/raid1/www/Hosts/bankrupt/TCRLA_Public/020111.mbx        T R O U B L E D   C O M P A N Y   R E P O R T E R

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

            Friday, January 11, 2002, Vol. 3, Issue 8

                           Headlines


A R G E N T I N A

BANCO BANSUD: Fitch Cuts Individual, Affirms Support Ratings
BANCO BISEL: Fitch Lowers Debt Ratings to `DDD'
BANCO DE GALICIA: Fitch Drops Long Term Debt Ratings To `DDD'
BANCO NACION: Government Considers Sell-Off To Placate IMF

BBVA BANCO FRANCES: Fitch Drops Ratings On Several Debt Issues
BBVA/SANTANDER: New Capital Only Rescue for Argentine Units
HSBC BANK: Fitch Downgrades Long-term Debt Rating
RIO DE LA PLATA: Fitch Takes Rating Actions on Emergency Measure
SCOTIABANK QUILMES: Company Profile


B R A Z I L

BRAZILIAN AIRLINES: May Spend $120M For Insurance This Year
LIGHT: S&P Changes Local Currency to Stable, Affirms Ratings
VARIG: Boeing Denies Report On Future Investment


C H I L E

TELEX-CHILE: Welcomes New Chairman


E L   S A L V A D O R

BANCO AGRICOLA: S&P Assigns `BB' Ratings, Outlook Stable


M E X I C O

CINTRA: Negotiates With Creditors; Won't Make Debt Payments


     - - - - - - - - - -


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

BANCO BANSUD: Fitch Cuts Individual, Affirms Support Ratings
------------------------------------------------------------
Fitch downgraded the Individual rating of Banco Bansud to `E'
from `D/E' and affirmed the bank's support rating at `5T.'

The actions were taken following the announcements of the first
concrete measures taken in conjunction with the passage of the
so-called Public Emergency law over the weekend. Under the law,
the government has been given broad powers to attack Argentina's
current economic problems, and has abandoned the Convertibility
foreign exchange regime. Other measures included the conversion
(or `pesofication') of dollar debts whose original amount was
$100,000 or less to pesos at an exchange rate of 1 to 1, a
directes, which have and will continue to be announced.

In addition to maintaining dollar liabilities, it is likely that
restructuring programs aimed at providing relief to dollar
borrowers will force banks to stretch tenors and limit interest
rates on such debt. While the severity of the effects will vary
from bank to bank, the still high exposure to the public sector,
and the losses that will result from the currency mismatch and
restructuring process imposed by the new regulations will put
bank solvency under heavy and, for some, unsustainable pressure,
leaving most, if not all, banks in need of some degree of
external assistance to continue viable. Some such assistance is
already in place and will continue in place for some time, such
as the deposit withdrawal restrictions and regulatory forbearance
easing requirements to recognize losses on the market value of
securities holdings. No details are as yet available on the
mechanisms behind the proposed bond issue mentioned above, but it
is questionable thaon the banking system of the measures already
taken and still to be taken will prove substantially more onerous
to the banks than would have been the case if the currency peg
had been removed and all local obligations had been uniformly
converted to pesos. The measures have also placed restrictions on
the banking system that influence bank managements' ability and
discretion to manage through the crisis, and this is reflected in
lower Support ratings for the foreign owned banks.

CONTACT:  FITCH
          Peter Shaw, 212/908-0553 (New York)
          Lorna Martin, 5411 4327 2444 ext. 31 (Buenos Aires)
          Ana Gavuzzo, 5411 4327 2444 ext. 73 (Buenos Aires)
          Charles Prescott +44 (0)20 7417 430her Cisco and
Oracle.

          BANCO BANSUD
          Sarmiento 401
          1041 Buenos Aires, Argentina
          Tel: (54-11) 5222-6500 / 5222-7800

          INVESTOR RELATIONS:
          Jorge Vaz-Ferreira
          Phone: (5411) 5222-6797
          Fax: (5411) 5222-6887
          E-mail: investor@bansud.com.ar

          Alejo Treachi (5411) 5222-7899

          Mariano Garcia (5411) 5222-8939


BANCO BISEL: Fitch Lowers Debt Ratings to `DDD'
-----------------------------------------------
Fitch lowered the long-term debt rating of Banco Bisel to `DDD'
from `CC.' The rating remains on Rating Watch Negative. The
ratings agency also lowered Banco Bisel's short-term debt rating
to `D' from `C.' The banks support rating was also changed to
`4T' from `3T.'

The actions were taken following the announcements of the first
concrete measures taken in conjunction with the passage of the
so-called Public Emergency law over the weekend.

Under the law, the government has been given broad powers to
attack Argentina's current economic problems, and has abandoned
the Convertibility foreign exchange regime. Other measures
included the conversion (or `pesofication') of dollar debts whose
original amount was $100,000 or less to pesos at an exchange rate
of 1 to 1, a directes which have and will continue to be
announced. In addition to maintaining dollar liabilities, it is
likely that restructuring programs aimed at providing relief to
dollar borrowers will force banks to stretch tenors and limit
interest rates on such debt. While the severity of the effects
will vary from bank to bank, the still high exposure to the
public sector, and the losses that will result from the currency
mismatch and restructuring process imposed by the new regulations
will put bank solvency under heavy and, for some, unsustainable
pressure, leaving most, if not all, banks in need of some degree
of external assistance to continue viable.

Some such assistance is already in place and will continue in
place for some time, such as the deposit withdrawal restrictions
and regulatory forbearance easing requirements to recognize
losses on the market value of securities holdings. No details are
as yet available on the mechanisms behind the proposed bond issue
mentioned above, but it is questionable thaon the banking system
of the measures already taken and still to be taken will prove
substantially more onerous to the banks than would have been the
case if the currency peg had been removed and all local
obligations had been uniformly converted to pesos. The measures
have also placed restrictions on the banking system that
influence bank managements' ability and discretion to manage
through the crisis, and this is reflected in lower Support
ratings for the foreign owned banks.

CONTACT:  Fitch
          Peter Shaw, 212/908-0553 (New York)
          Lorna Martin, 5411 4327 2444 ext. 31 (Buenos Aires)
          Ana Gavuzzo, 5411 4327 2444 ext. 73 (Buenos Aires)
          Charles Prescott +44 (0)20 7417 430her Cisco and
Oracle.

          BANCO BISEL
          President: Guillermo Harteneck
          General manager: Carlos Celaa
          Registered office:
          Bisel bank value - Put Central - Mitre 602 - 2000
Rosario -
          Provincia de Santa Fe - Argentina
          Tel: +54.341.4.200.300

          or

          Pierre Bringuier, based In Buenos Aires
          Tel: 54.11.43.21.78.35
          Telefax: 54.11.43.21.78.94
          email: pbringuier@bancobisel.com.ar


BANCO DE GALICIA: Fitch Drops Long Term Debt Ratings To `DDD'
-------------------------------------------------------------
Fitch cut Banco de Galicia y Buenos Aires' Individual rating to
`E' from `D.' The ratings agency also cut the bank's long-term
debt rating to `DDD' from `CC,' on Rating Watch Negative, and
lowers short-term rating to `D' from `C.'

The rating actions were taken following the announcements of the
first concrete measures taken in conjunction with the passage of
the so-called Public Emergency law over the weekend. Under the
law, the government has been given broad powers to attack
Argentina's current economic problems, and has abandoned the
Convertibility foreign exchange regime. Other measures included
the conversion (or `pesofication') of dollar debts whose original
amount was $100,000 or less to pesos at an exchange rate of 1 to
1, a directes which have and will continue to be announced.

In addition to maintaining dollar liabilities, it is likely that
restructuring programs aimed at providing relief to dollar
borrowers will force banks to stretch tenors and limit interest
rates on such debt. While the severity of the effects will vary
from bank to bank, the still high exposure to the public sector,
and the losses that will result from the currency mismatch and
restructuring process imposed by the new regulations will put
bank solvency under heavy and, for some, unsustainable pressure,
leaving most, if not all, banks in need of some degree of
external assistance to continue viable. Some such assistance is
already in place and will continue in place for some time, such
as the deposit withdrawal restrictions and regulatory forbearance
easing requirements to recognize losses on the market value of
securities holdings. No details are as yet available on the
mechanisms behind the proposed bond issue mentioned above, but it
is questionable thaon the banking system of the measures already
taken and still to be taken will prove substantially more onerous
to the banks than would have been the case if the currency peg
had been removed and all local obligations had been uniformly
converted to pesos. The measures have also placed restrictions on
the banking system that influence bank managements' ability and
discretion to manage through the crisis, and this is reflected in
lower Support ratings for the foreign owned banks.

CONTACT:  Fitch
          Peter Shaw, 212/908-0553 (New York)
          Lorna Martin, 5411 4327 2444 ext. 31 (Buenos Aires)
          Ana Gavuzzo, 5411 4327 2444 ext. 73 (Buenos Aires)
          Charles Prescott +44 (0)20 7417 430her Cisco and
Oracle.

          BANCO DE GALICIA
          Transfer Agent and Registrar:
          Caja de Valores S.A. Sarmiento 299 1er subsuelo (1353)
          Buenos Aires, Argentina
          Tel : (54 11) 4317 8900

          Contacts:
          Tte. Gral Juan D. Peron 407
          1038 Buenos Aires, Argentina
          Tel: +54-11-6329-0000
          Fax: +54-11-6329-6100

          Corporate Communications:
          Tel: (54 11) 6329 6439
          Fax:(54 11) 6329 6000 ext.: 2041

          Strategic Analysis Dept:
          Tel : (54 11) 6329 6430
          Fax : (54 11) 6329 6494:
          email: teresa.pascual@bancogalicia.com.ar


BANCO NACION: Government Considers Sell-Off To Placate IMF
----------------------------------------------------------
In an effort to placate the International Monetary Fund (IMF),
the Argentinean government is looking into the possibility of
selling off part of the country's largest bank, the federally-
owned Banco Nacion, reports Business News Americas.

The IMF and the Duhalde administration are currently in talks.
The IMF still hasn't come up with a decision whether to aid
Argentina financially and, if so, how much aid it would grant.
The current administration is under pressure from the IMF to
privatize part of Nacion in order to free up resources and boost
the bank's efficiency.

Two alternatives are apparently on the table, both of which
include the sale of Nacion's 645-strong branch network to the
private sector, thereby allowing it to become a second-tier or
development bank with its own resources. But the move is far from
a certainty in a government categorized as both nationalist and
populist, despite some softening up from the IMF funding
possibility.

CONTACT:  Enrique Olivera, President
          Bartolome Mitre 326
          Capital Federal 1036
          Buenos Aires, Argentina
          Phone: 011-4347-6000
          Fax: 011-4342-2991


BBVA BANCO FRANCES: Fitch Drops Ratings On Several Debt Issues
--------------------------------------------------------------
Fitch took rating actions on BBVA Banco Frances following the
announcements of the first concrete measures taken in conjunction
with the passage of the so-called Public Emergency law over the
weekend.

The ratings affected were:

-  Individual rating lowered to `E' from `D';

-  Long-term debt rating lowered to `DDD' from `CC', remains on
   Rating Watch Negative;

-  Short-term debt rating lowered to `D' from `C';

-  Support rating changed to `4T' from `3T'.

Under the law, the government has been given broad powers to
attack Argentina's current economic problems, and has abandoned
the Convertibility foreign exchange regime. Other measures
included the conversion (or `pesofication') of dollar debts whose
original amount was $100,000 or less to pesos at an exchange rate
of 1 to 1, a directes which have and will continue to be
announced. In addition to maintaining dollar liabilities, it is
likely that restructuring programs aimed at providing relief to
dollar borrowers will force banks to stretch tenors and limit
interest rates on such debt. While the severity of the effects
will vary from bank to bank, the still high exposure to the
public sector, and the losses that will result from the currency
mismatch and restructuring process imposed by the new regulations
will put bank solvency under heavy and, for some, unsustainable
pressure, leaving most, if not all, banks in need of some degree
of external assistance to continue viable. Some such assistance
is already in place and will continue in place for some time,
such as the deposit withdrawal restrictions and regulatory
forbearance easing requirements to recognize losses on the market
value of securities holdings.

No details are as yet available on the mechanisms behind the
proposed bond issue mentioned above, but it is questionable thaon
the banking system of the measures already taken and still to be
taken will prove substantially more onerous to the banks than
would have been the case if the currency peg had been removed and
all local obligations had been uniformly converted to pesos. The
measures have also placed restrictions on the banking system that
influence bank managements' ability and discretion to manage
through the crisis, and this is reflected in lower Support
ratings for the foreign owned banks.

CONTACT:  Fitch
          Peter Shaw, 212/908-0553 (New York)
          Lorna Martin, 5411 4327 2444 ext. 31 (Buenos Aires)
          Ana Gavuzzo, 5411 4327 2444 ext. 73 (Buenos Aires)
          Charles Prescott +44 (0)20 7417 430her Cisco and Oracle

          BANCO FRANCES
          Gervasio Collar Zabaleta, Chairman
          Antonio Martinez Jorquera, CEO
          Jorge Bledel, Head of Treasury and Wholesale Banking

          Reconquista 199
          1003 Buenos Aires, Argentina
          Phone: +54-11-4346-4000
          Fax: +54-11-4346-4320


BBVA/SANTANDER: New Capital Only Rescue for Argentine Units
-----------------------------------------------------------
Two of Spain's biggest banks stand to suffer larger losses than
previously forecast from the peso's devaluation and may need to
increase capital by as much as 1 billion euros (US$892 million)
to avert collapse of their Argentina units, says Bloomberg.

According to investors, the two banks, Santander Central Hispano
SA and Banco Bilbao Vizcaya Argentaria SA may need to set aside
more money to cover costs of as much as $3 billion in Argentina
after the government forced banks to convert most dollar loans to
pesos.

"It looks like the banks' provisions will be insufficient to face
losses in Argentina," said Ignacio Martin, who helps manage 2.5
billion euros at Espirito Santo Gestion.

Two months ago Santander said it would set aside 1 billion euros
in 2001 for unspecified losses, which could be used to cover
Argentina, while BBVA made a 400 million provision.

Those should be increased by about 100 million to 200 million
euros at Santander, and by as much as 300 million to 400 million
euros at BBVA, said SG, a unit of Societe Generale SA, in a note
to investors.

"They haven't put away enough money to pay for Argentina," said
SG analyst Elena Gonzalez del Pino.

Furthermore, the banks also face soaring loan defaults from
Argentina's recession and the currency devaluation and will take
losses from their combined $6 billion in government bonds.

Last week, Morgan Stanley Dean Witter & Co. estimated that the
two banks may need to inject as much as 1 billion euros to stave
off bankruptcy in their Argentine units.

"The worst-case scenario can be a lot more expensive than what
they've planned for," said Vasco Moreno, an analyst at Fox-Pitt,
Kelton Ltd. in London.

Merrill Lynch & Co. analysts said Santander and BBVA had made
adequate provisions, in a January 4 note to investors.

Merrill's scenario included a larger peso devaluation, of 40
percent, and said the maximum loss would be the capital that both
Spanish banks had committed to their Argentine units.

Santander has invested about $2.15 billion, while BBVA has
invested about $1.4 billion.

Under a similar 40 percent default and devaluation scenario, J.P.
Morgan Chase & Co. analyst Carlos Pertejo said write-offs for bad
loans and other expenses might amount to $1.5 billion at BBVA and
$1.6 billion at Santander, in a December report.

The total loss would be higher if the banks had to write off 70
percent of their government securities and consumer loan
portfolios, said Moreno. He said that worst-case scenario would
cost Santander as much as $5 billion and BBVA as much as $3.6
billion.

In that scenario, and if a bank bail-out doesn't come from the
Argentine central bank or another authority, Moreno said
Santander and BBVA would more likely let their Argentine units be
taken over by the Argentine government than invest more money.

"I don't think these banks would throw good money after bad
money," said Moreno.

SANTANDER CONTACT OFFICE: IR:
                          Seat of Canalejas nA§ 1, 5A§ plants
                          28014 Madrid. EspaAńa
                          Email: investor@gruposantander.com
                          Tel. + 34 91 558 13 69
                               + 34 91 558 10 05
                          Fax. + 34 91 558 14 53
                               + 34 91 522 66 70


HSBC BANK: Fitch Downgrades Long-term Debt Rating
-------------------------------------------------
Fitch downgraded HSBC Bank Argentina's long-term debt rating to
`DDD' from `CC'. The rating remains on Rating Watch Negative, and
withdrawn.

The ratings agency took the action following the announcements of
the first concrete measures taken in conjunction with the passage
of the so-called Public Emergency law over the weekend. Under the
law, the government has been given broad powers to attack
Argentina's current economic problems, and has abandoned the
Convertibility foreign exchange regime. Other measures included
the conversion (or `pesofication') of dollar debts whose original
amount was $100,000 or less to pesos at an exchange rate of 1 to
1, a directes which have and will continue to be announced. In
addition to maintaining dollar liabilities, it is likely that
restructuring programs aimed at providing relief to dollar
borrowers will force banks to stretch tenors and limit interest
rates on such debt. While the severity of the effects will vary
from bank to bank, the still high exposure to the public sector,
and the losses that will result from the currency mismatch and
restructuring process imposed by the new regulations will put
bank solvency under heavy and, for some, unsustainable pressure,
leaving most, if not all, banks in need of some degree of
external assistance to continue viable. Some such assistance is
already in place and will continue in place for some time, such
as the deposit withdrawal restrictions and regulatory forbearance
easing requirements to recognize losses on the market value of
securities holdings. No details are as yet available on the
mechanisms behind the proposed bond issue mentioned above, but it
is questionable thaon the banking system of the measures already
taken and still to be taken will prove substantially more onerous
to the banks than would have been the case if the currency peg
had been removed and all local obligations had been uniformly
converted to pesos. The measures have also placed restrictions on
the banking system that influence bank managements' ability and
discretion to manage through the crisis, and this is reflected in
lower Support ratings for the foreign owned banks.

CONTACT:  Fitch
          Peter Shaw, 212/908-0553 (New York)
          Lorna Martin, 5411 4327 2444 ext. 31 (Buenos Aires)
          Ana Gavuzzo, 5411 4327 2444 ext. 73 (Buenos Aires)
          Charles Prescott +44 (0)20 7417 430her Cisco and Oracle


RIO DE LA PLATA: Fitch Takes Rating Actions on Emergency Measure
----------------------------------------------------------------
Fitch took rating actions on Banco Rio de la Plata following the
announcements of the first concrete measures taken in conjunction
with the passage of the so-called Public Emergency law over the
weekend.

The ratings affected were:

-  Individual rating lowered to `E' from `D';

-  Long-term debt rating lowered to `DDD' from `CC' remains on
   Rating Watch Negative

-  Short-term debt rating lowered to `D' from `C';

-  Support rating changed to `4T' from `3T'.

Under the law, the government has been given broad powers to
attack Argentina's current economic problems, and has abandoned
the Convertibility foreign exchange regime. Other measures
included the conversion (or `pesofication') of dollar debts whose
original amount was $100,000 or less to pesos at an exchange rate
of 1 to 1, a directes which have and will continue to be
announced. In addition to maintaining dollar liabilities, it is
likely that restructuring programs aimed at providing relief to
dollar borrowers will force banks to stretch tenors and limit
interest rates on such debt. While the severity of the effects
will vary from bank to bank, the still high exposure to the
public sector, and the losses that will result from the currency
mismatch and restructuring process imposed by the new regulations
will put bank solvency under heavy and, for some, unsustainable
pressure, leaving most, if not all, banks in need of some degree
of external assistance to continue viable. Some such assistance
is already in place and will continue in place for some time,
such as the deposit withdrawal restrictions and regulatory
forbearance easing requirements to recognize losses on the market
value of securities holdings. No details are as yet available on
the mechanisms behind the proposed bond issue mentioned above,
but it is questionable thaon the banking system of the measures
already taken and still to be taken will prove substantially more
onerous to the banks than would have been the case if the
currency peg had been removed and all local obligations had been
uniformly converted to pesos. The measures have also placed
restrictions on the banking system that influence bank
managements' ability and discretion to manage through the crisis,
and this is reflected in lower Support ratings for the foreign
owned banks.

CONTACT:  Fitch
          Peter Shaw, 212/908-0553 (New York)
          Lorna Martin, 5411 4327 2444 ext. 31 (Buenos Aires)
          Ana Gavuzzo, 5411 4327 2444 ext. 73 (Buenos Aires)
          Charles Prescott +44 (0)20 7417 430her Cisco and Oracle

          BANCO RIO DE LA PLATA
          Ana Patricia B. S. de Sautuola y O'Shea, Chairman
          Jose L. E. Cristofani, Executive Vice Chairman and CEO
          Pablo Caride, Corporate Finance
          Bartolome Mitre 480
          1036 Buenos Aires, Argentina
          Phone: +54-(0)14-341-1081-1580
          Fax: +54-(0)14-341-1074-1084

          LEGAL ADVISOR:
          Shearman & Sterling
          599 Lexington Avenue
          New York, NY 10022-6069, USA
          Tel: (+1 212) 848-4000
          Fax: (+1 212) 848-7179
          Firm Managing Partner: Robert C. Treuhold


SCOTIABANK QUILMES: Company Profile
-----------------------------------

NAME:  Scotiabank Quilmes, S.A.

ARGENTINE CONTACT OFFICE:  Alan Macdonald
                           Chief Executive Officer
                           Phone: (54-11) 4338-8000
                           Fax: (54-11) 4338-8033
                           Mail: 6th Floor
                           Gral. J.D. Peron 564
                           (C1038AAL) Buenos Aires

                           Roy D. Scott
                           VP and Managing Dir., Latin America
                           Phone: (54-11) 4394-8726
                           Fax: (54-11) 4328-1901
                           Mail: P.O. Box 3955
                           C1000WBN Correo Central
                           Buenos Aires, Argentina
                           E-mail: scotiarep@sinectis.com.ar

WEBSITE: http://www.scotiabankquilmes.com.ar

TYPE OF BUSINESS:  Scotiabank Quilmes, S.A. is a wholly-owned
                   Argentine subsidiary of the 4th largest bank
in
                   Canada, the Bank of Nova Scotia. It is
                   Argentina's 12th largest commercial bank, with
                   93 branches - and its Scotiabank
                   Representative Office offer an extensive range
                   of corporate, commercial and retail banking
                   services.

TRIGGER EVENT:  Scotiabank Quilmes defaulted on a US$55-million
                bond payment early this month after the central
                bank refused to allow the money to leave
                Argentina. The default led to a rating reduction
                on the Company to default by rating agency
                Standard and Poor's.


AUDITORS:  KPMG LLP
           Av. Leandro N. Alem 1050, Piso 2
           C1001AAS-Buenos Aires, Argentina
           +54 (11) 4316 5700

           PRICEWATERHOUSECOOPERS LLP
           Buenos Aires Office
           Cerrito 268
           C1010AAF Buenos Aires
           Mail Address :
           Casilla de Correo Central 896
           C1010AAF Buenos Aires
           Argentina
           Telephone: [54] (11) 4370 6000, 4370 6700, 4370 6900
           Telecopier: [54] (11) 4370 6800, 4370 6339

           Cąrdoba Office
           PricewaterhouseCoopers
           Boulevard Chacabuco 492
           X5000IIR Cąrdoba
           Telephone: [54] (351) 420 2300
           Telecopier: [54] (351) 420 2332

Last TCRLA Headline DATE:  Wednesday, January 9, 2002, Vol. 3,
                           Issue 6



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

BRAZILIAN AIRLINES: May Spend $120M For Insurance This Year
-----------------------------------------------------------
The insurance premiums for Brazilian airlines this year will
quadruple from $30 million to $120 million, according to
estimates by the state reinsurance company IRB-Brasil, in an O
Estado de Sao Paulo report.

According to the story, some major airlines have already renewed
their coverage, while some are still in the process.

TAM, which last year paid $7 million and this year $30 million in
premiums, is going to pay more than four times as much to insure
its fleet of 84 aircraft. The Varig-Rio Sul group saw its costs
go from $8 million to $49 million.

Transbrasil renewed its policy in November 2001, with an increase
from $1.8 million to $4 million. However, it has not paid this as
it is currently not flying any planes, due to financial
difficulties, and the policy is being cancelled.

The Brazilian government is temporarily offering coverage for the
risk of war to the tune of between $150 million and $1 billion.
Three brokerage companies, Aon, Marsch and Willis, have been
given the task of finding alternative coverage, but have not as
yet found any, as the international market refuses to offer
coverage over $150 million.


LIGHT: S&P Changes Local Currency to Stable, Affirms Ratings
------------------------------------------------------------
Standard & Poor's changed Wednesday its local currency outlook on
LIGHT-Servicos de Eletricidade S.A.'s to stable from negative.
The local currency rating is affirmed at double-'B'. The foreign
currency rating and outlook are affirmed at double-'B'-
minus/negative.

This action reflects the support of Electricite de France (EdF;
double-'A'-plus/Negative/'A-1'-plus), which is likely to convert
its

US$550 million intercompany loan into equity once a pending share
exchange with The AES Corp. (double-'B'/stable) is consummated.
Another positive outcome of the share exchange is that about
US$500 million of debt residing at AES Elpa (formerly LIGHTGas)
will become an obligation of the AES family. As a result, LIGHT's
financial profile is expected to improve significantly.

LIGHT's ratings reflect the challenges of operating in Brazil
under an evolving regulatory framework and volatile macroeconomic
environment. LIGHT is the electric distribution company serving
the city of Rio de Janeiro. LIGHT is still struggling to offset
the negative effect of the real's continuing devaluation against
the dollar, which began in January 1999. Despite cost-cutting
efforts and improvement on certain operating parameters, LIGHT's
progress on reducing electricity energy losses has been
disappointing.

Offsetting these weaknesses are a stable customer base with a
large residential component, a monopoly franchise to distribute
electricity, and support of EdF, which is expected to increase
its ownership in LIGHT to 88% via a share swap with AES Corp. As
a result of this restructuring, LIGHT will also relinquish its
ownership stake in distributor Eletropaulo Metropolitana
Eletricidade de Sao Paulo S.A.

Furthermore, Edf is expected to take over the ownership position
in, and arrange the financing of, generation projects that LIGHT
has initiated. The expectation is that LIGHT will enter into
purchased power agreements with these plants.

Standard & Poor's considers regulatory risk in Brazil to be high,
despite some positive developments. The government has negotiated
a settlement with distributors, whereby distributors will recover
the bulk of revenues lost due to energy rationing, imposed in
June 2001, due to Brazil's energy crisis; LIGHT's kilowatt-hour
sales declined by 25% in the third quarter of 2001 compared to
the same period in 2000. Annual tariff reviews have been in
accordance with concession contract guidelines; LIGHT received a

20.6% increase in November 2001. However, annual rate increases
have not ensured full recovery of noncontrollable costs, such as
large power purchases from Itaipu, which is linked to the dollar.
A recently created task force has proposed an indexing mechanism
to remedy this problem. And finally, concerns about the tariff
revision in 2003 have been somewhat eased by the recent tariff
revision of Espirto Santo Centrais Eletricas (Escelsa), which set
a positive precedent in the revaluation of rate base.

OUTLOOK: STABLE

LIGHT's financial profile has deteriorated steadily since 1999.
Funds from operations (FFO) interest coverage and cash flow to
debt are expected to only approximate 1.5 times (x) and 5% for
2001, respectively. The retirement of third-party debt and
conversion of the EdF loan to equity should restore ratios to
levels commensurate with ratings. FFO interest coverage and FFO
to debt should rebound to about 4x and 35%, respectively, during
the next few years.

CONTACT:  STANDARD & POOR'S
          Cheryl E Richer
          +1-212-438-2084
          or
          Anna Paula Dal Secco
          +55-11-5501-8955


VARIG: Boeing Denies Report On Future Investment
------------------------------------------------
Boeing. Co. strongly denied a recent press report that it was
intending to invest in Brazilian flag carrier Varig, which caused
the airlines' stock to surge 33 percent, according to a report
released by eyeforaerospace.com.

Mike Tull, a spokesperson for Boeing said: "It's a false report.
We are definitely not planning to invest either now or in the
near future."

However, Tull did confirm that a clause in a six jet-leasing
contract with Varig, which was announced last month, did contain
an investment option for Boeing.

"We told them in the future we could consider investing in them,
but the fact is we are not. Three years later or five years
later, I don't know, you can never say never. But there is no
investment planned now," said Tull.

A press report on Tuesday said Boeing and General Electric Co.,
which makes jet engines and owns hundreds of jets on lease
through its GE Capital subsidiary, might invest $1 billion in
Varig, eliminating an onerous $830 million debt load. Varig, in
return, would agree to buy only Boeing jets, presumably equipped
with GE engines.

The Brazilian carrier, on the other hand, has also denied such
report. Varig's spokesman, Manuel Guedes, said: "There are no
talks or agreement of this kind with Boeing and General Electric.
There is no process in place now that would lead to this kind of
an agreement."

Hit by slow ticket sales and rising operating costs since the
September 11 attacks along with most other airlines, Varig has
announced it would cut 10 percent of its 17,500 workers and roll
back fleet growth plans.


VARIG CONTACTS:  Legal Department:
                 Rua 18 de Novembro nr. 800 Navegantes
                 Zip : 90240-040
                 City : Porto Alegre / RS - Brazil
                 Telephone numbers: (51) 358-7039/7040
                                   (51) 358-7010/7042

                 INDEPENDENT ACCOUNTANTS
                 Arthur Andersen S/C
                 Rua Alexandre Dumas 1981
                 Cep: 04.717-906 - Centro / Sao Paulo / S P-
                 Brazil
                 Tels.: (11) 5504-8200
                 Fax:  (11) 5504-8373

                 INVESTOR RELATIONS MANAGER/STOCKHOLDER SERVICES
                 Leir s  Stortti
                 E-mail: leir.stortti@varig.com.br
                 Av. Almte. Silvio de Noronha, n  365 -
                 Bloco "A" - s/416
                 Centro - Rio de Janeiro - RJ
                 Cep.:  20021-010
                 Tels.: (21) 3814-5401/5402/5403/5415
                 Fax:  (21) 3814-5543


=========
C H I L E
=========

TELEX-CHILE: Welcomes New Chairman
----------------------------------
Chilean long distance operator Telex now has a new chairman in
the person of Juan Pablo Roman, reports Business News Americas.

Roman will take over Jorge Awad, who relinquished his post
following Telex's late-December decision to transfer control to
US-based investment funds Southern Cross and GE Capital.

"I have completed my mission because the ownership has been
restructured and the ownership base has been widened [at Telex],"
said Awad. Awad took over as chairman a year ago as a
representative of the Company's creditors, who control 51 percent
of its equity, after Chile's Ibanez and Radic families had
allowed debts to grow to $220 million.

Roman is a lawyer who represents the Bank of America, one of
Telex's principal shareholders.



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

BANCO AGRICOLA: S&P Assigns `BB' Ratings, Outlook Stable
--------------------------------------------------------
Standard & Poor's on Monday assigned its long-term local and
foreign currency counterparty and CD ratings of double-'B' and
its short-term counterparty and CD ratings of single-'B' to Banco
AgrĄcola S.A., El Salvador's largest bank.

The outlook is stable.

The ratings are based on Banco AgrĄcola's leading market position
in El Salvador, particularly in attracting retail deposits,
contributing to strong liquidity. The bank also has a strong
capital base and reasonable earnings. However, the Salvadoran
banking system, along with Banco AgrĄcola, has experienced a
general deterioration in asset quality. Furthermore, the bank's
rating is also constrained by the relatively small size and
limited diversification of El Salvador's economy.

Banco AgrĄcola has a market share of about 33% in El Salvador,
which was boosted by the acquisition of Banco Desarrollo in 2000
and Banco Capital in 2001. Aided by the bank's historic
leadership in serving the retail market, it is particularly
strong in attracting retail deposits, including savings and time
deposits. Customer deposits are the bank's main funding source,
and liquid assets significantly exceed interbank borrowings.

Capital ratios have been strong, with equity equal to slightly
more than 8%, and nearly 14% of loans. ROA has been fairly stable
for the past three years, at around 1.1%, following a declining
trend over the preceding three years. Currently, profitability
has stabilized at a level that is sound for a bank of this type.

The lending portfolio is diversified by type, but subject to the
risks of operating in a relatively small economy with limited
diversification. Coffee and construction loans are particularly
problematic. Nonperforming loans are less than 3% of total loans
and are more than 100% covered by provisions. Restructured loans-
which include certain current loans that have been refinanced-and
foreclosed assets account for 8% of the loan portfolio. Banco
AgrĄcola has demonstrated significant progress in reducing
charge-offs, which have been high. Given the bank's more
conservative underwriting guidelines implemented by the current
management team, growth in problem assets should be negligible.

OUTLOOK: STABLE

The outlook reflects Standard & Poor's opinion that the
management of the bank, supported by strong capitalization and
liquidity, will be able to solve current asset quality problems
and maintain a comfortable level of earnings.

Analysts: Angelica Bala, Mexico City (52) 55-5279-2005; Roger B
Taillon, New York (1) 212-438-7400

CONTACTS:  BANCO AGRICOLA S.A.
           Ing. Claudia MarĄa Ląpez
           (503) 267-5616
           cmlopez@bancoagricola.com

           Arq. Rogelio Zepeda
           (503) 267-5620
           rzepeda@bancoagricola.com

           Archie D. Baldocchi, President
           mailto:info@bancoagricola.com



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

CINTRA: Negotiates With Creditors; Won't Make Debt Payments
-----------------------------------------------------------
Mexico's Cintra S.A., which controls Aeromexico and Mexicana, the
nation's largest airlines, revealed it is negotiating with
creditors, the AP reports.

Cintra admitted that Aeromexico and Compania Mexicana de Aviacion
won't be able to comply with some of their liability covenants
related to a commercial paper program backed by receivables. The
companies are negotiating with the trustee representing
creditors, the company said. Cintra added that, to date, it has
met all debt obligations.

Cintra didn't provide details on how much debt was owed and when
the payment is due. Stock exchange figures revealed that Cintra's
debt as of the third quarter totaled $1.44 billion.

The difficult financial situation at Cintra had been exacerbated
by the global economic slowdown and the September 11 terrorist
attacks in the U.S.

CONTACTS:  Jaime Corredor Esnaola, Chairman
           Juan DĄez-Canedo Ruiz, CEO
           Rodrigo Ocejo Rojo, CFO

           Xola 535, Piso 16, Col. del Valle
           03100 M‚xico, D.F., Mexico
           Phone: +52-5-448-8050
           Fax: +52-5-448-8055

           OR
           C.P. Francisco Cuevas Feliu, Investor Relations
           Xola 535, Piso 16
           Col. del Valle
           03100 M‚xico, D.F.
           Tel. (52) 5 448 80 50
           Fax (52) 5 448 80 55
           infocintra@cintra.com.mx



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 American is a daily newsletter
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and Beard Group, Inc., Washington, DC. John D. Resnick, Edem
Psamathe P. Alfeche and Fe Ong Va€o, Editors.

Copyright 2002.  All rights reserved.  ISSN 1529-2746.

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