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

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

           Tuesday, April 2, 2002, Vol. 3, Issue 64

                           Headlines


A R G E N T I N A

AGUAS ARGENTINAS: Fitch Lowers Ratings to Junk Status
BANCO FRANCES: Spanish Parent Company Extends US$100 million Aid
CAPEX S.A.: Makes Fitch Ratings' Troubled Firm Watch List
CTI HOLDINGS: Verizon Loosens Grip as Debt, Peso Woes Mount
EDENOR S.A.: Credit Cut to "C" Due to Liquidity Strain

HIDROELECTRICA PIEDRA: Local, Foreign Currency Dip to "C" Levels
IMAGEN SATELITAL: Threatened by Liquidity, Refinancing Risks
MOLINOS RIO: Depressed Outlook in Argentina Causes Ratings Cut
PECOM ENERGIA: Fitch cuts "B" Ratings to "CCC" Levels
SIDERAR S.A.: Suffers Downgrade due to Argetinean Woes

TELECOM ARGENTINA: Liquidity Concerns Lead to Rating Cut
TRANSENER S.A.: "CCC" Fitch Ratings Dropped to "C"
TRANSPORTADORA DE GAS: Debt, Currency Rates Deteriorate to "C"
YPF S.A.: Worsening Outlook Triggers Downgrade to "B+"


B R A Z I L

BCP S.A.: Owners Meet Following Downgrade, Plans Still Unclear
BCP S.A.: Default Last Week Prompts Debt Acceleration
CEEE: 2001 Tops Previous Results, But Still in the Red
CEMIG: Records Seven-fold Fourth Quarter Net Profit Increase
CESP: Net Losses Widen by 196% Despite Revenues of BRL2.27 Mln
TELEMAR: Trouble Sways Bondholders from Reinvesting in Parent


     - - - - - - - - - -


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

AGUAS ARGENTINAS: Fitch Lowers Ratings to Junk Status
-----------------------------------------------------
Aguas Argentinas S.A. was among 12 Argentinean companies that
last week joined Fitch Ratings' list of troubled firms that are
now threatened by liquidity and refinancing risks.

Explaining the move, Fitch said the downgrade reflects the
"ongoing, extremely adverse financial ramifications of the peso's
devaluation and subsequent emergency measures, as well as an
increasing probability of a general restructuring of all private
sector financial obligations."

The Company's ratings following the downgrade are:

                   To      From
IDB 'B' Loan Part. 'C'     'CC'

For more information, contact Daniel R. Kastholm, CFA 1-312-368-
2070, Chicago or Lorna Martin +5411 4327-2444, Buenos Aires.


BANCO FRANCES: Spanish Parent Company Extends US$100 million Aid
----------------------------------------------------------------
Troubled BBVA Banco Frances will reportedly receive a US$100
million cash injection from parent Banco Bilbao Vizcaya
Argentaria SA, following an interest rate hike by the Brazilian
central bank.

According to the online edition of Clarin, the rate increase from
9% to nearly 18% on loans owed by local banks to the central bank
prompted the move by the Spanish parent.  

The report says the cash injection will be used to clear some of
Banco Frances' outstanding loans from the central bank.  The same
news source said many banks in Brazil have begun returning the
money they owe to the central bank.

BBVA, Spain's second-largest banking group, owns 68% of Banco
Frances.  It recently set aside EUR1.35 billion as provisions for
its entire exposure in Argentina, according to a TCR-Latin
America report in February.

Early this year, Moody's cut the Argentinean unit's financial
strength rating to E, from E+.  


CAPEX S.A.: Makes Fitch Ratings' Troubled Firm Watch List
---------------------------------------------------------
Capex S.A. was among 12 Argentinean companies that last week
joined Fitch Ratings' list of troubled firms that are now
threatened by liquidity and refinancing risks.

Fitch says the downgrade reflects the "ongoing, extremely adverse
financial ramifications of the peso's devaluation and subsequent
emergency measures, as well as an increasing probability of a
general restructuring of all private sector financial
obligations."

The Company's ratings following the downgrade are:

                     To    From
Local Currency       'C'   'CC'
Foreign Currency     'C'   'CC'

For more information, contact Daniel R. Kastholm, CFA 1-312-368-
2070, Chicago or Lorna Martin +5411 4327-2444, Buenos Aires.


CTI HOLDINGS: Verizon Loosens Grip as Debt, Peso Woes Mount
-----------------------------------------------------------
US telecom giant Verizon Communications has bailed out of
troubled mobile phone service provider CTI Holdings S.A., by
diluting its interest in the Argentinean unit, says Dow Jones
Newswires.

Accordingly, the American telecom operator cut its 65% ownership
in the company to just 48% by transferring 5.5 million shares to
a newly created trust for CTI employees.  

The move will detach CTI from Verizon's consolidated financial
statements and will also reduce the parent's board representation
to four directors from five in the nine-member body.

The report says the continuing decline of the Argentinean peso,
coupled with the unit's ballooning debt were behind the bail out.  
CTI liabilities recently reached US$1 billion and the Company
suspended subsequent principal and interest payments.

CTI is a nationwide cellular/PCS provider in Argentina with
headquarters in Buenos Aires.  The Company offers wireless
service throughout the country.

Three other operating entities, all owned by CTI Holdings,
inclued: CTI Norte Compania de Telefonos del Interior S.A., CTI
Compania de Telefonos del Interior S.A., and CTI PCS S.A.


EDENOR S.A.: Credit Cut to "C" Due to Liquidity Strain
------------------------------------------------------
Edenor S.A. was among 12 Argentinean companies that last week
joined Fitch Ratings' list of troubled firms that are now
threatened by liquidity and refinancing risks.

"Ongoing, extremely adverse financial ramifications of the peso's
devaluation and subsequent emergency measures, as well as an
increasing probability of a general restructuring of all private
sector financial obligations," were part of Fitch's explanation
for the downgrade.

Following the downgrad, the Company's various debts are rated as:

                     To    From
Local Currency       'C'   'B-'
GAIN Trust Notes     'C'   'B-'
Foreign Currency     'C'   'CC'

For more information, contact Daniel R. Kastholm, CFA 1-312-368-
2070, Chicago or Lorna Martin +5411 4327-2444, Buenos Aires.


HIDROELECTRICA PIEDRA: Local, Foreign Currency Dip to "C" Levels
----------------------------------------------------------------
Hidroelectrica Piedra del Aguila S.A. was among 12 Argentinean
companies that last week joined Fitch Ratings' list of troubled
firms that are now threatened by liquidity and refinancing risks.

In explaining its move, Fitch said the downgrade reflects the
"ongoing extremely adverse financial ramifications of the peso's
devaluation and subsequent emergency measures, as well as an
increasing probability of a general restructuring of all private
sector financial obligations."

These are now the new ratings of the company following the
downgrade:

                     To    From
Local Currency       'C'   'B-'
Foreign Currency     'C'   'CC'

For more information, contact Daniel R. Kastholm, CFA 1-312-368-
2070, Chicago or Lorna Martin +5411 4327-2444, Buenos Aires.


IMAGEN SATELITAL: Threatened by Liquidity, Refinancing Risks
------------------------------------------------------------
Increasing liquidity and refinancing risks prompted Fitch Ratings
to include Imagen Satelital S.A. is among 12 Argentinean
companies that last week were listed as troubled firms. The 12
firms all received negative debt rating revisions.

Fitch said the downgrade reflects the "ongoing extremely adverse
financial ramifications of the peso's devaluation and subsequent
emergency measures, as well as an increasing probability of a
general restructuring of all private sector financial
obligations."

Imagen's downgrade results:

                     To    From
Foreign Currency     'C'   'CC'

For more information, contact Daniel R. Kastholm, CFA 1-312-368-
2070, Chicago or Lorna Martin +5411 4327-2444, Buenos Aires.


MOLINOS RIO: Depressed Outlook in Argentina Causes Ratings Cut
--------------------------------------------------------------
Molinos Rio de la Plata S.A. was among 12 Argentinean companies
that last week joined Fitch Ratings' list of troubled firms that
are now threatened by liquidity and refinancing risks.

Fitch lists the Company's debt ratings following the downgrade
as:

                     To    From
Local Currency       'CC'   'B'
Secured Export Notes 'B-'   'B'

For more information, contact Daniel R. Kastholm, CFA 1-312-368-
2070, Chicago or Lorna Martin +5411 4327-2444, Buenos Aires.


PECOM ENERGIA: Fitch cuts "B" Ratings to "CCC" Levels
-----------------------------------------------------
Pecom Energia S.A. was among 12 Argentinean companies that last
week joined Fitch Ratings' list of troubled firms that are now
threatened by liquidity and refinancing risks.

In explaining its move, Fitch said the downgrade reflects the
"ongoing extremely adverse financial ramifications of the peso's
devaluation and subsequent emergency measures, as well as an
increasing probability of a general restructuring of all private
sector financial obligations."

These are now the new ratings of the company following the
downgrade:

                     To    From
Local Currency      'CCC'  'B'
Foreign Currency    'CCC'  'B-'

For more information, contact Daniel R. Kastholm, CFA 1-312-368-
2070, Chicago or Lorna Martin +5411 4327-2444, Buenos Aires.


SIDERAR S.A.: Suffers Downgrade due to Argetinean Woes
------------------------------------------------------
Siderar S.A. was among 12 Argentinean companies that last week
joined Fitch Ratings' list of troubled firms that are now
threatened by liquidity and refinancing risks.

In explaining its move, Fitch said the downgrade reflects the
"ongoing extremely adverse financial ramifications of the peso's
devaluation and subsequent emergency measures, as well as an
increasing probability of a general restructuring of all private
sector financial obligations."

These are now the new ratings of the company following the
downgrade:

                     To    From
Foreign Currency     'C'   'CC'

For more information, contact Daniel R. Kastholm, CFA 1-312-368-
2070, Chicago or Lorna Martin +5411 4327-2444, Buenos Aires.


TELECOM ARGENTINA: Liquidity Concerns Lead to Rating Cut
------------------------------------------------------------
Telecom Argentina S.A. was among 12 Argentinean companies that
last week joined Fitch Ratings' list of troubled firms that are
now threatened by liquidity and refinancing risks.

In explaining its move, Fitch said the downgrade reflects the
"ongoing extremely adverse financial ramifications of the peso's
devaluation and subsequent emergency measures, as well as an
increasing probability of a general restructuring of all private
sector financial obligations."

These are now the new ratings of the company following the
downgrade:

                     To    From
Local Currency       'C'   'B-'
Foreign Currency     'C'   'CC'


For more information, contact Daniel R. Kastholm, CFA 1-312-368-
2070, Chicago or Lorna Martin +5411 4327-2444, Buenos Aires.


TRANSENER S.A.: "CCC" Fitch Ratings Dropped to "C"
--------------------------------------------------
Transener S.A. was among 12 Argentinean companies that last week
joined Fitch Ratings' list of troubled firms that are now
threatened by liquidity and refinancing risks.

In explaining its move, Fitch said the downgrade reflects the
"ongoing extremely adverse financial ramifications of the peso's
devaluation and subsequent emergency measures, as well as an
increasing probability of a general restructuring of all private
sector financial obligations."

These are now the new ratings of the company following the
downgrade:

                     To    From
Local Currency       'C'   'CCC+'
Foreign Currency     'C'   'CC'


For more information, contact Daniel R. Kastholm, CFA 1-312-368-
2070, Chicago or Lorna Martin +5411 4327-2444, Buenos Aires.


TRANSPORTADORA DE GAS: Debt, Currency Rates Deteriorate to "C"
--------------------------------------------------------------
Fitch Ratings downgraded Transportadora de Gas del Sur S.A. debt
and currency ratings last week as follows:

                     To    From
Local Currency       'C'   'B-'
IDB 'B' Loan Part.   'C'   'B-'
Foreign Currency     'C'   'CC'


The Company was among 12 Argentinean firms that made the Fitch's
list of troubled companies that are now threatened by liquidity
and refinancing risks.

Fitch detailed reasons for the move saying the downgrade reflects
the "ongoing extremely adverse financial ramifications of the
peso's devaluation and subsequent emergency measures, as well as
an increasing probability of a general restructuring of all
private sector financial obligations."


For more information, contact Daniel R. Kastholm, CFA 1-312-368-
2070, Chicago or Lorna Martin +5411 4327-2444, Buenos Aires.


YPF S.A.: Worsening Outlook Triggers Downgrade to "B+"
------------------------------------------------------
YPF S.A., the Argentine division of Repsol YPF, was among 12
companies that last week joined Fitch Ratings' list of troubled
firms that are now threatened by liquidity and refinancing risks.

In explaining its move, Fitch said the downgrade reflects the
"ongoing extremely adverse financial ramifications of the peso's
devaluation and subsequent emergency measures, as well as an
increasing probability of a general restructuring of all private
sector financial obligations."

These are now the new ratings of the company following the
downgrade:

                     To    From
Local Currency       'B+'  'BB'
Foreign Currency     'B+'  'BB'


For more information, contact Daniel R. Kastholm, CFA 1-312-368-
2070, Chicago or Lorna Martin +5411 4327-2444, Buenos Aires.


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

BCP S.A.: Owners Meet Following Downgrade, Plans Still Unclear
---------------------------------------------------------------
BellSouth Corporation says it is currently in discussion with
Safra Group, a controlling partner in BCP S.A., the Brazilian
wireless unit that defaulted on a US$375 million debt payment
last week.

BellSouth spokesman Jeff Battcher told Dow Jones Newswires
recently that steps are being taken to resolve the current
problem, although no formal plan between the partners has emerged
so far.

Mr. Battcher refused to say whether or not BellSouth will invest
additional money in the losing venture, where it holds 45% and
shares controlling rights with Safra Group.  He only said that
the company still sees its Latin American investments as
"valuable assets."

Last week, in cutting BCP's credit rating to "D", Standard &
Poor's cited the uncertainty of continued support from BellSouth
and Safra as part of its reasoning for the downgrade.

Recently, BellSouth absorbed several charges to earnings as
currency depreciation and economic hardship hurt its wireless
operations in Latin America.

The company also said last month that financial upheaval in
Argentina and Venezuela will cause it to take a first-quarter
charge and post lower revenue and earnings this year than
previously expected.


BCP S.A.: Default Last Week Prompts Debt Acceleration
-----------------------------------------------------
Brazilian mobile phone company BCP S.A. could be forced into  
paying nearly all of its US$1.6 billion debt in advance,
following its default on a US$375 million debt payment last week,
says Reuters. Citing Standard & Poor's, the news agency said the
default will trigger the acceleration of the other obligations
due to "cross-default debt clauses" in the company's other debt
deals.

The default prompted a downgrade last week by Standard & Poor's,
which underscored the absence of a plan to resolve the firm's
liquidity crisis as one of the reasons behind the cut.

The ratings agency lowered BCP's corporate credit rating to "brD"
from "brCC."  It also lowered the rating on BCP's BRL500 million
local debentures to "brD" from "brC."

The majority of the debentures are held by BCP's controlling
shareholders, U.S. telephone company BellSouth Corp. and a
Brazilian company called Verbier that is owned by the same
shareholders of the Safra Group bank, says Reuters.

According to Reuters, the US$375 million debt was used by BCP to
win the metropolitan Sao Paulo cell phone concession in March
1998 when Brazil privatized its telecommunications industry.

BCP boasts 1.75 million clients today in Sao Paulo. The company
posted losses of BRL356 million in 2000.


CEEE: 2001 Tops Previous Results, But Still in the Red
------------------------------------------------------

State-owned energy firm Companhia Estadual de Energia Eletrica
S.A recently announced that it had booked BRL1.02 billion net
revenue last year, a jump from the BRL884.2 million recorded in
2000.

But despite this improvement, Dow Jones Newswire said the "bottom
line" on the company's financial disclosure was still printed in
red as it absorbed a BRL72.7 million net loss in 2001 against
zero profit.

The only positive note in last year's performance was the big
leap of the firm's operating profit to BRL85.6 million from
negative (-) BRL149.3 million a year earlier.

CEEE, as the company is known, operates in Brazil 's southernmost
Rio Grande do Sul state.

Recently, the Brazilian government promised to assume part of its
debts, estimated at US$522 million.  These debts are related to
the construction of Candiota III, its thermal electric facility.  

The Company's major creditor is the French-based GEC Alsthom.


CEMIG: Records Seven-fold Fourth Quarter Net Profit Increase
------------------------------------------------------------
Power company Cia. Energetica de Minas Gerais posted more than
sevenfold increase in fourth quarter profit due to electricity
rate increases and currency gains.

Rate hikes resulted to BRL477.9 million net profit in 2001 and
the 16 percent fourth-quarter gain of the real against the U.S.
dollar reduced the value of its dollar-denominated debt. Cemig
had BRL2.1 billion in debt at the end of the third quarter, of
which BRL1.6 billion was dollar-denominated.

Marcos Severine, a power utility analyst at Sudameris brokerage
in Sao Paulo estimated that without the rate increase, Cemig
would have had a BRL50 million loss.

Cemig said its consolidated net income rose to BRL672.5 million
or BRL4.26 per 1,000 shares, from 91 million, or 57 centavos per
1,000 shares, a year earlier.


CESP: Net Losses Widen by 196% Despite Revenues of BRL2.27 Mln
--------------------------------------------------------------
Companhia Energetica de Sao Paulo SA booked another losing year
in 2001 by nearly doubling its year-earlier deficit, says Dow
Jones Newswires.

The company reported net losses of BRL813.3 million last year, up
by 196% from the BRL414.3 million recorded in 2000.  Operating
cost also ballooned to BRL1.49 billion from BRL739.5 million.

Net revenue at BRL2.27 billion was the only measure that showed a
slight improvement from BRL1.43 million recorded in 2000, the
newswire said.

According to the report, 2001 results were partly hurt by the
energy-rationing program introduced in June last year to help
replenish depleted reservoir levels.

In addition, the company's bottom line was also negatively
impacted by its dollar-denominated debt, which totaled BRL6.53
billion at the end of 2001.

The energy firm distributes electricity in Brazil's wealthiest
state of Sao Paulo.


TELEMAR: Trouble Sways Bondholders from Reinvesting in Parent
-------------------------------------------------------------
Telemar Participacoes, parent of troubled Brazilian telecom
operator Telemar, ended up issuing BRL355 million worth of new
bonds last week as the market shunned its refinancing offer.

Citing a reliable source in the banking sector, Dow Jones
Newswires said investors refused to roll over some BRL620 million
bonds due to the uncertainty surrounding its troubled subsidiary.

Going into the deal, the parent company had only planned to raise
BRL30 million in new bonds.  But after only BRL295 million in
existing bonds were tendered, the company was forced to issue
BRL355 million in new bonds to complete the BRL650 million deal.

By press time, the company couldn't be reached for comment.


               ***********


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 Ma. Cristina Canson, Editors.

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

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.

Information contained herein is obtained from sources believed to
be reliable, but is not guaranteed.

The TCR Latin America subscription rate is $575 per half-year,
delivered via e-mail.  Additional e-mail subscriptions for
members of the same firm for the term of the initial subscription
or balance thereof are $25 each.  For subscription information,
contact Christopher Beard at 240/629-3300.


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