TCRLA_Public/020130.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

            Wednesday, January 30, 2002, Vol. 3, Issue 21

                           Headlines


A R G E N T I N A

TELEFONICA DE ARGENTINA: Moody's Cuts Foreign Currency Ratings


B E R M U D A

GLOBAL CROSSING: Files For Bankruptcy Protection


B R A Z I L

BANCO NACIONAL: Former Owner, Directors May Serve 28 Yrs In Jail
EMBRAER: Shares Up On WTO Ruling Against Canada
EMBRAER: Executive, Govt. Official Comment On WTO Ruling
EMBRAER: Bombardier Weighs In, Spins WTO Ruling In Statement
EMBRAER: Brazil Seeks End To Canadian Subsidies On WTO Ruling
TAM: Cutting Latin American, European Flights
TRANSBRASIL: CVM Looks Into Possible Sale Irregularities

C H I L E

ENAMI: Mining Minister Recommends Sale Of Ventanas
MADECO: Argentine Exposure Triggers Fitch's Review On Ratings


E C U A D O R

BANCO DEL PACIFICO: BCE To Boost Capital Next Week
BANCO DEL PROGRESO: Progreso Sells Emelec Shares To Pay Customers


M E X I C O

BITAL: Analyst Sees Intervention If Finances Fail To Improve
GRUPO MEXICO: Forms Alliance With Grupo Carso
ISPAT MEXICANA: Restructuring Will Lead To Further Downgrade
PEGASO: Officials Deny Rumors of Huge Debts


P A R A G U A Y

COPACO: Argentine Crisis Won't Hinder Pending Sale
CORPOSANA: Pending Sale Attracts Another UK-Based Firm


     - - - - - - - - - - -



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

TELEFONICA DE ARGENTINA: Moody's Cuts Foreign Currency Ratings
--------------------------------------------------------------
Telefonica de Argentina Sociedad Anonima (TASA) has had its long-
term foreign currency debt ratings downgraded by Moody's
Investors Service to `B2' from `B1,' with a negative rating
outlook.

Moody's applies the adjustment to Telefonica de Argentina SA's
MTN Program and all drawdowns, issuer rating and senior implied
rating.

Moody's rating downgrade and negative rating outlook reflect the
increased uncertainty with regard to TASA's ability to make
future dollar-denominated payments in the event of a new
Argentinean law being approved, which would preclude Argentinean-
domiciled companies from making any payments in foreign currency.

According to Moody's, the increased uncertainty is also linked to
the expected redefinition of the regulatory framework, which will
be crucial in defining TASA's future tariff increases.

Moody's notes that TASA's B2 foreign currency bond rating is five
notches above Argentina's Ca long-term foreign currency ceiling
for bonds and notes.

The rating agency allowed TASA to pierce the Argentinean country
sovereign ceiling based on the still perceived strong implicit
support from Telefonica SA, which owns 98% of TASA, and the
strategic value of TASA.

Moody's rating downgrade also reflects the evolving regulatory
environment and the overall economic recession affecting the
Company's revenues, even though TASA continues to enjoy a strong
market position in Argentina and a relatively conservative
financial leverage.

CONTACTS:  MOODY'S (London)
           Stuart Lawton
           Managing Director
           Corporate Finance
           Tel. 44 20 7772 5454

           Carlos Winzer
           Senior Vice President
           Corporate Finance
           Tel. 44 20 7772 5454



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

GLOBAL CROSSING: Files For Bankruptcy Protection
------------------------------------------------
Global Crossing (NYSE: GX) announced Monday that it has signed a
letter of intent with Hutchison Whampoa Limited and Singapore
Technologies Telemedia Pte. Ltd. for a $750 million cash
investment for a joint majority stake in the company's equity in
connection with a restructuring of the company's balance sheet.
In order to begin the restructuring process, Global Crossing and
certain of its affiliates commenced Chapter 11 cases in the
United States Bankruptcy Court for the Southern District of New
York and coordinated proceedings in the Supreme Court of
Bermuda.

Under the terms of the proposed investment, which is conditional
on, among other things, the confirmation of a plan of
reorganization by the courts before the end of August 2002,
creditors would share in a combination of cash, new debt, and new
equity in the restructured company. Existing common equity and
preferred shareholders would not participate in the new capital
structure.

John Legere, Chief Executive Officer of Global Crossing stated,
"We believe this new equity investment from parties as strong as
Hutchison Whampoa and Singapore Technologies Telemedia validates
our confidence in the strong future of our company. This
investment, along with the financial and operational
restructuring that we're implementing, will strengthen our
balance sheet and enable Global Crossing to build a sustainable
business upon its existing unmatched global network. With this
restructuring, we believe we can become the global leader
providing networking services among the world's top 200 cities to
global enterprises and carriers."

Mr. Legere said that business would continue as usual during the
restructuring process. Employees will continue to be paid their
wages and other benefits without interruption. Worldwide
operations will be unaffected by the filing and customers will
not experience any changes in their service.

"Ours is a balance sheet issue, not an operational one," Mr.
Legere said, "and today's actions are intended to directly
address this issue. Even with the financial uncertainty we've
recently experienced, customers have continued to choose our
network over many others. With this restructuring, we'll put
financial uncertainty behind us and the power of our network will
once again become the primary factor in the minds of our
customers. Hutchison Whampoa and Singapore Technologies Telemedia
are perfect matches for Global Crossing. They bring considerable
financial resources and business acumen, which we are confident
will add significant value to Global Crossing's prospects."

"With a strengthened balance sheet and reduced debt, we are
confident that Global Crossing will be in an excellent position
to take advantage of its unique global network, growing customer
base, and outstanding service capabilities to create substantial
value in the coming years. We are committed to an expedited
restructuring process," Mr. Legere added.

Mr. Canning Fok, Group Managing Director of Hutchison Whampoa,
and Mr. Lee Theng Kiat, President and CEO of Singapore
Technologies Telemedia, said, "We are excited about the prospect
of working with Global Crossing's management team and the
opportunity presented by this transaction to develop and
strengthen Global Crossing's business."

Hutchison Whampoa and Singapore Technologies Telemedia already
have business relationships with Global Crossing and its
affiliates. Asia Global Crossing and Hutchison Whampoa each own
50 percent of Hutchison Global Crossing, a leading
telecommunications service provider in Hong Kong providing fixed-
line, Internet and data services. Asia Global Crossing and a
subsidiary of Singapore Technologies Telemedia each own 50
percent of StarHub Crossing, which owns and operates a high
capacity backhaul network in Singapore.

ABOUT GLOBAL CROSSING

Global Crossing (NYSE: GX) provides telecommunications solutions
over the world's first integrated global IP-based network, which
reaches 27 countries and more than 200 major cities around the
globe. Global Crossing serves many of the world's largest
corporations, providing a full range of managed data and voice
products and services. Global Crossing operates throughout the
Americas and Europe, and provides services in Asia through its
subsidiary, Asia Global Crossing (NYSE: AX). Please visit
www.globalcrossing.com or www.asiaglobalcrossing.com for more
information.

ABOUT HUTCHISON WHAMPOA

Hutchison Whampoa is a Hong Kong-based multinational conglomerate
with origins dating back to the 1800s. Hutchison is also part of
the Li Ka-shing group of companies, which together represent
about 15% of the total market capitalization of the Hong Kong
stock market. In 2000, consolidated turnover (including
associates) was over US$10 billion, and consolidated net profit
was approximately US$4.4 billion. With over 100,000 employees
worldwide, Hutchison operates five core businesses in 36
countries: ports and related services; telecommunications and e-
commerce; property and hotels; retail and manufacturing; and
energy and infrastructure. For more information, visit
http://www.hutchison-whampoa.com.

ABOUT SINGAPORE TECHNOLOGIES TELEMEDIA

Singapore Technologies Telemedia is a leading info-communications
group that provides voice, data and video services. It focuses on
three core businesses: data & voice, broadband, & multimedia.
Through its subsidiaries and associate companies, Singapore
Technologies Telemedia provides fixed and mobile telecom
services, wireless data communications services, Internet mobile
services, global IP network services, managed hosting services,
satellite services, broadband cable and e-business software
development services. Singapore Technologies Telemedia is a
wholly-owned subsidiary of the Singapore Technologies group.

CONTACTS:  GLOBAL CROSSING
           Press Contacts
           Dan Coulter - USA
           Tel. +1 973-410-5810
           daniel.coulter@globalcrossing.com

           Becky Yeamans - USA
           Tel. +1 973-410-5857
           rebecca.yeamans@globalcrossing.com

           Mish Desmidt - Europe
           Tel. + 44 1256-732-866
           mish.desmidt@globalcrossing.com

           Teresa Mueller - Latin America
           Tel. +1 305-808-5947
           teresa.mueller@globalcrossing.com

           ANALYSTS/INVESTORS CONTACT
           Ken Simril
           Tels. +1 310-385-5200 or +1 385-3742
           investors@globalcrossing.com



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

BANCO NACIONAL: Former Owner, Directors May Serve 28 Yrs In Jail
-----------------------------------------------------------------
Marcos Magalhaes Pinto, the former owner of bankrupt Banco
Nacional, along with seven of its former directors, have been
sentenced by a federal judge to jail terms ranging from 21 to 28
years on charges of fraudulent management that led to the demise
of the Brazilian bank, the Associated Press reports.

Supreme Court Chief Justice Marco Aurelio ordered the defendants'
release from the Rio de Janeiro prison where they had been taken
into custody late last week, saying they should be allowed to
await the outcome of their appeal process in liberty. However, he
ordered that they remain in Rio de Janeiro.

Pinto and the seven former directors are accused of fraudulent
management and illegally transferring about US$6 billion out of
Brazil between 1990 and 1995 through Interbanco, the bank's
subsidiary in neighboring Paraguay. In addition to that, they are
also accused of trying to hide bank losses by opening 600
fictitious accounts and forging loans that were then booked as
bank assets.

Nacional collapsed in 1995, forcing Brazil's Central Bank to
intervene, clean up some US$9.2 billion in bad debt and hand
Nacional's infrastructure and staff over to Unibanco SA, Brazil's
third-largest private bank.


EMBRAER: Shares Up On WTO Ruling Against Canada
-----------------------------------------------
Empresa Brasileira de Aeronautica SA preferred shares rose 3.7
percent, to BRL13.15 after the World Trade Organization (WTO)
ruled Monday that Canada broke global trading rules by providing
cut-rate loans to finance regional jet sales by Canada's
Bombardier I.

The WTO ruled that Canada had broken trade rules by offering a
CAD$1.7-billion (US$1.1 billion) low-interest loan to help
Canadian jet maker Bombardier sell passenger aircraft to U.S.
airline Air Wisconsin.

The WTO ruling is the latest step in a protracted battle over
Brazilian subsidies to jet-maker Embraer and similar aid by
Canada to Bombardier.

"The WTO did find that the (government) financing of the Air
Wisconsin transaction did not comply with WTO rules," the
Canadian government said in a statement.

CONTACTS:  EMBRAER
           Bob Sharp, Press office mgr.
           bob.sharp@embraer.com.br
           OR
           Wagner Gonzalez, Press officer
           wagner.gonzalez@embraer.com.br
           Phone +55 12 3945 1311
           Fax + 55 12 3945 2411


EMBRAER: Executive, Govt. Official Comment On WTO Ruling
--------------------------------------------------------
Henrique Rzezinski, vice president of external relations at
Brazilian aircraft maker Empresa Brasileira de Aeronautica SA,
and Celso Lafer, Brazil's Foreign Minister, commented on the
latest ruling issued by WTO.

As reported by Bloomberg, Rzezinski's Comments follow:

"From 1996 on, Canada was publicly claiming that it followed the
WTO rules while at the same time it claimed that Brazil violated
those rules. The (WTO) panel has concluded that Canada's
statements to the WTO were different from the reality. And, we
should not forget that last July another WTO panel found that
Brazil's PROEX program conforms completely with WTO rules."

"The results of these two panels are very clear. Brazil is in
full compliance with WTO requirements and Canada is in serious
violations- not only with the Canada Account, which was
previously found to be in violation, but also with financing by
the Export Development Corporation, the EDC, which Canada has
repeatedly said met WTO rules."

Celso Lafer's Comments:

"It was obvious that the panel would reject the legitimacy of
Canada's argument that the support it gave to Bombardier was
aimed only at making the playing ground even."

On the possibility of retaliation: "it's too early to talk about
retaliation. That's an extreme measure, which isn't favorable for
foreign trade. I don't want to speak in advance of what steps we
might take in the future. We'll wait for Canada and hope they
follow what the WTO determined."

"Brazil needs to improve exports and Canada is a very important
market. If both countries decide to retaliate, there'll be a
reduction in exports. It is in our interests to avoid a reduction
in the flow of exports."

"I much rather prefer to come to an agreement on trade. But if
Embraer's competitiveness is affected, then we'll have no option
but to retaliate."


EMBRAER: Bombardier Weighs In, Spins WTO Ruling In Statement
------------------------------------------------------------
Bombardier (TSE:BBD.A)(TSE:BBD.B) is pleased to note that all the
Canadian financing programmes that the Corporation uses in its
export markets have been found to be in full conformity with WTO
rules. The WTO has rejected all Brazilian complaints relating to
these programmes, both as such, and as applied in general.

It is with regret that Bombardier notes that on the subject of
matching, the WTO panel's decision differs with the arguments of
Canada, the European Union and the United States which all
emphasized the importance of matching, as defined by the OECD
rules, as the only efficient means, in many instances, to counter
non-market practices such as Brazil's subsidized financing.

Bombardier notes that by ruling on Canada's matching, the WTO in
fact confirmed that Brazil had offered financing on non-market
terms that are prohibited under WTO rules.

Bombardier sincerely hopes that the bilateral discussions between
Canada and Brazil will put an end to the dispute and will
conclude with an agreement, notwithstanding that competent
international bodies will continue discussions on the subject of
matching.

While, since 1999, the WTO has ruled seven times out of 10 in
flavor of Canada, Brazil has continued to offer subsidized
financing and Embraer continues delivering aircraft benefiting
with financing that has been ruled illegal several times. It is
in this particular context that Bombardier had to resort to
identical financing, in order to neutralize the Brazilian offer
so that the customer could make his choice solely on the product
and service offering. This was done because Bombardier's
competitor did not adhere to international trade rules.

Bombardier, which has only ever requested market-based financing
by all parties, obviously hopes that matching will no longer be a
necessary recourse.

However, in the absence of an agreement leading to an adherence
to the rules, Bombardier underlines the importance to ensure that
the Canadian aerospace industry is not put at risk by the illegal
practices of competitors who remain indifferent to the summons of
international bodies.

The future of the aerospace industry in Canada and of tens of
thousands of jobs depend on it.

Bombardier Inc., a diversified manufacturing and service company,
is a world leading manufacturer of business jets, regional
aircraft, rail transportation equipment and motorized
recreational products. It is also a provider of financial
services and asset management. The Corporation employs 79,000
people in 24 countries in the Americas, Europe and Asia-Pacific
and its revenues for the fiscal year ended Jan. 31, 2001 totalled
$16.1 billion Cdn.

CONTACT:  BOMBARDIER INC.
          Yvon Turcot, 514/861-9481
          or
          Dominique Dionne, 514/861-9481


EMBRAER: Brazil Seeks End To Canadian Subsidies On WTO Ruling
-------------------------------------------------------------
The Brazilian government on Monday demanded that Canada
immediately scrap subsidies to aircraft maker Bombardier after
the WTO said that soft loans violated global trade rules, reports
Reuters. Canada may still appeal the decision.

According to Celso Lafer, Brazil's Foreign Minister, the
government would request that the WTO's dispute settlement body
adopt the report's recommendations. He said he had spoken with
Canada's International Trade Minister Pierre Pettigrew on Monday.

If adopted by the body and if Canada does not withdraw its
subsidies, Brazil could apply to the WTO for permission to take
retaliatory action against Canada, including suspending
concessions won by Canadian firms in Brazil, Lafer said.



TAM: Cutting Latin American, European Flights
---------------------------------------------
TAM Linhas Aereas SA, Brazil's second-biggest airline, announced
that cuts in flights to Buenos Aires and Montevideo will take
effect February 18 and cuts in flights to Europe on March 3, says
Bloomberg.

The airline recently announced that it was going reduce the
number of daily flights to Argentina to three from five, cut one
of its three daily flights to Miami, end daily service to
Frankfurt and Zurich, and suspend twice-daily flights to the
Uruguayan capital Montevideo.

In addition to the flight cut backs, TAM also plans to fire 200
cabin crew, or 2.6 percent of its 7,600 workforce.

The airline will be taking these measures due to the fallout in
air travel demand stemming from the September 11 terrorist
attacks in the U.S. The company's problems are compounded by the
economic crisis in Argentina and the 19-percent decline in the
value of the Brazil's real in the past year that has increased
the cost of foreign travel for Brazilians.

CONTACT:  Daniel Mandelli Martin, President
          Buenos Aires
          Tel. (54) (11) 4816-0001
          URL: www.tam.com.br


TRANSBRASIL: CVM Looks Into Possible Sale Irregularities
--------------------------------------------------------
The sale of domestic airline Transbrasil to Dilson Prado da
Fonseca is believed to be fraught with irregularities. According
to a report released by Jornal do Commercio, the Brazilian
Security and Exchange Commission CVM (Comissao de Valores
Mobiliarios), is now investigating into the possibility that the
transaction included some questionable accounting.

At present, CVM is evaluating results of an analysis concerning
the airline's accounts that may represent losses for its minority
shareholders.

Just recently, a group of investors, headed by Fonseca, paid a
symbolic BRL1 for control of grounded airline Transbrasil,
assuming BRL1 billion (USD$422 million) in debt and immediately
investing $25 million to get Transbrasil back in the air.

Another BRL200 million (US$84 million) will also be invested over
the next three months.

CONTACT:  Antonio Celso Cipriani, CFO
          Rua Geral Pantaleao Telles, No. 4,
          Jardim Aeroporto
          04355-040 Sao Paulo, Brazil
          Phone: +55-11-533-7111
          Fax: +55-11-543-9083



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

ENAMI: Mining Minister Recommends Sale Of Ventanas
--------------------------------------------------
Enami, Chile's state-owned mining company, should sell the copper
smelter Ventanas to fellow state-owned Codelco, according to the
country's mining minister, Alfonso Dulanto.

In a report released by Estrategia, Dulanto recommends the move
as one solution to Enami's problematic financial condition. The
company is struggling to free itself from crippling debt that now
amounts to US$500 million.

Moreover, Dulanto's solution will also benefit Codelco, which has
been looking to expand its copper refining capacity.

However, the minister's solution may face opposition from the
Chilean Congress mining commission and from small mining
companies that consider selling Codelco only 50-70 percent of
Ventanas, which would allow it to continue serving other
companies.


MADECO: Argentine Exposure Triggers Fitch's Review On Ratings
-------------------------------------------------------------
Madeco's exposure to Argentina may prompt the risk rating company
Fitch Chile to review the rates of the Chilean copper products
manufacturer, reports Estrategia.

Madeco, a company controlled by Luksic group, began to operate in
the Argentinean cable & wires market in 1990 and slowly
diversified to pipes and flexible packaging. Now, the Company has
US$145 million worth of assets in the country, and is seeking to
raise resources to reinforce its position in the recession-
plagued Latin America region.

To respond to the Argentinean crisis, the Company began
restructuring and hired Salomon Smith Barney to tackle a plan for
its liabilities there.

At the same time, Madeco also sees uncertainties in the Brazilian
future and wants to protect its optical fibers & cables
investments there.

CONTACTS:  Investor Relations
           Ureta Cox 930, Santiago-Chile
           Voice: 56-2 5201380
           Fax: 56-2 5201545
           e-mail: ir@madeco.cl

           OR

           Oscar Ruiz-tagle Humeres, Chairman
           Albert Cussen Mackenna, CEO
           Santiago Edwards Morice, CFO
           Enrique S. Arangua, General Counsel

           Their Address:
           Ureta Cox 930
           Santiago Chile
           Phone   +56 2 520 1000
           Home Page http://www.madeco.cl



=============
E C U A D O R
=============

BANCO DEL PACIFICO: BCE To Boost Capital Next Week
--------------------------------------------------
The Ecuadorian Central Bank BCE is expected make a US$121-million
injection next week into Banco del Pacifico, as part of its
effort to keep Pacifico afloat and meet the Basell banking norms.

According to an El Universo report, US$75 million of that amount
will be in cash coming from the bank's rescue fund Fondo de
Liquidez, while the remainder will be in state bonds.

Interdin & Ahead Advisory took over the bank's management in
October 2001 in a bid to make Pacifico more attractive to foreign
investors. Interdin is in the midst of restructuring the Company.
It has slashed 300 job positions from its overall labor force of
3,500 employees.

In 2001, Pacifico held 7.3 percent of the overall bank deposits
in Ecuador. In October, the bank had assets of US$497.7 million,
liabilities of US$433.8 million, and losses of US$61.6 million.


BANCO DEL PROGRESO: Progreso Sells Emelec Shares To Pay Customers
-----------------------------------------------------------------
The recent agreement of AES to take over 49 percent of the shares
in the electric utility Emelec, held by The Progreso Depositors
Trust, failed to see a change in the Company's board of
directors.

Guayaquil power distributor Emelec is still under the management
of the Progreso, which recently agreed to sell its shares in
Emelec. Progreso needs to raise cash to settle payment of
bankrupt Banco del Progreso's customers, who have receivable
deposits of US$95 million.

However, the operation involved only the shares, not the assets,
of Emelec estimated at about US$100 million. A US$50 million
guarantee was deposited by AES, but the total amount involved in
the transaction was not disclosed.



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

BITAL: Analyst Sees Intervention If Finances Fail To Improve
------------------------------------------------------------
An analyst predicted that Antonio del Valle's decision to pull
out of Grupo Financiero Bital is putting the bank's future at
risk, reports Mexico City daily El Universal.

According to analyst Mario di Constanzo, should Bital fail to
show a significant improvement over the short term, it could find
itself in severe problems that could ultimately lead to
intervention by financial regulator the National Banking and
Securities Commission (CNBV).

Del Valle's decision to get out of Bital is significant because
of his knowledge of the banking system, said the analyst. It is
not unknown within banking circles that Bital is desperately
looking for investors to put up close to US$800 million urgently
needed by the bank.

As of September 2001, Bital's assets were reduced by 3.2 percent
over the year-ago period, indicating the institution's
inefficiency, said Di Constanzo.

CONTACTS:  Engr Luis Berrondo Avalos, Chairman
           Atty Jaime Ruiz Sacristan, CEO
           German Osuna Castelan,  General Manager Finance
           Atty Fenando Ysita Del Hoyo, Secretary

           THEIR ADDRESS:
           Grupo Financiero Bital SA de CV
           Paseo de la Reforma No 243 Cuauhtemoc
           Mexico DF    06500
           Mexico
           Phone   +52 5 721 5286
           Home Page http://www.bital.com.mx


GRUPO MEXICO: Forms Alliance With Grupo Carso
---------------------------------------------
A spokesperson from the world's third copper producer Grupo
Mexico disclosed Friday that the Company and Mexican conglomerate
Grupo Carso have agreed to unite their railroad operator units.

The agreement will see G-Mex's 74%-owned rail subsidiary Ferromex
(Grupo Ferroviario Mexicano) joining forces with Carso's
Ferrosur, controlled by subsidiaries Sinca and Frisco.

Carso will hold a 20-percent stake in the new company, to be
known as ITM (Infraestructura y Transportes Mexico), and G-Mex
the rest.

The deal, which will lead to the creation of Mexico's largest
railroad concern, awaits approval from the Mexican regulators,
antitrust officials, and the shareholders.

The value of the merger is still unknown, but according to
reports, the two companies expect to invest at least US$260
million over the next five years in rolling stock, railroad
maintenance and connection improvements.

"The merger made economic sense to both parties," according to
the spokesperson. "They [Carso] have rail interests where we do
not, and vice-versa. Their [Ferrosur's] southern assets around
Veracruz were of particular interest to us, and they're a solid
company, with plenty of capital," the spokesperson added.

Union Pacific of the US holds the remaining 26% stake in
Ferromex.

CONTACTS:  German Larrea Mota-Velasco, Chairman and CEO
           Avenida Baja California 200, Colonia Roma Sur
           06760 M,xico, D.F., Mexico
           Phone: +52-5-264-7775
           Fax: +52-5-264-7769

           C.P. Hector Garcia De Quevedo Topete, Corporate Dir.
           Av. Baja California No. 200, Colonia Roma Sur C.P.
           06760 MEXICO, D.F.
           Phone: 55-64-70 66 ext 7238
           Fax: 55-64-3714

           UNDERWRITER: ING BARRINGS
           Corporate communication and public relations:
           C.P. HECTOR GARCIA DE QUEVEDO TOPETE
           CORPORATE DIRECTOR
           AV. BAJA CALIFORNIA No. 200
           Colonia ROMA SUR C.P. 06760
           MEXICO, D.F.
           Tel: 55-64-70 66 ext 7238 Fax: 55-64-3714
           moram@gmexico.com.mx


ISPAT MEXICANA: Restructuring Will Lead To Further Downgrade
------------------------------------------------------------
Ispat International's Mexican steel operation Imexsa is likely to
have its ratings downgraded further by S&P if it opts to carry
out a financial restructuring, according to a report by Business
News Americas.

Just recently, S&P cut its ratings on Imexsa, Rotterdam-based
Ispat International (NYSE: IST) and its subsidiaries to 'CC' from
'B+', with all ratings remaining on "credit watch."

The rating actions came amid Imexsa's preparations for
restructuring discussions with holders of senior structured
export certificates (SENs) due 2003 because of difficult steel
slab market conditions, high energy prices, and a four-week
strike at the turn of the year. Imexsa plans to seek a moratorium
on all capital repayments on the notes until 2005.

"Standard & Poor's would view the implementation of such a
moratorium as a default on the SENs, because bondholders would
have no alternative but to accept this coercive offer. Upon
completion of the exchange, Imexsa's corporate credit rating
would be lowered to 'D'" or Default, the agency said.

Ispat International had to make a direct payment to the bank
after Imexsa defaulted on an US$8.5-million repayment due
December 31, said S&P. It will revise ratings on Imexsa once the
restructuring has been carried out, the ratings agency added.

The Dutch-based group's already lowered rating is due to its role
as guarantor of Imexsa SENs, and the downgrade will last until
the exchange is completed, said S&P.

A rating of 'SD' (selective default) would indicate Ispat
International and its other subsidiaries are expected to continue
to honor obligations on other issues, the agency said.

CONTACT:  ISPAT INTERNATIONAL LIMITED
          Annanya Sarin, Head of Communications
          Tel. +44-20-7543-1162, or +31-10-404-6738

          B. C. Agarwal, Chief Financial Officer
          Tel. +44-20-7543-1135

          OR
          Citigate Dewe Rogerson
          John McInerney, Investor Relations
          Tel. +1-212-419-4219, for Ispat International Limited


PEGASO: Officials Deny Rumors of Huge Debts
-------------------------------------------
Officials of Pegaso categorically denied what industry sources
have said that the Mexican mobile telephone operator has debts of
close to US$900 million, reports Mexico City daily Reforma.

But what is certain, according to the report, is that the
environment has become increasingly complicated due to the
Company's inability to reach an agreement with Spain's
Telefonica. Furthermore, Congress' recently-approved
telecommunications tax is also likely to complicate the situation
further.

Pegaso is yet to reach its expected number of subscribers, or its
projected level of expansion. The company is owned 33.3 percent
by Leap Wireless International and 33.3 percent by Sprint.



===============
P A R A G U A Y
===============

COPACO: Argentine Crisis Won't Hinder Pending Sale
--------------------------------------------------
The current economic and financial crisis in Argentina will not
impede the sell off of the Paraguayan telecoms Copaco (formerly
Antelco), according to Banco Santander Central Hispano, which is
modeling for Copaco's privatization.

The companies qualified to bid in the privatization of Copaco,
which is scheduled to take place in early March, are Brasil
Telecom, Millicom Internacional, Deutsche Telekom, Telecom
Argentina, and Telefonica. These companies are now evaluating
Copaco's assets, but according to a preliminary estimate from
Deloitte & Touche, Copaco's assets are worth US$88 million.

Meanwhile, the telecoms commission Conatel is expected to spend
another US$180,000 hiring an international consulting company to
present a study on the adjustment of telecom tariffs, a key
subject for the privatization of Copaco.

Copaco has 300,000 fixed telephone services users, with a
penetration of only 5.6 percent. The companyt is in dire need of
500,000 new lines to reach the required regional levels of
telephone penetration set at 20 percent in Uruguay and 12 percent
in Colombia.

In its latest report, Buenos Aires think tank Fundacion Capital
predicted that the Argentine crisis may extend to the whole of
Latin America if the government fails to keep under control the
devaluation of the peso

The Argentine crisis undoubtedly destabilizes the region, but
some countries should feel the impact more than others, it said.

The exact impact of the Argentine crisis will depend on how the
devaluation of the peso is managed, it added.


CORPOSANA: Pending Sale Attracts Another UK-Based Firm
-------------------------------------------------------
The upcoming sale of Paraguay's state water utility Corposana has
manged to attract one more company, reports Business News
Americas.

A spokesperson from the country's state reform agency SNRE
revealed that UK-based Anglian Water purchased pre-qualification
guidelines for the sale of Corposana.

Anglian joins fellow UK company International Water; Spain's
Canal de Isabel II; France's Proactiva Medio Ambiente (Vivendi-
FCC) and Ondeo; a consortium made up of Uruguay's state water
utility OSE and Spain's Aguas de Valencia; and Paraguayan firms
Compania Internacional de Aguas, Consorcio EMSA-ECOMIPA, Fluoder
and Consorcio EDB.

There's still no word about plans by Corposana's workers union
and capital Asuncion to form a consortium to compete for the
utility.

February 8 is the deadline to purchase the guidelines package for
a fee of US$3,000 and February 21 is the last day for companies
to deliver qualification documents. Qualified Companies will then
gain access to the Corposana data room, with final bids
tentatively scheduled for opening on June 27.

Chicago-based firm Baker & McKenzie is the sale's legal adviser.
Spanish banking group Santander Central Hispano is the financial
consultant and Spanish consulting firm Nmas1 is managing the sale
process.

CONTACTS:  CORPOSANA LEGAL ADVISER:
           Baker & McKenzie
           Latin America Regional Council
           c/o Eduardo de Cerqueira Leite - Chairman
           Av. Dr. Chucri Zaidan 920, 8th floor
           Market Place Tower I
           04583-904 Sao Paulo, SP, Brazil
           Tel: (55-11) 3048-6800
           Fax: (55-11) 5506-3455
           Email: info-latinamerica@bakernet.com
           Marketing Manager: Ellen Van-Waveren

           Baker & McKenzie Headquarters:
           1 Prudential Plaza, 130 E. Randolph Dr., Ste. 2500
           Chicago, IL 60601
           Phone: 312-861-8800
           Fax: 312-861-2899
           Bakerinfo.com

           FINANCIAL CONSULTANT:
           Banco Santander Central Hispano
           Plaza de Canalejas,1
           28014 Madrid, Spain
           Phone: +34-91-558-10-31
           Fax: +34-91-552-66-70

           CORPOSANA:
           Emilio Botn-Sanz, Chairman
           Angel Corc>stegui Guraya, First Vice-Chairman and CEO
           Jos, Luis del Valle, EVP Finance



               ***********


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
co-published by Bankruptcy Creditors' Service, Inc., Trenton, NJ,
and Beard Group, Inc., Washington, DC. John D. Resnick, Edem
Psamathe P. Alfeche and Fe Ong Vao, Editors.

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

This material is copyrighted and any commercial use, resale or
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