/raid1/www/Hosts/bankrupt/TCRLA_Public/020304.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

            Monday, March 4, 2002, Vol. 3, Issue 44

                           Headlines




A R G E N T I N A

GRUPO GALICIA: HSBC Stepping In To Rescue
METRO ARGENTINA: Files For Bankruptcy Protection
METRO INTERNATIONAL: Company Profile
REPSOL YPF: Falling Stock Interests Potential Rival Takeovers
TELEFONICA DE ARGENTINA: Costs 16% Against Parent's 01 Profit


B E R M U D A

GLOBAL CROSSING: Options Limited, Liquidation Seems Imminent


C H I L E

ENERSIS: Reports 4Q01 Loss On Argentine Devaluation
LANCHILE: Records Profit in 01, Sees First-Half 02 As Uncertain


G U Y A N A

MGPL: Boss Admits Cash Flows `Extremely Tight'


M E X I C O

GRUPO MEXICO: Considers Continued Production Cutbacks
GRUPO TELEVISA: Extends Exchange Offer on Outstanding 8% Notes


T R I N I D A D   &   T O B A G O

CARONI LTD: Government Gets Alternate Proposals On Land Use
CDA: Republic Bank Threatens Hotel Asset Loss for Non-Payment


V E N E Z U E L A

BANCO CARIBE: Moody's Cuts Financial Strength Rating to "D"
BANCO MERCANTIL: Political Turmoil Forces Moody's to Cut Ratings
BANCO PROVINCIAL: Moody's Assigns Negative Financial Outlook
BANCO VENEZUELA: Financial Strength Rating Drops to "D+"
UNIBANCA S.A.: Political Instability Drives Down Deposit Ratings


     - - - - - - - - - -


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

GRUPO GALICIA: HSBC Stepping In To Rescue
-----------------------------------------
HSBC Holdings Plc, U.K.'s largest bank, is close to an agreement
to buy Banco de Galicia y Buenos Aires SA, according to a report
by the daily Buenos Aires Economico newspaper.

"If confirmed, it means Galicia would not only continue to
function, but also function well," said Juan Napoli, vice
president of Napoli Sociedad de Bolsa, a Buenos Aires brokerage.

Galicia, which has run out of cash from a run on deposits, is
seeking a buyer after the Argentine government rejected its
bailout proposal.

As of November, Galicia had more than a third of its ARS10.8
billion of assets (US$5.1 billion) in defaulted government debt.
It has borrowed more than ARS2 billion from the central bank to
cover deposit withdrawals.

"We can't forget, we're talking about a technically insolvent
institution that's facing a liquidity crisis," said Greg Heywood,
who helps manage US$700 million of emerging market stocks for
Montgomery Asset Management LLC in San Francisco.

Analysts believe that Galicia needs a foreign owner or government
bailout to regain depositor confidence. A takeover would likely
depend on Argentina's government presenting a clearer plan to
rebuild the country's financial system after a devaluation and
$95 billion debt default left banks with billions of dollars of
losses, they said. Already, international banks face billions of
dollars of losses from Argentine loans.

Widespread speculation suggests that Citigroup Inc. might take a
40 percent stake in Galicia, with HSBC controlling 60 percent.

CONTACTS:  BANCO DE GALICIA Y BUENOS AIRES
           Teniente General Juan D. Peron 456, Piso 3
           1038 Buenos Aires, Argentina
           Phone: +54-11-4343-7528


METRO ARGENTINA: Files For Bankruptcy Protection
------------------------------------------------
Beset by a sharp drop in ad spending, Metro Argentina, a unit of
international free-sheet publisher Metro International, has filed
for bankruptcy, 17 months after launching in Buenos Aires,
reports Ad Age's Daily World Fire.

The filing, according to its Swedish parent, Metro International,
aims to help the Company claim a refund on the value-added tax
owed to it by the government's tax office.

A week before the filing, employees of Metro Argentina expressed
their concerns that the Company might file for bankruptcy and
might refuse to pay their January salaries and the severance due
to them according to Argentine labor law. They had enlisted help
from the journalists' union, the Union de Trabajadores de Prensa
de Buenos Aires (UTPBA), for talks with the Company.

However, the Swedish parent later said it paid January salaries
about 10 days ago, later than usual because of difficulties in
wiring money to Argentina. The government has implemented limits
on overseas wire transfers and other banking transactions because
of the financial crisis.

Metro Argentina directly employs 40 workers, according to Metro
International.

Metro launched the Buenos Aires edition, called Publimetro, in
October 2000, part of an expansion process into 15 countries.
Funded by and distributed to commuters, Publimetro fast became
one of top free daily papers in the capital, with a circulation
of 270,000 copies.

However, Argentina's economic problems forced the Company to halt
publication in late December. Circulation dropped 33 percent to
180,000 in November, according to the Company's 2001 financial
results. Concurrently, ad spending plunged at least 20 percent in
2001 from a year earlier, according ad agency executives and
media buyers.

Metro International, which publishes free tabloids in 15
countries, has had a bumpy February. The launch of its Paris
edition was marred by distribution problems caused by trade
unions. The company closed its Zurich edition, leaving the market
to Norwegian free-sheet rival 20 Minutes.


METRO INTERNATIONAL: Company Profile
------------------------------------
NAME: METRO INTERNATIONAL S.A.
      75, Route de Longwy,
      LU-8080 Bertrange,
      Luxembourg

PHONE: +352-27-750-10-1

FAX: +352-27-750-25-0

WEBSITE: www.metro.lu

EXECUTIVE MANAGEMENT TEAM:

     PELLE T™RNBERG, President & CEO
     JENS TORPE, COO and Senior VP
     ROBERT PATTERSON, CFO

INVESTOR RELATIONS:

    Investor Relations, Latin America
    Carlos Olivia-Velez, Head of Latin America
    Phone: +44 (0) 20 7408 0230

    Investor Relations, UK:
    30 St James's Square
    London SW1Y 4JH
    United Kingdom
    E-mail: info@metro.lu
    Telephone:  +44 20 7321 5010
    Fax: +44 20 7321 5020

    Investor Relations, Stockholm: +46 8 562 000 30
    Investor Relations, New York: +1 212 702 4636

TYPE OF BUSINESS: Metro International S.A. publishes and
distributes free daily newspapers, comprising 21 editions in 14
countries in 12 languages.  It is the world's fourth most read
newspaper with over 10 million daily readers and is owned by a
group of private and institutional shareholders in Europe and the
US.

At 31 December 2001, Metro had liquid funds of US$ 35.9 million,
reflecting the US$ 65.5 million in net proceeds from the private
placement and the repayment of Metro's existing US$ 9.6 million
short term credit facilities. Long-term debt amounted to US$ 84.5
million on 31 December 2001. Adjusted for the exercise of the
Millicom option and the conversion of the US$ 22.1 million
convertible debenture loan from Modern Times Group MTG AB, long
term debt would have totaled US$ 54.2 million. The issued and
outstanding share capital of the Company is $32,814,939 divided
into 55,823,671 Metro A Shares and 53,559,460 Metro B Shares with
no par value.

Metro International S.A. 'A' and 'B' shares are listed on the
NASDAQ National Market and on the Stockholmsb”rsen O-List under
the symbols MTROA and MTROB.

SHAREHOLDERS: Industrif”rvaltnings AB Kinnevik
              Invik & Co. AB
              Nordea
              Robur
              Emesco AB
              Handelsbanken
              Korsn„s AB's Social Fund
              SEB Fonder
              State Street Bank and Trust
              Jan H. Stenbeck
              Modern Times Group MTG AB
              Klingspor family
              Von Horn family
              Hugo Stenbecks Stiftelse

SIC: Media, Printing and Publishing

EMPLOYEES: 1009

SALES: $109,908 (millions for year ended Dec. 31, 2001)

TOTAL ASSETS: $92,895 (millions for year ended Dec. 31, 2001)

TOTAL LIABILITIES: $136,763 (millions for year ended Dec. 31,
      2001)

LATEST FINANCIAL STATEMENTS:
http://bankrupt.com/misc/Metrointernational.pdf

CREDITOR: Modern Times Group MTG AB
          Skeppsbron 18, Box 2094
          Stockholm, Sweden
          Phone: (468) 562-0005
          www.mtg.se


REPSOL YPF: Falling Stock Interests Potential Rival Takeovers
-------------------------------------------------------------
Repsol YPF SA's falling stock may make it a takeover target for
rivals such as the Royal/Dutch Shell Group, investors said in a
report released by Bloomberg.

Repsol ended 2001 with EUR19 billion in debt, matching its
equity. The drop in Repsol's share price has left it trading at
7.1 times earnings, the second-cheapest stock in the 12-member
Bloomberg Europe Oil and Gas Producers Index. The average price-
earnings ratio for the index is almost 17 times earnings.

That could make it vulnerable to a takeover, analysts said,
though the government has a "golden share" in Repsol until 2006,
allowing it to veto management decisions.

Bigger rivals such as BP Amoco or Royal Dutch/Shell could be
among potential suitors, analysts said.

According to Santiago Molina, an analyst at Ibersecurities in
Madrid, shareholders are going to demand that Repsol Chief
Executive Officer Alfonso Cortina explain why the stock is
trading at less than it did before the YPF purchase.

Cortina took advantage of the lowest oil prices in a decade to
buy Argentina's YPF for US$15 billion in 1999, assuring investors
the purchase would boost earnings and that Repsol would soon pay
off the debt.

But three years later, Europe's fifth-largest oil company is the
most indebted of all major oil producers, with liabilities that
equal equity.

"Repsol is a company with a series of unresolved risks that cause
us to be extremely skeptical about holding the shares," said
Cirus Andreu, who helps manage EUR7.5 billion (US$6.5 billion) in
funds at Bansabadell Inversion in Barcelona.

Cortina has had to slash earnings and debt-reduction targets and
may have to sell more assets, such as refineries and service
stations, to offset plunging in profits and reduce its debt.
Moody's Investors Service downgraded Repsol's rating twice
withing the last two months.

Last Month, Cortina said Argentina's currency devaluation may
force Repsol to set aside money against earnings. Repsol will
also have to take a charge against reserves to account for assets
in Argentina that are now worth less in euro terms, analysts
said.

CONTACTS:  REPSOL YPF
           Alfonso Cortina De Alcocer, Chairman & CEO
           Ramon Blanco Balin, Vice Chairman
           Carmelo De Las Morenas Lopez, CFO

           Their Address:
           Paseo de la Castellana 278
           28046 Madrid, Spain
           Phone   +34 91 348 81 00
           Home Page: http://www.repsol.com

           or
           Av. Roque S enz Pe a, 777.
           C.P 1364. Buenos Aires
           Argentina


TELEFONICA DE ARGENTINA: Costs 16% Against Parent's 01 Profit
-------------------------------------------------------------
Telefonica de Argentina's parent company took a substantial hit
as a result of troubles in the Latin American unit. Telefonica
ended up absorbing a 16 percent drop in its 2001 net profits,
Reuters said last week, based on the Argentine subsidiary's
performance.

Telefonica, Spain's largest company, saw its profit last year
slip to EUR2.11 billion, its first earnings decline for nearly a
decade, the report said.

The company attributed the drop to the EUR369 million charge it
took on account of Argentina's peso devaluation early this year.

The parent company expects to absorb more loses in the first
quarter due to the Argentine crisis.  Already, it has reserved
EUR1.42 billion for any additional hit.

Analysts say the Argentine charge was likely to weigh on the
share price of Telefonica.  So far, the Spanish firm's shares
have shed 10 percent this year.



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

GLOBAL CROSSING: Options Limited, Liquidation Seems Imminent
------------------------------------------------------------
Bankrupt telecom giant Global Crossing Ltd. is going to be
liquidated, according to The Deal.com.

The online newspaper claims the company will likely be purchased
in the coming months with the aim of dividing its assets. Any
hope of refinancing the company to emerge from court protection
under the same name is perceived as practically nil.

Accordingly, the evaporation of roughly US$750 million of cash in
just five months has made the company better off liquidated than
refinanced.  Recently, the company said that its US$2.26 billion
in cash and cash equivalents as of September 30 is now only
US$1.52 billion as of February 25.

"Their cash burn is just too high to fund a workable business,"
said a source closely following Global Crossing's bankruptcy
proceedings. "They have gone very quickly to a situation where
the best scenario for their creditors is to get liquidated and
sold off to one or numerous bidders."

Although the Blackstone Group, Global Crossing's restructuring
adviser, still has until April 23 to look for investors who can
match the current US$750 million bid for the company, the present
industry landscape is not too encouraging.

According to the analysis, U.S. telephone providers Verizon
Communications and SBC Communications Inc. won't bid for Global
Crossing's assets as they prefer serving customers rather than
owning and managing a worldwide fiber-optic network.

Long-distance providers AT&T Corp. and WorldCom Inc., on the
other hand, already own miles of broadband lines. Meanwhile, the
company's chief rivals Qwest Communications International Inc.,
Williams Communications Group and Level3 Communications Inc., are
far too saddled with debt and overcapacity to start bidding for
more.

European companies may not be interested either.  Deutsche
Telekom is already under heavy pressure to lower its debt while
France T‚l‚com is embroiled in a conflict with European wireless
operators.

As it stands the only offer is US$750 million from Hutchison
Whampoa Ltd. and Singapore Technologies Telemedia Pte. Ltd., in
exchange for a 79% stake in a reorganized company. The proposed
deal appears viable right now, but s not attractive to creditors.

"Global Crossing's problem is that it filed for bankruptcy at a
time when its Ebitda was negative. During the past year of
telecommunications bankruptcies, companies that could not show
positive earnings or enough cash to help retire long-term bonds
have had trouble receiving court approval to exit bankruptcy.

"In many cases - Winstar Communications Inc., Teligent Inc. and
Viatel Inc., for example - these companies were liquidated," the
news analysis noted.



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

ENERSIS: Reports 4Q01 Loss On Argentine Devaluation
---------------------------------------------------
Argentina's devaluation prompted Chile's Enersis, one of the
largest non-state electrical holdings in Latin America, to report
a loss in the fourth-quarter.

According to a report released by Bloomberg, Enersis, a unit of
Spain's Endesa SA, posted a loss of CLP3.7 billion (US$5.6
million) compared to a net income of CLP67.6 billion a year
earlier.

The Company didn't break out fourth-quarter results, which were
calculated by subtracting net income in the first nine months of
the year from full-year net profit.

"This is the first indication of the problems in Argentina," said
Mariela Iturriaga, head of research at BBVA Corredores de Bolsa
BHIF. "Everything will show up this year."

Expectation is that Enersis' earnings may fall further this year
on a reduction in revenue because of a devaluation and recession
in Argentina. Argentina's decision to devalue its currency
reduced fourth-quarter earnings at Enersis' generating unit,
Empresa Nacional de Electricidad SA, by US$21 million.

Under Chilean accounting regulations, the Company had to include
the decline in the value of its Argentine assets into fourth-
quarter results.

Net income in 2001 fell to CLP40.9 billion from CLP93 billion in
2000, when a sale of the company's Chilean transmission unit
increased earnings.

Fourth-quarter revenue, calculated by subtracting nine-month
revenue from full year revenue, rose 3.8 percent to CLP734
billion from CLP707 billion.

CONTACTS:  ENERSIS S.A.
           Santo Domingo 789
           Santiago, Chile
           Phone: (562) 688-6840
           www.enersis.cl
           Contacts:
           Alfredo Llorente, Chairman
           Enrique Garcia, CEO
           Rafael Miranda, Vice Chairman
           Mauricio Balbontin, CFO
           Domingo Valdes, Gen. Counsel


LANCHILE: Records Profit in 01, Sees First-Half 02 As Uncertain
---------------------------------------------------------------
Chilean airline LanChile recorded a modest profit in 2001 despite
absorbing US$4.752 million net loss in the fourth quarter due to
the industry downturn following the September 11 attacks.

The US$10.8 million profit, however, pales in comparison with the
US$48.386 million recorded in 2000 and the US$19.198 million net
profit the company earned during the 4th quarter of the same
year.

Hardest hit among its operations was the cargo segment,
representing about 40 percent of all revenues.  The division
recorded a 20.5 percent decline.  In comparison, the passenger
business fell just 3.6 percent in the fourth quarter.

Revenues in the fourth quarter slipped 8.6 percent to $348.6
million while operating profit plunged 60 percent year-on-year in
the quarter to $8.66 million.

Despite the modest profit, the company warned that it would be
difficult to register a profit in the first half of this year
because of the tough economic environment in Latin America and
the United States.

"Cargo demand is expected to remain weak but it should begin an
upturn once the economies of Latin America show signs of
recovery," the company said in a statement.

CONTACTS:  LANCHILE S.A.
           Avenida Americo Vespucio 901, Renca
           Santiago de Chile, Chile
           Phone: (562) 687-2525/5652501/6383884
           Email: mbarona@i-advize.com
           www.lanchile.com
           Contacts:
           Enrique Cueto Plaza, CEO
           Alejandro de la Fuente, CFO

           North American Headquarters
           9700 South Dixie Highway, Penthouse
           Miami, FL 33156
           Phone: (305) 670-1961
           Investor Relations:
           Mr. Daniel Jones
           Avenida Americo Vespucio 901, Renca
           Santiago de Chile, Chile
           Phone: 562-565-2538



===========
G U Y A N A
===========

MGPL: Boss Admits Cash Flows `Extremely Tight'
----------------------------------------------
Peter Cummings, Chief Executive Officer at Mazaruni Granite
Products Limited (MGPL) admitted that cash flows are "extremely
tight" as 90 percent of the projects on which the US$20 million
investment was premised, didn't yield the expected results,
reports the Stabroek News.

According to Cummings, many suppliers are owed money by the
Company. However, according to him, the Company is also owed a
substantial amount of money by other customers.

"There is no question that our finances are not where we want
them to be and there is no question that we are behind payment to
some of our creditors. Some of those creditors have worked
diligently with us on resolving these issues," said Cummings.

Cummings would not disclose the extent of his total indebtedness
to suppliers or his payment schedule to the banks. However, he
said that he is talking to his bankers to change the terms of the
loan he took from a short term arrangement to a longer term
arrangement.

The financing plan of the MGPL was predicated on a number of
major government projects funded from international financing
getting underway in 1999.

The company projected that 13 major construction projects would
consume in excess of US$200 million worth of quarry materials
with sea defenses topping the list as the most critical. Included
in this list of projects is the Secondary Town Infrastructure
Project, the Mahaica/Rosignol road, the rehabilitation of the
bridges between Rosignol and Timehri and massive sea defense work
along the coast.

Cummings said total sales last year for his company were just
under US$7 million and he had been anticipating sales in the
order of US$15 million per annum to justify the project. However,
he is optimistic that some of these projects would get off the
ground this year, confirming the viability of the project.

He argues that once these projects get off the ground, MGPL would
be on a very strong economic footing. Cummings added that Guyana
needs a better economic environment for all businesses to do
better.

The MGPL boss said that debt to sales ratio is at an acceptable
level but the problem remains at the top line as the firm's
revenues are directly dependent on the major projects coming on
stream. The company has made no profits since it began operating
in Guyana in September 1997. It has had positive cash flows but
made accounting losses. Cummings would not say to what extent. He
does not see the company making money until the major projects
come on stream.

Cummings does not see the current problems as a set back but
argues that the challenge the Company faces is managing its
affairs in troubling times.



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

GRUPO MEXICO: Considers Continued Production Cutbacks
-----------------------------------------------------
Shares of Grupo Mexico SA, the third-largest copper producer,
plunged MXN0.78, or 5.8 percent, to MXN12.75 after the Company
said its loss widened in the fourth quarter as copper prices fell
to a 14-year low and demand for metals waned as the U.S. sank
into recession.

The Mexico City-based mining giant posted a fourth-quarter net
loss of US$165 million, or MXN0.25 per share, compared with a net
loss of US$40 million, or MXN0.6, a year earlier.

Group Mexico warned it could make new copper production cuts but
didn't specify where or when.

The Company has cut output before, most recently in November and
December, when it announced the temporary closing of mining
operations in the United States and Mexico and thousands of
layoffs. At that time, it said that more cuts could follow and
raised the specter again on Wednesday.

"Grupo Mexico would seriously consider continued cutbacks to
production as an authoritative reply to the significant increase
in world inventories," the Company said in a statement late on
Wednesday when it released its fourth quarter earnings report.

Analysts said the warning meant little without further detail.

"The question is what copper production will they cut, and will
it be mined or refined," said one New York-based analyst.

Last year's output cuts came as base metals prices hovered near
historic lows, cutting deeply into Grupo Mexico earnings.

Grupo Mexico's U.S. subsidiary Asarco Inc. could be targeted
again for a new round of cuts, analysts predicted.

On November 30, Asarco said it was cutting copper ore output at
its Mission mine in Arizona and production at its Amarillo
refinery in Texas, due to low copper prices.

Grupo Mexico said then that 151,000 tonnes of copper production
cuts would come from Asarco Inc., reductions at a mine in Mexico,
and the suspension of third-party copper sales. It also said that
thousands of workers would be laid off.

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


GRUPO TELEVISA: Extends Exchange Offer on Outstanding 8% Notes
--------------------------------------------------------------
In an official press release, Grupo Televisa, S.A. (NYSE: TV;
BMV: TLEVISA CPO) announced last week the extension of its offer
to exchange its outstanding 8% Notes due 2011 for a like
principal amount of its 8% Exchange Notes due 2011, which have
been registered under the Securities Act of 1933, as amended.

The exchange offer has been extended through 5:00 p.m., New York
City time, on Thursday, March 7, 2002. The extension was made for
the purpose of allowing the holders an additional opportunity to
exchange their existing notes for registered exchange notes.

Televisa does not contemplate any additional extensions of the
exchange offer at this time.

Grupo Televisa S.A. is the largest media company in the Spanish-
speaking world, and a major player in the international
entertainment business.

The company has interests in television production and
broadcasting, programming for pay television, international
distribution of television programming, direct-to-home satellite
services, cable television, among others.

CONTACTS:  Emilio Azcarraga Jean Chairman, President & CEO
           Alejandro Burillo Azcarraga, Vice Chairman

           Address:
           GRUPO TELEVISA, S.A.
           Av. Vasco de Quiroga No. 2000
           Colonia Santa Fe
           01210 Mexico, D.F., Mexico
           PHONE: (525) 261-2000
           WEBSITE: www.televisa.com



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

CARONI LTD: Government Gets Alternate Proposals On Land Use
-----------------------------------------------------------
The Trinidad and Tobago government is yet to decide on the fate
of the bankrupt state-owned sugar company Caroni Ltd.

In a report released by the Trinidad Guardian, Agriculture
Minister John Rahael revealed lands owned by the company are
being increasingly demanded by those wanting to set up
manufacturing plants. Rahael cited one proposal for the
establishment of a light manufacturing plant on Caroni lands.

A tripartite report on Caroni done by the previous PNM
administration identifies the creation of an industrial estate as
one of the more viable options for Caroni Ltd.

He pointed to the agreement which also proposed the restructuring
of Caroni Ltd through the creation of three industrial estates
using Caroni's 79,000 acres of land: the first is the creation of
an agricultural estate to coincide with the offer of an enhanced
voluntary separation package; the second is the industrial
estate; and the third a housing estate.


CDA: Republic Bank Threatens Hotel Asset Loss for Non-Payment
-------------------------------------------------------------
Chaguaramas Development Authority now stands to lose its recently
refurbished hotel if it fails to settle its long-overdue debt
with the Republic Bank, says the Trinidad Guardian.

According to the report, a demand letter was sent to CDA General
Manager Ingrid E White-Wilson on January 9, 2002 requesting the
authority to pay its debts that now stand at $14,541,742.02 as of
January.

The money, which was used to refurbish the Chaguaramas Hotel and
partly to defray the cost of works in the area for the 1999 Miss
Universe Pageant, was supposed to have been already paid in
December 1999.  The hotel was pledged as security for the loan.

This is not the first time that the bank had sought payment from
the authority.  In September last year, the bank asked for the
intervention of then Minister of Finance Gerald Yetming to ensure
that at least the outstanding interest be paid.

The bank also sought for the monthly payment of the remaining
interest until the principal could be organized, but nothing came
out of this, the report says.

Planning Minister Dr. Keith Rowley recently told reporters that
he had already instructed the Board to meet the bank, before he
takes the issue to Cabinet.

Meanwhile, according to the Permanent Secretary in the Ministry
of Finance Victoria Mendez-Charles, the cost for the hotel
refurbishment totaled $22 million.


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

BANCO CARIBE: Moody's Cuts Financial Strength Rating to "D"
-----------------------------------------------------------
Following the downgrade of Venezuela's foreign currency bonds and
notes and foreign currency bank deposits, Moody's Investors
Service also lowered the rating of Banco Del Caribe S.A.

The ratings affected are the bank's foreign currency deposit
rating and its financial strength ratings, which was assigned a
negative outlook.

According to the rating agency, the downgrade was made to conform
to the country's ceiling, which is B2 for foreign currency bonds
and notes and B3 for foreign currency bank deposits.

Moody's says Venezuela's banking system must be viewed "with a
certain amount of caution in light of the deteriorating political
and economic environment in which it operates."

The agency says the ever "increasing government interference in
the financial system does not bode well for the bank's financial
flexibility."

Although Moody's acknowledges that the bank will benefit from
foreign exchange gains, higher margins and increasing fee income
in the next few months, the present high interest rate
environment "will shortly begin to take its toll on asset
quality, thus offsetting profitability gains in other areas."

Meanwhile, the agency explains that the outlook change on the
country ceilings mirrors the heightened risk that the resolve of
the authorities to make full and timely payments on its debt may
be tested.

"The combination of the government's large overall financing
needs, the lack of an adequate fiscal adjustment, and low oil
prices have the potential to lead to significant macroeconomic
problems," Moody's warns.

As a result of the downgrade, the bank's long-term foreign
currency bank deposits are rated B3 while its financial strength
rating stands at D.

For more information, contact:

Philip J. Guarco
VP - Senior Credit Officer
Financial Institutions Group
Moody's Investors Service
     or
Gregory W. Bauer
Managing Director
Financial Institutions Group
Moody's Investors Service


BANCO MERCANTIL: Political Turmoil Forces Moody's to Cut Ratings
----------------------------------------------------------------
Following the downgrade of Venezuela's foreign currency bonds and
notes and foreign currency bank deposits, Moody's Investors
Service also lowered the rating of Banco Mercantil S.A.

The ratings affected are the bank's foreign currency deposit
rating and its financial strength ratings, which was assigned a
negative outlook.

According to the rating agency, the downgrade was made to conform
to the country's ceiling, which is B2 for foreign currency bonds
and notes and B3 for foreign currency bank deposits.

Moody's says Venezuela's banking system must be viewed "with a
certain amount of caution in light of the deteriorating political
and economic environment in which it operates."

The agency says the ever "increasing government interference in
the financial system does not bode well for the bank's financial
flexibility."

Although Moody's acknowledges that the bank will benefit from
foreign exchange gains, higher margins and increasing fee income
in the next few months, the present high interest rate
environment "will shortly begin to take its toll on asset
quality, thus offsetting profitability gains in other areas."

Meanwhile, the agency explains that the outlook change on the
country ceilings mirrors the heightened risk that the resolve of
the authorities to make full and timely payments on its debt may
be tested.

"The combination of the government's large overall financing
needs, the lack of an adequate fiscal adjustment, and low oil
prices have the potential to lead to significant macroeconomic
problems," Moody's warns.

As a result of the downgrade, the bank's long-term foreign
currency bank deposits are rated B3 while its financial strength
rating stands at D+.

For more information, contact:

Philip J. Guarco
VP - Senior Credit Officer
Financial Institutions Group
Moody's Investors Service
    or
Gregory W. Bauer
Managing Director
Financial Institutions Group
Moody's Investors Service


BANCO PROVINCIAL: Moody's Assigns Negative Financial Outlook
------------------------------------------------------------
Following the downgrade of Venezuela's foreign currency bonds and
notes and foreign currency bank deposits, Moody's Investors
Service also lowered the rating of BBVA Banco Provincial S.A

The ratings affected are the bank's foreign currency deposit
rating and its financial strength ratings, which was assigned a
negative outlook.

According to the rating agency, the downgrade was made to conform
to the country's ceiling, which is B2 for foreign currency bonds
and notes and B3 for foreign currency bank deposits.

Moody's says Venezuela's banking system must be viewed "with a
certain amount of caution in light of the deteriorating political
and economic environment in which it operates."

The agency says "the ever increasing government interference in
the financial system does not bode well for the bank's financial
flexibility."

Although Moody's acknowledges that the bank will benefit from
foreign exchange gains, higher margins and increasing fee income
in the next few months, the present high interest rate
environment "will shortly begin to take its toll on asset
quality, thus offsetting profitability gains in other areas."

Meanwhile, the agency explains that the outlook change on the
country ceilings mirrors the heightened risk that the resolve of
the authorities to make full and timely payments on its debt may
be tested.

"The combination of the government's large overall financing
needs, the lack of an adequate fiscal adjustment, and low oil
prices have the potential to lead to significant macroeconomic
problems," Moody's warns.

As a result of the downgrade, the bank's long-term foreign
currency bank deposits are rated B3 while its financial strength
rating stands at D+.

For more information, contact:

Philip J. Guarco
VP - Senior Credit Officer
Financial Institutions Group
Moody's Investors Service
   or
Gregory W. Bauer
Managing Director
Financial Institutions Group
Moody's Investors Service


BANCO VENEZUELA: Financial Strength Rating Drops to "D+"
--------------------------------------------------------
Following the downgrade of Venezuela's foreign currency bonds and
notes and foreign currency bank deposits, Moody's Investors
Service also lowered the rating of Banco de Venezuela Grupo
Santander S.A.

The ratings affected are the bank's foreign currency deposit
rating and its financial strength ratings, which was assigned a
negative outlook.

According to the rating agency, the downgrade was made to conform
to the country's ceiling, which is B2 for foreign currency bonds
and notes and B3 for foreign currency bank deposits.

Moody's says Venezuela's banking system must be viewed "with a
certain amount of caution in light of the deteriorating political
and economic environment in which it operates."

"Increasing government interference in the financial system does
not bode well for the bank's financial flexibility," according to
the rating service.

Although Moody's acknowledges that the bank will benefit from
foreign exchange gains, higher margins and increasing fee income
in the next few months, the present high interest rate
environment "will shortly begin to take its toll on asset
quality, thus offsetting profitability gains in other areas."

Meanwhile, the agency explains that the outlook change on the
country ceilings mirrors the heightened risk that the resolve of
the authorities to make full and timely payments on its debt may
be tested.

"The combination of the government's large overall financing
needs, the lack of an adequate fiscal adjustment, and low oil
prices have the potential to lead to significant macroeconomic
problems," Moody's warns.

As a result of the downgrade, the bank's long-term foreign
currency bank deposits are rated B3 while its financial strength
rating stands at D+.

For more information, contact:

Philip J. Guarco
VP - Senior Credit Officer
Financial Institutions Group
Moody's Investors Service
    or
Gregory W. Bauer
Managing Director
Financial Institutions Group
Moody's Investors Service


UNIBANCA S.A.: Political Instability Drives Down Deposit Ratings
----------------------------------------------------------------
Following the downgrade of Venezuela's foreign currency bonds and
notes and foreign currency bank deposits, Moody's Investors
Service also lowered the rating of Unibanca.

The bank's foreign currency deposit rating was affected by the
downgrade, in particular.  Moody's maintained its financial
strength rating at "E+"

According to the rating agency, the downgrade was made to conform
to the country's ceiling, which is B2 for foreign currency bonds
and notes and B3 for foreign currency bank deposits.

Moody's says Venezuela's banking system must be viewed "with a
certain amount of caution in light of the deteriorating political
and economic environment in which it operates."

The agency says the ever "increasing government interference in
the financial system does not bode well for the bank's financial
flexibility."

Although Moody's acknowledges that the bank will benefit from
foreign exchange gains, higher margins and increasing fee income
in the next few months, the present high interest rate
environment "will shortly begin to take its toll on asset
quality, thus offsetting profitability gains in other areas."

Meanwhile, the agency explains that the outlook change on the
country ceilings mirrors the heightened risk that the resolve of
the authorities to make full and timely payments on its debt may
be tested.

"The combination of the government's large overall financing
needs, the lack of an adequate fiscal adjustment, and low oil
prices have the potential to lead to significant macroeconomic
problems," Moody's warns.

As a result of the downgrade, the bank's long-term foreign
currency bank deposits are rated B3.

For more information, contact:

Philip J. Guarco
VP - Senior Credit Officer
Financial Institutions Group
Moody's Investors Service
    or
Gregory W. Bauer
Managing Director
Financial Institutions Group
Moody's Investors Service



               ***********


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 Va¤o, Editors.

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

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