2003, Ford began receiving complaints about under hood fires
in certain of its vehicles using the Air Filters.

Despite the Debtors' repeated denials that it did not make any
changes to the air filter, in January 2004, they disclosed to
Visteon that they changed the air filter paper material
manufacturing and treatment process including the resin package
resulting in an increase in the sodium content of the air filter
paper, Mr. Hammer further relates.  The change caused the air
filter paper to smolder causing under hood fires in certain Ford
vehicles.

Mr. Hammer tells the Court that the Affinia Entities maintain
that they have not assumed the air filter contracts and
therefore are not liable with respect to the recall.
Accordingly, Visteon asserts that the Reorganized Debtors are
liable for the recall damages.

For the reasons stated, Visteon asks the Court to allow its
claim.

                   Preferred Stock Dividend

The Board of Directors of Dana Holding Corporation authorized
the payment of a dividend to shareholders of 4.0% Series A
Convertible Preferred Stock and 4.0% Series B Convertible
Preferred Stock.  A cash payment of US$1.00 per share for the
period from June 1, 2008, through Aug. 31, 2008, will be payable
on Sept. 2, 2008, to preferred shareholders of record at the
close of business on Aug. 1, 2008.

                           About DANA

Based in Toledo, Ohio, Dana Corporation -- http://www.dana.com/
-- designs and manufactures products for every major vehicle
producer in the world, and supplies drivetrain, chassis,
structural, and engine technologies to those companies.  Dana
employs 46,000 people in 28 countries.  Dana is focused on being
an essential partner to automotive, commercial, and off-highway
vehicle customers, which collectively produce more than 60
million vehicles annually.

Dana has facilities in China in the Asia-Pacific, Argentina in
the Latin-American regions and Italy in Europe.

The company and its affiliates filed for chapter 11 protection
on March 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354).  As of
Nov. 30, 2007, the Debtors listed US$7,131,000,000 in total
assets and US$7,665,000,000 in total debts resulting in a total
shareholders' deficit of US$534,000,000.

Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day,
in Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq.,
Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in
Cleveland, Ohio, represent the Debtors.  Henry S. Miller at
Miller Buckfire & Co., LLC, served as the Debtors' financial
advisor and investment banker.  Ted Stenger from AlixPartners
served as Dana's Chief Restructuring Officer.

Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel
LLP, represens the Official Committee of Unsecured Creditors.
Fried, Frank, Harris, Shriver & Jacobson, LLP served as counsel
to the Official Committee of Equity Security Holders.  Stahl
Cowen Crowley, LLC served as counsel to the Official Committee
of Non-Union Retirees.

The Debtors filed their Joint Plan of Reorganization on
Aug. 31, 2007.  On Oct. 23, 2007, the Court approved the
adequacy of the Disclosure Statement explaining their Plan.
Judge Burton Lifland of the U.S. Bankruptcy Court for the
Southern District of New York entered an order confirming the
Third Amended Joint Plan of Reorganization of the Debtors on
Dec. 26, 2007.

The Debtors' Third Amended Joint Plan of Reorganization was
deemed effective as of Jan. 31, 2008.  Dana Corp., starting on
the Plan Effective Date, operated as Dana Holding Corporation.

(Dana Corporation Bankruptcy News, Issue No. 79; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or
215/945-7000)

                          *     *     *

In February 2008, Standard & Poor's Ratings Services assigned
its 'BB-' corporate credit rating to Dana Holding Corp.
following the company's emergence from Chapter 11 on Feb. 1,
2008.  The outlook is negative.  At the same time, Standard &
Poor's assigned Dana's US$650 million asset-based loan revolving
credit facility due 2013 a 'BB+' rating (two notches higher than
the corporate credit rating) with a recovery rating of '1',
indicating an expectation of very high recovery in the event of
a payment default.  In addition, S&P assigned a 'BB' bank loan
rating to Dana's US$1.43 billion senior secured term loan with a
recovery rating of '2', indicating an expectation of average
recovery.

Moody's Investors Service affirmed the ratings of the
reorganized Dana Holding Corporation as: Corporate Family
Rating, B1; Probability of Default Rating, B1.  In a related
action, Moody's affirmed the Ba3 rating on the senior secured
term loan and raised the rating on the senior secured asset
based revolving credit facility to Ba2 from Ba3.  The outlook is
stable.  The financing for the company's emergence from Chapter
11 bankruptcy protection has been funded in line with the
structure originally rated by Moody's in a press release dated
Jan. 7, 2008.


NORTHWEST AIRLINES: S&P Trims Rating to 'B' on Expected Losses
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on
Northwest Airlines Corp. and subsidiary Northwest Airlines Inc.
(both rated B/Negative/--), including lowering the long-term
corporate credit ratings on both entities to 'B' from 'B+', and
removed the ratings from CreditWatch, where they had been placed
with negative implications April 15, 2008.  The outlook is
negative.

The downgrade reflects expected losses and reduced or negative
operating cash flow caused by high fuel prices.  S&P also
lowered our ratings on enhanced equipment trust certificates, in
some cases by more than one notch.

“We expect Northwest to report a loss this year, which could
exceed US$500 million, because of high, albeit recently somewhat
reduced, fuel prices,” said Standard & Poor's credit analyst
Philip Baggaley.  Northwest reported a second-quarter 2008 net
loss of US$377 million, but managed a profit of US$170 million
excluding a net noncash impairment charge of US$547 million.
That result, the best among peer “legacy carriers”, was aided by
US$250 million of gains on fuel hedges that will apply to future
periods.  Although the airline's performance was relatively
good, the earnings and cash flow outlook is still weak in
absolute terms and S&P expects unrestricted cash (US$3.3 billion
at June 30, 2008) to trend downward for the remainder of the
year.

Northwest, like other large U.S. airlines, is reducing capacity
in the domestic market, retiring aircraft, and shifting some
flying to regional partner airlines.  S&P now expects
Northwest's “mainline” capacity to decline about 8% year-over-
year by the fourth quarter, following earlier capacity
reductions in its 2005-2007 bankruptcy reorganization.  This,
along with capacity reductions by other airlines, should improve
somewhat the balance of supply and demand in the U.S. domestic
market, allowing Northwest to raise its fares further.  However,
the weak U.S. economy will likely constrain the extent of fare
hikes, and S&P does not expect that the higher fares will be
sufficient to avoid a loss this year if fuel prices remain high.
Northwest has also reduced international flying to a lesser
degree, though its aircraft used on those routes are, on
average, much newer than its domestic fleet.

Ratings on Eagan, Minnesota-based Northwest Airlines Corp. and
its Northwest Airlines Inc. subsidiary are based on
participation in the competitive, cyclical, and capital-
intensive airline industry; and substantial capital spending
needs to modernize the airline's fleet.  Adequate near-term
liquidity and cost reductions achieved in bankruptcy are
positives.

In April 2008, Northwest entered into a merger agreement with
Delta Air Lines Inc. (B/Watch Neg/--).  The proposed merger
would create a more comprehensive route network, with
opportunities for revenue and cost synergies, but entails risks
in integrating employee groups and information systems, and will
result in higher labor costs.

S&P's 'B' corporate credit rating is predicated on an expected
material loss in 2008, which could exceed US$500 million.  If
heavier losses in 2008 and 2009 or a bank covenant violation
that requires repayment of the credit facility cause an erosion
in unrestricted cash and short-term investments below
US$2.5 billion, S&P could lower our rating.

Northwest Airlines Corp. (NYSE: NWA) -- http://www.nwa.com/--
is the world's fourth largest airline with hubs at Detroit,
Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and about
1,400 daily departures.  Northwest is a member of SkyTeam, an
airline alliance that offers customers one of the world's most
extensive global networks.  Northwest and its travel partners
serve more than 1000 cities in excess of 160 countries on six
continents.  Northwest and its travel partners serve more than
1000 cities in excess of 160 countries on six continents,
including Italy, Spain, Japan, China, Venezuela and Argentina.


TYSON FOODS: Earns US$38 Million in 2008 Third Quarter 2008
-----------------------------------------------------------
Tyson Foods Inc. reported US$38 million net income on
US$6.8 billion on net revenues for the third quarter of 2008,
compared to US$236 million of net income on US$6.6 billion for
the same period of 2007.

Operating income for the third quarter of fiscal 2008 was
US$45 million compared to US$212 million.  In the third quarter
of fiscal 2008, operating income included US$13 million of
charges related to asset impairments and excluded US$18 million
of pretax income related to our discontinued Lakeside operation.

On June 25, 2008, the company entered into a letter of intent
with XL Foods Inc. to sell the beef processing, cattle feedyard
and fertilizer assets of Lakeside Farm Industries Ltd in
Alberta, Canada.  The transaction remains subject to government
approvals, the receipt of commercially reasonable financing by
XL Foods and the execution of a definitive agreement between
Tyson and XL Foods.  The company hopes to complete the sale by
the end of fiscal 2008.  The results for Lakeside, current and
prior periods, are reported as discontinued operations.

“In the third quarter of fiscal 2008, Tyson Foods' diversified
business offset the losses incurred by our Chicken segment,
which is experiencing more difficult market dynamics,” said
Richard L. Bond, president and chief executive officer.  “Our
Beef, Pork and Prepared Foods segments were profitable, while
our Chicken segment suffered a loss.”

“Beef performed better than expected, although results were
masked by a negative US$75 million impact from application of
mark-to-market accounting treatment related to our unrealized
derivative losses for forward cattle purchases and forward boxed
beef sales,” Mr. Bond said.  “Although we will profit from this
risk management activity over the coming months, it disguises an
otherwise solid performance in our beef operations this
quarter.”

“For the third consecutive quarter, our Pork segment achieved a
margin above the normalized range. Sales were up for the quarter
as well.  Prepared Foods sales and volume were up slightly over
the same quarter last year; however, operating income was down
significantly due to increased raw material costs, including
wheat, dairy and cooking ingredients in addition to charges
related to flood damage at our plant in Jefferson, Wisconsin,”
Mr. Bond said.

“The Chicken segment remains under pressure from higher input
costs, although we have been able to offset some losses through
pricing and risk management activities.  Grain costs were up an
additional US$140 million compared to the third quarter of 2007
and are expected to increase approximately US$550 million for
fiscal 2008.  There has been a tremendous effort by our poultry
operations, sales and marketing teams to improve efficiencies
and develop products to meet our customers' needs in this
economy.  I am confident our chicken business will be well
positioned when the economics improve,” Mr. Bond said.

                        About Tyson Foods

Headquartered in Springdale, Arkansas, Tyson Foods Inc.
(NYSE:TSN) -- http://www.tysonfoods.com/-- is a processor and
marketer of chicken, beef, and pork. The company makes a wide
variety of protein-based and prepared food products at its 123
processing plants.  Tyson has approximately 114,000 Team Members
employed at more than 300 facilities and offices in 26 states
and 80 countries.

Tyson's U.S. beef plants are located in Amarillo, Texas; Dakota
City, Nebraska; Denison, Iowa; Finney County, Kansas; Joslin,
Illinois, Lexington, Nebraska and Pasco, Washington. The
company also has a beef complex in Canada, and is involved in a
vertically integrated beef operation in Argentina.

                        *     *     *

As reported in the Troubled Company Reporter on April 7, 2008,
Moody's Investors Service confirmed Tyson Foods, Inc.'s
corporate family rating and probability of default rating at
Ba1.  Moody's said the rating outlook remains negative.


WENDY'S INT'L: Changes Executives Related to Triarc Cos. Merger
---------------------------------------------------------------
Triarc Companies Inc. disclosed that after the closing of its
pending merger with Wendy's International Inc.:

   -- J. David Karam will assume the position of president of
      Wendy's;

   -- Stephen D. Farrar will assume the position of chief
      operating officer of Wendy's; and

   -- Ken C. Calwell will assume the position of chief marketing
      officer of Wendy's.

The merger of Wendy's and Triarc is expected to close in the
second half of 2008.

In assuming the role of president of Wendy's after the closing,
Mr. Karam will succeed Kerrii B. Anderson, who serves as both
president and chief executive officer.  On April 24, 2008,
Roland Smith, Triarc's chief executive officer, will also assume
the position of chief executive officer of Wendy's.  Mr. Farrar
will succeed Dave Near, who will resume his role as a leading
Wendy's franchisee.  Mr. Calwell will succeed Paul Kershisnik,
who was named interim chief marketing officer in February 2008.
Mr. Kershisnik will continue in his role as interim CMO through
the closing of the merger and then plans to work closely with
Calwell in a senior leadership role in marketing.

Mr. Karam is a minority shareholder and serves as president of
Cedar Enterprises Inc., which owns and operates 135 Wendy's Old
Fashioned Hamburgers restaurants in Indianapolis, Las Vegas, San
Antonio, Hartford and Seattle.  Cedar Enterprises is also the
parent company of Syrus Ltd., which provides information
processing services designed to increase operating productivity
and financial performance for nearly 20% of the Wendy's
franchise-operated restaurants throughout the country.

As a franchisee, Mr. Karam was the recipient of the Founders
Award in 1990, honoring R. David Thomas, and the Diamond Award
for the National Marketer of the Year in 1998.  Prior to joining
Cedar Enterprises Inc., he was a senior auditor at Touche &
Ross, nka Deloitte.  He holds a BSBA in accounting from The Ohio
State University and completed the Owner President Management
Program at the Harvard University Graduate School of Business
Administration.  In connection with joining Wendy's as
President, Mr. Karam will relinquish management of the day-to-
day operations of Cedar Enterprises and its subsidiaries and
resign from their respective boards of directors.  Mr. Karam
will continue as a minority shareholder of Cedar Enterprises and
will dispose of his interest in Syrus Ltd.

Mr. Farrar returned to Wendy's in April 2008 as chief of North
American Operations in the U.S. and Canada after retiring in
2006.  In his role, he is responsible for improving restaurant
operations at company and franchise restaurants in all three
U.S. regions and Canada.  During his 26-year career with
Wendy's, Mr. Farrar served in a variety of roles where his
achievements included helping to establish Wendy's Service
Excellence(TM) program, pioneering Wendy's Super Value Menu(R),
creating a human resources planning and development system, and
developing numerous planning and control systems to reduce
costs.  He was one of the system's most respected leaders and
seasoned operators with a track record that earned him a Wendy's
Hall of Famer distinction.  Before joining Wendy's, Mr. Farrar
held various positions at Restaurant Profitability Analysts,
Pelican's Restaurants, Ten Tex Food, Steak and Ale Restaurants,
and McDonald's.  He attended the University of Texas, Arlington.

Mr. Calwell served as chief marketing officer-executive vice
president, marketing, research and development at Domino's Pizza
Inc., where he was responsible for the leadership of all
national marketing, brand strategy, advertising, new product
development, database marketing, media, field marketing,
pricing, marketing research, R&D, CRM, and sports and event
marketing.  Prior to joining Domino's in 2001, Mr. Calwell
served as vice president, new product marketing, researching,
and planning at Wendy's.

Previously, Mr. Calwell held various marketing positions in the
Frito-Lay and Pizza Hut divisions of PepsiCo Inc. and at The
Pillsbury Company.  He holds an M.B.A. from Indiana University
and a B.B.A. from Washburn University.

“A key element in realizing the great potential of the Wendy's
brand and generating enhanced value for shareholders is to build
a premier team that will drive a performance-based culture
grounded in Wendy's heritage of quality and operational
excellence,” Roland Smith stated.  “With the appointment of
three high-caliber and well respected individuals to key
leadership roles, we are taking an important first step toward
improving Wendy's performance and achieving our growth
objectives.  With extensive backgrounds in the Wendy's
organization and years of operating experience, these executives
are uniquely qualified to help lead Wendy's during the next
phase of growth and development.  This is certainly a very
exciting time to be part of the Wendy's family.”

“Together with Kerrii Anderson, I wish to thank [Mr.] Near for
playing an integral part in Wendy's operational initiatives over
his two years as COO, and we look forward to his ongoing
contributions as he returns to his previous role as a leading
franchisee of Wendy's restaurants in Austin, Texas,” Mr. Smith
continued.  “I also want to thank Paul Kershisnik who led
Wendy's marketing initiatives over the last several months and
will continue to lead the team through closing of the merger.”

On April 24, 2008, Triarc and Wendy's signed a definitive merger
agreement for an all-stock transaction in which Wendy's
shareholders will receive a fixed ratio of 4.25 shares of Triarc
Class A Common Stock for each share of Wendy's common stock they
own.  The transaction will bring together Arby's and Wendy's,
two quick service restaurant brands.  The combined systems will
have approximately 10,000 restaurant units and pro forma annual
system sales of more than US$12 billion.

                   About Triarc Companies Inc.

Headquartered in New York City, Triarc Companies Inc.
(NYSE:TRY.B/TRY) -- http://www.triarc.com/-- is a holding
company and, through its subsidiaries, is currently the
franchisor of the Arby's restaurant system and the owner of
approximately 94% of the voting interests, 64% of the capital
interests and at least 52% of the profits interests in Deerfield
& Company LLC, an asset management firm.   The Arby's restaurant
system is comprised of approximately 3,600 restaurants, of
which, as of Dec. 31, 2006, 1,061 were owned and operated by the
company's subsidiaries.

Deerfield & Company LLC, through its wholly-owned subsidiary,
Deerfield Capital Management LLC, is a Chicago-based asset
manager offering a diverse range of fixed income and credit-
related strategies to institutional investors with about
US$13.2 billion under management as of Dec. 31, 2006.

                 About Wendy's International

Based in Dublin, Ohio, Wendy's International Inc. (NYSE:
WEN) -- http://www.wendysintl.com/-- is one of the world's
largest and most successful restaurant operating and franchising
companies, with more than 6,300 Wendy's Old Fashioned Hamburgers
restaurants in North America and more than 300 international
Wendy's restaurants.   It has restaurants in the United States,
Canada, Mexico, Argentina, among others.

At Dec. 30, 2007, the company's balance sheet showed total
assets of US$1.79 billion, total liabilities of US$0.99 billion,
and total shareholders' equity of US$0.80 billion.

                           *     *     *

As reported in the Troubled Company Reporter-Latin America on
April 28, 2008, Moody's Investors Service stated that it
continues the review for possible downgrade the ratings of
Wendy's International Inc.'s after the announcement that Triarc
Companies Inc. and Wendy's have signed a definitive merger
agreement for an all-stock transaction.

Ratings on review for further possible downgrade are: (i)
corporate family rating at Ba3; (ii) probability of default
rating at Ba3; (iii) senior unsecured notes rating at Ba3; (iv)
senior unsecured shelf rating at (P)Ba3; (v) subordinated shelf
at (P)B2; and (vi) preferred stock shelf at (P)B2.

Standard & Poor's Ratings Services said that its ratings on
Wendy's International Inc., including the 'BB-' corporate credit
rating, would remain on CreditWatch, where they had been placed
with negative implications on April 26, 2007.


W.R. GRACE: Equity Committee Refuses JP Morgan's Interest Hike
--------------------------------------------------------------
The Official Committee of Equity Holder supports W.R. Grace Co.
and its debtor-affiliates in their request for the disallowance
of JP Morgan Chase, N.A.'s demand for additional interest
payments.

A hearing is set for Sept. 18, 2008, to rule on the issue.

Giving in to the demands of JP Morgan would cause the asbestos
personal injury settlement entered into by the Debtors, and the
asbestos, creditor, and equity holder constituents, to fail,
Philip Bentley, Esq., at Kramer Levin Naftalis & Frankel LLP, in
New York, argues on behalf of the Equity Committee.  He says the
Equity Committee has made significant concessions despite its
continued belief that equity holders would receive significantly
greater distributions if the asbestos claim estimation process
were litigated to conclusion.

The Equity Committee is not prepared to agree to provide the
Lenders a higher rate of postpetition interest than the
Negotiated Bank Default Interest Rate provided under the
asbestos settlement, Mr. Bentley tells Judge Fitzgerald.  “Any
further dilution of equity's proposed distribution would make
the economics of the Settlement disadvantageous to equity
holders,” he argues.  “If any such modifications were made, the
Equity Committee would have no choice but to withdraw its
support for the Settlement, causing the Settlement to fail.”

The Lenders are currently demanding payments for accrued
postpetition interest at 7.77% rather than at 6.09% interest
through the end of 2005 and at the prime rate for later periods
as proposed in the asbestos settlement.  An increase in the
interest rate would mean additional payment of about
US$100,000,000.  According to Bloomberg News, the non-default
rate was 5.77% at the outset of the Chapter 11 case.

Under the plan of reorganization proposed by the Debtors,
existing shareholders will retain their stock, although diluted
by warrants and shares securing the Debtors' obligation to make
future payments.

             Creditors' Committee Sides with Lenders

The Official Committee of Unsecured Creditors, however, argue
that the Debtors are solvent, and, that the roughly
US$100,000,000 in additional postpetition interest payable to
the Lenders does not diminish the payout to any other creditor.

The Debtors currently have a market capitalization between
US$1,600,000,000 and US$2,000,000,000, and have committed to the
asbestos settlement, which preserves more than US$1,000,000,000
of value for the Debtors' existing equity holders, Lewis Kruger,
Esq., at Stroock & Stroock & Lavan LLP, in New York, on behalf
of the Creditors' Committee, tells Judge Fitzgerald.

“The issue . . . is not whether the Debtors' solvency has been
judicially determined or whether the proposed asbestos
settlement addresses solvency, but rather that the settlement
expressly provides the Debtors' equity holders with a recovery
at the expense of the commercial creditors,” Mr. Kruger argues.

According to Mr. Kruger, the Debtors' unwillingness to pay the
additional interests aims to preserve a deal they have with the
equity holders.  “This perverse result violates the absolute
priority rule and is the polar opposite of 'equitable',” he
argues.  “There are no equitable considerations that warrant
depriving the bank debt holders of default interest where their
prepetition contracts provide for it.”

“By the time the plan of reorganization is confirmed, presumably
in 2009, the Debtors will have enjoyed the use of the bank debt
holders' money for nearly eight years and, correspondingly, the
bank debt holders have been deprived of the use of that money
during that lengthy period of time,” Mr. Kruger asserts.
Despite the Debtors' description of the default rate as
“exorbitant”, the credit agreements provide for only a 24%
difference between the contract default rate and the base
contract rate, which is not exorbitant, he contends.

Mr. Kruger tells Judge Fitzgerald that the Creditors' Committee
has not and will not support a plan of reorganization, like the
one contemplated by the Asbestos Settlement, that fails to
provide for payment of appropriate postpetition interest to the
members of its constituency.

The Creditors' Committee, in defense of the Lenders, complain
that the Asbestos Settlement deprive the Lenders of their right
to payment of postpetition interest at the contract default rate
and is also inadequate in the manner in which postpetition
interest is to be paid to the estates' trade creditors.

The Debtors' proposed reorganization plan provides that
unsecured creditors will be paid in full with interest.

        Lenders Insist on Additional Interest Payments

The Lenders and JP Morgan ask the Court to overrule the Debtors'
objection to their Claims arguing that, because the Debtors are
solvent, the Lenders are entitled to payment of postpetition
interests at the contract default rate.

Adam Landis, Esq., at Landis Rath & Cobb LLP, in Wilmington,
Delaware, echoes the Creditors' Committee's point that the
Asbestos Settlement propose to divide the Debtors'
reorganization value among all constituencies, including the
preservation of more than US$1,000,000,000 for equity holders.
He notes that an additional feature of the settlement limits the
Lenders' US$500,000,000 prepeption principal claims to an amount
less than the contractual default rate presumed in the
circumstance of a solvent debtor.

In attempting to limit the Lenders' postpetition interest
recovery, Mr. Landis argues that the Debtors are trying to have
it both ways -- depriving the Lenders of postpetition default
interest by claiming that there is no solvency determination to
justify its award, at the same time letting equity holders keep
almost US$2,000,000,000 of value without any solvency
determination.

Mr. Landis asserts that the parties should not waste their time
and money or the energies of the Court over the argument that
the Lenders have no right to postpetition interest in the
absence of a solvency determination.  “If the Debtors insist
that the Lenders must establish solvency as a condition
precedent to establishing their entitlement to postpetition
interest, so be it; the Bank Lenders are prepared to do so,” he
tells Judge Fitzgerald.

“If the Debtors want their shareholders to retain their
interests through this shift and gift, value must shift a second
time -- approximately US$100,000,000 must move to the Bank
Lenders from equity's US$2,000,000,000 of value,” Mr. Landis
asserts.  “Otherwise, the now-unfiled plan that will implement
the Proposed Asbestos Settlement will violate the absolute
priority rule because it will let equity keep US$100,000,000
that belongs to the Bank Lenders.”

                      About W.R. Grace

Headquartered in Columbia, Md., W.R. Grace & Co. (NYSE:GRA)
-- http://www.grace.com/-- supplies catalysts and silica
products, especially construction chemicals and building
materials, and container products globally, including Argentina,
Australia and Ireland.

The Company and its debtor-affiliates filed for chapter 11
protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139).
David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and
Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP,
represent the Debtors in their restructuring efforts.  The
Debtors hired Blackstone Group, L.P., for financial advice.
PricewaterhouseCoopers LLP is the Debtors' accountant.

Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent
the Official Committee of Unsecured Creditors.  The Creditors
Committee tapped Capstone Corporate Recovery LLC for financial
advice.  David T. Austern, the legal representative of future
asbestos personal injury claimants, is represented by Orrick
Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA.
Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and
Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the
Official Committee of Asbestos Personal Injury Claimants.  The
Asbestos Committee of Property Damage Claimants tapped Scott
Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena
Price & Axelrod, LLP, to represent it.  Thomas Moers Mayer,
Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the
Official Committee of Equity Security Holders.

The Debtors' filed their Chapter 11 Plan and Disclosure
Statement on Nov. 13, 2004.  On Jan. 13, 2005, they filed an
Amended Plan and Disclosure Statement.  The hearing to consider
the adequacy of the Debtors' Disclosure Statement began on
Jan. 21, 2005.  The Debtors' exclusive period to file a chapter
11 plan expired on July 23, 2007.

Estimation of W.R. Grace's asbestos personal injury liabilities
commenced on January 14, 2008.

At Dec. 31, 2006, the W.R. Grace's balance sheet showed total
assets of US$3,620,400,000 and total debts of US$4,189,100,000.
As of November 30, 2007, W.R. Grace's balance sheet showed total
assets of US$3,335,000,000, and total debts of US$3,712,000,000.

(W.R. Grace Bankruptcy News, Issue No. 162; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000)


W.R. GRACE: Gets Court Nod to Use US$59M From Insurance Policies
----------------------------------------------------------------
The United States Bankruptcy Court for the District of Delaware
authorized W.R. Grace Co. and its debtor-affiliates to borrow a
maximum of US$59,000,000 against the value of certain company
owned life insurance polices to provide an additional source of
liquidity for the operation of their businesses and their
emergence from Chapter 11.

As reported in the Troubled Company Reporter on July 8, 2008,
for a number of years, the Debtors have held, as a financial
product, COLI policies insuring the lives of a number of their
past and present employees.  In October 2007, the Court
authorized the Debtors to surrender the COLI policies for their
cash surrender value to support liquidity requirements for
operations and for emergence from Chapter 11.  David M. Bernick,
P.C., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois,
however, relates that the Debtors subsequently determined that
it was more tax efficient to dispose of the policies in 2008.

As of March 31, 2008, the Debtors had COLI policies, excluding
split-dollar policies, with an aggregate cash surrender value of
approximately US$73,700,000.  According to Mr. Bernick, the
Debtors are in the process of surrendering policies with a cash
surrender value of approximately US$8,100,000.  As regards the
remaining US$65,600,000 of COLI policies, he says the Debtors
are reviewing a potential opportunity to sell the policies on
terms more favorable than surrender.  The review will likely
take several months, he contends.

To be able to meet possible liquidity needs, while retaining the
option of a possible favorable sale transaction, the Debtors
determined it would be in their best interest to seek permission
to borrow against the COLI policies, with an eye to eventual
sale or surrender of policies, depending on which alternative is
more financially favorable, Mr. Bernick tells the Court.

The COLI policies permit the owner to borrow against their cash
surrender value.  The COLI borrowing terms, which include credit
of part of the interest to the value of the policies, are
generally more favorable than those available under the Debtors'
DIP Facility, Mr. Bernick contends, thus could be used either in
lieu of DIP Facility debt, or to replace DIP Facility debt if
liquidity requirements necessitate borrowing under the DIP
Facility before the Court's approval of borrowing under the COLI
policies.

“The Debtors propose to make COLI loans in amounts not greater
than 90% of the policies' values, because loans for higher
percentages of the cash surrender value tend to erode the value
of the policies,” Mr. Bernick told the Court.  “This would give
the Debtors additional liquidity available of approximately
US$59,000,000.”

The documentation for loans under COLI policies generally
require that the borrowers grant security interests in the
policies to secure the loans.  The COLI policies are not pledged
as security for any other obligations of the Debtors and a
recent amendment of the DIP Facility documents permits the
borrowings under the COLI policies, Mr. Bernick said.

In addition, Mr. Bernick contended that the availability of COLI
loans enables the Debtors to retain the option of a possible
sale of the COLI policies for a higher return than their cash
surrender value.  “If the sale option proves not to be
favorable, the Debtors can terminate the policies for their net
cash surrender value,” he said.  “Thus, the potential borrowing
requested herein is fair and reasonable.”

                      About W.R. Grace

Headquartered in Columbia, Md., W.R. Grace & Co. (NYSE:GRA)
-- http://www.grace.com/-- supplies catalysts and silica
products, especially construction chemicals and building
materials, and container products globally, including Argentina,
Australia and Ireland.

The Company and its debtor-affiliates filed for chapter 11
protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139).
David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and
Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP,
represent the Debtors in their restructuring efforts.  The
Debtors hired Blackstone Group, L.P., for financial advice.
PricewaterhouseCoopers LLP is the Debtors' accountant.

Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent
the Official Committee of Unsecured Creditors.  The Creditors
Committee tapped Capstone Corporate Recovery LLC for financial
advice.  David T. Austern, the legal representative of future
asbestos personal injury claimants, is represented by Orrick
Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA.
Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and
Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the
Official Committee of Asbestos Personal Injury Claimants.  The
Asbestos Committee of Property Damage Claimants tapped Scott
Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena
Price & Axelrod, LLP, to represent it.  Thomas Moers Mayer,
Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the
Official Committee of Equity Security Holders.

The Debtors' filed their Chapter 11 Plan and Disclosure
Statement on Nov. 13, 2004.  On Jan. 13, 2005, they filed an
Amended Plan and Disclosure Statement.  The hearing to consider
the adequacy of the Debtors' Disclosure Statement began on
Jan. 21, 2005.  The Debtors' exclusive period to file a chapter
11 plan expired on July 23, 2007.

Estimation of W.R. Grace's asbestos personal injury liabilities
commenced on January 14, 2008.

At Dec. 31, 2006, the W.R. Grace's balance sheet showed total
assets of US$3,620,400,000 and total debts of US$4,189,100,000.
As of November 30, 2007, W.R. Grace's balance sheet showed total
assets of US$3,335,000,000, and total debts of US$3,712,000,000.

(W.R. Grace Bankruptcy News, Issue No. 162; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000)



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

CENTRAL EUROPEAN: To Acquire Bulgarian TV Stations for US$172MM
---------------------------------------------------------------
Central European Media Enterprises Ltd. has entered into
agreements to acquire from Top Tone Media Holdings Limited an
80% interest in two Bulgarian television channels: the TV2
channel, a national terrestrial network launched in November
2007, and Ring TV, a sports cable channel.  Total consideration
for the 80% interest, which is payable in cash, is expected to
be approximately US$172 million, before adjustment for debt and
working capital as well as a holdback to cover potential
undisclosed liabilities.  Closing is expected to occur within
two weeks.

In connection with this acquisition, Central European will also
enter into a consulting agreement with Krassimir Guergov, a well
know media entrepreneur in Bulgaria who will continue to provide
his expertise and advice for the development of TV2, Ring TV and
the other broadcasting properties of the company in Bulgaria.

Central European Media Enterprises Chief Executive Officer,
Michael Garin commented, “This acquisition is an important next
step in the continuing expansion of our free-to-air broadcasting
operations in Central and Eastern Europe.  Our entrance into the
Bulgarian market represents the first new CME territory in three
years and demonstrates our ability to continue our growth
strategy within the region.  The TV2 Group, with a core
free-to-air national network and supporting assets such as niche
cable channels, is an exceptional fit with our multi-channel
business model.  We look forward to entering Bulgaria, which has
a dynamic economy and a rapidly growing television advertising
market.”

Central European's Chief Operating Officer, Adrian Sarbu
commented, “Bulgaria represents an excellent opportunity for
CME.  The Bulgarian TV market is dominated by a few key players
and I firmly believe in CME's ability to achieve market
leadership within the next 5 years.  This target is achievable
through the development of local programming, use of synergies
with our Romanian operations and leveraging our existing proven
skills and knowledge base.  This acquisition is another
milestone in our strategy to expand throughout Central and
Eastern Europe.”

Following the closing of the transaction, Top Tone Media
Holdings will have a put option to sell its 20% interest in the
business from the fifth anniversary of the closing at a price
based on an agreed valuation.  Central European has the right to
call a 14% interest from the fifth anniversary of the closing.

TV2 is a start-up network with a 70% technical reach currently.
TV2 was launched in November 2007 and is one of three private
national free-to-air networks serving Bulgaria in addition to a
single state owned channel.

The Bulgarian net television advertising market was
approximately US$168 million in 2007 and is forecasted to
experience a compound annual growth rate of 20% between 2008 and
2012.  Bulgaria acceded to the European Union in 2007 and has a
total population of 7.6 million, with 70% living in urban
environments.

                     About Central European

Based in Bermuda, Central European Media Enterprises Ltd.,  is a
TV broadcasting company with leading networks in six Central and
Eastern European countries.  Launched in 1994, the company and
its partners now operate 16 channels in six countries, including
TV Nova, Nova Cinema and Galaxie Sport in the Czech Republic;
PRO TV, PRO Cinema, Pro International, Sport.ro, MTV and Acasa
in Romania; Nova TV in Croatia, TV Markiza in the Slovak
Republic; POP TV and Kanal A in Slovenia; and Studio 1+1, Kino
and Citi in Ukraine.  For the year ended Dec. 31, 2007, the
company generated segment revenues of US$840 million and segment
EBITDA of US$320 million.  Central European Media is traded on
the NASDAQ and the Prague Stock Exchange under the ticker symbol
"CETV".

                          *    *    *

As reported in the Troubled Company Reporter-Latin America on
April 25, 2008, Standard & Poor's Ratings Services assigned its
'BB' debt rating to the `475 million senior secured convertible
notes due 2013 issued by Bermuda-based emerging markets TV
broadcaster, Central European Media Enterprises Ltd. in March
2008.  The long-termcorporate credit rating was affirmed at
'BB'.  The outlook is stable.

At the same time, S&P raised the debt rating on both Central
European Media's EUR245 million and EUR150 million floating-rate
notes due, respectively, in 2012 and 2014 to 'BB' from the
previous 'BB-'.


FOSTER WHEELER: UK Subsidiary Bags Contract From Nghi Son
---------------------------------------------------------
Foster Wheeler Ltd.'s UK-headquartered subsidiary Foster Wheeler
Energy Limited, part of its Global Engineering and Construction
Group, has been awarded a contract by Nghi Son Refinery &
Petrochemical Limited Liability Company (NSRP LLC) for the
planned Nghi Son Refinery, which will be Vietnam's second
refinery.  NSRP LLC is a joint venture company comprising
PetroVietnam and its international partners.

The Foster Wheeler contract value for this project was not
disclosed, and will be included in the company's third-quarter
2008 bookings.

Foster Wheeler will execute the pre-front-end engineering design
(pre-FEED) followed by the FEED for this new complex, which will
include a 10 million tonnes per annum refinery and a
petrochemical complex.  The FEED phase is expected to be
completed during the fourth quarter of 2009.

Foster Wheeler Ltd. (Nasdaq: FWLT) -- http://www.fwc.com/--
offers a broad range of engineering, procurement, construction,
manufacturing, project development and management, research and
plant operation services.  Foster Wheeler serves the refining,
upstream oil and gas, LNG and gas-to-liquids, petrochemical,
chemicals, power, pharmaceuticals, biotechnology and healthcare
industries.  The corporation is based in Hamilton, Bermuda, and
its operational headquarters are in Clinton, New Jersey.

                        *     *     *

As reported in the Troubled Company Reporter-Latin America on
April 28, 2008, Moody's Investors Service upgraded Foster
Wheeler LLC's corporate family rating to Ba2 from Ba3, and
raised its probability of default Rating to Ba2 from Ba3.  The
outlook continues to be positive.

As reported in the Troubled Company Reporter-Latin America on
Feb. 5, 2008, Standard & Poor's Ratings Services revised its
outlook on Foster Wheeler Ltd. to positive from stable.  At the
same time, S&P affirmed its 'BB' corporate credit rating on the
company.  The company reported total debt of approximately
US$150 million at Sept. 30, 2007.


SECURITY CAPITAL: Reaches Deal with XL Capital & Merrill Lynch
--------------------------------------------------------------
Security Capital Assurance Ltd. and its principal operating
subsidiaries, XL Capital Assurance Inc. and XL Financial
Assurance Ltd., entered into an agreement (Master Transaction
Agreement) with XL Capital Ltd. and certain of XL Capital's
affiliates.  Certain financial institutions that are
counterparties (Financial Counterparties) to credit default swap
agreements with XL Capital Assurance are also parties to the
Master Transaction Agreement.

The Master Transaction Agreement provides for the termination,
elimination or commutation of certain reinsurance, guarantees
and other agreements with XL Capital and its subsidiaries in
exchange for a payment by XL Capital to Security Capital of
US$1.775 billion in cash and 8 million shares of XL Capital
Class A Ordinary Shares to Security Capital's subsidiaries, and
the transfer of XL Capital's 46% ownership stake in the company
to a trust.

Concurrent with the Master Transaction Agreement, Security
Capital also entered into an agreement with Merrill Lynch & Co.,
Inc. for the termination of eight credit default swaps and the
related financial guarantee insurance policies that were issued
by XL Capital Assurance Inc.

Additionally, as of June 30, 2008, due to significant adverse
development on loss reserves, XL Capital Assurance will report
negative statutory surplus and XL Financial will report negative
total statutory capital and surplus.  Upon the successful
closing of the transactions contemplated by the Master
Transaction Agreement, the Merrill Agreement and related
agreements, XL Capital Assurance expects to have positive
statutory surplus, and XL Financial expects to have positive
total statutory capital and surplus.

Security Capital and XL Capital have obtained approval from the
New York Insurance Department and the Bermuda Monetary Authority
for the Master Transaction Agreement and the transactions
contemplated thereby.  Other required approvals related to the
agreement have been received from the Delaware Department of
Insurance.  The New York Insurance Department has also approved
the Merrill Agreement and the transactions contemplated thereby.

“The agreements with XL Capital and Merrill Lynch represent a
significant step in the restructuring process of SCA and are
critical to our efforts to stabilize the company,” Security
Capital Chief Executive Officer, Paul S. Giordano commented.
“While we are very pleased with the progress made to date, our
company remains exposed to potentially significant adverse loss
development and there is still much work to be done.  In the
next phase, we will commence discussions with swap
counterparties seeking to commute, terminate or restructure our
remaining credit default swaps.  The New York Insurance
Department, the Bermuda Monetary Authority, the Delaware
Department of Insurance and the UK Financial Services Authority,
as well as our other regulators, have been extremely supportive
in this process, and we look forward to continuing to work
constructively with them in the future.”

                   Master Transaction Agreement

According to the Master Transaction Agreement, a number of
reinsurance, guarantees and other arrangements among Security
Capital and its subsidiaries and XL Capital and its subsidiaries
will be terminated, eliminated or commuted in return for the
payment by XL Capital and certain of its affiliates of
US$1.775 billion in cash, 8 million of XL Capital's Class A
Ordinary Shares to XL Capital Assurance and XL Financial and the
transfer of XL Capital's 46% ownership of Security Capital into
a trust.

It is expected that the Security Capital shares currently owned
by XL Capital will be transferred at the closing of the Master
Transaction Agreement into a trust for the benefit of XL Capital
Assurance until such time as an agreement between XL Capital
Assurance and the Financial Counterparties is reached, and
thereafter such Security Capital shares will be held for the
benefit of the Financial Counterparties.  To the extent that the
required regulatory approvals for the transfer are not received
prior to such closing, the company shares will be deposited into
escrow pending the transfer.  Upon any such deposit into escrow,
XL will irrevocably disclaim any and all voting, economic and
other rights with respect to the company shares.  In connection
with the transfer of the Security Capital shares, XL Capital
will no longer have the right to nominate directors to Security
Capital's Board of Directors.  As a condition to closing, the
four XL Capital-nominated Directors on Security Capital's Board
of Directors, Messrs. Fred Corrado, Paul Hellmers, Gardner
Grant, Jr. and Jonathan Bank, are expected to resign from
Security Capital's Board of Directors at closing.

After the closing of the transactions contemplated by the Master
Transaction Agreement, substantially all reinsurance agreements
and guarantees with XL Capital and subsidiaries will be
eliminated.

                      Merrill Agreement

Pursuant to the Merrill Agreement, Security Capital, XL
Financial, Merrill Lynch, Merrill Lynch International and eight
trusts affiliated with Security Capital, the obligations of
which are guaranteed by policies issued by XL Capital Assurance,
agreed to terminate eight credit default swaps and the related
financial guarantee insurance policies issued by XL Capital
Assurance, with an insured gross par outstanding as of June 30,
2008 of US$3.74 billion, in exchange for a payment by the
company to Merrill Lynch of an aggregate amount of
US$500 million.  As part of the closing of the transactions
contemplated by the Merrill Agreement, the parties will provide
mutual releases of claims with respect to the Swaps and the
related policies.  In addition, XL Capital Assurance and Merrill
Lynch International have agreed to dismiss, after the closing of
the transaction, the litigation related to seven of the Swaps.

               Second Quarter 2008 Developments

Security Capital also announced that it has conducted a review
of its June 30, 2008 loss reserves.  Based on the preliminary
results of this review, the company believes that its case
reserves will have increased substantially as of June 30, 2008,
primarily due to significant deterioration with respect to the
company's exposure to collateralized debt obligations of asset-
backed securities and residential mortgage-backed securities.
As a result, the company's New York-based insurance subsidiary,
XL Capital Assurance Inc., will report negative statutory
surplus and its Bermuda-based reinsurance subsidiary, XL
Financial, will report negative total statutory capital and
surplus as of June 30, 2008.  Upon the successful closing of the
transactions contemplated by the Master Transaction Agreement,
the Merrill Agreement and related agreements, pending the
satisfaction of the conditions noted below, XL Capital Assurance
expects to have positive statutory surplus and XL Financial
expects to have positive total statutory capital and surplus.

In the absence of the consummation of the transactions
contemplated by the Master Transaction Agreement, the Merrill
Agreement and related agreements, XL Capital Assurance and XL
Financial would likely be subject to regulatory action by their
primary regulators, the New York Insurance Department and the
Bermuda Monetary Authority.

                        Going Concern Doubt

As a result of these developments, there is substantial doubt
about the company's ability to continue as a going concern. Upon
the closing of the transactions contemplated by the Master
Transaction Agreement, the Merrill Agreement and other related
agreements, Security Capital intends to re-assess whether
substantial doubt exists about the company's ability to continue
as a going concern.

          Closings of the Master Transaction Agreement
                    and the Merrill Agreement

The closings of the transactions contemplated by the Master
Transaction Agreement, the Merrill Agreement, and other
agreements are expected to occur concurrently in early August
2008.  In addition to customary closing conditions, the closings
are also subject to the completion by XL Capital of a registered
public offering of its equity and equity units.  The parties may
choose to terminate the Master Transaction Agreement if the
closing does not occur by Aug. 15, 2008.  Further, concurrent
with the execution of the Master Transaction Agreement, XL
Financial has entered into an agreement with Financial Security
Assurance to commute all business reinsured by XL Financial
under reinsurance agreements between the parties.  XL Capital
Assurance has agreed to directly reinsure a portion of such
commuted business.  In addition, XL Financial has entered into
agreements to commute certain other ceded reinsurance contracts.

The negotiations of the Master Transaction Agreement and the
Merrill Agreement, as well as the continuing discussions among
Security Capital, certain policyholders and other interested
parties, have been facilitated by the New York Insurance
Department.  The company has also worked closely with the
Bermuda Monetary Authority, the UK Financial Services Authority,
the Delaware Department of Insurance and other relevant
authorities regarding these
agreements.

While Security Capital expects the transactions contemplated by
the Master Transaction Agreement, the Merrill Agreement and the
other related agreements to close by Aug. 15, 2008, there can be
no assurance that all the closing conditions will be satisfied
or waived.  Therefore, there can be no assurance that the
transactions described under the Master Transaction Agreement,
the Merrill Agreement and other related agreements will be
consummated or that the New York Insurance Department and the
Bermuda Monetary Authority, or other regulators, will not take
regulatory action at any time with respect to the company's
operating subsidiaries.

            Agreement with Financial Counterparties

In consideration of the releases and waivers agreed to by the
Financial Counterparties as part of the Master Transaction
Agreement, XL Capital Assurance has agreed to hold an aggregate
amount of US$820 million in cash, plus the interest thereon,
premiums paid by the Financial Counterparties from July 28, 2008
through Oct. 15, 2008, and any proceeds from the sale by the
trust of the Security Capital shares, in the event such shares
are sold, for the purpose of commuting, terminating, amending or
otherwise restructuring existing agreements with the Financial
Counterparties pursuant to an agreement to be negotiated with
the Financial Counterparties.  In the event that such agreement
is not reached by Oct. 15, 2008, the company has agreed to use
such proceeds only to pay claims under the credit default swaps
of the Financial Counterparties.

In addition, through such date, XL Capital Assurance and XL
Financial have agreed to restrictions on their ability to
commute, terminate, amend or otherwise restructure policies and
contracts to which either is a party.

             Agreement with Credit Agreement Lenders

On July 28, 2008 Security Capital also entered into an
amendment, forbearance and limited waiver agreement (Credit
Agreement Amendment) with respect to its Credit Agreement, dated
as of Aug. 1, 2006, as amended.  Pursuant to the Credit
Agreement Amendment, the company agreed:

   (i) to permanently reduce the availability under its
       revolving credit facility from US$250,000,000 to zero,

  (ii) to reduce the availability under the letter of credit
       facility to the amount of the letter of credit exposure
       as of July 28, 2008, and

(iii) that upon the closing of the Master Transaction
       Agreement, it will cash collateralize the remaining
       letters of credit after giving effect to the transactions
       contemplated by the Master Transaction Agreement.

In consideration of the foregoing, the lenders under the Credit
Agreement have agreed to:

   (i) forbear from declaring certain defaults, if any, set
       forth in the Credit Agreement Amendment,

  (ii) waive such defaults, if any, upon the satisfaction of
       certain conditions set forth in the Credit Agreement
       Amendment, and

(iii) grant certain waivers in connection with the consummation
       of the Master Transaction Agreement.

                      Corporate Name Change

As previously announced, Security Capital will formally change
its corporate name on Aug. 4, 2008, from Security Capital
Assurance Ltd. to Syncora Holdings Ltd.  The company's operating
subsidiaries will also change names on the same date: XL Capital
Assurance Inc. will become Syncora Guarantee Inc. and XL
Financial Assurance Ltd. will become Syncora Guarantee Re Ltd.
As of Aug. 4, 2008, Security Capital is no longer permitted to
use the “XL” name.  The company's stock ticker symbol will
remain “SCA”.

                    About Security Capital

Based in Hamilton, Bermuda, Security Capital Assurance Ltd.
(NYSE: SCA) -- http://www.scafg.com/--is a holding company
whose primary operating subsidiaries, XL Capital Assurance Inc.
and XL Financial Assurance Ltd, provide credit enhancement and
protection products to the public finance and structured finance
markets throughout the United States and internationally.  For
the three months ended March 31, 2008, Security Capital reported
a net loss available to common shareholders of US$97 million.

                        *      *      *

As reported in the Troubled Company Reporter-Latin America on
June 24, 2008, Moody's Investors Service has downgraded to B2,
from A3, the insurance financial strength ratings of XL Capital
Assurance Inc., XL Capital Assurance (UK) Limited and XL
Financial Assurance Ltd.  In the same rating action, Moody's
also downgraded the debt ratings of Security Capital Assurance
Ltd.'s  preference shares to Ca from B3 and a related financing
trust.  The rating actions conclude a review for possible
downgrade that was initiated on March 4, 2008, and reflects the
company's severely impaired financial flexibility and the
company's proximity to minimum regulatory capital requirements
relative to Moody's estimations of expected case losses.
Moody's outlook for the ratings is negative.


XL CAPITAL: Earns US$237.9 Mil. in Second Quarter Ended June 30
---------------------------------------------------------------
XL Capital Ltd. reported net income available to ordinary
shareholders of US$237.9 million for the quarter ended June 30,
2008, as compared to US$544.5 million for the same period of
2007.

For the second quarter of 2008, the company had US$2.1 billion
of net revenues compared to US$2.60 billion of net revenues for
the same period of 2007.

The company's ordinary shareholders' equity at June 30, 2008,
was US$7.77 billion, a reduction of US$486.2 million from
US$8.26 billion at March 31, 2008.  This reduction reflected the
net income for the quarter offset by an increase of
US$686.3 million in unrealized losses within the investment
portfolio, caused principally by interest rate increases in the
quarter.

          Dividend Reduction & Declaration of Dividend

The company's Board of Directors has approved a reduction in the
quarterly dividend payable on the Company's Class A Ordinary
Shares to US$0.19 per ordinary share beginning with the next
quarterly dividend.  In line with that reduction, the Board
declared a quarterly dividend of US$0.19 per ordinary share
payable on Sept. 30, 2008 to ordinary shareholders of record as
of Sept. 12, 2008.

The company also announced that the Board declared a dividend on
the company's Series E Perpetual Non-Cumulative Preference
Shares (Preference Shares) of US$0.3250 per share payable on
October 15, 2008 to Preference Shareholders of record on
Oct. 14, 2008.  The aggregate dividend amount payable on the
Preference Shares is US$32.5 million.

                             Ratings

Based on the above announcement as relating to the Master
Agreement and the Company's planned concurrent capital raise, if
successful, it is management's expectation that the company's
financial strength and debt ratings will ultimately be affirmed
at their current levels, though the company does expect that
some of the rating agencies will maintain or assign a 'negative'
outlook to XL.

                    Operational Transformation

The Company also announced the launch of a five-year operational
transformation program for XL Insurance.

The transformation of XL Insurance's operating systems will
result in the consolidation of multiple business processes and
technology systems into a unified global architecture.  In
addition, the transformation will enhance key business functions
through advanced technology for global claims, new underwriting
and policy administration for most U.S. policy volume, strategic
and operational management information, technical accounting and
reinsurance administration.

Accenture, the global management consulting, technology services
and outsourcing company, will provide business consulting and
technological services under a multi-year contract.

                          Other Actions

Commenting on these developments, XL's Chief Executive Officer
Michael S. McGavick said, “When I joined XL less than three
months ago, I said my three primary areas of focus would be to
resolve SCA, enhance Enterprise Risk Management and pursue
stable ratings from our rating agencies.  From the actions
above, I believe you can see that we have delivered on the
commitment to put the SCA overhang firmly behind us and this
will allow us to emphasize again XL's world class reputation as
an insurer and reinsurer.  The transactions contemplated by the
Master Agreement eliminates more than 98% of the exposure from
SCA and the remainder is likely to be eliminated.  Even if this
remainder is not eliminated, these residual contracts are
performing well and we have not been advised of any losses to
SCA under these contracts.”

Mr. McGavick stated, “As part of our efforts to refocus XL on
our property and casualty roots, we are also exploring strategic
opportunities related to our Life Reinsurance operations.  This
review, along with the appointment of a new Chief Enterprise
Risk Officer, which I hope to announce shortly, forms part of
our enhanced commitment to risk management.  The capital raise
we have announced separately reflects my desire to maintain a
capital cushion with each of the major rating agencies allowing
us to focus exclusively on our core P&C Insurance and
Reinsurance businesses.  Our investment in our operational
transformation program is also critical to achieving our growth
aspirations and continuing to deliver value to our customers and
shareholders.  It matches our commitment to maintaining our
position as a global commercial insurance leader by continuing
to deliver the quality coverage products and services long
associated with the XL brand.”

Mr. McGavick continued, “Further, given the softening market
conditions, we will take actions during the remainder of 2008 to
eliminate between US$110 million and US$120 million from XL's
run rate operating expenses from 2009 onwards, reducing XL's
expense base by approximately US$70 million from 2008 levels.
As a result of this we expect to record a charge of between
US$50 million and US$60 million in the remainder of 2008.  This
expense reduction will involve all parts of the organization
geographically but the primary emphasis will be on streamlining
corporate functions.  This will be achieved through job
eliminations, increased outsourcing and the cessation of certain
projects and activities.”

                  Executive Management Changes

Henry Keeling, Executive Vice President and Chief Operating
Officer, will retire from the company effective Aug. 1, 2008.
As a result of Henry's decision to retire, the role of the Chief
Operating Officer will be eliminated.  Mr. McGavick commented:
“Regrettably Henry has decided to retire.  Henry has driven our
successful dual platform strategy in our P&C businesses as well
as leading our Life Reinsurance business.  He has made a
significant contribution in many parts of the organization since
he joined the XL group in 1993.  The Board of Directors and all
of Henry's XL colleagues appreciate his leadership and
commitment throughout his tenure at XL, but in particular
through these recent challenging times.”

Michael “Spike” Lobdell will leave his current position of
Executive Vice President and Chief Executive of Global Business
Services, effective Aug. 31, 2008.  Mike McGavick thanked Spike
for his commitment and leadership to Global Business Services,
commenting, “The decision Spike and I came to to realign the
majority of Global Business Services within the business
operations means that the current executive structure will no
longer be required.  Spike has led this area through significant
change over the past two years and I want to thank him for his
leadership and selflessness.”

In addition, Fiona Luck, Executive Vice President and Chief of
Staff, will become Special Advisor to the CEO, based in Bermuda
and London and with a reduced time commitment.  She will step
down from her current role and the senior leadership group on
Aug. 1, 2008, at which time the role of Chief of Staff will be
eliminated.  Mr. McGavick commented, “I look forward to having
continued access to Fiona's knowledge and expertise as I work
with my new senior leadership group.”

Mr. McGavick also announced that Susan Cross, Global Chief
Actuary, will join the senior leadership group with immediate
effect.

Mr. McGavick concluded, “Each of these management changes are
occurring for different reasons, but XL has great bench strength
which I am determined to retain.  To do so and to motivate
success, we will make a limited number of targeted option
awards.  Options awarded to the most senior executives will have
a performance vesting feature.  I have complete confidence that
our new streamlined leadership will deliver on our refined
strategy.  Indeed, I believe all of our actions today will
reinforce the confidence of our customers and investors in the
strength of our underlying businesses which continue to perform
strongly.”

                         About XL Capital

Headquartered in Bermuda, XL Capital Ltd. --
http://www.xlcapital.com/-- writes liability insurance and
reinsurance worldwide, specializing in low-frequency, high-
severity risks from riots to natural disasters.  The company
writes policies through numerous subsidiaries, many of them
offshore, and also manages a Lloyd's of London syndicate.  XL's
coverage includes general and executive liability, property, and
political risk insurance.  Its reinsurance covers property,
aviation, energy, nuclear accident, and professional indemnity.

                         *     *     *

As reported in the Troubled Company Reporter-Latin America on
July 7, 2008, Standard & Poor's Ratings Services placed its
ratings on XL Capital Group on CreditWatch with negative
implications stating its concern that “earnings, capitalization,
and financial flexibility might be adversely affected by the
uncertainty surrounding XL's outstanding reinsurance agreements
and guarantee of business underwritten by the operating
subsidiaries of bond insurer Security Capital Assurance, or SCA,
prior to the SCA IPO by XL in August 2006.”

As reported in the Troubled Company Reporter-Latin America on
April 3, 2008, Fitch Ratings downgraded XL Capital Ltd.'s Class
A1 to 'BB' from 'A' and Class A2 to 'BB' from 'A' and removed it
from Rating Watch Negative.  Fitch also downgraded XLCA's
Insurer Financial strength rating to 'BB' and removed the IFS.


XL CAPITAL: Plans to Offer US$2.5 Bln of Shares & Security Units
----------------------------------------------------------------
XL Capital Ltd. is planning to offer US$2.5 billion of
securities in a combination of ordinary shares and equity
security units pursuant to the company's existing shelf
registration statement.

Each Equity Security Unit will consist of:

   (i) a forward purchase contract requiring the holder to
       purchase, and XL to issue, a variable number of ordinary
       shares of XL and

  (ii) an ownership interest in a debt security of XL.  The
       company has not yet determined the exact breakdown
       between Ordinary Shares and Equity Security Units, but
       currently expects that the Ordinary Shares will
       constitute approximately US$1.75 to US$2.0 billion of the
       total.

The company intends to use the net proceeds from the Offerings
to pay US$1.775 billion in connection with an agreement it
entered into today with Security Capital Assurance Ltd and
certain of its subsidiaries and certain other parties thereto in
connection with the termination of certain reinsurance and other
agreements and for general corporate purposes including capital
funding of certain of the company's subsidiaries.

The joint book-running managers for the Offerings are Goldman,
Sachs & Co. and UBS Investment Bank.  Full details of the
Offerings, including a description of the Ordinary Shares and
the Equity Security Units and certain risk factors related to
the company and these securities, will be contained in a
prospectus supplement that will be available through the
underwriters.

Headquartered in Bermuda, XL Capital Ltd. --
http://www.xlcapital.com/-- writes liability insurance and
reinsurance worldwide, specializing in low-frequency, high-
severity risks from riots to natural disasters.  The company
writes policies through numerous subsidiaries, many of them
offshore, and also manages a Lloyd's of London syndicate.  XL's
coverage includes general and executive liability, property, and
political risk insurance.  Its reinsurance covers property,
aviation, energy, nuclear accident, and professional indemnity.

                         *     *     *

As reported in the Troubled Company Reporter-Latin America on
April 3, 2008, Fitch Ratings downgraded XL Capital Ltd.'s Class
A1 to 'BB' from 'A' and Class A2 to 'BB' from 'A' and removed it
from Rating Watch Negative.  Fitch also downgraded XLCA's
Insurer Financial strength rating to 'BB' and removed the IFS
from Rating Watch Negative.


XL CAPITAL: Prices Issue of Shares and Equity Security Units
------------------------------------------------------------
XL Capital Ltd. has agreed to sell 125,000,000 ordinary shares
(plus up to an additional 18,750,000 shares issuable upon
exercise of the underwriters' option to purchase additional
Ordinary Shares) pursuant to the company's shelf registration
statement.  The Ordinary Shares are being issued at a price to
the public of US$16.00 per Ordinary Share.

In addition, the company has agreed to sell 20,000,000 equity
security units (plus up to an additional 3,000,000 Equity
Security Units issuable upon exercise of the underwriters'
option to purchase additional Equity Security Units), with a
stated amount of US$25 per unit, consisting of:

   (i) a forward purchase contract requiring the holder to
       purchase, and XL to issue, a variable number of ordinary
       shares of XL; and

  (ii) an ownership interest in a debt security of XL also
       pursuant to XL's shelf registration statement.

The forward purchase contracts of the Equity Security Units
require each investor to purchase on the stock purchase date of
Aug. 15, 2011, a number of the company's Ordinary Shares to be
determined based on the average trading price of the company's
Ordinary Shares for a period preceding that date, or, in certain
situations, a fixed number of Ordinary Shares.

Total annual distributions on the Equity Security Units will be
at the rate of 10.75%, consisting of interest payments at the
rate of 8.25% on the senior notes and contract adjustment
payments at the rate of 2.50% under the forward purchase
contracts.  The reference price for the Equity Security Units is
US$16.00 per Ordinary Share, the price to public in the Ordinary
Share Offering, and the threshold appreciation price is US$18.88
per Ordinary Share, which represents a premium of approximately
18% over the reference price.

The company expects total gross proceeds from the Offerings to
be approximately US$2.5 billion.

The company intends to use the net proceeds from the Offerings
to pay US$1.775 billion in connection with an agreement it
entered into on July 28, 2008 with Security Capital Assurance
Ltd and certain of its subsidiaries and certain other parties
thereto in connection with the termination of certain
reinsurance and other agreements and for general corporate
purposes including capital funding of certain of the company's
subsidiaries.

The joint bookrunning managers for the Offerings are Goldman,
Sachs & Co. and UBS Investment Bank.  Full details of the
Offerings, including a description of the Ordinary Shares and
the Equity Security Units and certain risk factors related to
the Company and these securities, will be contained in a
prospectus supplement that is available through the
underwriters.  Any offer will be made only by means of a
prospectus, including a prospectus supplement, forming a part of
the company's effective shelf registration statement.

A copy of the prospectus supplement meeting the requirements of
Section 10 of the Securities Act of 1933 may be obtained from
either:

   (i) Goldman, Sachs & Co.
       Attn: Prospectus Department
       85 Broad Street
       New York, NY 10004
       Fax: (212) 902-9316
       prospectus-ny@ny.email.gs.com

                 -- or --

  (ii) UBS Prospectus Department
       UBS Investment Bank
       Attn: Prospectus Department
       299 Park Avenue
       New York, NY 10171
       Tel: (888) 827-7275

                         About XL Capital

Headquartered in Bermuda, XL Capital Ltd. --
http://www.xlcapital.com/-- writes liability insurance and
reinsurance worldwide, specializing in low-frequency, high-
severity risks from riots to natural disasters.  The company
writes policies through numerous subsidiaries, many of them
offshore, and also manages a Lloyd's of London syndicate.  XL's
coverage includes general and executive liability, property, and
political risk insurance.  Its reinsurance covers property,
aviation, energy, nuclear accident, and professional indemnity.

                         *     *     *

As reported in the Troubled Company Reporter-Latin America on
July 7, 2008, Standard & Poor's Ratings Services placed its
ratings on XL Capital Group on CreditWatch with negative
implications stating its concern that “earnings, capitalization,
and financial flexibility might be adversely affected by the
uncertainty surrounding XL's outstanding reinsurance agreements
and guarantee of business underwritten by the operating
subsidiaries of bond insurer Security Capital Assurance, or SCA,
prior to the SCA IPO by XL in August 2006.”

As reported in the Troubled Company Reporter-Latin America on
April 3, 2008, Fitch Ratings downgraded XL Capital Ltd.'s Class
A1 to 'BB' from 'A' and Class A2 to 'BB' from 'A' and removed it
from Rating Watch Negative.  Fitch also downgraded XLCA's
Insurer Financial strength rating to 'BB' and removed the IFS.


XL CAPITAL: Reaches Accord to Pay Security Capital for US$1.8BB
---------------------------------------------------------------
XL Capital Ltd disclosed that XL and certain of its subsidiaries
have entered into an agreement with Security Capital Assurance
Ltd and certain of its subsidiaries in connection with the
termination of certain reinsurance and other agreements.

Certain of the counterparties to credit default swap agreements
with SCA are also parties, and others may become parties (at any
time on or prior to the closing under the Master Agreement), to
the Master Agreement.  Such counterparties that are or become
party to the Master Agreement are called the “Counterparties”.

The Master Agreement provides for the payment by XL to SCA of
US$1.775 billion in cash, the issuance by XL to SCA of eight
million Class A Ordinary Shares to be newly issued by XL and the
transfer by XL of all of the shares it owns in SCA (representing
approximately 46% of SCA's issued and outstanding shares) to a
trust.  This consideration will be made in exchange for, among
other things, the full and unconditional:

   * Commutation of the Third Amended and Restated Facultative
     Quota Share Reinsurance Treaty, effective July 1, 2006,
     between XL Financial Assurance Ltd. (XLFA) and XL Capital
     Assurance Inc. (XLCA), and all individual risk cessions
     thereunder, as a result of which the guarantee by XL
     subsidiary XL Insurance (Bermuda) Ltd (XLIB) of XLFA's
     obligations to XLCA thereunder (the XLFA Guarantee) will no
     longer have any force or effect;

   * Commutation of the Excess of Loss Reinsurance Agreement,
     executed on Oct. 3, 2001, pursuant to which XLIB agreed to
     reinsure certain liabilities of XLFA (the Excess of Loss
     Agreement);

   * Commutation of the Second Amended and Restated Facultative
     Master Certificate, effective March 1, 2007, pursuant to
     which XL Re America, Inc. (XLRA) agreed to reinsure certain
     liabilities of XLCA, and all individual risk cessions
     thereunder (the XLRA Master Facultative Agreement);

   * Commutation of the Facultative Quota Share Reinsurance
     Agreement, effective August 17, 2001, as amended by
     Amendment No. 1 to such agreement, dated as of Aug. 4,
     2006, pursuant to which XLIB agreed to reinsure certain
     liabilities of XLFA and all individual risk cessions
     thereunder;

   * Commutation of the Adverse Development Reinsurance
     Agreement, dated as of August 4, 2006, between XLCA and
     XLRA, and the Indemnification Agreement, dated as of
     Aug. 4, 2006, between XLFA and XLIB; and Termination of
     certain indemnification and services agreements between XL
     and SCA.

After giving effect to the closing of the Master Agreement,
US$64.6 billion of the Company's total net exposure (which was
US$65.7 billion as at June 30, 2008) under reinsurance
agreements and guarantees with SCA subsidiaries will be
eliminated.

Pursuant to the terms of the Master Agreement, SCA will be
required to use commercially reasonable efforts to commute the
agreements that are the subject of the company's guarantee of
XLCA's obligations under certain financial guarantees issued by
XLCA to European Investment Bank (the EIB Policies), subject to
certain limitations.  If that commutations are not completed by
the closing of the Master Agreement, XL's exposures relating to
the EIB Policies (which relate to project finance transactions)
as of June 30, 2008, would be approximately US$1.1 billion.

The company expects to record a charge of between US$1.4 billion
and US$1.5 billion in respect of the Master Agreement in the
quarter ending September 30, 2008.

It is expected that the SCA Shares will be transferred at
closing of the Master Agreement into a trust for the benefit of
XLFA and/or XLCA until such time as an agreement between XLCA
and the Counterparties is reached, and thereafter the trust will
act for the benefit of the Counterparties.  To the extent that
the required regulatory approvals for the transfer are not
received prior to such closing, the SCA Shares will be deposited
into escrow pending the transfer.  Upon any such deposit into
escrow, XL will irrevocably disclaim any and all voting,
economic or other rights with respect to the SCA Shares.

As part of the transaction, the Counterparties will provide
releases to XL and SCA.  The Company and SCA have obtained
approval from the New York State Insurance Department for the
Master Agreement and each of the commutations to which XLRA or
XLCA is a party.  SCA has also obtained applicable approvals
from the Bermuda Monetary Authority, the Delaware Insurance
Department and other regulators.

In addition to customary closing conditions, the Master
Agreement is conditioned on the commutation by SCA of the
Amended and Restated Master Facultative Reinsurance Agreement,
dated November 3, 1998, between Financial Security Assurance,
Inc. (Financial Security) and XLFA, and all individual risk
cessions thereunder.  As a result of this commutation, XL's
guarantee of XLFA's obligations thereunder will no longer have
any force or effect.  SCA has entered into an agreement with
Financial Security to commute such agreement simultaneously with
the closing of the Master Agreement.

The closing is also conditioned upon the termination of eight
Merrill Lynch International (Merrill Lynch) asset backed
security collateralized debt obligation credit default swaps
entered into between Merrill Lynch and SCA.  SCA announced that
it has entered into an agreement with Merrill Lynch to terminate
such agreements simultaneous with the closing of the Master
Agreement.

The closing of the Master Agreement is also conditioned upon the
successful completion of XL's capital raise.  The closing of the
transactions contemplated by the Master Agreement is expected to
take place in early August 2008 and concurrently with the
closing of the capital raise.  The parties may choose to
terminate the Master Agreement if the closing does not occur by
Aug. 15, 2008.

In order to fund the payments described above, XL separately
reported that it currently plans to sell approximately
US$2.5 billion of securities in a combination of ordinary shares
and equity security units pursuant to the company's existing
shelf registration statement.

                       Other Transactions

XL also intends to:

   (i) exercise the put option under its Mangrove Bay contingent
       capital facility entered into in July 2003 resulting in
       net proceeds to the Company of approximately
       US$500 million in exchange for the issuance by the
       company of 20,000,000 Series C Preference Ordinary Shares
       and

  (ii) upon XL's completion of its capital raise (as discussed
       above) and the closing of the transactions contemplated
       by the Master Agreement, redeem X.L. America, Inc.'s
       outstanding US$255.0 million 6.58% Guaranteed Senior
       Notes due April 2011.

In connection with this redemption, the company expects to
record an additional charge of approximately US$21.8 million in
the quarter ending September 30, 2008.

                         About XL Capital

Headquartered in Bermuda, XL Capital Ltd. --
http://www.xlcapital.com/-- writes liability insurance and
reinsurance worldwide, specializing in low-frequency, high-
severity risks from riots to natural disasters.  The company
writes policies through numerous subsidiaries, many of them
offshore, and also manages a Lloyd's of London syndicate.  XL's
coverage includes general and executive liability, property, and
political risk insurance.  Its reinsurance covers property,
aviation, energy, nuclear accident, and professional indemnity.

                         *     *     *

As reported in the Troubled Company Reporter-Latin America on
July 7, 2008, Standard & Poor's Ratings Services placed its
ratings on XL Capital Group on CreditWatch with negative
implications stating its concern that “earnings, capitalization,
and financial flexibility might be adversely affected by the
uncertainty surrounding XL's outstanding reinsurance agreements
and guarantee of business underwritten by the operating
subsidiaries of bond insurer Security Capital Assurance, or SCA,
prior to the SCA IPO by XL in August 2006.”

As reported in the Troubled Company Reporter-Latin America on
April 3, 2008, Fitch Ratings downgraded XL Capital Ltd.'s Class
A1 to 'BB' from 'A' and Class A2 to 'BB' from 'A' and removed it
from Rating Watch Negative.  Fitch also downgraded XLCA's
Insurer Financial strength rating to 'BB' and removed the IFS.


XL CAPITAL: Reports US$449.7MM Net Income in First Half of 2008
---------------------------------------------------------------
XL Capital Ltd. has reported its financial results for the
second quarter of 2008.

For the quarter ended June 30, 2008, the company recorded net
income available to ordinary shareholders of US$237.9 million as
compared to US$544.5 million for the quarter ended June 30,
2007, and “net income excluding realized gains and losses” of
US$266.2 million as compared to US$526.3 million in the prior
year quarter.  The key elements are:

  -- A solid underwriting performance with gross written
     premiums for the quarter of US$1,947.5 million, a reduction
     of 12.7% from the prior year quarter which included gross
     written premiums of US$52 million from Security Capital
     Assurance Ltd.  Gross written premiums for the current
     quarter included US$1,388.8 million from the Insurance
     segment and US$397.5 million from the Reinsurance segment
     compared with US$1,417.9 million and US$526.3 million,
     respectively, in the prior year quarter.  The loss ratio
     for the quarter was 62.2% with a combined ratio of 92.3% as
     compared to 56.9% and 86.3%, respectively, in the prior
     year quarter.  The results for the current quarter
     benefited from favorable prior year development of US$182.6
     million but were adversely affected by US$98.1 million of
     natural catastrophe losses.  In the prior year quarter
     there was favorable prior year development of
     US$124.1 million offset in part by US$30 million of natural
     property catastrophe losses.

  -- A charge of US$82.4 million arising from guarantee and
     reinsurance agreements with Security Capital.  This was
     comprised of US$22.7 million in respect of the XLRA Master
     Facultative agreement,  US$3.7 million for the unwinding of
     the discounted loss reserves in respect of the Excess of
     Loss Agreement and US$56 million in respect of the XLFA
     Guarantee.

  -- A contribution of US$28.2 million from the Life Operations
     segment and a contribution of US$6.2 million from the Other
     Financial Lines segment compared with contributions of
     US$24.7 million and US$6.8 million, respectively, in the
     prior year quarter.

  -- Net investment income from P&C operations, excluding
     investment income from structured products, was
     US$298.1 million as compared to US$323 million in the prior
     year quarter.  Net investment income from P&C structured
     products was US$25.1 million as compared to US$31 million
     in the prior year quarter. Both reductions were caused
     principally by lower average yields for the period.  There
     was a net loss of US$20.4 million from investment
     affiliates as compared to a profit of US$67 million in the
     prior year quarter and net income from investment manager
     affiliates of US$1.7 million compared to US$43.9 million in
     the prior year quarter.  Both results reflected the
     difficult market conditions during the period.

  -- Net income from financial and operating affiliates,
     excluding the Security Capital related charges noted above,
     was US$11.7 million as compared to a loss of US$2.2 million
     in the prior year quarter.

  -- There were net realized gains of US$2 million in the
     quarter arising from the company's investment portfolio
     including a charge of US$47.7 million for other than
     temporary impairments.  In the prior year quarter, the
     company recorded net realized gains of US$18.3 million.
     The 2007 total included a gain of US$81.3 million on the
     sale by XL Capital of shares of Security Capital.

  -- Operating expenses for the quarter were US$298.3 million as
     compared to US$306.6 million in the prior year quarter.
     The expense for the current quarter was lower than the
     prior year quarter principally due to the inclusion in the
     prior year quarter of US$19.5 million of expenses relating
     to Security Capital from the time that it was a subsidiary.
     The underlying increase in operating expenses was caused
     principally by US$17 million arising from the US Dollar
     being weaker than in the prior year quarter, professional
     fees of US$10.9 million incurred in connection with the
     company's negotiations with Security Capital and
     US$9.5 million of expenses from the XL GAPS business that
     was acquired in the fourth quarter of 2007.  These items
     were offset in part by lower accruals for performance based
     compensation.

For the first half of 2008, net income available to ordinary
shareholders was US$449.7 million as compared to
US$1,094.3 million in the prior year period.  “Net income
excluding net realized gains and losses” for the same period was
US$543.1 million compared to US$1,066.3 million in the prior
year period.

The company's ordinary shareholders' equity at June 30, 2008,
was US$7.77 billion, a reduction of US$486.2 million from
US$8.26 billion at March 31, 2008.  This reduction reflected the
net income for the quarter offset by an increase of
US$686.3 million in unrealized losses within the investment
portfolio, caused principally by interest rate increases in the
quarter.

The annualized return on ordinary shareholders' equity, based on
“net income excluding net realized gains and losses”, was 13.3%
for the quarter as compared to 21.3% in the prior year quarter.

   Segment Highlights: 2nd quarter 2008 vs. 2nd quarter 2007

Insurance

Gross and net premiums written decreased by 2.1% and 1.8%,
respectively, during the three months ended June 30, 2008
compared with the three months ended June 30, 2007.  Gross
premiums written decreased as a result of continued decreases in
premium rates across most lines of business as market conditions
continued to soften, selective non-renewals and decreases in new
business within certain specialty lines including professional,
environmental and aerospace lines of business.  To date, the
company has seen limited lost renewals from recent rating
actions, largely limited to U.S. professional lines as noted
above.  Partially offsetting these decreases was growth in
certain lines of business where the company has expanded its
operations recently and favorable foreign exchange rate
movements of US$43.1 million.  Net premiums written decreased as
a result of the factors noted above affecting gross premiums
written.

Net premiums earned decreased by 3.3% in the three months ended
June 30, 2008, compared with the three months ended June 30,
2007.  The decrease resulted primarily from the earn-out of
overall lower net premiums written in the past twelve months,
including decreases in professional, aerospace, programs and
marine lines of business, partially offset by growth in excess
and surplus lines as well as certain property lines of business.

The loss ratio was 64.2% and the combined ratio was 94% compared
to 62.6% and 90.6%, respectively, in the prior year quarter.
The current quarter results included favorable prior year
development of US$99.7 million (or 9.8 loss ratio points) and
US$59.9 million (or 5.9 loss ratio points) from natural
catastrophe loss activity in the quarter.  The prior year
quarter included US$43.7 million (or 4.2 loss ratio points) of
favorable prior year releases and US$20 million (or 1.9 loss
ratio points) from natural catastrophe loss activity.  In
addition, the 5 point increase in standard professional lines
loss ratio initiated in the first quarter of 2008 related to
sub-prime loss activity on the 2008 report year had a 1.3 point
impact on the segment loss ratio in the second quarter of 2008.

Reinsurance

Gross and net premiums written during the three months ended
June 30, 2008, decreased by 24.5% and 31.2%, respectively, as
compared to the second quarter in 2007.  These decreases
resulted from softening market conditions and the company
declining certain business where market rates were below the
company's acceptable underwriting return levels, together with
increased retentions by clients.  For the three months ended
June 30, 2008, premium rate decreases were most significant in
non-U.S. property lines of business as well as U.S. casualty
lines.  Up to June 30, 2008, the negative impact on gross
premiums written as a result of rating agency actions was
limited.  Since that date, some ceding companies have taken
actions placing limitations on the amount of new and/or renewal
business that they will cede to us.  The overall impact of these
actions has, to date, been limited.  The company anticipates
that many of these companies will remove these limitations after
the Master Agreement closes and the company's financial strength
ratings are clarified.  Net premiums written reflect the above
changes in gross premiums written combined with a reduction in
ceded premiums in the three months ended June 30, 2008, as
compared to the same period in 2007.  Ceded premiums written
decreased as a result of property catastrophe cessions to Cyrus
Re II in 2008 being 10% as compared to cessions of 35% to Cyrus
Re throughout 2007.  This reduction has been offset by ceded
premiums totaling US$23.3 million associated with the purchase
of additional catastrophe loss protection including industry
loss warranty covers in the second quarter of 2008.

Net premiums earned in the second quarter of 2008 decreased 18%
as compared to the second quarter of 2007.  This decrease was a
reflection of the overall reduction of net premiums written over
the last 24 months, partially offset by the impact of favorable
foreign exchange rate movements.

The loss ratio was 58.1% and the combined ratio was 89% in the
three months ended June 30, 2008 compared to 46.8% and 78.4%,
respectively, in the prior year quarter.  The current quarter
results included favorable prior year development of
US$82.9 million (or 16.9 loss ratio points) and US$38.2 million
(or 7.8 loss ratio points) from natural catastrophe loss
activity in the quarter.  Additionally, there was
US$14.6 million (or 3.0 lossratio points) of activity arising
from certain property risk and catastrophe losses impacting
three structured products transactions.  The prior year quarter
included US$80.4 million (or 13.4 loss ratio points) of
favorable prior year releases and US$10 million (or 1.7 loss
ratio points) from natural catastrophe loss activity.

Life Operations

Gross written premiums for the life operations was
US$161.2 million during the three months ended June 30, 2008, as
compared to US$235 million in the prior year quarter, which
included a single premium for US$94.6 million.  The contribution
for the quarter was US$28.1 million as compared to
US$24.7 million in the prior year quarter, the increase arising
principally from higher investment income, caused in part by
foreign exchange rate fluctuations.

                      Other Financial Lines

The other financial lines segment recorded a contribution of
US$6.2 million during the three months ended June 30, 2008, as
compared to a contribution of US$6.8 million in the prior year
quarter.  During the quarter, US$778 million of funding
agreements matured and the outstanding deposit liabilities in
respect of this business at June 30, 2008, were
US$1,058 million.  The lower income in the quarter arising from
lower underlying balances was offset mostly by reduced operating
expenses.

In the prior year quarter, Security Capital was a separate
segment until the effective date of the secondary sale by XL
Capital of shares in Security Capital.  This sale reduced the
company's interest in Security Capital from 63% to 46% and,
following that sale, Security Capital was accounted for as an
affiliate rather than as a consolidated subsidiary.  The
contribution from Security Capital as a subsidiary in the prior
year quarter was US$14.4 million.  The income statement impact
of all transactions with Security Capital subsequent to the
June 6, 2007 sale have been included in “net (loss) income from
operating affiliates”.

        Dividend Reduction and Declaration of Dividend

The company also announced that the Board of Directors has
approved a reduction in the quarterly dividend payable on the
its Class A Ordinary Shares to US$0.19 per ordinary share
beginning with the next quarterly dividend.  In line with that
reduction, the Board of Directors declared a quarterly dividend
of US$0.19 per ordinary share payable on Sept. 30, 2008, to
ordinary shareholders of record as of Sept. 12, 2008.

The Board of Directors declared a dividend on the company's
Series E Perpetual Non-Cumulative Preference Shares of US$0.3250
per share payable on Oct. 15, 2008, to Preference Shareholders
of record on Oct. 14, 2008.  The aggregate dividend amount
payable on the Preference Shares is US$32.5 million.

                            Ratings

Based on the above announcement as relating to the Master
Agreement and the company's planned concurrent capital raise, if
successful, it is management's expectation that the XL Capital's
financial strength and debt ratings will ultimately be affirmed
at their current levels, though the company does expect that
some of the rating agencies will maintain or assign a 'negative'
outlook to XL Capital.

                   Operational Transformation

The company also announced the launch of a five-year operational
transformation program for XL Insurance.

The transformation of XL Insurance's operating systems will
result in the consolidation of multiple business processes and
technology systems into a unified global architecture.  In
addition, the transformation will enhance key business functions
through advanced technology for global claims, new underwriting
and policy administration for most U.S. policy volume, strategic
and operational management information, technical accounting and
reinsurance administration.

Accenture, the global management consulting, technology services
and outsourcing company, will provide business consulting and
technological services under a multi-year contract.

                         Other Actions

Commenting on these developments, XL Capital Ltd. Chief
Executive Officer Michael S. McGavick said, “When I joined XL
less than three months ago, I said my three primary areas of
focus would be to resolve SCA, enhance Enterprise Risk
Management and pursue stable ratings from our rating agencies.
From the actions above, I believe you can see that we have
delivered on the commitment to put the SCA overhang firmly
behind us and this will allow us to emphasize again XL's world
class reputation as an insurer and reinsurer.  The transactions
contemplated by the Master Agreement eliminates more than 98% of
the exposure from SCA and the remainder is likely to be
eliminated.  Even if this remainder is not eliminated, these
residual contracts are performing well and we have not been
advised of any losses to SCA under these contracts.”

Mr. McGavick noted, “As part of its efforts to refocus XL
Capital on the property and casualty roots, the company is also
exploring strategic opportunities related to its Life
Reinsurance operations.  This review, along with the appointment
of a new Chief Enterprise Risk Officer, which I hope to announce
shortly, forms part of its enhanced commitment to risk
management.  The capital raise reflects my desire to maintain a
capital cushion with each of the major rating agencies allowing
the company to focus exclusively on its core P&C Insurance and
Reinsurance businesses.  XL Capital's investment in its
operational transformation program is also critical to achieving
growth aspirations and continuing to deliver value to its
customers and shareholders.  It matches the commitment to
maintaining the company's position as a global commercial
insurance leader by continuing to deliver the quality coverage
products and services long associated with the XL brand.”

Mr. McGavick said, “Further, given the softening market
conditions, we will take actions during the remainder of 2008 to
eliminate between US$110 million and US$120 million from XL's
run rate operating expenses from 2009 onwards, reducing XL's
expense base by approximately US$70 million from 2008 levels.
As a result of this we expect to record a charge of between
US$50 million and US$60 million in the remainder of 2008.  This
expense reduction will involve all parts of the organization
geographically but the primary emphasis will be on streamlining
corporate functions.  This will be achieved through job
eliminations, increased outsourcing and the cessation of certain
projects and activities.”

                  Executive Management Changes

Executive Vice President and Chief Operating Officer, Henry
Keeling will retire from the company effective Aug. 1, 2008.  As
a result of Henry's decision to retire, the role of the Chief
Operating Officer will be eliminated.  Mr. McGavick commented:
“Regrettably Henry has decided to retire.  Henry has driven our
successful dual platform strategy in our P&C businesses as
well as leading our Life Reinsurance business.  He has made a
significant contribution in many parts of the organization since
he joined the XL group in 1993.  The Board of Directors and all
of Henry's XL colleagues appreciate his leadership and
commitment throughout his tenure at XL, but in particular
through these recent challenging times.”

Michael “Spike” Lobdell will leave his current position of
Executive Vice President and Chief Executive of Global Business
Services, effective Aug. 31, 2008.

Mr. McGavick thanked Spike for his commitment and leadership to
Global Business Services, commenting, “The decision Spike and I
came to to realign the majority of Global Business Services
within the business operations means that the current executive
structure will no longer be required.  Spike has led this area
through significant change over the past two years and I want to
thank him for his leadership and selflessness.”

In addition, Fiona Luck, Executive Vice President and Chief of
Staff, will become Special Advisor to the CEO, based in Bermuda
and London and with a reduced time commitment.  She will step
down from her current role and the senior leadership group on
Aug. 1, 2008, at which time the role of Chief of Staff will be
eliminated.  Mr. McGavick commented, “I look forward to having
continued access to Fiona's knowledge and expertise as I work
with my new senior leadership group.”

Mr. McGavick also announced that Susan Cross, Global Chief
Actuary, will join the senior leadership group with immediate
effect.

Mr. McGavick stated, “Each of these management changes are
occurring for different reasons, but XL has great bench strength
which I am determined to retain.  To do so and to motivate
success, we will make a limited number of targeted option
awards.  Options awarded to the most senior executives will have
a performance vesting feature.  I have complete confidence that
our new streamlined leadership will deliver on our refined
strategy.  Indeed, I believe all of our actions today will
reinforce the confidence of our customers and investors in the
strength of our underlying businesses which continue to perform
strongly.”

                     About XL Capital Ltd.

Headquartered in Bermuda, XL Capital Ltd. --
http://www.xlcapital.com/-- writes liability insurance and
reinsurance worldwide, specializing in low-frequency, high-
severity risks from riots to natural disasters.  The company
writes policies through numerous subsidiaries, many of them
offshore, and also manages a Lloyd's of London syndicate.  XL's
coverage includes general and executive liability, property, and
political risk insurance.  Its reinsurance covers property,
aviation, energy, nuclear accident, and professional indemnity.

                         *     *     *

As reported in the Troubled Company Reporter-Latin America on
April 3, 2008, Fitch Ratings downgraded XL Capital Ltd.'s Class
A1 to 'BB' from 'A' and Class A2 to 'BB' from 'A' and removed it
from Rating Watch Negative.  Fitch also downgraded XLCA's
Insurer Financial strength rating to 'BB' and removed the IFS
from Rating Watch Negative.


XL CAPITAL: Signs Master Agreement with Security Capital
--------------------------------------------------------
XL Capital Ltd. and certain of its subsidiaries have entered
into an agreement (Master Agreement) with Security Capital
Assurance Ltd. and its subsidiaries in connection with the
termination of certain reinsurance and other agreements.
Certain of the counterparties to credit default swap agreements
with Security Capital are also parties, and others may become
parties, to the Master Agreement.  Such counterparties that are
or become party to the Master Agreement are herein called the
“Counterparties”.

The Master Agreement provides for the payment by XL Capital to
Security Capital of US$1.775 billion in cash, the issuance by
the company to Security Capital of eight million Class A
Ordinary Shares to be newly issued by XL Capital and the
transfer by the company of all of the shares it owns in Security
Capital (representing approximately 46% of Security Capital's
issued and outstanding shares) to a trust.  This consideration
will be made in exchange for, among other things, the full and
unconditional:

  -- commutation of the Third Amended and Restated Facultative
     Quota Share Reinsurance Treaty, effective July 1, 2006,
     between XL Financial Assurance Ltd. and XL Capital
     Assurance Inc., and all individual risk cessions
     thereunder, as a result of which the guarantee by XL
     subsidiary XL Insurance (Bermuda) Ltd. of XL Financial's
     obligations to XL Capital Assurance thereunder will no
     longer have any force or effect;

  -- commutation of the Excess of Loss Reinsurance Agreement,
     executed on Oct. 3, 2001, pursuant to which XL Insurance
     (Bermuda) agreed to reinsure certain liabilities of XL
     Financial (Excess of Loss Agreement);

  -- commutation of the Second Amended and Restated Facultative
     Master Certificate, effective March 1, 2007, pursuant to
     which XL Re America, Inc. agreed to reinsure certain
     liabilities of XL Capital Assurance, and all individual
     risk cessions thereunder (XL Re America Master Facultative
     Agreement);

  -- commutation of the Facultative Quota Share Reinsurance
     Agreement, effective Aug. 17, 2001, as amended by Amendment
     No. 1 to such agreement, dated as of Aug. 4, 2006, pursuant
     to which XL Insurance (Bermuda) agreed to reinsure certain
     liabilities of XL Financial and all individual risk
     cessions thereunder;

  -- commutation of the Adverse Development Reinsurance
     Agreement, dated as of Aug. 4, 2006, between XL Capital
     Assurance and XL Re America, and the Indemnification
     Agreement, dated as of Aug. 4, 2006, between XL Financial
     and XL Insurance (Bermuda); and

  -- termination of certain indemnification and services
     agreements between XL Capital and Security Capital.

After giving effect to the closing of the Master Agreement,
US$64.6 billion of the company's total net exposure (which was
US$65.7 billion as at June 30, 2008) under reinsurance
agreements and guarantees with Security Capital subsidiaries
will be eliminated.

Pursuant to the terms of the Master Agreement, Security Capital
will be required to use commercially reasonable efforts to
commute the agreements that are the subject of the company's
guarantee of XL Capital Assurance's obligations under certain
financial guarantees issued by XL Capital Assurance to European
Investment Bank (EIB Policies), subject to certain limitations.
In the event such commutations are not completed by the closing
of the Master Agreement, XL Capital's exposures
relating to the EIB Policies (which relate to project finance
transactions) as of June 30, 2008 would be approximately
US$1.1 billion.

The company expects to record a charge of between US$1.4 billion
and US$1.5 billion in respect of the Master Agreement in the
quarter ending Sept. 30, 2008.

It is expected that the Security Capital Shares will be
transferred at closing of the Master Agreement into a trust for
the benefit of XL Financial and/or XL Capital Assurance until
such time as an agreement between XL Capital Assurance and the
Counterparties is reached, and thereafter the trust will act for
the benefit of the Counterparties.  To the extent that the
required regulatory approvals for the transfer are not received
prior to such closing, the Security Capital Shares will be
deposited into escrow pending the transfer.  Upon any such
deposit into escrow, XL Capital will irrevocably disclaim any
and all voting, economic or other rights with respect to the
Security Capital Shares.

As part of the transaction, the Counterparties will provide
releases to XL Capital and Security Capital.

The company and Security Capital have obtained approval from the
New York State Insurance Department for the Master Agreement and
each of the commutations to which XL Re America or XL Capital
Assurance is a party.  Security Capital has also obtained
applicable approvals from the Bermuda Monetary Authority, the
Delaware Insurance Department and other regulators.

In addition to customary closing conditions, the Master
Agreement is conditioned on the commutation by Security Capital
of the Amended and Restated Master Facultative Reinsurance
Agreement, dated Nov. 3, 1998, between Financial Security
Assurance, Inc. (Financial Security) and XL Financial, and all
individual risk cessions thereunder.  As a result of this
commutation, XL Capital's guarantee of XL Financial's
obligations thereunder (Financial Security Guarantee) will no
longer have any force or effect.  Security Capital has entered
into an agreement with Financial Security to commute such
agreement simultaneously with the closing of the Master
Agreement.

The closing is also conditioned upon the termination of eight
Merrill Lynch International asset backed security collateralized
debt obligation credit default swaps entered into between
Merrill Lynch and Security Capital.  Security Capital has
entered into an agreement with Merrill Lynch to terminate such
agreements simultaneous with the closing of the Master
Agreement.

The closing of the Master Agreement is also conditioned upon the
successful completion of XL Capital's capital raise.  The
closing of the transactions contemplated by the Master Agreement
is expected to take place in early August 2008 and concurrently
with the closing of the capital raise.  The parties may choose
to terminate the Master Agreement if the closing does not occur
by Aug. 15, 2008.

In order to fund the payments described above, XL Capital
separately announced that it currently plans to sell
approximately US$2.5 billion of securities in a combination of
ordinary shares and equity security units pursuant to the
company's existing shelf registration statement.

                        Other Transactions

XL Capital also intends to (i) exercise the put option under its
Mangrove Bay contingent capital facility entered into in July
2003 resulting in net proceeds to the company of approximately
US$500 million in exchange for the issuance by the company of
20,000,000 Series C Preference Ordinary Shares and (ii) upon XL
Capital's completion of its capital raise and the closing of the
transactions contemplated by the Master Agreement, redeem XL
America, Inc.'s outstanding US$255 million 6.58% Guaranteed
Senior Notes due April 2011.  In connection with this
redemption, the company expects to record an additional charge
of approximately US$21.8 million in the quarter ending Sept. 30,
2008.

                    About XL Capital Ltd.

Headquartered in Bermuda, XL Capital Ltd. --
http://www.xlcapital.com/-- writes liability insurance and
reinsurance worldwide, specializing in low-frequency, high-
severity risks from riots to natural disasters.  The company
writes policies through numerous subsidiaries, many of them
offshore, and also manages a Lloyd's of London syndicate.  XL's
coverage includes general and executive liability, property, and
political risk insurance.  Its reinsurance covers property,
aviation, energy, nuclear accident, and professional indemnity.

                         *     *     *

As reported in the Troubled Company Reporter-Latin America on
April 3, 2008, Fitch Ratings downgraded XL Capital Ltd.'s Class
A1 to 'BB' from 'A' and Class A2 to 'BB' from 'A' and removed it
from Rating Watch Negative.  Fitch also downgraded XLCA's
Insurer Financial strength rating to 'BB' and removed the IFS
from Rating Watch Negative.


XL CAPITAL: Will Axe Jobs to Reduce Operating Costs
---------------------------------------------------
XL Capital Ltd. is planning to cut jobs in order to slash more
than US$100 million from its operating costs, Jonathan Kent of
Royal Gazzette reports.

According to Royal Gazzette, XL Chief Executive Officer Mike
McGavick said the move's main emphasis will be on streamlining
corporate functions although the cost reduction will include all
parts of the organization geographically, adding that it will
increase outsourcing and the cessation of certain projects and
activities.

Headquartered in Bermuda, XL Capital Ltd. --
http://www.xlcapital.com/-- writes liability insurance and
reinsurance worldwide, specializing in low-frequency, high-
severity risks from riots to natural disasters.  The company
writes policies through numerous subsidiaries, many of them
offshore, and also manages a Lloyd's of London syndicate.  XL's
coverage includes general and executive liability, property, and
political risk insurance.  Its reinsurance covers property,
aviation, energy, nuclear accident, and professional indemnity.

                         *     *     *

As reported in the Troubled Company Reporter-Latin America on
July 7, 2008, Standard & Poor's Ratings Services placed its
ratings on XL Capital Group on CreditWatch with negative
implications stating its concern that “earnings, capitalization,
and financial flexibility might be adversely affected by the
uncertainty surrounding XL's outstanding reinsurance agreements
and guarantee of business underwritten by the operating
subsidiaries of bond insurer Security Capital Assurance, or SCA,
prior to the SCA IPO by XL in August 2006.”

As reported in the Troubled Company Reporter-Latin America on
April 3, 2008, Fitch Ratings downgraded XL Capital Ltd.'s Class
A1 to 'BB' from 'A' and Class A2 to 'BB' from 'A' and removed it
from Rating Watch Negative.  Fitch also downgraded XLCA's
Insurer Financial strength rating to 'BB' and removed the IFS.



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

AMERICAN AXLE: Posts US$644.3 Mil. Net Loss in 2nd Quarter 2008
---------------------------------------------------------------
American Axle & Manufacturing Holdings Inc. reported a net loss
of US$644.3 million for the second quarter ended June 30, 2008,
compared with net income of US$34.6 million in the same period
last year.

Net sales were US$490.5 million in the second quarter of 2008 as
compared to US$916.5 million in the second quarter of 2007.
Sales in the second quarter of 2008 were adversely affected by
the 87-day International UAW strike as well as a reduction in
consumer demand for the company's major full-size truck and SUV
programs for GM and Chrysler and the company's mid-size light
truck and SUV programs for GM.

On Feb. 25, 2008, the International United Automobile, Aerospace
and Agricultural Implement Workers of America (UAW) called a
strike at the company's original five facilites in Michigan and
New York upon expiration of the four-year master labor agreement
between the company and the International UAW.  The strike was
resolved on May 23, 2008, when UAW represented associates at
these locations ratified the master and local labor agreements.

The company estimates the adverse impact of the strike on net
sales in the second quarter of 2008 was US$274.9 million.

Gross profit (loss) was a loss of US$527.9 million in the second
quarter of 2008 as compared to profit of US$113.7 million in the
second quarter of 2007.  Gross margin was negative 107.6% in the
second quarter of 2008 as compared to 12.4% in the second
quarter of 2007.  The decrease in gross profit and gross margin
in the second quarter of 2008 reflects the impact of the
International UAW strike, lower sales, and special charges and
other non-recurring operating costs totaling US$517.8 million.

The special charges and other non-recurring operating costs
include US$131.2 million for the Special Separation Program
(SSP) offered to all UAW represented associates at the company's
original locations, US$6.1 million in termination benefits for
associates represented by the International Association of
Machinists, US$329.9 million in asset impairments, indirect
inventory obsolescence and idled leased assets, US$19.1 million
for signing bonuses, US$18.0 million relating to supplemental
unemployment benefits to be payable to current UAW represented
associates during the new labor agreements, a US$6.4 million
special charge for salaries workforce reductions, and
US$7.4 million for plant closure costs and charges.

Gross profit in the second quarter of 2007 includes
US$7.0 million in special charges, primarily related to
attrition program activity.

Operating income (loss) was a loss of US$572.8 million in the
second quarter of 2008 as compared to income of US$59.5 million
in the second quarter of 2007.  Operating margin was negative
116.8% in the second quarter of 2008 as compared to 6.5% in the
second quarter of 2007.   The company estimates the reduction in
operating income resulting from the strike in the second quarter
of 2008 to be US$86.6 million.

Income tax expense was US$59.1 million in the second quarter of
2008 as compared to US$5.3 million in the second quarter of
2007.

Net cash used in operating activities in the second quarter of
2008 was US$84.2 million as compared to net cash provided by
operating activities of US$224.8 million in the same period last
year.  Capital spending for the second quarter of 2008 was
US$33.6 million as compared to US$33.0 million in the second
quarter of 2007.  Reflecting the impact of this activity and
dividend payments of US$8.2 million, the company's free cash
flow use of US$123.7 million in the second quarter of 2008
compared to US$183.8 million of positive free cash flow in the
second quarter of 2007.

The company's results in the first half of 2008 were a net loss
of US$671.3 million.  This compares to net earnings of
US$50.3 million in the second half of 2007.  Net sales in the
first half of 2008 were US$1.1 billion as compared to
US$1.7 billion in the first half of 2007.  The company's
operating loss in the first half of 2008 was US$609.5 million as
compared to operating income of US$95.9 million for the first
half of 2007.  For the first half of 2008, the company estimates
the reduction in sales and operating income resulting from the
International UAW strike to be US$414.0 million and
US$129.4 million, respectively.

                          Balance Sheet

At June 30, 2008, the company's consolidated balance sheeet
showed US$2.5 billion in total assets, US$2.2 billion in total
liabilities, and US$315.3 million in total stockholders' equity.

Full-text copies of the company's consolidated financial
statements for the quarter ended June 30, 2008, are available
for free at http://researcharchives.com/t/s?301b

                       About American Axle

Headquartered in Detroit, Michigan, American Axle &
Manufacturing Holdings Inc. (NYSE: AXL) -- http://www.aam.com/
-- is a world leader in the manufacture, engineering, design and
validation of driveline and drivetrain systems and related
components and modules, chassis systems and metal-formed
products for trucks, sport utility vehicles, passenger cars and
crossover utility vehicles.  In addition to locations in the
United States (Michigan, New York, Ohio and Indiana), the
company also has offices or facilities in Brazil, China,
Germany, India, Japan, Luxembourg, Mexico, Poland, South Korea,
Thailand and the United Kingdom.

                          *     *     *

As reported in the Troubled Company Reporter-Latin America on
July 1, 2008, Moody's Investors Service lowered American Axle &
Manufacturing Holdings Inc.'s Corporate Family Rating to B1 from
Ba3, as well as the senior unsecured rating to B1 from Ba3 on
American Axle & Manufacturing Inc.'s notes and term loan.  The
outlook is stable.  The Speculative Grade Liquidity Rating also
has been lowered to SGL-3 from SGL-2.


AMR CORP: S&P Cuts Ratings on Neg. Cash Flow; Outlook Negative
--------------------------------------------------------------
Standard & Poor's Ratings Services has lowered its ratings on
AMR Corp. (B-/Negative/B-3) and subsidiary American Airlines
Inc. (B-/Negative/--), including lowering the long-term
corporate credit ratings on both entities to 'B-' from 'B', and
removed the ratings from CreditWatch, where they had been placed
with negative implications May 22, 2008.  The outlook is
negative.  S&P affirmed the 'B-3' short-term rating on AMR and
removed the rating from CreditWatch.

The downgrade reflects expected heavy losses and negative
operating cash flow caused by record high fuel prices.  S&P also
lowered ratings on most enhanced equipment trust certificates of
American, in some cases by more than one notch.  Ratings on
airport revenue bonds that S&P considers equivalent to unsecured
debt were not lowered, as they are already rated 'CCC+', which
is the rating to which S&P lowered unsecured debt.  All ratings
were removed from CreditWatch, where they were placed with
negative implications on May 22, 2008, as part of an
industrywide review.

“We expect AMR to report a heavy loss this year, which we
estimate could exceed $2 billion [before charges for asset
writedowns and gains on sale of assets], because of very high
and volatile, albeit recently reduced, fuel prices,” said S&P's
credit analyst Philip Baggaley.  AMR reported a net loss of
US$1.45 billion (including US$55 million of employee severance
costs and a US$1.1 billion charge to write down the value of its
MD80 and Embraer RJ-135 fleets) in the second quarter of 2008.
American is accelerating fleet modernization to replace fuel-
thirsty MD80s with new B737-800s, but this will take a long
time, as its fleet includes more than 300 MD80s.

Ratings on Fort Worth, Texas-based AMR and subsidiary American
Airlines reflect participation in the competitive, cyclical, and
capital-intensive airline industry; a heavy debt and retiree
obligation burden; and substantial capital spending needs to
modernize the airline's fleet.  Satisfactory near-term
liquidity, with US$5.1 billion of unrestricted cash and short-
term investments at June 30, 2008, and substantial market
positions in the U.S. domestic, trans-Atlantic, and Latin
American markets (though a minimal presence in the Pacific) are
positives.

The 'B-' corporate credit rating is predicated on AMR incurring
a heavy loss in 2008, which could exceed US$2 billion, and a
substantial but reduced loss next year.  S&P also anticipates
that AMR will experience a reduction in its unrestricted cash
and short-term investments from the US$5.1 billion at June 30,
2008.  The negative outlook reflects our concern that a
potential continuation of heavy losses could erode liquidity.
If S&P expects that losses will continue at the current rate or
it projects that unrestricted cash will decline below
US$3 billion in 2009, S&P would likely lower the rating.

Headquartered in Forth Worth, Texas, AMR Corporation (NYSE:
AMR) operates with its principal subsidiary, American Airlines
Inc. -- http://www.aa.com/-- a worldwide scheduled passenger
airline.  At the end of 2006, American provided scheduled jet
service to about 150 destinations throughout North America, the
Caribbean, Latin America, including Brazil, Europe and Asia.
American is also a scheduled airfreight carrier, providing
freight and mail services to shippers throughout its system.

Its wholly owned subsidiary, AMR Eagle Holding Corp., owns two
regional airlines, American Eagle Airlines Inc. and Executive
Airlines Inc., and does business as “American Eagle”.  American
Beacon Advisors Inc., a wholly owned subsidiary of AMR, is
responsible for the investment and oversight of assets of AMR's
U.S. employee benefit plans, as well as AMR's short-term
investments.


BANCO DO BRASIL: Forms Alliance With FirstRand for Car Loans
------------------------------------------------------------
Banco do Brasil SA has entered into a partnership agreement with
FirstRand Ltd. to offer car loans in Brazil, Telma Marotto of
Bloomberg News reports.

According to Bloomberg News, Banco do Brasil said the
partnership will give the bank a 73.5% share, through its
subsidiary BB Banco de Investimento.  FirstRand, through its
FirstRand Bank Holdings Ltd., will hold a 26.5 percent stake.

The bank's Vice President Aldemir Bendine, Bloomberg News
relates, disclosed that the credit market has potential to be
more and more mature in Brazil.

Citing the Brazilian association of automakers' financing units,
Bloomberg News states that lending to consumers and leasing
transactions for car buyers rose 43% in the 12 months ended in
May to BRL126.7 billion (US$80.4 billion).  In June, Brazilian
new-vehicle sales gain 29% as falling unemployment and growth in
incomes drived consumers to make huge buys.

Mr. Bendine said the venture targeted a 20% of the total auto
lending market within eight years and the operations will likely
start in 2009 and break even in 2010.  The bank is planing a
BRL980 million investment in the first two years and aiming to
be among the three largest auto finance companies in the country
while FirstRand will invest about BRL330 million, Mr. Bendine
added, as cited by Bloomberg News.

                      About Banco do Brasil

Banco do Brasil SA is Brazil's federal bank and is the largest
in Latin America with some 20 million clients and more than
7,000 points of sale (3,200 branches) in Brazil, and 34 offices
and partnerships in 26 other countries.  In addition to its
traditional retail banking services, Banco do Brasil underwrites
and sells bonds, conducts asset trading, offers investors
portfolio management services, conducts financial securities
advising, and provides market analysis and research.

                        *     *     *

On Feb. 29, 2008, Moody's Investors Rating Service assigned a
Ba2 foreign currency deposit rating to Banco do Brasil.


BANCO FIBRA: Increases Capital by BRL275 Million
------------------------------------------------
Banco Fibra S.A. increased its capital on July 23, 2008, by
BRL275 million, raising its shareholders' equity to
approximately BRL800 million.  The capital increase was
underwritten jointly and proportionally by the bank's
shareholders, the Vicunha Group and the International Finance
Corporation, whose respective stakes of 92.1% and 7.9% in the
bank remained unchanged.

As a result of this capital increase, Banco Fibra's capital
ratio will exceed 15%, allowing it to continue to pursue its
growth strategy, in line with the sector's evolution.

In just one year, Banco Fibra reported substantial performance
results, rising to a return on average equity of 22.9% p.a., in
the first half of 2008, up from 14% p.a. before.  The bank has
been focusing on fundamentals and attaining a consistent
improvement of its main indicators.

Despite the international financial crisis, the banking sector
has reflected growth opportunities on the domestic front, as a
result of buoyant demand for credit and services.  Abroad, even
though a certain downtrend and price pressures are at play,
Banco Fibra floated two issues this year that amounted to
US$300 million, with spreads substantially lower than those of
its peers and positive performance in the secondary market,
reflecting its investors' trust.

Banco Fibra is attuned to acquisition opportunities that may
appear in the market.  Its focus is profitability based on the
quality of its services.  The organization is poised for prompt
action in the market's different segments.

Regarding its initial public offering, if the capital market
continues to be unfavorable, failing to properly reflect the
organization's capacity for generating economic value, its
shareholders are committed to underwriting further capital
increase, as necessary.  Banco Fibra enjoys the trust of its
shareholders, a sound capital base and qualified professionals
in its quest for growth; it is therefore able to wait for the
optimum moment in which to go public.

The capital increase was ratified in the bank's Special General
Meeting held on July 21, 2008, and is now in the process of
being approved by Brazil's Central Bank.

Banco Fibra will release its full financial statements for the
first half of 2008 on Aug. 19.

Banco Fibra S.A. -- http://www.bancofibra.com.br/-- is a
commercial midsize Brazilian bank.  Despite its relatively small
market share, Banco Fibra is among the top banks operating in
the small corporates and middle-market companies segment.  Banco
Fibra is the financial arm of a large traditional conglomerate
in Brazil, owned by the Steinbruch family, with important
operations in the textile (Vicunha Txtil; not rated), steel
(Companhia Siderurgica Nacional; BB/Stable/--), and gas (CEGAS;
not rated) sectors.  As of March 30, 2007, Banco Fibra reached
US$215 million in equity and US$4.05 billion in total assets.

                        *     *     *

As reported in the Troubled Company Reporter-Latin America on
June 11, 2008, Standard & Poor's Ratings Services assigned its
'BB-' foreign-currency long-term debt rating to the
US$150 million unsecured, unsubordinated three-year notes,
issued by Banco Fibra SA (BB-/Stable/B global scale,
brA/Stable/brA-2 Brazil national scale ratings), acting through
its Cayman Islands branch.


DELPHI CORP: Appaloosa Balks at GM Engaging in Adversary Suit
-------------------------------------------------------------
A-D Acquisition Holdings, LLC, and Appaloosa Management L.P.
oppose the participation of General Motors Corporation as party-
in-interest with respect to Delphi Corp.'s US$2,550,000,000
adversary complaint against Appaloosa and other Plan Investors.

As disclosed in the Troubled Company Reporter on July 15, 2008,
GM sought authority from the U.S. Bankruptcy Court for the
Southern District of New York to participate in the adversary
proceedings filed by Delphi Corp. against Appaloosa, Management,
L.P., et al.  GM wants to participate in the proceedings as a
“party-in-interest”.

Delphi's ties with Appaloosa, et al., soured after Delphi sought
funding of the US$2,825,000,000 of its US$6,100,000,000 exit
debt financing facility from General Motors, its primary
customer.  The lenders, including GM, were ready to close
April 4, but the financing agreements have been terminated after
Appaloosa, et al., pulled out from their commitment to provide
US$2,550,000,000 of equity financing to Delphi.

Douglas P. Baumstein, Esq., at White & Case LLP, in New York,
says that ADAD and AMLP anchor their opposition on GM's failure
to adequately define what a “party in interest” means, given
that it seeks to participate in the adversary proceeding in a
limited capacity, yet it seeks rights afforded only to full
parties to a proceeding without undertaking the obligations of a
party.

Mr. Baumstein admits that some of the relief sought by GM is
acceptable, “but much of the relief it seeks goes well beyond
that to which a party in interest is entitled,” Mr. Baunstein
says.

Mr. Baumstein anticipates that at this time, GM does not seek to
intervene in the proceedings, however, it seeks court authority
to (i) appear before the Court on any matter arising in the
Adversary Proceeding, including hearings and chamber
conferences, (ii) participate in any settlement discussions,
mediation sessions and arbitrations regarding the Adversary
Proceeding, and (iii) participate in the discovery process,
including through the review of documents produced and
attendance at depositions.

Mr. Baumstein argues that GM is not entitled to participate so
as to fully monitor the progress and status of the Adversary
Proceeding and to permit involvement in activities likely to
affect or overlap with a new plan, contrary to the relief it
seeks.  Mr. Baumstein then cites the grounds for ADAH and AMLP's
objections:

  (1) GM should only be permitted to appear in the litigation so
      long as it limits itself to the role of observer and does
      not duplicate effort or unduly burden the parties.

        It is not clear that GM is willing to limit its role, as
        GM seeks to participate in the action by appearing
        before the Court on “any matter arising in the Adversary
        Proceeding” including by appearing at the chambers'
        conferences.  This right is inconsistent with the
        monitoring function GM purports to seek.

  (2) There is no basis for GM's request to participate in any
      settlement negotiations.

        GM has articulated no concrete interest or right of its
        own that is at stake in this proceeding.  Instead, GM
        purports to seek participation on a limited basis in
        order to inform its own position in negotiations of a
        modified or new plan of reorganization that is not
        before this Court in this proceeding.

  (3) GM should not be permitted to seek discovery without first
      intervening as a party.

        The right to serve discovery requests is one reserved to
        full parties at an action, which GM is not and does not
        seek.

Harbinger Del-Auto Investment Company Ltd. and  Merrill Lynch,
Pierce, Fenner & Smith Incorporated have joined in Appaloosa's
objection.  Both parties request the Court to deny GM's motion
to participate in the adversary proceeding as party-in-interest.

                            About GM

Based in Detroit, Michigan, General Motors Corp. (NYSE:
GM) -- http://www.gm.com/-- was founded in 1908.  GM employs
about 266,000 people around the world and manufactures cars and
trucks in 35 countries.  In 2007, nearly 9.37 million GM cars
and trucks were sold globally under the following brands: Buick,
Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel,
Pontiac, Saab, Saturn, Vauxhall and Wuling.  GM's OnStar
subsidiary is the industry leader in vehicle safety, security
and information services.

At March 31, 2008, GM's balance sheet showed total assets of
US$145,741,000,000 and total debts of US$186,784,000,000,
resulting in a stockholders' deficit of US$41,043,000,000.
Deficit, at Dec. 31, 2007, and March 31, 2007, was
$37,094,000,000 and US$4,558,000,000, respectively.

                          About Delphi

Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ)
-- http://www.delphi.com/-- is the single supplier of vehicle
electronics, transportation components, integrated systems and
modules, and other electronic technology.  The company's
technology and products are present in more than 75 million
vehicles on the road worldwide.  Delphi has regional
headquarters in Japan, Brazil and France.

The company filed for Chapter 11 protection on Oct. 8, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-44481).  John Wm. Butler Jr.,
Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden,
Arps, Slate, Meagher & Flom LLP, represent the Debtors in their
restructuring efforts.  Robert J. Rosenberg, Esq., Mitchell A.
Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP,
represent the Official Committee of Unsecured Creditors.  As of
March 31, 2007, the Debtors' balance sheet showed
US$11,446,000,000 in total assets and US$23,851,000,000 in total
debts.

The Court approved Delphi's First Amended Joint Disclosure
Statement and related solicitation procedures for the
solicitation of votes on the First Amended Plan on Dec. 20,
2007.  The Court confirmed the Debtors' First Amended Plan on
Jan. 25, 2008.  The Plan has not been consummated after a group
led by Appaloosa Management, L.P., backed out from their
proposal to provide US$2,550,000,000 in equity financing to
Delphi.

(Delphi Bankruptcy News, Issue No. 138; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000)


DELPHI CORP: Allowed to Pursue US$2.55 Fraud Claim vs. Appaloosa
----------------------------------------------------------------
Judge Robert Drain of the U.S. Bankruptcy Court for the Southern
District of New York denied Appaloosa Management, L.P., and
other investors' motions for dismissal of the US$2.55 billion
lawsuits filed by Delphi Corporation against them.

Delphi sued Appaloosa and seven other parties, which include
Merrill Lynch, UBS Securities and Goldman Sachs, after they
withdrew from their commitment to provide exit equity financing
for Delphi, which was supposed to exit bankruptcy in April 2008.

The David Tepper-led Appaloosa terminated their US$2.55-billion
investment agreement after Delphi allowed General Motors Corp.
to fund up to US$2,825,000,000 of its US$6,100,000,000 exit debt
financing.  Appaloosa, et al., argued that Delphi was barred
under their Equity Purchase and Commitment Agreement to enter
into transactions with GM outside the ordinary course of
business.

Appaloosa moved for the dismissal of the lawsuits, saying that
Delphi cannot seek specific performance of the Plan Investors
under the EPCA because Delphi itself cannot allege that it is
presently ready, willing  and able to perform under the EPCA.
Delphi terminated its US$6-billion debt financing agreements
with other investors after Appaloosa, et al., terminated the
EPCA on April 4.

According to The Wall Street Journal, Judge Drain ruled that
Delphi can pursue its fraud claim against Appaloosa.  Judge
Drain, according to the report, dismissed a portion of Delphi's
complaint, but he rejected most of the defendants' arguments.

Delphi said that Appaloosa defrauded the Court, the Debtors and
various stakeholders by affirmatively stating that it had every
intention of performing its obligations to the Debtors under the
EPCA when, in fact, it had no such intention.  David Tepper
testified before the Court that the Plan Investors will fully
honor their commitments, which led to the Court's approval of
Delphi's Joint Plan of Reorganization, which consummation
required the US$2.55 billion financing from the Plan Investors.

                          About Delphi

Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ)
-- http://www.delphi.com/-- is the single supplier of vehicle
electronics, transportation components, integrated systems and
modules, and other electronic technology.  The company's
technology and products are present in more than 75 million
vehicles on the road worldwide.  Delphi has regional
headquarters in Japan, Brazil and France.

The company filed for Chapter 11 protection on Oct. 8, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-44481).  John Wm. Butler Jr.,
Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden,
Arps, Slate, Meagher & Flom LLP, represent the Debtors in their
restructuring efforts.  Robert J. Rosenberg, Esq., Mitchell A.
Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP,
represent the Official Committee of Unsecured Creditors.  As of
March 31, 2007, the Debtors' balance sheet showed
US$11,446,000,000 in total assets and US$23,851,000,000 in total
debts.

The Court approved Delphi's First Amended Joint Disclosure
Statement and related solicitation procedures for the
solicitation of votes on the First Amended Plan on Dec. 20,
2007.  The Court confirmed the Debtors' First Amended Plan on
Jan. 25, 2008.  The Plan has not been consummated after a group
led by Appaloosa Management, L.P., backed out from their
proposal to provide US$2,550,000,000 in equity financing to
Delphi.

(Delphi Bankruptcy News; Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)


DELPHI CORP: Negotiating New or Amended Plan with GM and Panel
--------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in the
bankruptcy cases of Delphi Corp. and its debtor-affiliates says
it is actively negotiating with the Debtors to reach mutually
acceptable modification of the current Joint Plan of
Reorganization of the Debtors, following Appaloosa Management,
L.P., et al.'s decision to back out from their US$2,550,000,000
exit financing agreement, and in light of the Debtors' pending
lawsuit against Appaloosa, et al.

Committee counsel Edward M. Fox, Esq., at K&L Gates, LLP, in New
York, says that if the negotiations don't achieve the
resolution, it will pursue its adversary proceeding, seeking the
revocation of the order confirming the Plan, which the Committee
says it accepted based upon the “promissory fraud of Appaloosa”.

As reported in the Troubled Company Reporter on July 15, 2008,
General Motors Corp., in its request to join as party-in-
interest in Delphi's adversary proceedings against Appaloosa, et
al., said it is a major constituent of a new plan under
negotiation together with Delphi and Creditors Committee.  GM
has been asked to provide major support through financial
contributions, subsidies and loans, its counsel Michael P.
Kessler, Esq., at Weil, Gotshal & Manges LLP, in New York,
disclosed.

GM also had said its interest in participating in the
US$2,550,000,000 lawsuits is in the litigation's representation
of a significant asset of the Debtors' estates.  The terms and
conditions of a modified or new plan will depend, in part, on
the value ascribed to the litigation and the disposition of any
recoveries from the litigation, Mr. Kessler said.

                            About GM

Based in Detroit, Michigan, General Motors Corp. (NYSE:
GM) -- http://www.gm.com/-- was founded in 1908.  GM employs
about 266,000 people around the world and manufactures cars and
trucks in 35 countries.  In 2007, nearly 9.37 million GM cars
and trucks were sold globally under the following brands: Buick,
Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel,
Pontiac, Saab, Saturn, Vauxhall and Wuling.  GM's OnStar
subsidiary is the industry leader in vehicle safety, security
and information services.

At March 31, 2008, GM's balance sheet showed total assets of
US$145,741,000,000 and total debts of US$186,784,000,000,
resulting in a stockholders' deficit of US$41,043,000,000.
Deficit, at Dec. 31, 2007, and March 31, 2007, was
$37,094,000,000 and US$4,558,000,000, respectively.

                          About Delphi

Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ)
-- http://www.delphi.com/-- is the single supplier of vehicle
electronics, transportation components, integrated systems and
modules, and other electronic technology.  The company's
technology and products are present in more than 75 million
vehicles on the road worldwide.  Delphi has regional
headquarters in Japan, Brazil and France.

The company filed for Chapter 11 protection on Oct. 8, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-44481).  John Wm. Butler Jr.,
Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden,
Arps, Slate, Meagher & Flom LLP, represent the Debtors in their
restructuring efforts.  Robert J. Rosenberg, Esq., Mitchell A.
Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP,
represent the Official Committee of Unsecured Creditors.  As of
March 31, 2007, the Debtors' balance sheet showed
US$11,446,000,000 in total assets and US$23,851,000,000 in total
debts.

The Court approved Delphi's First Amended Joint Disclosure
Statement and related solicitation procedures for the
solicitation of votes on the First Amended Plan on Dec. 20,
2007.  The Court confirmed the Debtors' First Amended Plan on
Jan. 25, 2008.  The Plan has not been consummated after a group
led by Appaloosa Management, L.P., backed out from their
proposal to provide US$2,550,000,000 in equity financing to
Delphi.

(Delphi Bankruptcy News, Issue No. 138; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000)


DELPHI CORP: WTC, Panel Want Plan Confirmation Order Revoked
------------------------------------------------------------
Wilmington Trust Company, as indenture trustee to
US$2,000,000,000 of notes issued by Delphi Corp. and its debtor-
affiliates, and the Official Committee of Unsecured Creditors in
the case asks the Hon. Robert Drain of the U.S. Bankruptcy Court
for the Southern District of New York to revoke his Jan. 25,
2008 order confirming the Debtors' Joint Plan of Reorganization
after allegations that Appaloosa Management, L.P., et al., had
engaged in fraudulent conduct that would not enable Delphi to
consummate the Plan.

Wilmington Trust points out that the Court, in its July 18, 2007
order signing the EPCA, acknowledged that the Plan Investors'
investment was an “integral . . . component of the Plan”.  The
Debtors, however, have been unable to emerge from bankruptcy
pursuant to the terms of the Plan after Appaloosa and other
parties terminated their commitment to provide US$2,550,000,000
in equity exit financing pursuant to the Equity Purchase and
Commitment Agreement.

On behalf of WTC, Edward M. Fox, Esq., at K&L Gates LLP, in New
York, argues the Plan Confirmation Order should be revoked,
noting that Debtors acknowledge and concede, in their lawsuits
against the Plan Investors, that the Order was procured by
fraud.  Mr. Fox notes the Debtors have alleged that ADAH
defrauded the Court, the Debtors and various stakeholders by
affirmatively stating that it had every intention of performing
its obligations to the Debtors under the EPCA when, in fact, it
had no such intention.

Aside from several agreements that expressly obligate ADAH and
the other Plan Investors to provide equity financing, Mr. Fox
notes that David Tepper, the principal of ADAH and Appaloosa, at
a Dec. 6, 2007 hearing to consider approval of amendments to the
EPCA, testified that the Plan Investors will use their
reasonable best effort to consummate the transactions.  “But in
the fact that, and the same thing I said before, you know, you
make a handshake you make a handshake, it's what it is,” Mr.
Tepper said.

WTC notes that the Court, in approving the EPCA and thereafter
confirming the Plan, relied on Mr. Tepper's statements that ADAH
fully intended to honor its commitments.

Wilmington Trust is the successor indenture trustee for senior
notes and debentures issued by Delphi pursuant to an Indenture
dated as of April 28, 1999, all of which remain outstanding: (i)
US$500,000,000 in aggregate principal amount of 6.55% Notes Due
2006; (ii) US$500,000,000 in aggregate principal amount of 6.5%
Notes Due May 1, 2009; (iii) US$500,000,000 in aggregate
principal amount of 6.50% Notes Due 2013; and (iv)
US$500,000,000 in aggregate principal amount of 7.125%
Debentures Due May 1, 2029.

The Committee tells the Court that Appaloosa and its principal
David Tepper has defrauded Delphi, the Committee, all other
parties-in-interest, and the Court by making numerous promises
to remain committed to the Plan and to use its best efforts to
consummate the Plan while at the same time, covertly discussing
and then executing a strategy to ensure the Plan's demise.  For
falsely promising to be an equity investor in the reorganized
Debtors, Appaloosa has extracted from the estate and its
stakeholders in excess of US$60,000,000 in fees and millions
more in expense reimbursements, with a claim pending for another
US$82,500,000 on account of Alternative Transaction Fee.

The committee says that Appaloosa's motive was greed.  The fraud
occurred when Appaloosa made numerous promises that were untrue
about its commitment to the Plan and the emergence of the
Debtors from bankruptcy.

“Known as the 'king' of 'vulture investors', or those who
capitalize on distressed assets for financial gain, Appaloosa
and Mr. Tepper in particular, has amassed a fortune by investing
in companies in Chapter 11 and then realizing a healthy
financial gain as a result,” the Committee states.  “Although
such tactics could be hailed as reflecting shrewd business
sense, the law stops short of sanctioning them where, as here,
they are based upon fraud.”

As per terms of the EPCA, Appaloosa recouped another
US$21,200,000 in commitment fees from the Debtors, for a total
of US$35,000,000 in fees even before any capital had been
committed.  Appaloosa anticipated receiving the balance of its
fees once the disclosure statement was approved, the Committee
points out.

To avoid having to comply with its promised commitments under
the August EPCA, Appaloosa stalled by using the financial
markets as an excuse to spend the next five months renegotiating
the August EPCA.  Appaloosa had no intention of living up to its
promises -- it was simply using the worsening financial markets
as cover for its pre-planned exit.

By inducing Delphi, its stakeholders, and the Court to rely on
its promises, Appaloosa both secured the court approval, and
clinched multi-million dollar payday for itself, the Committee
states.

                          About Delphi

Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ)
-- http://www.delphi.com/-- is the single supplier of vehicle
electronics, transportation components, integrated systems and
modules, and other electronic technology.  The company's
technology and products are present in more than 75 million
vehicles on the road worldwide.  Delphi has regional
headquarters in Japan, Brazil and France.

The company filed for Chapter 11 protection on Oct. 8, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-44481).  John Wm. Butler Jr.,
Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden,
Arps, Slate, Meagher & Flom LLP, represent the Debtors in their
restructuring efforts.  Robert J. Rosenberg, Esq., Mitchell A.
Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP,
represent the Official Committee of Unsecured Creditors.  As of
March 31, 2007, the Debtors' balance sheet showed
US$11,446,000,000 in total assets and US$23,851,000,000 in total
debts.

The Court approved Delphi's First Amended Joint Disclosure
Statement and related solicitation procedures for the
solicitation of votes on the First Amended Plan on Dec. 20,
2007.  The Court confirmed the Debtors' First Amended Plan on
Jan. 25, 2008.  The Plan has not been consummated after a group
led by Appaloosa Management, L.P., backed out from their
proposal to provide US$2,550,000,000 in equity financing to
Delphi.

(Delphi Bankruptcy News, Issue No. 138; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000)


DELPHI CORP: Wants Plan-Filing Deadline Extended to October 31
--------------------------------------------------------------
Delphi Corp. and its debtor-affiliates ask the U.S. Bankruptcy
Court for the Southern District of New York to extend their
exclusive periods to:

   (a) file a plan of reorganization through and including
       Oct. 31, 2008; and

   (b) solicit acceptances of that Plan through and including
       Dec. 31, 2008.

John Wm. Butler, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, in Chicago, Illinois, tells the Court that on April 4,
2008, the Debtors announced that although they had met the
conditions required to substantially consummate the Plan,
including obtaining US$6,100,000,000 of exit financing, Delphi's
Plan Investors refused to participate in a closing.

As disclosed in the Troubled Company Reporter on May 7, 2007,
the Debtors obtained an extension, subject to certain
exceptions, of their exclusive right under Section 1121 of the
Bankruptcy Code to file one or more reorganization plans until
30 days after substantial consummation of the Plan and the
exclusive right to solicit and obtain acceptances for those
plans 90 days after substantial consummation of the plan by
entry of the Order Under Section 1121(d) of the Bankruptcy Code.
The Order, however, extended the Debtors' exclusive right to
file a plan, as between the Debtors and the Statutory
Committees, through and including Aug. 31, 2008, and the right
to solicit a plan, as between the Debtors and the Statutory
Committees, through and including Oct. 31, 2008, Mr. Butler
recalls.

On May 16, 2008, Delphi filed complaints for damages and
specific performance against the Plan Investors who refused to
participate in the closing that would have led to Delphi's
successful emergence from Chapter 11.  The Debtors nevertheless
continue to work with their stakeholders to achieve their goal
of emerging from Chapter 11 as soon as practicable, Mr. Butler
says.

Out of an abundance of caution and to ensure clarity with their
stakeholders, including their customers and suppliers, the
Debtors seek an extension of the Exclusive Periods to prevent
any lapse in exclusivity between the Debtors and the Statutory
Committees, Mr. Butler clarifies.

Mr. Butler explains that a further extension of the Exclusive
Periods, Mr. Butler says, is justified by the significant
progress the Debtors have made toward emerging from Chapter 11.
After obtaining confirmation of the First Amended Plan, the
Debtors secured exit financing and met all other conditions to
the effectiveness of the Plan and Investment Agreement and were
prepared to emerge from Chapter 11.

Since April 30, 2008, Mr. Butler notes, the Debtors have
continued to make progress toward emerging from Chapter 11 in
three major areas:

  (i) The Debtors have engaged in a reaffirmation process with
      respect to the business plan contained in the Disclosure
      Statement.  That process includes an analysis, among other
      things, of the impact of an unprecedented increase in
      global commodity costs and reduction of projected North
      American automobile industry production volumes;

(ii) The Debtors have explored their exit financing
      possibilities in capital markets that remain turbulent;
      and

(iii) The Debtors have entered into complex negotiations with
      the Statutory Committees and General Motors Corp. with
      respect to potential modifications of the Plan that will
      enable Delphi to emerge from chapter 11 as soon as
      reasonably practicable, thereby moving forward so that the
      Debtors can focus solely on their business operations and
      mitigate the damages caused by the Plan Investors.

Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ)
-- http://www.delphi.com/-- is the single supplier of vehicle
electronics, transportation components, integrated systems and
modules, and other electronic technology.  The company's
technology and products are present in more than 75 million
vehicles on the road worldwide.  Delphi has regional
headquarters in Japan, Brazil and France.

The company filed for Chapter 11 protection on Oct. 8, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-44481).  John Wm. Butler Jr.,
Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden,
Arps, Slate, Meagher & Flom LLP, represent the Debtors in their
restructuring efforts.  Robert J. Rosenberg, Esq., Mitchell A.
Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP,
represent the Official Committee of Unsecured Creditors.  As of
March 31, 2007, the Debtors' balance sheet showed
US$11,446,000,000 in total assets and US$23,851,000,000 in total
debts.

The Court approved Delphi's First Amended Joint Disclosure
Statement and related solicitation procedures for the
solicitation of votes on the First Amended Plan on Dec. 20,
2007.  The Court confirmed the Debtors' First Amended Plan on
Jan. 25, 2008.  The Plan has not been consummated after a group
led by Appaloosa Management, L.P., backed out from their
proposal to provide US$2,550,000,000 in equity financing to
Delphi.

(Delphi Bankruptcy News, Issue No. 137; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000)


EMBRATEL PARTICIPACOES: Income Drops 77% to BRL115MM in 2nd Qtr.
----------------------------------------------------------------
Embratel Participacoes SA's net income decreased 77% to
BRL115 million in the second quarter 2008, from BRL499 million
year-on-year.

Net revenues increased 11.5% to BRL2.34 billion in the second
quarter 2008, from BRL2.10 billion in the second quarter 2007,
TeleGeography relates, citing Embratel Participacoes.  The
firm's EBITDA rose 1.9% to BRL550 million.  EBITDA margin
dropped 2.2 percentage points to 23.5%.

TeleGeography notes that Embratel Participacoes said sales
increased 33.8% due to strong demand for local communications
services in the second quarter this year, compared to the same
period last year.  According to Embratel Participacoes, its data
communications rose 12.1%, voice call services increased 5.9%,
and other related services grew 6.4%.

The report says that Embratel Participacoes' revenues from
domestic long-distance national calls increased 7.6% to
BRL1.07 billion in this year's second quarter, from last year's
second quarter.  Embratel Participacoes' income from
international calls declined 8.2% to BRL120 million.

TeleGeography relates that Embratel Participacoes had
4.16 million access lines in service in June 2008, about 61.5%
higher compared to June 2007.  The firm's high speed Internet
connections rose 30% to 3.36 million.

Embratel Participacoes' overall investments rose to
BRL409 million in the second quarter 2008, compared to
BRL209 million in the second quarter 2007, TeleGeography states.

Embratel Participacoes SA offers a range of complete
telecommunications solutions to the market all over Brazil,
including local, long distance domestic and international
telephone services, data, video and Internet transmission, and
is present all over the country with its satellite solutions.
Embratel is the market leader in revenues with Long Distance,
Domestic and International calls.

                         *     *     *

Embratel Participacoes continues to carry Moody's “B1” local
currency issuer rating and “B2” senior unsecured debt rating.


GENERAL MOTORS: To Offer Discounts on Sales Until July 31
---------------------------------------------------------
General Motors Corp. will offer employee discounts to non-
employees on a limited basis to augment its sales amid slump in
the U.S. auto industry, The Wall Street Journal reports.

As reported in the Troubled Company Reporter on July 2, 2008, in
GM's June sales results, the company related that despite the
significant decline of industry market volume and the limited
availability of some of GM's most popular models, GM dealers in
the United States delivered 265,937 vehicles in June, down 8%
(18.5% unadjusted).  Truck sales declined 6%.

WSJ, citing GM sales chief Mark LaNeve, says, all GM employees
in the U.S. can give out one employee discount, between now and
the end of July, to anyone who considers purchasing a new
vehicle.

According to Mr. LaNeve, a better way to promote our products is
to give an additional incentive to buy GM, WSJ states.

WSJ indicates that GM is already offering attractive discounts
and financing plans on most of its vehicles in July as it
struggles to rebound from deep sales declines in the first half
of 2008.

Based in Detroit, Michigan, General Motors Corp. (NYSE:
GM) -- http://www.gm.com/-- was founded in 1908.  GM employs
about 266,000 people around the world and manufactures cars and
trucks in 35 countries, including the United Kingdom, Germany,
France, Russia, Brazil and India.  In 2007, nearly 9.37 million
GM cars and trucks were sold globally under the following
brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden,
HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling.  GM's
OnStar subsidiary is the industry leader in vehicle safety,
security and information services.

General Motors Latin America, Africa and Middle East, with
headquarters in Miramar, Florida, is one of GM's four regional
business units.  GM LAAM employs approximately 37,000 people in
18 countries and has manufacturing facilities in Argentina,
Brazil, Colombia, Ecuador, Egypt, Kenya, South Africa and
Venezuela.  GM LAAM markets vehicles under the Buick,
Cadillac, Chevrolet, GMC, Hummer, Isuzu, Opel, Saab and
Suzuki brands.

                          *     *     *


As reported in the Troubled Company Reporter-Latin America on
July 18, 2008, Standard & Poor's Ratings Services said that its
'B' corporate credit and senior unsecured debt ratings and 'BB-'
senior secured debt rating on General Motors Corp. remain on
CreditWatch with negative implications, where they were placed
June 20, 2008.  The update follows GM's announcement of a series
of cost reductions and other initiatives aimed at saving
US$10 billion in cash from operations by the end of 2009.  GM
also announced plans to obtain US$4 billion to US$7 billion in
cash from capital market transactions and asset sales.

The TCR-AP reported on July 17, 2008, that Moody's Investors
Service reviewed the ratings of General Motors Corporation for
possible downgrade.  Ratings under review include its B3
Corporate Family Rating, B3 Probability of Default Rating, Ba3
rating for secured debt, and Caa1 rating for senior unsecured
debt.


GENERAL MOTORS: To Cut Production at Four Plants on September 29
----------------------------------------------------------------
General Motors Corp. spokesperson Tony Sapienza disclosed that
the automaker is planning to terminate one shift at truck plants
in Moraine, Ohio, and Shreveport, Louisiana, on Sept. 29, Greg
Bensinger of Bloomberg News reports.  The action will displace
1,760 of the 4,000 workers and chip the forecasted 300,000
output by 117,000, on an annual basis as consumers shift to cars
and crossovers from SUVs due to rising fuel prices.

According to Bloomberg News, Mr. Sapienza said that the company
also intends to pare the hourly production rates at SUV
facilities in Silao, Mexico, and Mishawaka, Indiana.

As disclosed in the Troubled Company Reporter on July 16, 2008,
GM said it is taking further steps to adapt its business to
rapidly changing market conditions, marked by the weak U.S.
economy, record high fuel prices, shifts in consumer vehicle
preferences, and the lowest U.S. industry sales volumes in a
decade.

For liquidity planning purposes, GM is using assumptions of U.S.
light vehicle industry volumes of 14.0 million units in 2008-
2009 which are significantly below trend.  Other planning
assumptions include lower U.S. share of approximately 21% and
continued elevated average oil price estimates ranging from
US$130 to US$150 per barrel by 2009.  Based on those
assumptions, GM is taking actions to further reduce structural
cost, and generate cash, with the goal of maximizing liquidity.

Based in Detroit, Michigan, General Motors Corp. (NYSE:
GM) -- http://www.gm.com/-- was founded in 1908.  GM employs
about 266,000 people around the world and manufactures cars and
trucks in 35 countries, including the United Kingdom, Germany,
France, Russia, Brazil and India.  In 2007, nearly 9.37 million
GM cars and trucks were sold globally under the following
brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden,
HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling.  GM's
OnStar subsidiary is the industry leader in vehicle safety,
security and information services.

General Motors Latin America, Africa and Middle East, with
headquarters in Miramar, Florida, is one of GM's four regional
business units.  GM LAAM employs approximately 37,000 people in
18 countries and has manufacturing facilities in Argentina,
Brazil, Colombia, Ecuador, Egypt, Kenya, South Africa and
Venezuela.  GM LAAM markets vehicles under the Buick,
Cadillac, Chevrolet, GMC, Hummer, Isuzu, Opel, Saab and
Suzuki brands.

                          *     *     *


As reported in the Troubled Company Reporter-Latin America on
July 18, 2008, Standard & Poor's Ratings Services said that its
'B' corporate credit and senior unsecured debt ratings and 'BB-'
senior secured debt rating on General Motors Corp. remain on
CreditWatch with negative implications, where they were placed
June 20, 2008.  The update follows GM's announcement of a series
of cost reductions and other initiatives aimed at saving
US$10 billion in cash from operations by the end of 2009.  GM
also announced plans to obtain US$4 billion to US$7 billion in
cash from capital market transactions and asset sales.

The TCR-AP reported on July 17, 2008, that Moody's Investors
Service reviewed the ratings of General Motors Corporation for
possible downgrade.  Ratings under review include its B3
Corporate Family Rating, B3 Probability of Default Rating, Ba3
rating for secured debt, and Caa1 rating for senior unsecured
debt.


GENERAL MOTORS: Appaloosa Balks at Participation on Delphi Suit
---------------------------------------------------------------
A-D Acquisition Holdings, LLC, and Appaloosa Management L.P.
oppose the participation of General Motors Corporation as party-
in-interest with respect to Delphi Corp.'s US$2,550,000,000
adversary complaint against Appaloosa and other Plan Investors.

As disclosed in the Troubled Company Reporter on July 15, 2008,
GM sought authority from the U.S. Bankruptcy Court for the
Southern District of New York to participate in the
adversary proceedings filed by Delphi Corp. against Appaloosa,
Management, L.P., et al.  GM wants to participate in the
proceedings as a “party-in-interest”.

Delphi's ties with Appaloosa, et al., soured after Delphi sought
funding of the US$2,825,000,000 of its US$6,100,000,000 exit
debt financing facility from General Motors, its primary
customer.  The lenders, including GM, were ready to close
April 4, but the financing agreements have been terminated after
Appaloosa, et al., pulled out from their commitment to provide
US$2,550,000,000 of equity financing to Delphi.

Douglas P. Baumstein, Esq., at White & Case LLP, in New York,
says that ADAD and AMLP anchor their opposition on GM's failure
to adequately define what a “party in interest” means, given
that it seeks to participate in the adversary proceeding in a
limited capacity, yet it seeks rights afforded only to full
parties to a proceeding without undertaking the obligations of a
party.

Mr. Baumstein admits that some of the relief sought by GM is
acceptable, “but much of the relief it seeks goes well beyond
that to which a party in interest is entitled,” Mr. Baunstein
says.

Mr. Baumstein anticipates that at this time, GM does not seek to
intervene in the proceedings, however, it seeks court authority
to (i) appear before the Court on any matter arising in the
Adversary Proceeding, including hearings and chamber
conferences, (ii) participate in any settlement discussions,
mediation sessions and arbitrations regarding the Adversary
Proceeding, and (iii) participate in the discovery process,
including through the review of documents produced and
attendance at depositions.

Mr. Baumstein argues that GM is not entitled to  participate so
as to fully monitor the progress and status of the Adversary
Proceeding and to permit involvement in activities likely to
affect or overlap with a new plan, contrary to the relief it
seeks.  Mr. Baumstein then cites the grounds for ADAH and AMLP's
objections and supporting with contentions:

  (1) GM should only be permitted to appear in the litigation so
      long as it limits itself to the role of observer and does
      not duplicate effort or unduly burden the parties.

        It is not clear that GM is willing to limit its role, as
        GM seeks to participate in the action by appearing
        before the Court on “any matter arising in the Adversary
        Proceeding” including by appearing at the chambers'
        conferences.  This right is inconsistent with the
        monitoring function GM purports to seek.

  (2) There is no basis for GM's request to participate in any
      settlement negotiations.

        GM has articulated no concrete interest or right of its
        own that is at stake in this proceeding.  Instead, GM
        purports to seek participation on a limited basis in
        order to inform its own position in negotiations of a
        modified or new plan of reorganization that is not
        before this Court in this proceeding.

  (3) GM should not be permitted to seek discovery without first
      intervening as a party.

        The right to serve discovery requests is one reserved to
        full parties at an action, which GM is not and does not
        seek.

Harbinger Del-Auto Investment Company Ltd. and  Merrill Lynch,
Pierce, Fenner & Smith Incorporated have joined in Appaloosa's
objection.  Both parties request the Court to deny GM's motion
to participate in the adversary proceeding as party-in-interest.

                          About Delphi

Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ)
-- http://www.delphi.com/-- is the single supplier of vehicle
electronics, transportation components, integrated systems and
modules, and other electronic technology.  The company's
technology and products are present in more than 75 million
vehicles on the road worldwide.  Delphi has regional
headquarters in Japan, Brazil and France.

The company filed for Chapter 11 protection on Oct. 8, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-44481).  John Wm. Butler Jr.,
Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden,
Arps, Slate, Meagher & Flom LLP, represent the Debtors in their
restructuring efforts.  Robert J. Rosenberg, Esq., Mitchell A.
Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP,
represent the Official Committee of Unsecured Creditors.  As of
March 31, 2007, the Debtors' balance sheet showed
US$11,446,000,000 in total assets and US$23,851,000,000 in total
debts.

The Court approved Delphi's First Amended Joint Disclosure
Statement and related solicitation procedures for the
solicitation of votes on the First Amended Plan on Dec. 20,
2007.  The Court confirmed the Debtors' First Amended Plan on
Jan. 25, 2008.  The Plan has not been consummated after a group
led by Appaloosa Management, L.P., backed out from their
proposal to provide US$2,550,000,000 in equity financing to
Delphi.

(Delphi Bankruptcy News, Issue No. 138; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000)

                       About General Motors

Based in Detroit, Michigan, General Motors Corp. (NYSE:
GM) -- http://www.gm.com/-- was founded in 1908.  GM employs
about 266,000 people around the world and manufactures cars and
trucks in 35 countries, including the United Kingdom, Germany,
France, Russia, Brazil and India.  In 2007, nearly 9.37 million
GM cars and trucks were sold globally under the following
brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden,
HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling.  GM's
OnStar subsidiary is the industry leader in vehicle safety,
security and information services.

General Motors Latin America, Africa and Middle East, with
headquarters in Miramar, Florida, is one of GM's four regional
business units.  GM LAAM employs approximately 37,000 people in
18 countries and has manufacturing facilities in Argentina,
Brazil, Colombia, Ecuador, Egypt, Kenya, South Africa and
Venezuela.  GM LAAM markets vehicles under the Buick,
Cadillac, Chevrolet, GMC, Hummer, Isuzu, Opel, Saab and
Suzuki brands.

                          *     *     *


As reported in the Troubled Company Reporter-Latin America on
July 18, 2008, Standard & Poor's Ratings Services said that its
'B' corporate credit and senior unsecured debt ratings and 'BB-'
senior secured debt rating on General Motors Corp. remain on
CreditWatch with negative implications, where they were placed
June 20, 2008.  The update follows GM's announcement of a series
of cost reductions and other initiatives aimed at saving
US$10 billion in cash from operations by the end of 2009.  GM
also announced plans to obtain US$4 billion to US$7 billion in
cash from capital market transactions and asset sales.

The TCR-AP reported on July 17, 2008, that Moody's Investors
Service reviewed the ratings of General Motors Corporation for
possible downgrade.  Ratings under review include its B3
Corporate Family Rating, B3 Probability of Default Rating, Ba3
rating for secured debt, and Caa1 rating for senior unsecured
debt.


GENERAL MOTORS: Negotiating New or Amended Plan for Delphi Corp.
----------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in the
bankruptcy cases of Delphi Corp. and its debtor-affiliates says
it is actively negotiating with the Debtors to reach mutually
acceptable modification of the current Joint Plan of
Reorganization of the Debtors, following Appaloosa Management,
L.P., et al.'s decision to back out from their US$2,550,000,000
exit financing agreement, and in light of the Debtors' pending
lawsuit against Appaloosa, et al.

Committee counsel Edward M. Fox, Esq., at K&L Gates, LLP, in New
York, says that if the negotiations don't achieve the
resolution, it will pursue its adversary proceeding, seeking the
revocation of the order confirming the Plan, which the Committee
says it accepted based upon the “promissory fraud of Appaloosa”.

As reported in the Troubled Company Reporter on July 15, 2008,
General Motors Corp., in its request to join as party-in-
interest in Delphi's adversary proceedings against Appaloosa, et
al., said it is a major constituent of a new plan under
negotiation together with Delphi and Creditors Committee.  GM
has been asked to provide major support through financial
contributions, subsidies and loans, its counsel Michael P.
Kessler, Esq., at Weil, Gotshal & Manges LLP, in New York,
disclosed.

GM also had said its interest in participating in the
US$2,550,000,000 lawsuits is in the litigation's representation
of a significant asset of the Debtors' estates.  The terms and
conditions of a modified or new plan will depend, in part, on
the value ascribed to the litigation and the disposition of any
recoveries from the litigation, Mr. Kessler said.

                          About Delphi

Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ)
-- http://www.delphi.com/-- is the single supplier of vehicle
electronics, transportation components, integrated systems and
modules, and other electronic technology.  The company's
technology and products are present in more than 75 million
vehicles on the road worldwide.  Delphi has regional
headquarters in Japan, Brazil and France.

The company filed for Chapter 11 protection on Oct. 8, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-44481).  John Wm. Butler Jr.,
Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden,
Arps, Slate, Meagher & Flom LLP, represent the Debtors in their
restructuring efforts.  Robert J. Rosenberg, Esq., Mitchell A.
Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP,
represent the Official Committee of Unsecured Creditors.  As of
March 31, 2007, the Debtors' balance sheet showed
US$11,446,000,000 in total assets and US$23,851,000,000 in total
debts.

The Court approved Delphi's First Amended Joint Disclosure
Statement and related solicitation procedures for the
solicitation of votes on the First Amended Plan on Dec. 20,
2007.  The Court confirmed the Debtors' First Amended Plan on
Jan. 25, 2008.  The Plan has not been consummated after a group
led by Appaloosa Management, L.P., backed out from their
proposal to provide US$2,550,000,000 in equity financing to
Delphi.

(Delphi Bankruptcy News, Issue No. 138; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000)

                            About GM

Based in Detroit, Michigan, General Motors Corp. (NYSE:
GM) -- http://www.gm.com/-- was founded in 1908.  GM employs
about 266,000 people around the world and manufactures cars and
trucks in 35 countries, including the United Kingdom, Germany,
France, Russia, Brazil and India.  In 2007, nearly 9.37 million
GM cars and trucks were sold globally under the following
brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden,
HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling.  GM's
OnStar subsidiary is the industry leader in vehicle safety,
security and information services.

General Motors Latin America, Africa and Middle East, with
headquarters in Miramar, Florida, is one of GM's four regional
business units.  GM LAAM employs approximately 37,000 people in
18 countries and has manufacturing facilities in Argentina,
Brazil, Colombia, Ecuador, Egypt, Kenya, South Africa and
Venezuela.  GM LAAM markets vehicles under the Buick,
Cadillac, Chevrolet, GMC, Hummer, Isuzu, Opel, Saab and
Suzuki brands.

                          *     *     *


As reported in the Troubled Company Reporter-Latin America on
July 18, 2008, Standard & Poor's Ratings Services said that its
'B' corporate credit and senior unsecured debt ratings and 'BB-'
senior secured debt rating on General Motors Corp. remain on
CreditWatch with negative implications, where they were placed
June 20, 2008.  The update follows GM's announcement of a series
of cost reductions and other initiatives aimed at saving
US$10 billion in cash from operations by the end of 2009.  GM
also announced plans to obtain US$4 billion to US$7 billion in
cash from capital market transactions and asset sales.

The TCR-AP reported on July 17, 2008, that Moody's Investors
Service reviewed the ratings of General Motors Corporation for
possible downgrade.  Ratings under review include its B3
Corporate Family Rating, B3 Probability of Default Rating, Ba3
rating for secured debt, and Caa1 rating for senior unsecured
debt.


PERDIGAO SA: Adjusted Net Income Grows to BRL102.5MM in 2nd Qtr.
----------------------------------------------------------------
Perdigao closed the second quarter 2008 with gross sales of
BRL3.3 billion, 81.2% more than the same period in 2007.  Growth
reflects the increase in sales in both volume and revenues in
the domestic and export markets.  In addition to these factors,
performance was also driven by the consolidation of the results
from the acquisition of Eleva/Cotoches, among others, as well as
outsourced production agreements signed with other dairy product
processors.

Exports reported an increase of 45.4% in meat volume and 64% in
total revenues, reaching BRL1.3 billion.  The growth in
international demand for animal protein (poultry and pork) from
Brazil has sustained the positive performance in overseas
markets.  This is despite the continuing appreciation of the
Real against the U.S. dollar during the quarter and the increase
in principal commodity prices well above levels recorded in the
comparative period for 2007.

Domestic market revenues for the quarter increased year-on-year
by 93.9%, reporting a total of BRL1.99 billion. Sales volumes of
dairy products increased 338.9% and by 30.5% in the case of
meats.  Performance in this market was driven by acquisitions,
new partnerships -- instrumental in enhancing milk output, and
the expansion of the company's business in the margarine and
other processed product segments, resulting in a 185.4% increase
in sales volumes.

The improvement in the company's operations in meat and dairy
products, allied to sales performance, has been conducive in
achieving good operating results.  EBITDA reached
BRL233.2 million, 40.3% more than for the comparative period
last year.

Gross profit increased from BRL411.2 million to BRL624.6
million, equivalent to a year-on-year increase of 51.9%.  Net
adjusted income reported growth of 44.7% to BRL102.5 million
before the effect for the amortization of goodwill arising from
the acquisition of some major operating assets.

In May, Perdigao fully recognized goodwill of BRL1.5 billion,
accruing from the acquisitions of Eleva, the margarine
businesses and the Batavia business still not controlled by the
company.  This generated a tax benefit of BRL501.3 million in
addition to a net negative non-recurring effect in the quarter
of BRL984.3 million.

Headquartered in Sao Paulo, Brazil, Perdigao S.A. is one of the
largest food processors in Brazil, with a focus on poultry,
pork, beef, milk and processed products including dairy.  With
revenues of BRL6 billion for the last twelve months eding in
June 30, 2007, Perdigao is one of the leaders in the domestic
market and exports 42% of its sales to over 100 countries and
850 customers around the world.

                        *     *     *

As reported in the Troubled Company Reporter-Latin America on
July 10, 2008, Standard & Poor's Ratings Services has assigned
its 'BB+' long-term corporate credit rating with a stable
outlook to Brazil-based food producer Perdigao S.A.

TCR-Latin America reported on Sept. 26, 2007, that Moody's
Investors Service has assigned a first-time Ba1 global local
currency corporate family rating with a stable outlook to
Perdigao S.A.


REVLON INC: Selling Non-Core Brazilian Brands for US$104 Million
----------------------------------------------------------------
Revlon Inc. has sold its non-core Bozzano brand, a leading men's
hair care and shaving line of products, and certain other non-
core brands, which are sold in the Brazilian market.  The
transaction was effected through the sale of the company's
Brazilian subsidiary, Ceil Comrrcio E Distribuidora Ltda. to
Hypermarcas, S.A., a Brazilian diversified consumer products
corporation.

The gross purchase price was approximately US$104 million in
cash.  The company expects net proceeds, after payment of taxes
and transaction costs, to be approximately US$94 million.  The
company is currently evaluating the most appropriate use of net
proceeds from this transaction.

In the results for the third quarter of 2008, the company
expects to record a one-time gain from this transaction of
approximately US$50 million.  The company expects that Ceil's
net sales, operating income and adjusted EBITDA would not be
material to the ongoing financial results of Revlon, Inc.

Revlon brand color cosmetics will continue to be marketed in
Brazil through its current third party distributor.

Commenting on this transaction, Revlon President and Chief
Executive Officer, David Kennedy, said, “Our business strategy
is to build and leverage our strong brands worldwide,
particularly the Revlon brand.  This transaction presented
Revlon with an opportunity to monetize a non-core, non-strategic
brand at a very attractive valuation, while enabling us to
remain focused on building our core brands around the world.”

Headquartered in New York City, Revlon Inc. (NYSE: REV) --
http://www.revlon.com/-- is a worldwide cosmetics, hair color,
beauty tools, fragrances, skincare, anti-perspirants/deodorants
and personal care products company.  The company's brands, which
are sold worldwide, include Revlon(R), Almay(R), Mitchum(R),
Charlie(R), Bozzano(R), Gatineau(R) and Ultima II(R).  The
company's Latin American operations are located in Argentina,
Brazil, Chile, Mexico and Venezuela.

At March 31, 2008, the company's consolidated balance sheet
showed US$882.6 million in total assets and US$2.0 billion in
total liabilities, resulting in a US$1.1 billion total
stockholders' deficit.


SPECTRUM BRANDS: Moody's Renews B1 Rating to US$50MM LC Facility
----------------------------------------------------------------
On July 22, 2008, Moody's Investors Service inadvertently
withdrew its B2 rating on Spectrum Brands' US$50 million
synthetic letter of credit facility.  Rather than being
withdrawn, the synthetic LOC should have been upgraded to B1,
consistent with the upgrade on Spectrum's secured credit
facility.  The rating action has no impact on any other rating
or LGD assessment/point estimate, all of which are affirmed.

This rating was reinstated and upgraded and assessment revised
as:

  -- US$50 million synthetic letter of credit facility due 2013
     to B1 (LGD 2, 13%) from B2 (LGD2, 29%);

These ratings were affirmed and assessments revised:

  -- Corporate family rating at Caa1;
  -- Probability-of-default rating at Caa2;

  -- US$700 million 7.375% senior subordinated bonds due 2015 at
     Caa3 (LGD4, 62%);

  -- US$350 million variable rate toggle senior subordinated
     notes due 2013 at Caa3 (LGD4, 62%); and

  -- US$1.55 billion senior secured credit facility due 2013 at
     B1 (LGD 2, 13%)

Headquartered in Atlanta, Georgia, Spectrum Brands Inc. (NYSE:
SPC) -- http://www.spectrumbrands.com/-- is a supplier of
consumer batteries, lawn and garden care products, specialty pet
supplies, shaving and grooming products, household insect
control products, personal care products and portable lighting.

The company's European unit, Rayovac Europe GmbH, is
headquartered in Sulzbach, Germany.  Outside the United States,
the company also has manufacturing facilities in Brazil,
Columbia and China.


UAL CORP: Shares Up 2-Year High as US$2.7BB Loss Beats Estimates
----------------------------------------------------------------
UAL Corp.'s shares rose 69% to US$8.41 at 4 p.m. of July 22,
2008, New York time in Nasdaq Stock Market composite trading,
the highest since emerging from Chapter 11 in early 2006,
Bloomberg News reports.  Investor confidence was boosted after
United Airlines' parent reported a US$2,729,000,000 net loss
that was narrower than analysts' when some costs are excluded,
Bloomberg adds.  UAL also said it will let go of more than 7,000
employees by the end of 2009 to offset increasing fuel costs.

UAL's new financing deal with JPMorgan is also expected to
increase the company's cash position by US$1,000,000,000, amidst
high fuel prices and upcoming lower demand.  UAL reported that
it has US$2,899,000,000 in cash and cash equivalents as of
June 30, 2008.

MarketWatch says UAL reported better-than-feared loss of US$1.19
a share, compared to a $1.85 a share expected by analysts polled
by FactSet Research.

Six of the eight largest U.S. airlines have now reported second
quarter results, increasing the group's aggregate net loss to
US$5,800,000,000:

      Airline               Net Income (Loss)
      -------               -----------------
      AMR                   (US$1,448,000,000)
      UAL                   (US$2,729,000,000)
      Delta                 (US$1,044,000,000)
      Continental               (US$3,000,000)
      Southwest             Not Yet Reported
      Northwest             Not Yet Reported
      US Airways              (US$567,000,000)
      JetBlue                   (US$7,000,000)

Players in the airline industry have blamed escalating fuel
costs.  UAL said that gains from continued revenue growth were
insufficient to offset the more than 55% increase in average
fuel price per gallon.  Despite a 17.7% growth in operating
revenues, JetBlue Airways Corp., reported a meek US$3,000,000
loss, acknowledging that revenue gains were not keeping pace
with “the extraordinary increase in the price of jet fuel”.

According to The Wall Street Journal, the net losses of JetBlue,
US Airways Group, and UAL weren't as deep as Wall Street had
predicted, as their sales rose on healthy passenger traffic,
higher ticket prices and additional fees to passengers.

While UAL has expressed concerns over the airline industry's
challenges due to skyrocketing prices of fuel, US Airways
Chairman and CEO Doug Parker said, “Despite our disappointing
results, we are pleased with the early performance of our a la
carte initiatives as we are seeing strong early sales in our
Choice Seats program and encouraging revenue trends from our new
first and second checked bag policies.”  He added, “We are also
encouraged by our industry's response to the current economic
environment.”

Northwest Airlines Corp. and Southwest Airlines Co. are
scheduled to post their second quarter results this week.

                      About UAL Corporation

Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA)
-- http://www.united.com/-- is the holding company for United
Airlines, Inc.  United Airlines is the world's second largest
air carrier.  The airline flies to Brazil, Korea and Germany.

The company filed for chapter 11 protection on Dec. 9, 2002
(Bankr. N.D. Ill. Case No. 02-48191).  James H.M. Sprayregen,
Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and
Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the
Debtors in their restructuring efforts.  Fruman Jacobson, Esq.,
at Sonnenschein Nath & Rosenthal LLP represented the Official
Committee of Unsecured Creditors before the Committee was
dissolved when the Debtors emerged from bankruptcy.

Judge Eugene R. Wedoff confirmed the Debtors' Second Amended
Plan on Jan. 20, 2006.  The company emerged from bankruptcy
protection on Feb. 1, 2006.

(United Airlines Bankruptcy News, Issue No. 162; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or
215/945-7000)


UAL CORP: Expected Heavy Losses Cue S&P to Cut Ratings to B-
------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on UAL
Corp. and subsidiary United Air Lines Inc. (both rated B-
/Negative/--), including lowering the long-term corporate credit
ratings on both entities to 'B-' from 'B', and removed the
ratings from CreditWatch, where they had been placed with
negative implications May 22, 2008, as part of an industrywide
review.  The outlook is negative.

The downgrade reflects expected heavy losses and sharply reduced
operating cash flow caused by high and volatile fuel prices.
S&P also lowered certain ratings on United enhanced equipment
trust certificates, but selected debt issues were not lowered,
due to improving collateral coverage that offset increased
United default risk.

“UAL currently has adequate near-term liquidity, with
US$2.9 billion of unrestricted cash and short-term investments
at June 30, 2008, and subsequent actions that have raised
significant added liquidity, but S&P expect heavy losses, which
could be well above US$1 billion this year, based on its current
fuel price and revenue outlook, with further, albeit reduced,
losses in 2009,” said Standard & Poor's credit analyst Philip
Baggaley.  UAL reported a second-quarter loss of US$233 million
(including US$82 million of severance costs but before about
US$2.5 billion of goodwill write-off and various other largely
non-cash special charges), consistent with a pattern of much
worse year-over-year earnings performance from U.S. airlines.

United, like its peers, is shrinking its domestic operations and
grounding older aircraft to trim its losses.  United will reduce
its domestic mainline (nonregional) capacity by 15.5% to 16.5%
in the fourth quarter of this year, one of the sharpest
reductions in the industry, and is also shrinking international
flying, though to a much lesser extent.  This, along with
capacity reductions by other airlines, should improve somewhat
the balance of supply and demand, particularly in the U.S.
domestic market, allowing United to raise its fares further.
However, this effort will face headwinds in the form of a weak
U.S. economy, and S&P does not expect that the higher fares will
be sufficient to avoid a heavy loss this year and reduced, but
still substantial, deficit in 2009 if fuel prices remain very
high.

The corporate credit rating on UAL reflects subsidiary United
Air Lines' participation in the price-competitive, cyclical, and
capital-intensive airline industry; very high fuel costs, which
have not been fully recovered by raising fares; and a highly
leveraged financial profile.  These weaknesses are mitigated by
United's extensive and well-positioned route system and by
reductions in labor costs and financial obligations achieved in
bankruptcy reorganization.  Chicago-based United is the second-
largest U.S. airline, with strong positions in the Midwest and
western U.S. and on trans-Pacific routes and a solid position on
trans-Atlantic routes.

S&P's 'B-' corporate credit rating anticipates heavy losses in
2008, which could be well over US$1 billion.  The negative
outlook reflects our concern that continued substantial losses
could erode UAL's liquidity.  If unrestricted cash and short-
term investments fall below US$2.5 billion, S&P could lower
ratings.

Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA)
-- http://www.united.com/-- is the holding company for United
Airlines, Inc.  United Airlines is the world's second largest
air carrier.  The airline flies to Brazil, Korea and Germany.


USINAS SIDERURGICAS: To Boost Iron Ore Output Capacity by 480%
--------------------------------------------------------------
Noticias Financieras reports that Usinas Siderurgicas de Minas
Gerais S.A., a.k.a. Usiminas, will boost its yearly iron ore
production capacity by 480% to 29 million tons until 2013, from
five million tons.

According to Noticias Financieras, Usiminas will carry out the
plan in the four units it recently bought in Serra Azul, Minas
Gerais.

Noticias Financieras relates that Usiminas will also construct a
sea terminal for product flow.  It bought a 850,000 square meter
land in Baia de Sepetiba in Rio de Janeiro's port area.

Headquartered in Minas Gerais, Brazil, Usinas Siderurgicas de
Minas Gerais S.A. -- http://www.usiminas.com.br-- is among the
world's 20 largest steel manufacturing complexes, with a
production capacity of approximately 10 million tons of steel.
Usiminas System companies produces galvanized and non-coated
flat steel products for the automotive, small and large diameter
pipe, civil construction, hydro-electronic, rerolling,
agriculture, and road machinery industries.  Brazil consumes 80%
of its products and the company's largest export markets are the
US and Latin America.  The company also sells in China and
Japan.

                        *     *     *

As reported in the Troubled Company Reporter-Latin America on
Feb. 5, 2008, Moody's Investors Service assigned a Ba1 local
currency rating and an Aa1.br rating on its Brazilian national
scale to the BRL500 million non-guaranteed subordinated
debentures due 2013 to be issued by Usinas Siderurgicas de Minas
Gerais S.A. (aka Usiminas).  Net proceeds from the debentures
issuance will be used to partially fund the company's capex
program.  Moody's said the rating outlook is stable.



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

ALL POINTS: Deadline for Proofs of Claim Filing Is Aug. 1
---------------------------------------------------------
All Points Ltd.'s creditors have until Aug. 1, 2008, to prove
their claims to R.A. Holdsworth, the company's liquidator, or be
excluded from receiving any distribution or payment.

In their proofs of claim, creditors must indicate their full
names, addresses, the full particulars of their debts or claims,
and the names and addresses of their lawyers, if any.

All Points' shareholder decided on April 7, 2008, to place the
company into voluntary liquidation under The Companies Law (2004
Revision) of the Cayman Islands.

The liquidator can be reached at:

                R.A. Holdsworth
                c/o Garden House
                2 Boulevard Hector Otto
                MC98000, Monaco

Contact for inquiries:

                Bryant Terry
                c/o Ogier
                P.O. Box 1234
                Queensgate House, South Church Street
                Grand Cayman, Cayman Islands
                Telephone: (345) 949-9876
                Fax: (345) 949-1986


CLEAR SPRINGS: Proofs of Claim Filing Deadline Is Aug. 1
--------------------------------------------------------
Clear Springs Ltd.'s creditors have until Aug. 1, 2008, to prove
their claims to Westport Services Ltd., the company's
liquidator, or be excluded from receiving any distribution or
payment.

In their proofs of claim, creditors must indicate their full
names, addresses, the full particulars of their debts or claims,
and the names and addresses of their lawyers, if any.

Clear Springs' shareholders decided on May 29, 2008, to place
the company into voluntary liquidation under The Companies Law
(2004 Revision) of the Cayman Islands.

The liquidator can be reached at:

                Westport Services Ltd.
                P.O. Box 1111
                Grand Cayman, Cayman Islands

Contact for inquiries:

                Bonnie Willkom
                Telephone: (345) 949-5122
                Fax: (345) 949-7920


CLEAR SPRINGS ACQUISITION: Claims Filing Deadline Is Aug. 1
-----------------------------------------------------------
Clear Springs Acquisition Ltd.'s creditors have until
Aug. 1, 2008, to prove their claims to Westport Services Ltd.,
the company's liquidator, or be excluded from receiving any
distribution or payment.

In their proofs of claim, creditors must indicate their full
names, addresses, the full particulars of their debts or claims,
and the names and addresses of their lawyers, if any.

Clear Springs' shareholders decided on May 29, 2008, to place
the company into voluntary liquidation under The Companies Law
(2004 Revision) of the Cayman Islands.

The liquidator can be reached at:

                Westport Services Ltd.
                P.O. Box 1111
                Grand Cayman, Cayman Islands

Contact for inquiries:

                Bonnie Willkom
                Telephone: (345) 949-5122
                Fax: (345) 949-7920


CLEAR SPRINGS EQUITY: Proofs of Claim Filing Deadline Is Aug. 1
---------------------------------------------------------------
Clear Springs Equity Ltd.'s creditors have until Aug. 1, 2008,
to prove their claims to Westport Services Ltd., the company's
liquidator, or be excluded from receiving any distribution or
payment.

In their proofs of claim, creditors must indicate their full
names, addresses, the full particulars of their debts or claims,
and the names and addresses of their lawyers, if any.

Clear Springs' shareholders decided on May 29, 2008, to place
the company into voluntary liquidation under The Companies Law
(2004 Revision) of the Cayman Islands.

The liquidator can be reached at:

                Westport Services Ltd.
                P.O. Box 1111
                Grand Cayman, Cayman Islands

Contact for inquiries:

                Bonnie Willkom
                Telephone: (345) 949-5122
                Fax: (345) 949-7920


CLEAR SPRINGS HOLDINGS: Deadline for Claims Filing Is Aug. 1
------------------------------------------------------------
Clear Springs Holdings Ltd.'s creditors have until Aug. 1, 2008,
to prove their claims to Westport Services Ltd., the company's
liquidator, or be excluded from receiving any distribution or
payment.

In their proofs of claim, creditors must indicate their full
names, addresses, the full particulars of their debts or claims,
and the names and addresses of their lawyers, if any.

Clear Springs' shareholders decided on May 29, 2008, to place
the company into voluntary liquidation under The Companies Law
(2004 Revision) of the Cayman Islands.

The liquidator can be reached at:

                Westport Services Ltd.
                P.O. Box 1111
                Grand Cayman, Cayman Islands

Contact for inquiries:

                Bonnie Willkom
                Telephone: (345) 949-5122
                Fax: (345) 949-7920


DIVERSIFIED EQUITY: Proofs of Claim Filing Deadline Is Aug. 1
--------------------------------------------------------------
Diversified Equity Ltd.'s creditors have until Aug. 1, 2008, to
prove their claims to Westport Services Ltd., the company's
liquidator, or be excluded from receiving any distribution or
payment.

In their proofs of claim, creditors must indicate their full
names, addresses, the full particulars of their debts or claims,
and the names and addresses of their lawyers, if any.

Diversified Equity's shareholders decided on May 29, 2008, to
place the company into voluntary liquidation under The Companies
Law (2004 Revision) of the Cayman Islands.

The liquidator can be reached at:

                Westport Services Ltd.
                P.O. Box 1111
                Grand Cayman, Cayman Islands

Contact for inquiries:

                Bonnie Willkom
                Telephone: (345) 949-5122
                Fax: (345) 949-7920


IJARA EQUITY: Deadline for Proofs of Claim Filing Is Aug. 1
-----------------------------------------------------------
Ijara Equity Ltd.'s creditors have until Aug. 1, 2008, to prove
their claims to Westport Services Ltd., the company's
liquidator, or be excluded from receiving any distribution or
payment.

In their proofs of claim, creditors must indicate their full
names, addresses, the full particulars of their debts or claims,
and the names and addresses of their lawyers, if any.

Ijara Equity's shareholders decided on May 29, 2008, to place
the company into voluntary liquidation under The Companies Law
(2004 Revision) of the Cayman Islands.

The liquidator can be reached at:

                Westport Services Ltd.
                P.O. Box 1111
                Grand Cayman, Cayman Islands

Contact for inquiries:

                Bonnie Willkom
                Telephone: (345) 949-5122
                Fax: (345) 949-7920


QPM QUORUM: Deadline for Proofs of Claim Filing Is Aug. 1
---------------------------------------------------------
QPM Quorum Long Short Equity Brazil Fund Ltd.'s creditors have
until Aug. 1, 2008, to prove their claims to Carlos Eduardo
Soares Castanho, the company's liquidator, or be excluded from
receiving any distribution or payment.

In their proofs of claim, creditors must indicate their full
names, addresses, the full particulars of their debts or claims,
and the names and addresses of their lawyers, if any.

QPM Quorum's shareholder decided on June 26, 2008, to place the
company into voluntary liquidation under The Companies Law (2004
Revision) of the Cayman Islands.

The liquidator can be reached at:

                Carlos Eduardo Soares Castanho
                Rua Iguatemi, Andar
                Cj.301, Itaim Bibi
                Sao Paulo, Brazil

Contact for inquiries:

                Bryant Terry
                c/o Ogier
                P.O. Box 1234
                Queensgate House, South Church Street
                Grand Cayman, Cayman Islands
                Telephone: (345) 949-9876
                Fax: (345) 949-1986


SEDGEWOOD EQUITY: Proofs of Claim Filing Deadline Is Aug. 1
-----------------------------------------------------------
Sedgewood Equity Ltd.'s creditors have until Aug. 1, 2008, to
prove their claims to Westport Services Ltd., the company's
liquidator, or be excluded from receiving any distribution or
payment.

In their proofs of claim, creditors must indicate their full
names, addresses, the full particulars of their debts or claims,
and the names and addresses of their lawyers, if any.

Sedgewood Equity's shareholders decided on May 29, 2008, to
place the company into voluntary liquidation under The Companies
Law (2004 Revision) of the Cayman Islands.

The liquidator can be reached at:

                Westport Services Ltd.
                P.O. Box 1111
                Grand Cayman, Cayman Islands

Contact for inquiries:

                Bonnie Willkom
                Telephone: (345) 949-5122
                Fax: (345) 949-7920


SEDGEWOOD INVESTMENTS: Deadline for Claims Filing Is Aug. 1
-----------------------------------------------------------
Sedgewood Investments Ltd.'s creditors have until Aug. 1, 2008,
to prove their claims to Westport Services Ltd., the company's
liquidator, or be excluded from receiving any distribution or
payment.

In their proofs of claim, creditors must indicate their full
names, addresses, the full particulars of their debts or claims,
and the names and addresses of their lawyers, if any.

Sedgewood Investments' shareholders decided on May 29, 2008, to
place the company into voluntary liquidation under The Companies
Law (2004 Revision) of the Cayman Islands.

The liquidator can be reached at:

                Westport Services Ltd.
                P.O. Box 1111
                Grand Cayman, Cayman Islands

Contact for inquiries:

                Bonnie Willkom
                Telephone: (345) 949-5122
                Fax: (345) 949-7920


TRUE NORTH: Proofs of Claim Filing Deadline Is Until Aug. 1
-----------------------------------------------------------
True North Ltd.'s creditors have until Aug. 1, 2008, to prove
their claims to R.A. Holdsworth, the company's liquidator, or be
excluded from receiving any distribution or payment.

In their proofs of claim, creditors must indicate their full
names, addresses, the full particulars of their debts or claims,
and the names and addresses of their lawyers, if any.

True North's shareholder decided on April 7, 2008, to place the
company into voluntary liquidation under The Companies Law (2004
Revision) of the Cayman Islands.

The liquidator can be reached at:

                R.A. Holdsworth
                c/o Garden House
                2 Boulevard Hector Otto
                MC98000, Monaco

Contact for inquiries:

                Bryant Terry
                c/o Ogier
                P.O. Box 1234
                Queensgate House, South Church Street
                Grand Cayman, Cayman Islands
                Telephone: (345) 949-9876
                Fax: (345) 949-1986



=============
G R E N A D A
=============

OLINT CORP: Grenadan Gov't Monitoring Dev't of Firm's Case
----------------------------------------------------------
Radio Jamaica reports that the Grenadan government said it is
monitoring the development of Olint Corp. Limited's case.

As reported in the Troubled Company Reporter-Latin America on
July 28, 2008, Olint's problems in Jamaica are affecting
Grenadan investment firm SGL Holdings Incorporated.  SGL
Holdings was reportedly experiencing difficulty paying its
customers due to the freezing of Olint's assets.  SGL Holdings
officials advised that until Olint's problems are solved, they
wouldn't be able to make any payments.

Radio Jamaica relates that SGL Holdings said the problems it is
facing were due to difficulties facing its trader, Olint's Turks
and Caicos Islands unit Olint TCI, whose assets had been frozen
while a probe is being conducted into its operations.  According
to SGL Holdings, Olint TCI will resume payments in nine months.
Olint in Jamaica was also given a nine-month deadline to pay out
investors.

Olint Corp. Limited is an investment scheme based in Jamaica.
It has operations in Turks and Caicos and the U.S.  It has been
facing legal problems since 2006 when the Financial Services
Commission served a cease-and-desist order on the firm.  On
Dec. 24, 2007, the court ruled that the operations of Olint
breached provisions of the Securities Act.  The firm had been
dealing in securities and engaging in the participation of a
profit-sharing agreement, issuing investment contracts, and
providing advice to potential investors without licenses and
registration.  Olint appealed the ruling and was granted a stay
of execution of the cease-and-desist order until the appeal was
heard in February 2008.  In May 2008, the National Commercial
Bank Jamaica Limited attempted to close three Olint accounts in
the bank.  However, Olint secured an injunction from the court
barring the National Commercial from closing the accounts.
Olint has suspended payments to its members since early this
year.


SGL HOLDINGS: Grenadan Gov't Monitoring Dev't of Olint's Case
-------------------------------------------------------------
Radio Jamaica reports that the Grenadan government said it is
monitoring the development of Olint Corp. Limited's case, which
has affected Grenadan investment firm SGL Holdings Incorporated.

Olint Corp. is an investment scheme based in Jamaica.

Radio Jamaica relates that SGL Holdings said the problems it is
facing were due to difficulties facing its trader, Olint Corp.'s
Turks and Caicos Islands unit, Olint TCI, whose assets had been
frozen while a probe is being conducted into its operations.

According to SGL Holdings, Olint TCI will resume payments in
nine months.  Olint in Jamaica was also given a nine-month
deadline to pay out investors.

The TCR-LA previously reported that SGL Holdings is experiencing
difficulty paying its customers due to the freezing of Olint's
assets.

SGL Holdings officials advised that until Olint's problems are
solved, they wouldn't be able to make any payments.

SGL Holdings Incorporated -- http://sglholdings.com/-- is an
Internet-based business using modern trading platforms and very
secure communication technologies.  It has operations in
Grenada.

After being directed in May 2008 to cease and desist from
conducting securities business as it didn't have a license, SGL
Holdings stopped accepting new deposits.  It was in the process
of preparing an application to the Grenada Authority for the
Regulation of Financial Institutions.



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

AIR JAMAICA: Several Companies Eye Buying Airline, Ministry Says
----------------------------------------------------------------
Several companies have expressed their interest in buying
Air Jamaica, Go Jamaica reports citing the country's
finance ministry.

According to the report, following the government's decision to
divest Air Jamaica by the end of the fiscal year in March 2009,
the finance ministry appointed a new board to prepare the
airline for divestment.

Meanwhile, the report says Air Jamaica Acting Chief Executive
Officer, Will Rodgers, said he is not aware of this, while
Millicent Hughes, acting senior vice president in charge of
finance at Air Jamaica, said that the national airline was
unreliable, adding that this would change by the end of August
when the company's maintenance woes are resolved.

Go Jamaica says Air Jamaica is currently losing US$10 million
per month, but executives said the airline had requested
a US$100 million cash injection to be able to return to
profitability.

Headquartered in Kingston, Jamaica, Air Jamaica --
http://www.airjamaica.com/-- was founded in 1969.  It flies
passengers and cargo to almost 30 destinations in the Caribbean,
Europe, and North America.  Air Jamaica offers vacation packages
through Air Jamaica Vacations.  The company closed its intra-
island services unit, Air Jamaica Express, in October 2005.  The
Jamaican government assumed full ownership of the airline after
an investor group turned over its 75% stake in late 2004.  The
government had owned 25% of the company after it went private in
1994.  The Jamaican government does not plan to own Air Jamaica
permanently.

                          *    *     *

As reported in the Troubled Company Reporter-Latin America on
June 12, 2007, Moody's Investors Service assigned a B1 rating
to Air Jamaica Limited's guaranteed senior unsecured notes.

On July 21, 2006, Standard & Poor's Rating Services assigned a
“B” long-term foreign issuer credit rating on Air Jamaica Ltd.,
which is equal to the long-term foreign currency sovereign
credit rating on Jamaica, based on the government's
unconditional guarantee of both principal and interest payments.


NATIONAL COMMERCIAL: Court Denies Firm's Application for Leave
--------------------------------------------------------------
Jamaica's Appeal Court has turned down the  National Commercial
Bank Jamaica Limited's application for leave to go to the UK
Privy Council to appeal the ruling in its case against Olint
Corp. Limited, Radio Jamaica and Go-Jamaica report.

As reported in the Troubled Company Reporter-Latin America on
July 23, 2008, the National Commercial planned to file an appeal
on a court ruling that kept it from closing Olint's accounts.
The Court of Appeal granted Olint an injunction that stops the
closing of its accounts.  The National Commercial planned to
start efforts for its appeal last week.

According to Radio Jamaica, Justice Seymour Panton, who was
handling the case, said when he made the ruling he was worried
that banks have the power to close customers' accounts when
there was no evidence of illegal transactions taking place.  The
National Commercial filed an application last week, seeking
leave to appeal the court ruling.

Radio Jamaica relates that the court said it had ordered a
speedy trial.  The court ordered the attorneys to go back to the
Supreme Court for an early date for the hearing.

RJR News quoted the National Commercial's General Legal Services
Manager Dave Garcia as saying, “The Court of Appeal gave a very
clear indication that the matter needs to be tried as early as
possible, and in fact encouraged the parties to consult with the
Registrar of the Supreme Court and if necessary the Chief
Justice, in order to obtain an early trial date, and we will
certainly be pursuing that.  Also, however we do think that the
issues that were involved in the Court of Appeal's hearing
require urgent consideration by the Privy Council, and we have
therefore instructed our attorneys to file a petition to the
Privy Council, to obtain leave directly from the Privy Council
to appeal the decision.”

Headquartered in Kingston, Jamaica, the National Commercial Bank
Jamaica Limited  -- http://www.jncb.com/-- provides commercial
and retail banking, wealth management services.  The company's
services include personal banking, business banking, mortgage
loans, wealth management and insurance services.  Founded in
1977, the bank primarily operates in West Indies and the U.K.

                        *     *     *

As reported in the Troubled Company Reporter-Latin America on
July 3, 2008, Fitch Ratings affirmed National Commercial
Bank Jamaica Limited's ratings on long-term foreign and local
currency Issuer Default Ratings at 'B+'; short-term foreign and
local currency IDRs at 'B'; Individual at 'D'; Support at 4; and
Support Floor at 'B'.

As reported in the Troubled Company Reporter-Latin America on
Dec. 18, 2006, Standard & Poor's Rating Services affirmed its
'B/B' counterparty credit and CD ratings on National Commercial
Bank Jamaica Ltd.  S&P said the outlook is stable.


SUGAR COMPANY: Infinity to Inject US$200 Million For Retooling
--------------------------------------------------------------
Infinity Bio-Energy will inject J$14.4 billion (US$200 million)
to retool sugar factories of the Sugar Company of Jamaica, The
Jamaica Gleaner reports.

Chairperson Robert Levy told The Gleaner that the proceeds will
be used for the maintenance of the factories and restore them to
viability.  The five sugar factories, which include Monymusk in
Clarendon, Bernard Lodge in St. Catherine and Frome in Westmore-
land, have been poorly maintained in the last 15 years.

"It (the sugar company) is at a point that Government would
never have the money to put it back into shape," The Gleaner
Quoted Mr. Levy as saying.

According to estate manager Glenroy Miller, Bernard Lodge has
the capacity to mill 3,000 tons of sugarcane per day but is only
producing 1,500 tons.  The St. Thomas Sugar Company has a sugar
output 14,000 tons last year but it is capable of milling 2,200
tons per day, if overhauled.

"We need a major retooling, and if we get that, we should be
on a viable path," The Gleaner relates, citing senior engineer,
Uriel Smith.

The Sugar Company of Jamaica Limited, a.k.a. SCJ, was formed in
November 1993 by a consortium made up of J. Wray & Nephew
Limited, Manufacturers Investments Limited and Booker Tate
Limited.  The three companies each held 17% equity in SCJ, with
the remaining 49% being held by the government of Jamaica.  In
1998, the government became the sole shareholder of SCJ by
acquiring the interests of the members of the consortium. Its
stated goal was to maximize efficiency, productivity and
profitability of the three sugar factories, within three years.
The principal activities of the company are the cultivation of
cane and the manufacture and sale of sugar and molasses.

                          *     *     *

The Sugar Company of Jamaica Limited registered a net loss of
almost US$1.1 billion for the financial year ended Sept. 30,
2005, 80% higher than the US$600 million reported in the
previous financial year.  Sugar Company blamed its financial
deterioration to the reduction in sugar cane production.
According to published reports, the Jamaican government has
taken responsibility for the payment of the firm's debts.  Radio
Jamaica has said that to date, the five sugar factories have
incurred J$3 billion in debts.  The government is now selling
the factories.


SUGAR COMPANY: Jamaica to Divest Assets to Infinity Bio-Energy
--------------------------------------------------------------
The Jamaica Gleaner reports that the Jamaican government has
agreed to divest the assets of its state-run sugar producer,
Sugar Company of Jamaica Ltd., to Infinity Bio-Energy last June
2007.

The Gleaner relates that the assets will be fully transferred by
Sept. 30, 2008.  The government will continue to hold a 25%
stake of the company's assets, amounting to J$1.8 billion (US$25
million).

As part of the agreement, Infinity expects to produce 80 million
kiloliters of ethanol in two years, and 135 million kiloliters
by 2013, The Gleaner notes.  Infinity also hopes to improve the
production of sugarcane to 1.4 million tons in 2009 and 2.5
million by 2013.

According to The Gleaner, this is the second divestiture attempt
the Jamaican government made in behalf of The Sugar Company.
The first attempt was in the 1990s with a British firm, Booker
Tate but the agreement fell apart due to failure of the
government to meet its commitments.

The Sugar Company of Jamaica Limited, a.k.a. SCJ, was formed in
November 1993 by a consortium made up of J. Wray & Nephew
Limited, Manufacturers Investments Limited and Booker Tate
Limited.  The three companies each held 17% equity in SCJ, with
the remaining 49% being held by the government of Jamaica.  In
1998, the government became the sole shareholder of SCJ by
acquiring the interests of the members of the consortium. Its
stated goal was to maximize efficiency, productivity and
profitability of the three sugar factories, within three years.
The principal activities of the company are the cultivation of
cane and the manufacture and sale of sugar and molasses.

                          *     *     *

The Sugar Company of Jamaica Limited registered a net loss of
almost US$1.1 billion for the financial year ended Sept. 30,
2005, 80% higher than the US$600 million reported in the
previous financial year.  Sugar Company blamed its financial
deterioration to the reduction in sugar cane production.
According to published reports, the Jamaican government has
taken responsibility for the payment of the firm's debts.  Radio
Jamaica has said that to date, the five sugar factories have
incurred J$3 billion in debts.  The government is now selling
the factories.



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


FRONTIER AIRLINES: Gets US$75MM DIP Financing Offer from Perseus
----------------------------------------------------------------
Frontier Airlines Holdings Inc. received a US$75 million in
post-petition debtor-in-possession financing commitment from
Perseus LLC, a private investment firm based in Washington, D.C.
with offices in Evergreen, Colorado, New York and Munich that
invests in numerous buyout and growth equity transactions in the
United States, Canada, and Western Europe.

Perseus has also agreed to serve as equity sponsor for
Frontier's plan of reorganization, allowing Perseus to purchase
79.9% of the equity in the reorganized company for
US$100 million.  The DIP facility and plan sponsorship are
subject to bankruptcy court approval and to various conditions.

“This statement is a major boost to Frontier and builds momentum
toward its emergence from bankruptcy as a viable enterprise,”
Sean Menke, Frontier president and chief executive officer,
said.  “The US$75 million commitment in DIP financing from
Perseus is a significant vote of confidence in the employees of
Frontier, our product and business plan.  Despite the current
challenges facing the airline industry, these transactions help
point the way towards Frontier's emergence from bankruptcy as a
competitive, sustainable airline.”

“We are enthusiastic about the opportunity to invest in the
future of Frontier,” Brian Leitch, senior managing director of
Perseus, said.  “We believe that Frontier has the highest-
quality affordable coach product in the domestic airline
industry.  We are impressed by Frontier's excellent employees
and friendly customer service, well as the numerous product
characteristics that distinguish Frontier from its competitors.
Industry data supports our conclusion that when given a choice,
the majority of coach travelers prefer Frontier over the
competitive options.  The airline industry is in a state of
transition and some degree of turmoil.  Although Frontier has
been buffeted by recent fuel price increases and certain other
issues, we believe that Frontier has proven that it deserves a
chance to succeed in this challenging market, and we are proud
to help it do so.”

“We have named our acquisition affiliate Go Flip Go, L.L.C, as a
symbol of our desire to encourage and preserve Frontier's unique
cultural attributes,” Mr. Leitch continued.  “Of course, we also
want to support Larry, Hector, Grizwald, Jack, Sally, the
penguins and all the other Frontier animals.”

Frontier filed a motion on July 25 with the U.S. Bankruptcy
Court for the Southern District of New York.  Upon court
approval, Perseus will provide funding under the proposed DIP
credit facility in two installments to support the company's
working capital needs.

The proposed DIP funding, coupled with Frontier's negotiations
with partners to improve liquidity, reduce expenses, and
preserve cash, is expected to provide sufficient working capital
for the Company's operations.  The company continues to work
with its partners and employees to obtain additional liquidity,
reduce expenses and enhance revenues.

“We are grateful that many of our key vendors and business
partners, as well as all of our employees, have stepped up and
made financial sacrifices to help provide Frontier with a lot of
staying power,” Mr. Menke said.  “Through a variety of
transactions and business initiatives, we have improved our
liquidity over a very short period of time.  All of this support
reaffirms the fundamental business changes we have been making
since the beginning of the year.  We continue to adjust capacity
and realign our route network to leverage our brand strengths
and market awareness during a period of severe industry
turmoil.”

                   About Frontier Airlines Inc.

Headquartered in Denver, Colorado, Frontier Airlines Inc. --
http://www.frontierairlines.com/-- provide air transportation
for passengers and freight.  They operate jet service carriers
linking their Denver, Colorado hub to 46 cities coast-to-coast,
8 cities in Mexico, and 1 city in Canada, well as provide
service from other non-hub cities, including service from 10
non-hub cities to Mexico.  As of May 18, 2007 they operated 59
jets, including 49 Airbus A319s and 10 Airbus A318s.

The Debtor and its debtor-affiliates filed for Chapter 11
protection on April 10, 2008, (Bankr. S.D. N.Y. Case No.: 08-
11297 thru 08-11299.)  Hugh R. McCullough, Esq., at Davis Polk &
Wardwell, represents the Debtors in their restructuring efforts.
Togul, Segal & Segal LLP is the Debtors' Conflicts Counsel,
Faegre & Benson LLP is the Debtors' Special Counsel, and Kekst
and Company is the Debtors' Communications Advisors.  At
Dec. 31, 2007, Frontier Airlines Holdings Inc. and its
subsidiaries' total assets was US$1,126,748,000 and total debts
was US$933,176,000.


GRUPO CASA: Reports MXN210.09 Mln Net Profit in Second Quarter
--------------------------------------------------------------
Grupo Casa Saba has reported its consolidated financials and
operating results for the second quarter of 2008.

                   Financial Highlights:

  -- Sales for the quarter totaled MXN6,959.41 million

  -- Gross income increased 34.45%

  -- Gross margin for the quarter was 10.64%

  -- Quarterly operating expenses as a percentage of sales were
     7.19%

  -- The operating margin for the quarter was 3.46%

  -- Net profit for the quarter reached MXN210.09 million

  -- Cash and cash equivalents at the end of the quarter was
     MXN315.42 million

                       Quarterly Earnings

Net Sales

During the second quarter, Grupo Casa Saba's sales were
MXN6,959.41 million, an increase of 14.05%.

Sales for the Private Pharma division grew 13.62% during the
second quarter of 2008, due to the consolidation of investments
made within the sector over the past several months, including
the most recent acquisition of Drogasmil Medicamento e
Perfumeria, S.A., a Brazilian pharmacy chain.

Sales in the Health, Beauty, Consumer Goods, General Merchandise
and Others division rose 10.52% compared to the second quarter
of 2007.  This growth was primarily the result of the
acquisition of new lines of consumer products that the company
distributes on an exclusive basis.

Sales in the Government Pharma division increased 58.91% due to
a significant increase in the number of units sold, primarily to
Petroleos Mexicanos.

Publication sales decreased 1.31% as a result of lower unit
sales.  This decrease was due to the fact that Citem stopped
distributing some publications that that did not meet the
company's minimal profitability requirements.

The sales mix did not change significantly this quarter. Private
Pharma sales represented 83.70% of total sales (compared to
84.02% during the second quarter of 2007), while Government
Pharma accounted for 3.92% (versus 2.82% during the second
quarter of 2007).  Health, Beauty, Consumer Goods, General
Merchandise and Other represented 9.21% (compared to 9.50% in
the second quarter of 2007) and Publications made up the
remaining 3.17% (versus 3.66% during the second quarter 2007).

                       Sales By Division

Private Pharma Sales in the Private Pharma division rose 13.62%
during the second quarter of 2008, as a result of the
consolidation of investments that were made within the sector
during the past several months.  This includes the most recent
acquisition of Drogasmil Medicamento e Perfumeria, S.A., a
Brazilian pharmacy chain.

Sales reached MXN5,825.07 million and represented 83.70% of the
group's total sales.

Sales in the Government Pharma division grew 58.91% due to a
significant increase in the number of units sold, primarily to
Petroleos Mexicanos.  Government Pharma sales reached MXN273.04
million during second quarter 2008 and accounted for 3.92% of
the total sales.

Sales in the Health, Beauty, Consumer Goods, General Merchandise
and Other division increased 10.52% versus the second quarter of
2007, primarily as a result of the acquisition of new lines of
exclusively distributed consumer products.

Publication sales decreased 1.31% as a result of lower unit
sales.  This decrease was due to the fact that Citem stopped
distributing some publications that that no longer met the
company's minimal profitability requirements.  This division's
participation as a percentage of total sales went from 3.66% in
second quarter 2007 to 3.17% in the second quarter of 2008.

                          Gross Income

During the second quarter of the year, Grupo Casa Saba's gross
income increased 34.45% to reach MXN740.63 million.  The
company's gross margin improved as a result of the recent
investments, to reach 10.64%.

                      Operating Expenses

Operating expenses reached MXN500.13 million, an increase of
47.58% compared to the second quarter of 2007. This was due to
the investments that were made over the past several months.
Operating expenses represented 7.19% of the total sales.

                       Operating Income

Operating income continued to grow.  This quarter, it rose
13.45%, to reach MXN240.50 million.  The operating margin was
3.46%, 1 basis points lower than the 3.47% margin registered in
the second quarter of 2007.

      Operating Income Plus Depreciation and Amortization

Operating income plus depreciation and amortization for second
quarter 2008 was MXN259.07 million, an increase of 9.61%
compared to the second quarter of 2007.  Depreciation and
amortization for the period was MXN18.57 million, 23.81% lower
than in the second quarter of 2007.

                   Cash and Cash Equivalents

Cash and cash equivalents at the end of the second quarter of
2008 was MXN315.42 million.

                Comprehensive Cost of Financing

During the second quarter of 2008, Grupo Casa Saba's
comprehensive cost of financing was MXN47.66 million due to an
increase in the amount of interest income paid.  This interest
came, in large part, from the long-term loan related to the
Brazilian acquisition.

                     Other Expenses (Income)

During the second quarter of 2008, the Company registered an
income of MXN21.16 million in other expenses (income).  The
expenses (income) from this line item were derived from
activities that are distinct from the company's everyday
business operations.

                         Tax Provisions

During the second quarter, tax provisions were MXN3.91 million.
These provisions included MXN39.57 million in income tax and
-MXN35.66 million in deferred income tax.

                           Net Income

Grupo Casa Saba's net income for the second quarter was
MXN210.09 million, an increase of 15.92% compared to the second
quarter of 2007.  The net margin for the period was 3.02%, 5
basis points higher than the net margin obtained during the
second quarter of 2007.

                        Working Capital

During the second quarter of 2008, Grupo Casa Saba's accounts
receivable days were virtually the same at 60.6 days (they were
60.2 days in the second quarter of 2007).  In addition, the
company's accounts payable days increased 1.3 days compared to
second quarter 2007, to reach 48 days.  Finally, its inventory
days were 53.9 days, 1.5 more days than in second quarter 2007.

                      About Grupo Casa Saba

Founded in 1892 and based in Mexico City, Mexico, Grupo Casa
Saba, SAB de CV (fka. Grupo Casa Autrey, SA de CV) through its
subsidiaries, operates as a multi-channel, multi-product
wholesale distributor in Mexico.  It distribute pharmaceutical
products, health, beauty aids and consumer goods, general
merchandise, and publications, as well as office, electronic,
and other products, including keyboards, audio and television
equipment, and related accessories.  The company also offers
freight services to third parties; real estate services; a range
of value added services, including multiple daily deliveries,
emergency product replacement, merchandising, marketing support,
and other customer counseling services; and training,
conferences, and trade fairs.  It serves privately-owned and
government pharmacies, mass merchandisers, regional and national
supermarkets, department stores, convenience stores,
wholesalers, and other specialized channels.

                         *     *     *

As of March 30, 2007, Moody's Investors Service maintains a Ba2
global scale and A1.mx national scale corporate family rating
for Grupo Casa Saba, S.A. de C.V. with a stable ratings outlook.
The rating action still holds to date.


GRUPO TMM: Posts US$14.7 Mil. Net Loss in Quarter Ended June 30
---------------------------------------------------------------
Grupo TMM S.A.B. has posted a net loss of US$14.7 million for
the three months ended June 30, 2008, compared to a net loss of
US$955,000 for the same period of 2007.

In the second quarter of 2008, consolidated revenues increased
26.3 percent to US$92.6 million, compared to US$73.3 million in
the same period of 2007.

Jose F. Serrano, chairperson and chief executive officer of
Grupo TMM, stated, “We are very pleased to have successfully
completed our 20-year Mexican Trust Certificates Program through
the recent issuance of the third tranche.  This facility is non
recourse to the Company and is tied to the useful life of the
vessels purchased with its proceeds.  The Program was rated AA
by Fitch Ratings, reflecting TMM's continued quality operating
performance, increased demand for maritime transportation
services in Mexico and the Mexican Navigation Law principles.
This Program was the largest placement of long-term debt tied to
the useful life of transportation assets that has been issued in
the Mexican market, setting a milestone for this kind of
transaction.”

Mr. Serrano said, “With the total proceeds from the three
tranches, approximately 8.94 billion pesos or approximately
US$868 million dollars, we refinanced 20 vessels in July of last
year, which were at the time financed in U.S. dollars.
Additionally, we acquired 12 offshore vessels and three product
tankers, to service Mexico's exploration and transportation
priorities.  These actions are designed to further enhance the
quality of TMM's offerings to its clients and to support the
growth of TMM over the longer term.”

“The second quarter of 2008 was a transitional period for the
Company, as the closing of the third tranche was delayed due to
market conditions, and as the majority of our new vessels have
not been delivered yet and are not reflected in our results,”
Mr. Serrano noted.

Mr. Serrano said, “However, due to the strong demand for vessels
in the Mexican maritime transportation market, we foresee having
all 15 new vessels in operation as they are delivered.  We
already have contracts with Pemex and other clients in place for
six of these vessels, three of them starting during the third
quarter, one in March of 2009 and two during the third quarter
of 2009.  Additionally, we will participate in bids for two
contracts this week; four vessels are currently being built and
will be delivered in 2009; and the three product tankers will
start operations in the spot market as soon as they are
delivered, which will keep them employed until long-term
contracts are awarded.”

Mr. Serrano stated, “The company's Trust Certificates Program
will provide non-restricted cash flow to TMM, as this structure
provides that five percent of the collected revenues are
released to TMM on monthly basis as the Trust receives each
payment generated by each contract.  An additional five percent
success fee is released to TMM if the planned interest expense
and principal generated from the Trust Certificates are paid
according to schedule.  Moreover, after the third year of the
Program, if all required payments have been fulfilled, and
provided that the required reserve funds are fully funded, TMM
is entitled to receive at the end of each semi-annual period up
to 50 percent of any excess cash and 50 percent is used by the
Trust to pay down principal.  At the end of the Program, TMM
will receive the remaining cash, and the Trust will transfer all
assets plus the residual value of the vessels, which could
represent approximately 20 percent of the original investment,
back to TMM.”

“Assuming no change in TMM's current EBITDA run rate, and taking
in consideration the anticipated dry dock maintenance of the
Maritime fleet in the second quarter, we maintain our EBITDA run
rate guidance of approximately US$90 million for the fourth
quarter of 2008 and estimate an EBITDA run rate of approximately
US$132 million for the fourth quarter of 2009.”

Mr. Serrano noted, “With the successful completion of our Trust
Certificates financing, we are now focused on consolidating the
financial stability of the company through the refinancing of
our securitization facility, which we expect to complete before
year end.  To assist in this refinancing, the company has
identified certain non-productive, non-strategic assets which
could be sold, using the proceeds from these sales to partially
pay down this securitization facility.”

“Additionally, to support our shareholders in these times of
high volatility in the Markets, the company reactivated its
share repurchase program. Since this program was authorized in
December 2007, the Company has repurchased 687,800 shares,” Mr.
Serrano said.

Mr. Serrano stated, “With the completion of our efforts to raise
capital to acquire vessels in response to the critical need for
oil exploration in Mexico, our next priority is to capitalize
TMM and reduce our debt service.  We will also look at new
strategies that will enable us to gain our full potential market
share and improve our operating performance and cost management.
We see tremendous opportunity in front of us and look forward to
building positive momentum in 2008 and beyond.  We are committed
to improving operating results and providing economic value to
our shareholders.”

                       About Grupo TMM

Headquartered in Mexico City, Grupo TMM, S.A.B. (NYSE: TMM)(MEX
VALORIS: TMMA) -- http://www.grupotmm.com/-- is a Latin
American multimodal transportation and logistics company.
Through its branch offices and network of subsidiary companies,
TMM provides a dynamic combination of ocean and land
transportation services.

As reported in the Troubled Company Reporter-Latin America on
July 17, 2008, Grant Thornton, S.C., raised substantial doubt
about the ability of Grupo TMM, S.A.B, to continue as a going
concern after it audited the company's financial statements for
the year ended Dec. 31, 2007.  The auditing firm pointed to the
company's sustained substantial losses from continuing
operations during the past five years.


PORTOLA PACKAGING: Will Restructure by Pre-Package Chapter 11
-------------------------------------------------------------
Portola Packaging Inc. entered into a restructuring support
agreement with its principal secured lenders and holders in
excess of 80% in amount of its 8-1/4% Senior Notes due 2012
which will enable the company to significantly reduce its
outstanding indebtedness.  The company plans to implement the
proposed restructuring through a pre-packaged Chapter 11
bankruptcy filing.

In connection with the restructuring, the company also has
reached agreement with Wayzata Investment Partners LLC, a
Minnesota-based investment firm with more than US$6 billion in
assets under management, which will provide the company with
access to a US$10 million bridge facility to fund the
restructuring process.

Pursuant to the restructuring, holders of the senior notes will
receive 100% of the common stock of reorganized Portola in
exchange for their claims.  Wayzata is expected to be the
company's controlling shareholder upon emergence from Chapter
11.

Importantly, the restructuring contemplates that all obligations
owed to trade creditors, suppliers, customers and employees in
the ordinary course of business will be unimpaired and
unaffected by the restructuring.

The company expects to commence the formal process of vote
solicitation in early August.  When the necessary votes are
received, the restructuring will be finalized through a
voluntary pre-packaged bankruptcy filing under chapter 11 of the
U.S. Bankruptcy Code to be commenced in early September 2008.

The company anticipates that the restructuring process will be
completed by the end of October 2008 at the latest.

“We are pleased to have achieved such strong support for a
consensual restructuring that dramatically improves our balance
sheet, reduces our annual cash interest obligations by
approximately US$15 million, and enables continued reinvestment
in our products and future growth,” Brian J. Bauerbach,
Portola's President and CEO, stated.  “We are thrilled to have
the continued support of Wayzata and look forward to its long
term commitment to the business.”

                         Notice of Default

As reported in the Troubled Company Reporter on July 21, 2008,
Portola Packaging received a notice of default under its
US$60.0 million revolving credit agreement dated Jan. 16, 2004,
with General Electric Capital Corporation.

The notice was prompted by the company's filing stating that the
company was investigating accounting irregularities at certain
subsidiaries in China that may require restatement of these
financial statements for approximately US$2.5 million net over
these periods, in total.

            S&P Cuts Corporate Credit Rating to 'CCC-'

Standard & Poor's Ratings Services said on July 23, 2008, it
lowered its ratings on Portola Packaging Inc. by one notch,
including its corporate credit rating to 'CCC-' from 'CCC'.  The
outlook remains negative.

The downgrade reflects a potential debt restructuring that S&P
could view as tantamount to a default, heightened liquidity
concerns, and continued poor operating results.  The company
recently disclosed that it is evaluating alternatives that could
include a restructuring of its funded debt obligations.

On June 30, 2008, Portola received a notice of default and
reservation of rights from General Electric Capital Corp. in
accordance with the credit agreement governing its US$60 million
senior secured revolving credit facility.  The notice was
prompted by Portola's earlier filing stating that it was
investigating accounting irregularities at certain subsidiaries
in China that may require an unfavorable restatement of
financial statements.

Portola reported on July 7, 2008, that GECC continued to make
funds available under the credit agreement.

“However, we are becoming increasingly concerned about its
continuing access to the facility in light of the accounting
investigation and ongoing discussions with GECC and Wayzata
Investment Partners LLC regarding forbearance arrangements that
would allow the company to pursue a balance sheet
restructuring,” credit analyst Henry Fukuchi said.

“In addition, recent operating results have been weaker than
expected due to ongoing challenges related to resin and energy-
related cost increases,” Mr. Fukuchi said.

With annual sales of about US$284 million, Batavia, Illinois-
based Portola produces tamper-evident plastic closures on
packaging applications for noncarbonated beverages such as dairy
drinks, fruit juices, and water; cosmetics; and food products.

                      About Portola Packaging

Headquartered in Batavia, Illinois, Portola Packaging Inc. --
http://www.portpack.com/-- designs, manufactures and markets
tamper-evident plastic closures used in dairy, fruit juice,
bottled water, sports drinks, institutional food and other non-
carbonated beverage markets.  The company also produces a wide
variety of plastic bottles for use in dairy, water and juice
markets, including various high density bottles, as well as
five-gallon polycarbonate water bottles.  In addition, the
company designs, manufactures and markets capping equipment for
use in high speed bottling, filling and packaging production
lines.  Portola is also engaged in the manufacture and sale of
tooling and molds used for blow molding.  The company has
locations in China, Mexico and Belgium.


PORTOLA PACKAGING: Bankruptcy Filing Cues Moody's to Junk Rating
----------------------------------------------------------------
Moody's Investors Service has downgraded the Corporate Family
Rating of Portola Packaging, Inc. to Caa3 from Caa1 and changed
the outlook for the ratings to negative from stable.  The
company's Probability of Default Rating was lowered to Ca from
Caa1.

The downgrades were prompted by Portola's announcement that it
intends to file for bankruptcy, which is reflective of
deteriorating business conditions, higher input costs, and
liquidity constraints.  The company has announced its intention
to seek a Chapter 11 bankruptcy.  Portola also announced that it
has reached an agreement with 80% of the holders of the senior
notes due 2012 to exchange these notes for common stock in the
reorganized company.  Minnesota investment firm Wayzata
Investment Partners LLC is expected to provide a US$10 million
bridge loan to fund the restructuring.

Portola has faced ongoing business challenges, including weak
demand, negative changes in mix and inflationary pressures,
which have pressured volumes and margins.  In addition, on
June 30, 2008, Portola received a notice of default and
reservation of rights from the lender for its US$60 million
senior secured revolving credit facility.  The notice was
prompted by the company's June 23, 2008 filing stating that it
was investigating accounting irregularities at its China
subsidiaries, which may require a restatement of financial
statements which would lower net income by approximately
US$2.5 million.

Moody's took these rating actions:

-- Downgraded and withdrew the US$60 million Guaranteed Senior
   Secured Revolver due 2009, to B3 (LGD2, 13%) from B1 (LGD 2,
   11%)

-- Downgraded the US$180 million Guaranteed Senior Unsecured
   Notes due 2012, to Ca (LGD4, 56%) from Caa2 (LGD4, 65%)

-- Downgraded the Corporate Family Rating to Caa3 from Caa1

-- Downgraded the Probability of Default Rating to Ca from Caa1

The rating outlook was changed to negative from stable.

The Ca Probability of Default Rating (PDR) reflects the very
high probability of default in the near-term.  Moody's believes
that the overall family recovery (Loss Given Default Assessment)
for Portola will be approximately 60%, which is somewhat better
than the standard 50% family recovery.  As a result of the
slightly-higher-than-average recovery rate, the Corporate Family
Rating is, at Caa3, one notch higher than the PDR.  The Ca
rating on the Guaranteed Senior Unsecured Notes reflects a
sizable expected loss for this class of debt.  The B3 rating for
the Senior Secured Revolver is one notch lower than that
indicated by Moody's Loss-Given-Default methodology but is
believed to be more indicative of the small losses likely to be
incurred by the lender as a result of the company's bankruptcy
and restructuring.  The proximity to default was also a factor
in adjusting the Revolver rating downward to B3.

                    About Portola Packaging

Portola Packaging Inc. -- http://www.portpack.com/-- designs,
manufactures and markets tamper evident plastic closures used in
dairy, fruit juice, bottled water, sports drinks, institutional
food products and other non-carbonated beverage products.  The
company also produces a wide variety of plastic bottles for use
in the dairy, water and juice industries, including various high
density bottles, as well as five-gallon poly carbonate water
bottles.  In addition, the company designs, manufactures and
markets capping equipment for use in high-speed bottling,
filling and packaging production lines.  The company is also
engaged in the manufacture and sale of tooling and molds used in
the blow molding industry.  The company has locations in China,
Mexico and Belgium.


SEMGROUP ENERGY: March 31 Balance Sheet Upside-Down by US$54.6MM
----------------------------------------------------------------
SemGroup Energy Partners, L.P.'s consolidated balance sheet at
March 31, 2008, showed US$262.0 million in total assets and
US$316.6 million in total liabilities, resulting in a
US$54.6 million partners' deficit.

At March 31, 2008, the company's consolidated balance sheet also
showed strained liquidity with US$5.8 million in total current
assets available to pay US$16.1 million in total current
liabilities.

The company reported net income of US$9.8 million on service
revenues of US$40.2 million for the first quarter ended
March 31, 2008.

These results compare to pre-IPO predecessor results of a net
loss of US$12.3 million on revenues of US$8.6 million for the
quarter ended March 31, 2007.  The predecessor did not record
any revenue associated with the gathering and transportation and
terminalling and storage services provided on an intercompany
basis, but did recognize the costs of providing such services.

The company generated US$19.0 million in earnings before
interest, taxes, depreciation and amortization, or EBITDA, for
the first quarter of 2008, and distributable cash flow of
US$15.7 million.

Kevin Foxx, SemGroup Energy Partners president and chief
executive officer, said, “We're pleased that 2008 is off to a
great start.  SGLP's results were driven by three factors:
strong storage demand; an increase in transportation volumes at
long-haul rates; and 41 days of earnings contribution from the
asphalt terminalling and storage facilities that we acquired on
February 20th of this year.”

On March 31, 2008, the net book value of the company's property,
plant and equipment was US$244.8 million compared with
US$102.2 million on Dec. 31, 2007, which reflects the impact of
the asphalt terminalling and storage facilities acquired.

“SGLP remains on track to increase our per unit annual cash
distribution rate for 2008 by US$0.40 to US$0.50 over the fourth
quarter 2007 annualized rate of US$1.35 per unit,” Foxx said.

                 Liquidity and Capital Resources

Net cash used in investing activities was US$380.5 million for
the three months ended March 31, 2008, compared to
US$9.0 million for the three months ended March 31, 2007.  This
increase is primarily attributable to the purchase of the
SemMaterials, L.P's asphalt assets in February 2008 for
approximately US$379.3 million.

Net cash provided by financing activities was US$355.0 million
for the three months ended March 31, 2008, as compared to
US$21.1 million for the three months ended March 31, 2007.  Net
cash provided by financing activities for the three months ended
March 31, 2008, is primarily comprised of net borrowings under
the company's credit facility of US$205.4 million and proceeds
from the February 2008 public offering, net of offering fees, of
US$161.2 million, and is offset by distributions paid of
US$9.4 million for the three months ended March 31, 2008.

At March 31, 2008, the company had approximately US$305.0
million of availability under its US$350.0 millionrevolving
credit facility.

                    Purchase of Asphalt Assets

On Feb. 20, 2008, the company purchased land, receiving
infrastructure, machinery, pumps and piping and 46 liquid
asphalt cement and residual fuel oil terminalling and storage
facilities from SemMaterials, L.P., a subsidiary of SemGroup,
L.P. (the company's parent), for aggregate consideration of
US$379.5 million, including US$700,000 of acquisition-related
costs.

For accounting purposes, the acquisition has been reflected as a
purchase of assets, with the acquired asphalt assets recorded at
the historical cost of SemMaterials, which was approximately
US$145.5 million, with the additional purchase price of
US$234.0 million reflected in the statement of changes in
partners' capital as a distribution to SemGroup, L.P.

In conjunction with the purchase of the acquired asphalt assets,
the company amended its existing credit facility, increasing its
borrowing capacity to US$600 million.  The amended credit
facility is comprised of a US$350.0 revolving credit facility
and a US$250.0 million term loan facility and will mature on
July 20, 2012.

Full-text copies of the company's consolidated financial
statements for the quarter ended March 31, 2008, are available
for free at http://researcharchives.com/t/s?3017

                  About SemGroup Energy Partners

Tulsa, Oklahoma-based SemGroup Energy Partners, L.P. (Nasdaq:
SGLP) -- http://www.SGLP.com/-- owns and operates a diversified
portfolio of complementary midstream energy assets.  SemGroup
Energy Partners provides crude oil and liquid asphalt cement
terminalling and storage services and crude oil gathering and
transportation services.  SemGroup serves customers in the
United States, Canada, Mexico, Wales, Switzerland and Vietnam.
SemMaterials Mexico, S. de R.L. de C.V. is a major subsidiary of
the company.

On July 22, 2008, the company's parent, SemGroup, L.P., filed a
voluntary petition for reorganization under Chapter 11 of the
Bankruptcy Code in the United States Bankruptcy Court for the
District of Delaware.  Various subsidiaries of SemGroup, L.P.
also filed voluntary petitions for reorganization under Chapter
11 of the Bankruptcy Code on such date.  None of the company,
the general partner of the company, nor any of the subsidiaries
of the company or the general partner were included in the
bankruptcy filings.


SEMGROUP LP: Has About US$13 Million Payable to Hiland Holdings
---------------------------------------------------------------
Hiland Holdings GP, LP, and Hiland Partners, LP, updated the
status of the Partnership's product sales to certain affiliates
of SemGroup, L.P., in response to the bankruptcy of SemGroup,
L.P. and certain of its affiliates.

In the Partnership's public filings with the U.S. Securities and
Exchange Commission, the Partnership has historically sold
natural gas liquids and condensate that are produced at its
Bakken and Badlands plants and gathering systems to SemGroup.
The Partnership currently has an account receivable of
approximately US$8 million from SemGroup relating to product
sales made during June 2008 and estimates additional uninvoiced
product sales of approximately US$5 million from July 1 through
July 18, 2008.  Any potential accounts receivable write-off
related to the Partnership's exposure to SemGroup is not
expected to cause the Partnership to be out of compliance with
its covenants under its credit facility or impact its liquidity
position in any material respect.

The Partnership has made temporary arrangements for its product
sales while assessing its options in light of SemGroup's
bankruptcy.  The Partnership does not anticipate that the
SemGroup bankruptcy will cause it to lower its distribution
guidance or impede the execution of its current growth capital
expenditure program.

                    About the Hiland Companies

Enid, Oklahoma-based Hiland Partners, LP (NASDAQ: HLND) --
http://www.hilandpartners.com/-- gathers, compresses,
dehydrates, treats, processes and markets natural gas, and
fractionates, or separates, natural gas liquids, or NGLs.  The
Partnership also provides air compression and water injection
services for use in oil and gas secondary recovery operations.
The Partnership's operations are primarily located in the Mid-
Continent and Rocky Mountain regions of the United States.
Hiland Partners, LP's midstream assets consist of fourteen
natural gas gathering systems with approximately 2,030 miles of
gathering pipelines, five natural gas processing plants, seven
natural gas treating facilities and three NGL fractionation
facilities.  The Partnership's compression assets consist of two
air compression facilities and a water injection plant.

Hiland Holdings GP, LP owns the two percent general partner
interest, 2,321,471 common units and 3,060,000 subordinated
units in Hiland Partners, LP, and the incentive distribution
rights of Hiland Partners, LP.

                       About SemGroup L.P.

SemGroup L.P. -- http://www.semgrouplp.com/-- is a midstream
service company providing the energy industry means to move
products from the wellhead to the wholesale marketplace.
SemGroup provides diversified services for end users and
consumers of crude oil, natural gas, natural gas liquids,
refined products and asphalt.  Services include purchasing,
selling, processing, transporting, terminaling and storing
energy.  SemGroup serves customers in the United States, Canada,
Mexico, Wales, Switzerland and Vietnam.  SemMaterials Mexico, S.
de R.L. de C.V. is a major subsidiary of the company.

SemGroup L.P. and its debtor affiliates filed for Chapter 11
protection on July 22, 2008 (Bankr. D. Del. Lead Case No.: 08-
11525) These represent the Debtors' restructuring efforts: John
H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins,
Esq. at Richards Layton & Finger; Harvey R. Miller, Esq.,
Michael P. Kessler, Esq. and Sherri L. Toub, Esq. at Weil,
Gotshal & Manges LLP; and Martin A. Sosland, Esq. and Sylvia A.
Mayer, Esq. at Weil Gotshal & Manges LLP.  Kurtzman Carson
Consultants L.L.C. is the Debtors' claims agent.  The Debtors'
financial advisors are The Blackstone Group L.P. and A.P.
Services LLC.  Margot B. Schonholtz, Esq. and Scott D. Talmadge,
Esq. at Kaye Scholer LLP; and Laurie Selber Silverstein Esq. at
Potter Anderson & Corroon LLP represent the Debtors' prepetition
lenders.

The Debtors' consolidated, unaudited financial conditions as of
June 30, 2007, showed US$5,429,038,000 in total assets and
US$5,033,214,000 in total debts.  In their petition, they showed
more than US$1,000,000,000 in estimated total assets and more
than US$1,000,000,000 in total debts.

(SemGoup Bankruptcy News, Issue No. 2; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000)

                          *     *    *

On July 25, 2008, the Troubled Company Reported that Fitch
Ratings downgraded the ratings of SemGroup, L.P., SemCrude L.P,
and SemCAMS Midstream Co. and simultaneously withdrawn all
ratings.  The withdrawn ratings include Issuer default Rating D
assigned to SemGroup, L.P., SemCrude, L.P., and SemCAMS
Midstream Co.  Fitch Ratings has downgraded, removed from Rating
Watch Negative, and simultaneously withdrawn (a) SemGroup,
L.P.'s Senior unsecured to 'C' from'B/RR3'; (b) SemCrude L.P.'s
Senior secured working capital facility to 'CCC' from 'BB-/RR1';
Senior secured revolving credit facility to 'CC' from 'B+/RR1';
and Senior secured term loan B to 'CC' from 'B+/RR1'; and (c)
SemCAMS Midstream Co. (SemCAMS) Senior secured working capital
facility to 'CCC' from 'BB-/RR1'; Senior secured revolving
credit facility to 'CC' from 'B+/RR1'; and Senior secured term
loan B to 'CC' from 'B+/RR1'.

Also, Moody's Investors Service downgraded SemGroup, L.P.'s
Corporate Family Rating to Ca from Caa2, its Probability of
Default Rating to D from Caa3, its senior unsecured rating to C
(LGD 5; 86%) from Ca (LGD 4; 69%), and its first secured bank
facilities to Caa3 (LGD 3; 38%) from B3 (LGD 2; 21%).  These
actions affect rated cross guaranteed debt at parent SemGroup
and its subsidiaries SemCams Holding Company and SemCrude, L.P.

Further, Fitch Ratings lowered the Issuer Default Ratings of
SemGroup, L.P., SemCrude L.P, and SemCAMS Midstream Co. to 'D'
following the bankruptcy petition by SemGroup and most of units
on July 22, 2008.  These ratings are removed from Rating Watch
where they were placed on July 17, 2008.  The bank facility and
securities ratings of SemGroup and units remain on Rating Watch
Negative pending a review of the bankruptcy court petition.


SEMGROUP LP: Seeks Schedules and Statements Filing Extension
------------------------------------------------------------
SemGroup L.P. and its debtor-affiliates asked the U.S.
Bankruptcy Court for the District of Delaware to extend their
time to file their Schedules and Statements until Oct. 20, 2008.

John H. Knight, Esq., at Richards, Layton & Finger, P.A., in
Wilmington, Delaware, the Debtors' proposed counsel, told Judge
Brendan L. Shannon that the Debtors must compile information
from their books and records relating to their numerous assets
and contracts, as well as more than 1,500 creditors.  Assembling
information within 30 days will be a burden to the Debtors, and
may adversely impact the Debtors' business operations, he said.

Mr. Knight added that substantial time and work is required for
the Debtors to prepare the Schedules and Statements, given the
complexity of their affairs.  The Debtors anticipate that they
require an additional 60 days to complete the Schedules.

                        About SemGroup L.P.

SemGroup L.P. -- http://www.semgrouplp.com/-- is a midstream
service company providing the energy industry means to move
products from the wellhead to the wholesale marketplace.
SemGroup provides diversified services for end users and
consumers of crude oil, natural gas, natural gas liquids,
refined products and asphalt.  Services include purchasing,
selling, processing, transporting, terminaling and storing
energy.  SemGroup serves customers in the United States, Canada,
Mexico, Wales, Switzerland and Vietnam.  SemMaterials Mexico, S.
de R.L. de C.V. is a major subsidiary of the company.

SemGroup L.P. and its debtor affiliates filed for Chapter 11
protection on July 22, 2008 (Bankr. D. Del. Lead Case No.: 08-
11525) These represent the Debtors' restructuring efforts: John
H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins,
Esq. at Richards Layton & Finger; Harvey R. Miller, Esq.,
Michael P. Kessler, Esq. and Sherri L. Toub, Esq. at Weil,
Gotshal & Manges LLP; and Martin A. Sosland, Esq. and Sylvia A.
Mayer, Esq. at Weil Gotshal & Manges LLP.  Kurtzman Carson
Consultants L.L.C. is the Debtors' claims agent.  The Debtors'
financial advisors are The Blackstone Group L.P. and A.P.
Services LLC.  Margot B. Schonholtz, Esq. and Scott D. Talmadge,
Esq. at Kaye Scholer LLP; and Laurie Selber Silverstein Esq. at
Potter Anderson & Corroon LLP represent the Debtors' prepetition
lenders.

The Debtors' consolidated, unaudited financial conditions as of
June 30, 2007, showed US$5,429,038,000 in total assets and
US$5,033,214,000 in total debts.  In their petition, they showed
more than US$1,000,000,000 in estimated total assets and more
than US$1,000,000,000 in total debts.

(SemGoup Bankruptcy News, Issue No. 2; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000)

                          *     *    *

On July 25, 2008, the Troubled Company Reported that Fitch
Ratings downgraded the ratings of SemGroup, L.P., SemCrude L.P,
and SemCAMS Midstream Co. and simultaneously withdrawn all
ratings.  The withdrawn ratings include Issuer default Rating D
assigned to SemGroup, L.P., SemCrude, L.P., and SemCAMS
Midstream Co.  Fitch Ratings has downgraded, removed from Rating
Watch Negative, and simultaneously withdrawn (a) SemGroup,
L.P.'s Senior unsecured to 'C' from'B/RR3'; (b) SemCrude L.P.'s
Senior secured working capital facility to 'CCC' from 'BB-/RR1';
Senior secured revolving credit facility to 'CC' from 'B+/RR1';
and Senior secured term loan B to 'CC' from 'B+/RR1'; and (c)
SemCAMS Midstream Co. (SemCAMS) Senior secured working capital
facility to 'CCC' from 'BB-/RR1'; Senior secured revolving
credit facility to 'CC' from 'B+/RR1'; and Senior secured term
loan B to 'CC' from 'B+/RR1'.

Also, Moody's Investors Service downgraded SemGroup, L.P.'s
Corporate Family Rating to Ca from Caa2, its Probability of
Default Rating to D from Caa3, its senior unsecured rating to C
(LGD 5; 86%) from Ca (LGD 4; 69%), and its first secured bank
facilities to Caa3 (LGD 3; 38%) from B3 (LGD 2; 21%).  These
actions affect rated cross guaranteed debt at parent SemGroup
and its subsidiaries SemCams Holding Company and SemCrude, L.P.

Further, Fitch Ratings lowered the Issuer Default Ratings of
SemGroup, L.P., SemCrude L.P, and SemCAMS Midstream Co. to 'D'
following the bankruptcy petition by SemGroup and most of units
on July 22, 2008.  These ratings are removed from Rating Watch
where they were placed on July 17, 2008.  The bank facility and
securities ratings of SemGroup and units remain on Rating Watch
Negative pending a review of the bankruptcy court petition.


SEMGROUP LP: Various Entities Discloses Financial Exposure
----------------------------------------------------------
Various entities disclose financial exposure in relation to the
bankruptcy petition of SemGroup L.P. and its debtor-affiliates
filed under chapter 11 of the U.S. Bankruptcy Code and the
Companies' Creditors Arrangement Act (Canada).

A. Sunoco Logistics

Sunoco Logistics Partners L.P., believes it has minimal credit
exposure to SemGroup LP and its affiliates.  Affiliates of
Sunoco Logistics conduct business with SemCrude LP for the
purchase and sale of crude oil.  Sunoco Logistics has a net-out
agreement with SemCrude LP, pursuant to which receivables and
payables are set-off.  As of the chapter 11 filing date of
SemGroup and its debtor-affiliates, Sunoco Logistics estimates
that it is in a net payable position with SemCrude LP, with
limited credit exposure, if any.

B. ARC Resources

ARC Resources Ltd., a subsidiary of ARC Energy Trust, has a
potential exposure of US$26.2 million from oil sales for the
months of June and July 2008 to SemGroup, L.P.'s subsidiary,
SemCanada Crude Company, for the marketing of a portion of ARC's
oil production.  ARC is not certain of what portion if any of
the US$26.2 million is collectible but in any case the amount is
not considered material to ARC's operations and overall
financial position.

C. Crescent Point Energy

Crescent Point Energy Trust said it has a potential exposure to
SemCanada Crude Company, a Canadian subsidiary of SemGroup,
L.P., relating to the marketing of a portion of the Trust's
crude oil and liquids production.  The contract pertaining to
the majority of the production volumes purchased by SemCanada
was previously terminated and does not represent an ongoing
exposure for the Trust.

Crescent Point's exposure is listed in SEMGroup's U.S.
bankruptcy filing as US$42.5 million based on SEMGroup's
forecasts of prices and production volumes.  The Trust expects
the actual exposure to be closer to US$30 million based on its
most recent estimates.  As of this date, the Trust is not able
to quantify the portion, if any, of the exposure that will be
collected, but in any case the amount is not considered material
to Crescent Point's operations and overall financial position.

Crescent Point expects 2008 to be a record year with production
forecast to average 36,250 barrels of oil equivalent per day
(boe/d) and exit over 37,500 boe/d.  The Trust continues to
expect record cash flow for 2008 and does not expect the
potential exposure to SemCanada to materially impact its cash
flow expectations.  The Trust will not be revising its cash flow
guidance for the year.

D. Petroflow Energy

Petroflow Energy, Ltd., said it has a potential exposure to
SemCrude, L.P. and SemGas, L.P., subsidiaries of SemGroup, L.P.,
relating to the marketing of a portion of the Company's crude
oil, liquids and natural gas production.

Certain SemGroup contracts, which are held by Petroflow's
working interest partner, pertain to the majority of the oil
production volumes produced by Petroflow and approximately 20%
of the natural gas volumes.

Petroflow's current exposure is limited to amounts uncollected
for June and July production up to July 22, 2008 amounting to
approximately US$3.2 million.  Petroflow is not able to quantify
the portion, if any, of the exposure that will be collected, but
in any case the amount is not considered material to Petroflow's
operations and overall financial position.

Ongoing production revenues will be governed by the terms of
Chapter 11 of the US Bankruptcy Code and the Company expects to
be paid under normal industry terms for production in this time
frame.  Petroflow is actively seeking alternative arrangements
with other oil and gas purchasers as well as working with
SemGroup in a plan that may see all debts paid on a timely
basis.  SemGroup listed assets of US$6.14 billion and
liabilities of US$7.53 billion in its US bankruptcy filing.

E. Plains All American

Plains All American Pipeline, L.P. reiterated statements made in
a press release issued July 17, 2008, that it does not expect to
have any material credit exposure to SemGroup, L.P. and its
affiliates.

The trade debt amounts attributed to PAA in such bankruptcy
filings were gross amounts and, as noted in the bankruptcy
filing, are “Subject to Set-Off”.  However, the presence of such
amounts in SemGroup, L.P.'s bankruptcy filing (and subsequent
media reports reciting such gross amounts) have precipitated
calls from PAA's stakeholders and customers seeking
clarification.

As indicated in the SemGroup filings, PAA has various
arrangements in place to mitigate credit exposure, such as net-
out agreements that allow for set-off of payables and
receivables between counterparties.

F. TEPPCO Partners

TEPPCO Partners, L.P. confirmed that its subsidiary, TEPPCO
Crude Oil, LLC, is listed as one of the unsecured creditors in
the bankruptcy filing by SemGroup, L.P. and certain of its North
American subsidiaries.  Through an existing netting agreement
for crude oil sold to and purchased from a subsidiary of
SemGroup, TEPPCO's credit exposure has historically been
minimal.  While a review of the bankruptcy filings is still
ongoing, based on historical arrangements TEPPCO does not expect
any future material impact as a result of the SemGroup
bankruptcy nor does it expect any future material credit
exposure to SemGroup.  SemGroup has represented less than 3.0%
of the partnership's current crude oil gathering volumes.

G. Tortoise Capital Advisors

Tortoise Capital Advisors, LLC, the investment adviser for
Tortoise Energy Infrastructure Corp., Tortoise Energy Capital
Corp., and Tortoise North American Energy Corp., has evaluated
the impact of recent adverse developments related to SemGroup,
L.P. Sem Parent is a private, diversified energy midstream
company that transports, stores and markets multiple energy
products.  A subsidiary of Sem Parent is the general partner of
SemGroup Energy Partners, L.P., or SGLP, a publicly traded
master limited partnership that stores and transports crude oil
and asphalt.  On July 21, 2008, Manchester Securities and
Alerian Capital Management assumed control of the general
partner of SGLP.

SGLP derives a substantial portion of its revenues from Sem
Parent.  On July 22, 2008, Sem Parent filed Chapter 11
bankruptcy due to claimed liquidity issues.  SGLP has not filed
for bankruptcy and is not included in Sem Parent's filing.  As a
result of these events, Sem Parent's 8.75% Senior Notes declined
in value from approximately 96.5% of par on July 16, 2008
to approximately 11.5% of par on July 23, 2008.  SGLP's common
unit price traded from a close of US$22.80 per unit on July 16,
2008 to a close of US$8.00 per unit on July 23, 2008.

TYN owns approximately US$9.3 million par value of Sem Parent's
8.75% Senior Notes.  As of July 16, 2008, TYG, TYY and TYN owned
342,162; 436,774; and 37,000 units of SGLP, respectively.
Combined, the Sem Parent Notes and SGLP units represented 0.69%
of TYG's total assets, 1.27% of TYY's total assets and 4.3% of
TYN's total assets, as of July 16, 2008.

TYN's investment in Sem Parent Notes is expected to represent an
unsecured claim in the Sem Parent bankruptcy.  TYN has ceased
accruing interest income on the Sem Parent Notes and has
reserved against its existing unpaid interest.  The recovery of
the par value and unpaid interest on the Sem Parent Notes is
uncertain at this time.  TYN reflects Sem Parent Notes on its
balance sheet at fair value, as determined by TYN according to
its valuation policy and procedures.

TYN's July 17, 2008 net asset value of US$24.82 reflected the
Sem Parent Notes at 29.5% of par value.

SGLP's board has indicated that it is too early to determine the
appropriate distribution for the quarter.  SGLP operates more
than 1,000 miles of pipeline, and owns or leases more than 13
million barrels of storage and other transportation assets.
“Given the geographic significance of its assets, we continue to
believe SGLP's fee-based energy infrastructure assets retain
intrinsic value and are an important component of the midstream
energy industry,” said Tortoise Capital Advisors' Managing
Director Zachary Hamel.

Tortoise Capital Advisors is monitoring the impact the Sem
Parent bankruptcy may have on other portfolio holdings for each
of the funds, and is presently unaware of any material impact or
diminution in value that has occurred as a result of these
events.

“We expect TYG, TYY and TYN to maintain their current
distribution to stockholders and to grow those distributions
over the long term, despite the Sem Parent bankruptcy,” said the
funds' Chief Financial Officer, Terry Matlack.  “Although these
investments represented 4.3% of TYN's total assets as of
July 16, 2008, we believe TYN's 90.8% distributable cash flow
payout ratio for the six months ended May 31, 2008 should
provide cushion to maintain our distributions.  In addition, we
remain in compliance with all of our leverage coverage ratios.”

                          About Sunoco

Sunoco Logistics Partners L.P., headquartered in
Philadelphia, -- http://www.sunocologistics.com/-- is a master
limited partnership formed to acquire, own and operate refined
product and crude oil pipelines and terminal facilities,
including those of Sunoco, Inc.  The Eastern Pipeline System
consists of approximately 1,800 miles of primarily refined
product pipelines and interests in four refined products
pipelines, consisting of a 9.4% interest in Explorer Pipeline
Company, a 31.5% interest in Wolverine Pipe Line Company, a
12.3% interest in West Shore Pipe Line Company and a 14.0%
interest in Yellowstone Pipe Line Company.  The Terminal
Facilities consist of 9.2 million shell barrels of refined
product terminal capacity and 22.8 million shell barrels of
crude oil terminal capacity (including 15.9 million shell
barrels of capacity at the Texas Gulf Coast Nederland Terminal).
The Western Pipeline System consists of approximately 3,700
miles of crude oil pipelines, located principally in Oklahoma
and Texas, a 55.3% interest in Mid-Valley  Pipeline Company and
a 43.8% interest in the West Texas Gulf Pipe Line Company and a
37.0% interest in the Mesa Pipe Line System.

                         About ARC Energy

ARC Energy Trust is one of Canada's largest conventional oil
and gas royalty trusts with an enterprise value of approximately
US$7.5 billion.  The Trust expects full year 2008 oil and gas
production to average approximately 64,000 barrels of oil
equivalent per day from six core areas in western Canada.
ARC Energy Trust units trade on the TSX under the symbol AET.UN
and ARC Resources exchangeable shares trade under the symbol
ARX.

                    About Crescent Point Energy

Crescent Point Energy Trust (TSX: CPG.un) --
http://www.crescentpointenergy.com/-- offers commodity price
risk management programs.  The Trust hedges (on a rolling three
year basis) crude oil and natural gas prices, along with the
U.S./Canadian dollar exchange rate, to provide stability to
revenues, cash flows and distributions.  The Trust also hedges
interest rates and power prices to provide stability to input
costs.

                    About Petroflow Energy Ltd.

Petroflow Energy Ltd. -- http://www.petroflowenergy.com/-- is
an independent oil and natural gas company that explores,
develops and produces hydrocarbon reserves primarily in the mid-
continent region.

                        About PAA Pipeline

Houston, Texas-based Plains All American Pipeline, L.P. (NYSE:
PAA) -- http://www.paalp.com/-- is a master limited partnership
engaged in the transportation, storage, terminalling and
marketing of crude oil, refined products and liquefied petroleum
gas and other natural gas related petroleum products.  Through
its 50% ownership in PAA/Vulcan Gas Storage LLC, the partnership
is also engaged in the development and operation of natural gas
storage facilities.

                      About TEPPCO Partners

TEPPCO Partners, L.P., (NYSE: TPP) -- http://www.teppco.com/--
has an enterprise value of approximately US$5 billion, is a
diversified energy logistics company with operations that span
much of the continental United States.  TEPPCO owns and operates
an extensive network of assets that facilitate the movement,
marketing, gathering and storage of various commodities and
energy-related products.  Texas Eastern Products Pipeline
Company, LLC, the general partner of TEPPCO Partners, L.P., is
owned by Enterprise GP Holdings and is based in Houston, Texas.

               About Tortoise Capital Advisors, LLC

Tortoise Capital Advisors, LLC is a pioneer in the capital
markets for master limited partnership investment companies and
a leader in closed-end funds and separately managed accounts
focused on MLPs in the energy infrastructure sector.  As of
June 30, 2008, the adviser had approximately US$2.7 billion of
assets under management.

                        About SemGroup L.P.

SemGroup L.P. -- http://www.semgrouplp.com/-- is a midstream
service company providing the energy industry means to move
products from the wellhead to the wholesale marketplace.
SemGroup provides diversified services for end users and
consumers of crude oil, natural gas, natural gas liquids,
refined products and asphalt.  Services include purchasing,
selling, processing, transporting, terminaling and storing
energy.  SemGroup serves customers in the United States, Canada,
Mexico, Wales, Switzerland and Vietnam.  SemMaterials Mexico, S.
de R.L. de C.V. is a major subsidiary of the company.

SemGroup L.P. and its debtor affiliates filed for Chapter 11
protection on July 22, 2008 (Bankr. D. Del. Lead Case No.: 08-
11525) These represent the Debtors' restructuring efforts: John
H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins,
Esq. at Richards Layton & Finger; Harvey R. Miller, Esq.,
Michael P. Kessler, Esq. and Sherri L. Toub, Esq. at Weil,
Gotshal & Manges LLP; and Martin A. Sosland, Esq. and Sylvia A.
Mayer, Esq. at Weil Gotshal & Manges LLP.  Kurtzman Carson
Consultants L.L.C. is the Debtors' claims agent.  The Debtors'
financial advisors are The Blackstone Group L.P. and A.P.
Services LLC.  Margot B. Schonholtz, Esq. and Scott D. Talmadge,
Esq. at Kaye Scholer LLP; and Laurie Selber Silverstein Esq. at
Potter Anderson & Corroon LLP represent the Debtors' prepetition
lenders.

The Debtors' consolidated, unaudited financial conditions as of
June 30, 2007, showed US$5,429,038,000 in total assets and
US$5,033,214,000 in total debts.  In their petition, they showed
more than US$1,000,000,000 in estimated total assets and more
than US$1,000,000,000 in total debts.

(SemGoup Bankruptcy News, Issue No. 1; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000)

                          *     *    *

On July 25, 2008, the Troubled Company Reported that Fitch
Ratings downgraded the ratings of SemGroup, L.P., SemCrude L.P,
and SemCAMS Midstream Co. and simultaneously withdrawn all
ratings.  The withdrawn ratings include Issuer default Rating D
assigned to SemGroup, L.P., SemCrude, L.P., and SemCAMS
Midstream Co.  Fitch Ratings has downgraded, removed from Rating
Watch Negative, and simultaneously withdrawn (a) SemGroup,
L.P.'s Senior unsecured to 'C' from'B/RR3'; (b) SemCrude L.P.'s
Senior secured working capital facility to 'CCC' from 'BB-/RR1';
Senior secured revolving credit facility to 'CC' from 'B+/RR1';
and Senior secured term loan B to 'CC' from 'B+/RR1'; and (c)
SemCAMS Midstream Co. (SemCAMS) Senior secured working capital
facility to 'CCC' from 'BB-/RR1'; Senior secured revolving
credit facility to 'CC' from 'B+/RR1'; and Senior secured term
loan B to 'CC' from 'B+/RR1'.

Also, Moody's Investors Service downgraded SemGroup, L.P.'s
Corporate Family Rating to Ca from Caa2, its Probability of
Default Rating to D from Caa3, its senior unsecured rating to C
(LGD 5; 86%) from Ca (LGD 4; 69%), and its first secured bank
facilities to Caa3 (LGD 3; 38%) from B3 (LGD 2; 21%).  These
actions affect rated cross guaranteed debt at parent SemGroup
and its subsidiaries SemCams Holding Company and SemCrude, L.P.

Further, Fitch Ratings lowered the Issuer Default Ratings of
SemGroup, L.P., SemCrude L.P, and SemCAMS Midstream Co. to 'D'
following the bankruptcy petition by SemGroup and most of units
on July 22, 2008.  These ratings are removed from Rating Watch
where they were placed on July 17, 2008.  The bank facility and
securities ratings of SemGroup and units remain on Rating Watch
Negative pending a review of the bankruptcy court petition.


SENSATA TECH: Moody's Puts Caa2 to US$2.8BB Subordinated Notes
--------------------------------------------------------------
Moody's Investors Service assigned a Caa2 rating to Sensata
Technologies B.V.'s EUR141 million subordinated notes due 2014,
which replaces Sensata's existing EUR141 million term loan
maturing 2013.  In a related rating action, Moody's affirmed the
following ratings: corporate family rating - B3; probability of
default rating - B3, senior secured credit facility - B1, senior
unsecured notes - Caa1; and, senior subordinated notes - Caa2.
The company's speculative grade liquidity rating remains at SGL-
2.  The outlook is stable.

The company's B3 corporate family rating reflects the lack of
deleveraging as the company continues to face challenging
economic environments.  Key leverage metrics through the twelve
months of March 31, 2008, were as follows: debt/EBITDA near 9.0x
times and EBITA/interest of 1.2 times (all ratios adjusted per
Moody's methodology). The high leverage results from the initial
acquisition of Sensata by Bain Capital, LLC (Bain) in April 2006
augmented by a series of debt-financed acquisitions since then.
Moody's had expected some level of debt repayment beyond
mandatory term loan amortization, which would have partially
offset some of the negative impact from foreign exchange
translation on the company's euro-denominated debt. The strong
euro relative to the U.S. dollar is resulting in higher debt
balances on Sensata's consolidated balance sheet adding to the
high leverage.  This leveraged capital structure could hinder
the company's financial flexibility as some of the company's end
markets face increasing economic pressures.  Additionally, the
slowing U.S. economy is negatively impacting the domestic
housing market, a key source of revenue for its controls
business.  While a significant portion of Sensata's business is
derived from sensors used on automobiles, the company is less
affected by declining auto sales than traditional auto parts
suppliers because of the increasing content of electronics on
vehicles.  These weaknesses are balanced against the company's
good liquidity, global presence, and growing exposure to several
other end markets including aerospace and telecommunications.

The stable outlook reflects Sensata's good liquidity and ability
to generate free cash flow as it faces a slowing U.S. economy,
which is negatively impacting some of its key end markets.

These ratings/assessments were affected by this action:

Corporate family rating affirmed at B3;

Probability of default rating affirmed at B3;

Senior secured credit facility affirmed at B1 (LGD2, 28%);

US$450 million senior unsecured notes due 2014 affirmed at Caa1
(LGD5, 73%);

EUR245 million senior subordinate notes due 2016 affirmed at
Caa2 (LGD6, 90%); and,

EUR141 million senior subordinate notes due 2014 assigned Caa2
(LGD6, 90%).

The company's speculative grade liquidity rating of SGL-2 is
unchanged.

Headquartered in Attleboro, Massachusetts and incorporated under
the laws of The Netherlands, Sensata Technologies B.V. --
http://www.sensata.com/-- designs and manufactures sensors and
electronic controls.  Sensata is a global designer,
manufacturer, and marketer of customized and engineered sensors
and control products.  The company has manufacturing locations
in Brazil, Mexico, China, Japan and the Netherlands.  Revenues
for the twelve months ended March 31, 2008 totaled about
US$1.5 billion.



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

INTERPUBLIC GROUP: S&P Puts 'B+' Rtg. on US$335M Credit Facility
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its issue-level and
recovery ratings to Interpublic Group of Cos. Inc.'s
US$335 million unsecured revolving credit facility due 2011.
This senior unsecured debt was assigned an issue-level rating of
'B+' and a recovery rating of '4', indicating our expectation of
average (30%-50%) recovery in the event of a payment default.

The 'B+' corporate credit rating reflects Interpublic's high
leverage, relatively weak discretionary cash flow, and
profitability measures that are below those of peers.  The
company's large portfolio of advertising and communications
services brands, its broad geographic and business diversity,
its return to organic revenue growth after a period of net
client losses, and very strong cash balances partially offset
these factors.

New York-based, Interpublic Group of Companies Inc. (NYSE: IPG)
-- http://www.interpublic.com/-- is one of the world's leading
organizations of advertising agencies and marketing services
companies.  Major global brands include Draftfcb, FutureBrand,
GolinHarris International, Initiative, Jack Morton Worldwide,
Lowe Worldwide, MAGNA Global, McCann Erickson, Momentum, MRM
Worldwide, Octagon, Universal McCann and Weber Shandwick.
Leading domestic brands include Campbell-Ewald, Carmichael
Lynch, Deutsch, Hill Holliday, Mullen, The Martin Agency and
R/GA.  The New York City-based global advertising agency holding
company had approximately US$2.2 billion in debt outstanding as
of March 31, 2008.

The company has operations in Argentina, Brazil, Barbados,
Belize, Chile, Colombia, Costa Rica, Dominican Republic,
Ecuador, El Salvador, Guatemala, Honduras, Jamaica, Mexico,
Nicaragua, Panama, Paraguay, Puerto Rico, Peru, Uruguay and
Venezuela.



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

HINDU CREDIT: Chaguanas Borough to Kick Firm Out of Car Park
------------------------------------------------------------
The Chaguanas Borough Corporation will force Hindu Credit Union
Co-Operative Society Limited out of a car park it rents next to
its administrative complex on the Chaguanas main road, The
Trinidad Guardian reports.

According to The Guardian, Mayor Suruj Rambachan said Hindu
Credit failed to pay the Chaguanas Borough the US$200 per day
rental for the car park for several months.  Chaguanas Borough
will now seek ways to have Nipdec run a public car park at the
facility, Mayor Rambachan added.

Headquartered in Borough, Chaguanas, Hindu Credit Union Co-
Operative Society Limited -- www.ourhcu.com -- has an asset base
of over US$1.7 billion and a membership totaling over 200,000.

                        *     *     *

As reported in the Troubled Company Reporter-Latin America on
July 28, 2008, the High Court of Trinidad and Tobago granted the
government full control of Hindu Credit as the company faces
financial difficulties, leaving depositors in limbo despite
requests from lawyers.  In June 2008, chartered accountants
Ernst and Young inspected Hindu Credit's books, accounts, and
records after a public outcry and calls for an internal audit.
Charles Mitchell, the Commissioner for Co-Operative Development,
represents Hindu Credit's depositors.


HINDU CREDIT: Forms HCU Depositors & Shareholders Group
-------------------------------------------------------
The Trinidad Guardian reports that Hindu Credit Union Co-
Operative Society Limited's depositors, shareholders, and
workers have created the HCU Depositors and Shareholders Group.

According to HCU Depositors' Public Relations Officer Deosaran
Bisnath, the group was created during a meeting in Chaguanas
last Sunday.  HCU Depositors' main objective was to protect
assets in Hindu Credit, The Guardian relates, citing Mr.
Bisnath.

The Guardian notes that Ramdath Buchoon was appointed HCU
Depositors' president.  Ms. Helen Dwarika was named as the
group's secretary.

Headquartered in Borough, Chaguanas, Hindu Credit Union Co-
Operative Society Limited -- www.ourhcu.com -- has an asset base
of over US$1.7 billion and a membership totaling over 200,000.

                        *     *     *

As reported in the Troubled Company Reporter-Latin America on
July 28, 2008, the High Court of Trinidad and Tobago granted the
government full control of Hindu Credit as the company faces
financial difficulties, leaving depositors in limbo despite
requests from lawyers.  In June 2008, chartered accountants
Ernst and Young inspected Hindu Credit's books, accounts, and
records after a public outcry and calls for an internal audit.
Charles Mitchell, the Commissioner for Co-Operative Development,
represents Hindu Credit's depositors.


HINDU CREDIT: Sanatan Dharma to Probe Firm's Costa Rican Links
--------------------------------------------------------------
The Trinidad Guardian reports that Sanatan Dharma Maha Sabha's
Secretary General Sat Maharaj said the organization will conduct
a probe to determine if Hindu Credit Union Co-Operative Society
Limited has links in Costa Rica.

The Sanatan Dharma Maha Sabha is a Hindu organization in
Trinidad and Tobago that operates about 150 mandirs and over 50
schools.  The Guardian relates that the Sanatan Dharma had been
closely connected to Hindu Credit for several years.  In 2002,
Mr. Maharaj called for a forensic audit after carefully
reviewing Hindu Credit's operation and cautioned the Hindu
community about their investments with the firm.  The Sanatan
Dharma advised Hindu Credit's depositors and shareholders to
seek immediate legal advice from an attorney of their choice and
send, in writing, a claim to the Commissioner of Co-operatives
or R D Rampersad and Co. to secure at least some portion of
their funds.  The Sanatan Dharma's broadcast unit had absorbed
some workers of Hindu Credit.

Sanatan Dharma was planning a meet next week with Hindu Credit
union employees and former Caroni (1975) Ltd. workers who had
invested in Hindu Credit, The Guardian says, citing Mr. Maharaj.

Headquartered in Borough, Chaguanas, Hindu Credit Union Co-
Operative Society Limited -- www.ourhcu.com -- has an asset base
of over US$1.7 billion and a membership totaling over 200,000.

                        *     *     *

As reported in the Troubled Company Reporter-Latin America on
July 28, 2008, the High Court of Trinidad and Tobago granted the
government full control of Hindu Credit as the company faces
financial difficulties, leaving depositors in limbo despite
requests from lawyers.  In June 2008, chartered accountants
Ernst and Young inspected Hindu Credit's books, accounts, and
records after a public outcry and calls for an internal audit.
Charles Mitchell, the Commissioner for Co-Operative Development,
represents Hindu Credit's depositors.


HINDU CREDIT: Workers Hold Demonstrations Against Firm
------------------------------------------------------
The Trinidad Guardian reports that over 100 Hindu Credit Union
Co-Operative Society Limited's employees have launched protests
against the firm at its head office on Chaguanas.

According to The Guardian, the workers are demanding answers on
what will happen to them now that the firm's assets have been
confiscated by the Trinidad government.  The employees were
worried that they wouldn't receive their salaries at the end of
July.

As reported in the Troubled Company Reporter-Latin America on
July 28, 2008, the High Court of Trinidad and Tobago granted the
government full control of Hindu Credit as the company faces
financial difficulties, leaving depositors in limbo despite
requests from lawyers.  In June 2008, chartered accountants
Ernst and Young inspected Hindu Credit's books, accounts, and
records after a public outcry and calls for an internal audit.
Charles Mitchell, the Commissioner for Co-Operative Development,
represents Hindu Credit's depositors.

The Guardian relates that the workers' spokesperson, Mukesh
Babooram, accused the liquidator of not addressing employees.
According to Mr. Babooram, Hindu Credit expected the government
to give some assistance, as the firm supported Prime Minister
Patrick Manning and Finance Minister Karen Nunez-Tesheira during
the general election.  Mr. Babooram said that Hindu Credit used
its vehicles to transport the prime minister and the finance
minster supporters and campaigned for the ruling party.

Workers weren't allowed to enter Hindu Credit's premises, The
Guardian states.

Headquartered in Borough, Chaguanas, Hindu Credit Union Co-
Operative Society Limited -- www.ourhcu.com -- has an asset base
of over US$1.7 billion and a membership totaling over 200,000.



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


CHRYSLER LLC: Arm Halts Lease Operations; To Cut 1,000 Employees
----------------------------------------------------------------
Chrysler LLC's financial arm, Chrysler Financial, will cease
offering vehicle lease alternatives in the U.S. to focus more on
financing vehicle purchases, various reports say.

According to the reports, the unit will stop offering leases
starting Aug. 1.  Chrysler's decision stems from trouble
taunting its unit's lease business, particularly in the
borrowing and selling end, WSJ adds.

WSJ relates that Chrysler Financial has been trying to persuade
more than 20 banks to renew a US$30 billion credit facility but
was unable to do so because of the jittery state of potential
lenders and Chrysler's own uncertain financial situation.

WSJ relates that for years, auto makers have offered leases as a
way of enticing consumers into getting new vehicles.  Monthly
payments for leasing customers is lower than taking out loans to
buy cars outright, WSJ adds.

Leases, according to WSJ, poses a big risk for finance units
such as Chrysler Financial.  These operations need to borrow
billions of dollars, because they buy and own the vehicles to be
leased, WSJ indicates.

                              Job Cut

WSJ, citing a memo sent to employees, states that Chrysler LLC
is planning to reduce 1,000 salaried jobs by September 30 in an
effort to cut costs amid a deep slump in U.S. auto sales.

HR head Nancy Rae, WSJ says, an incremental manpower reduction
will be required to deal with the current market conditions.

The slash in jobs is an addition to the disclosed reductions and
will be accomplished through a combination of attrition,
buyouts, early retirements and involuntary layoffs, WSJ points
out.

According to the memo, WSJ adds, Chrysler's liquidity position
in the first half remained unchanged compared with December as a
result of previous production cuts, asset sales and cost-cutting
efforts.

                        About Chrysler LLC

Based in Auburn Hills, Michigan, Chrysler LLC --
http://www.chrysler.com/-- a unit of Cerberus Capital
Management LP, produces Chrysler, Jeep(R), Dodge and Mopar(R)
brand vehicles and products.  The company has dealers worldwide,
including Canada, Mexico, U.S., Germany, France, U.K.,
Argentina, Brazil, Venezuela, China, Japan and Australia.

                          *     *     *

As reported in the Troubled Company Reporter-Latin America on
June 25, 2008, Moody's Investors Service affirmed the B3
Corporate Family Rating and Probability of Default Rating of
Chrysler LLC, but changed the outlook to negative from stable.
The change in outlook reflects the increasingly challenging
environment faced by Chrysler as the outlook for US vehicle
demand falls, and as high fuel costs drive US consumers away
from light trucks and SUVs, and toward more fuel efficient
vehicles.

At the same time, Standard & Poor's Ratings Services is placing
its corporate credit ratings on the three U.S. automakers,
General Motors Corp., Ford Motor Co., and Chrysler LLC, on
CreditWatch with negative implications.  Included in the
CreditWatch placement are the finance units Ford Motor Credit
Co. and DaimlerChrysler Financial Services Americas LLC, as well
as GM's 49%-owned finance affiliate GMAC LLC.

In May 2008, Fitch Ratings downgraded the Issuer Default Rating
of Chrysler LLC to 'B' from 'B+', with a Negative Rating
Outlook.  Fitch has also downgraded the senior secured bank
facilities, including senior secured first-lien bank loan to
'BB/RR1' from 'BB+/RR1'; and senior secured second-lien bank
loan to 'CCC+/RR6' from 'BB+/RR1'.  The recovery rating on the
second lien was also downgraded from 'BB+/RR1' to 'CCC+/RR6'
based on lower asset value assumptions and associated recoveries
in the event of a stress scenario.


PETROLEOS DE VENEZUELA: JV Gets Three Bids for Argentine Project
----------------------------------------------------------------
Petroleos de Venezuela SA's joint venture with Argentina, Enarsa
PDVSA, has received three technical bids for a contract to build
Argentina's first onshore liquefied natural gas receiving
terminal, energy information provider Platts reports.

The winning bidder will be awarded a contract for consulting,
engineering studies, and bidding documents for another auction
for the construction of the terminal, SteelGuru says, citing
Enarsa's Institutional Relations manager Carlos Davidson.

SteelGuru relates that Mr. Davidson said the facility could be
built in the ports of Bahia Blanca, Ensenada, Quequen and San
Antonio Oeste.  The facility will have an initial daily capacity
of 10 million cubic meters of gas, which will then be increased
to 20 million cubic meters, Mr. Davidson added.

According to SteelGuru, Mr. Davidson said economic bids will be
opened in about ten days.

Petroleos de Venezuela S.A. -- http://www.pdvsa.com/-- 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.  The company has a commercial office in China.

                        *     *     *

As reported in the Troubled Company Reporter-Latin America on
April 28, 2008, Standard & Poor's Ratings Services affirmed its
'BB-' long-term corporate credit rating on Petroleos de
Venezuela S.A.  S&P said the outlook is stable.

In March 2007, Fitch Ratings gave a BB- rating to PdVSA's
Senior Unsecured debt.

On Feb. 7, 2007, Moody's Investors Service affirmed the
company's B1 global local currency rating.


PETROLEOS DE VENEZUELA: To Sell Oil to Spain for US$100/Barrel
--------------------------------------------------------------
Indo-Asian News Service reports that Venezuelan President Hugo
Chavez has urged Spain's Repsol YPF to participate in Petroleos
de Venezuela SA's projects in the Orinoco Belt.

Agence France-Presse relates that President Chavez said he
agreed to let Repsol increase its presence in the Orinoco oil
belt.  According to IANS, Repsol is currently working at one of
the Orinoco fields.  The firm has expressed interest in bidding
for another field, IANS says, citing President Chavez.

Repsol and Petroleos de Venezuela could produce some 200,000
barrels per day that could go directly to Spain, IANS relates,
citing President Chavez.  This would have Spain's oil supply
ensured “forever”, according to President Chavez.

EFE News notes that sources from Spain said President Chavez
reached a deal with Spanish Prime Minister Jose Luis Rodriguez
Zapatero to allow Venezuela to sell Spain some 10,000 barrels
per day of crude at US$100 per barrel.  In exchange, Spain will
make investments and share technology, the sources added.

AFP states that President Chavez said in an interview with
Spanish public television TVE that the US$400 million that will
be raised from the sale of oil to Spain will be deposited in a
bank account in Madrid.  The Venezuelan president said his
country will use this account to pay for the imports.

Venezuelan Energy Minister and Petroleos de Venezuela chief
Rafael Ramirez will lead a working group with Spanish Industry
Minister Miguel Sebastian to supervise the creation of a fund
that would receive revenue from the oil sales, IANS states,
citing the sources.  According to the sources, the fund would be
used to finance technology, medical equipment, and
infrastructure projects in Venezuela.

Petroleos de Venezuela S.A. -- http://www.pdvsa.com/-- 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.  The company has a commercial office in China.

                        *     *     *

As reported in the Troubled Company Reporter-Latin America on
April 28, 2008, Standard & Poor's Ratings Services affirmed its
'BB-' long-term corporate credit rating on Petroleos de
Venezuela S.A.  S&P said the outlook is stable.

In March 2007, Fitch Ratings gave a BB- rating to PdVSA's
Senior Unsecured debt.

On Feb. 7, 2007, Moody's Investors Service affirmed the
company's B1 global local currency rating.


* VENEZUELA: US$1.5B Debt Buyback Not Yet Ready, Says Rodriguez
---------------------------------------------------------------
Finance Minister Ali Rodriguez disclosed that Venezuela is not
yet prepared to repurchase a debt of US$1.5 billion, various
reports say.

A government source quoted by Reuters said that the Venezuelan
Government, with the approval of the National Assembly, was
considering the repurchasing of US$1.5 billion in foreign debt.

According to Reuters, Mr. Rodriguez, when asked about progress
on the buyback plan, said that it has not been planned but will
happen at the right moment.

Reuters relates that debt traders have been expecting details
about the planned deal, which was announced shortly before Mr.
Rodriguez took the finance ministry job.

                         *     *     *

As reported in the Troubled Company Reporter-Latin America on
May 9, 2008, Fitch Ratings assigned these ratings to the
Bolivarian Republic of Venezuela's international bond combined
offer:

   * Long-term Foreign Currency issuer default rating of the
     15-year, US$2 billion Eurobond (9% coupon) 'BB-';

   * Long-term Foreign Currency issuer default rating of the
     20-year, US$2 billion Eurobond (9.25% coupon) 'BB-'.

The ratings are in line with Venezuela's foreign currency issuer
default rating.  The rating outlook is negative.



                            ***********

Monday's edition of the TCR-LA delivers a list of indicative
prices for bond issues that reportedly trade well below par.
Prices are obtained by TCR-LA editors from a variety of outside
sources during the prior week we think are reliable.   Those
sources may not, however, be complete or accurate.  The Monday
Bond Pricing table is compiled on the Friday prior to
publication.  Prices reported are not intended to reflect actual
trades.  Prices for actual trades are probably different.  Our
objective is to share information, not make markets in publicly
traded securities.  Nothing in the TCR-LA constitutes an offer
or solicitation to buy or sell any security of any kind.  It is
likely that some entity affiliated with a TCR-LA editor holds
some position in the issuers' public debt and equity securities
about which we report.

Tuesday's edition of the TCR-LA features a list of companies
with insolvent balance sheets obtained by our editors based on
the latest balance sheets publicly available a day prior to
publication.  At first glance, this list may look like the
definitive compilation of stocks that are ideal to sell short.
Don't be fooled.  Assets, for example, reported at historical
cost net of depreciation may understate the true value of a
firm's assets.  A company may establish reserves on its balance
sheet for liabilities that may never materialize.  The prices at
which equity securities trade in public market are determined by
more than a balance sheet solvency test.

A list of Meetings, Conferences and Seminars appears in each
Thursday's edition of the TCR-LA. Submissions about insolvency-
related conferences are encouraged.  Send announcements to
conferences@bankrupt.com

                            ***********


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.  Marie Therese Profetana, Sheryl Joy P. Olano,
Rizande de los Santos, and Pamella Ritah K. Jala, Editors.

Copyright 2008.  All rights reserved.  ISSN 1529-2746.

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without
prior written permission of the publishers.

Information contained herein is obtained from sources believed
to be reliable, but is not guaranteed.

The TCR Latin America subscription rate is US$625 per half-year,
delivered via e-mail.  Additional e-mail subscriptions for
members of the same firm for the term of the initial
subscription or balance thereof are US$25 each.  For
subscription information, contact Christopher Beard at
240/629-3300.


           * * * End of Transmission * * *