/raid1/www/Hosts/bankrupt/TCRLA_Public/020429.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, April 29, 2002, Vol. 3, Issue 83

                           Headlines

A R G E N T I N A

ARGENTINE BANKS: Congress Moves To Fend Off Financial Meltdown
ARGENTINE BANKS: Fundacion Economist Balks at New Law
METRO INTERNATIONAL: 2Q02 Results Improve, Argentina Abandoned
REPSOL YPF: Moody's Reviewing For Possible Downgrade
TELEFONICA DE ARGENTINA: Moody's Drops Ratings On Argentine Woes
TRANSENER: Missed Payment Goes Uncured, Fitch Drops To 'DD'


B E R M U D A

TYCO INTERNATIONAL: Posts 96 Cents/Share 2Q02 Loss
TYCO INTERNATIONAL: Details "No Breakup" Rationale in Letter
TYCO INTERNATIONAL: Moody's Lowers After Breakup Plans Reversed


B R A Z I L

AES CORP.: Announces Improving First Quarter Financial Results
TELECOM AMERICAS: Parent Warns Debt Refinancing May Be Difficult
CEMIG: Financing New Hydro Project with BRL90M Debentures Issue
EMBRATEL: Shares Trading Higher On Sale Speculations


M E X I C O

AHMSA: Committee Representing Creditors Abandons Debt Talks
SAVIA: Reports Mixed First Quarter 2002 Results


P A N A M A

BLADEX: S&P Cuts Senior Unsecured Ratings To BBB-


P E R U

AEROCONTINENTE: Suing To Recoup Losses From Criminal Probe


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

ARGENTINE BANKS: Congress Moves To Fend Off Financial Meltdown
--------------------------------------------------------------
As part of a measure aimed at salvaging Argentina's nearly-
collapsed banking system, the country's Congress approved a law
keeping depositors from withdrawing funds from their bank
accounts, potentially overriding even lower court injunctions
which would otherwise allow fund transfers. The law is designed
to stem the outflow of as much as ARS350 million (US$112 million)
a day of deposits, which led the government to close banks a week
ago Friday.

Under the bill, savers who mount successful legal challenges
against existing restrictions on withdrawals will be prevented
from claiming their money until the government has had a chance
to appeal.

The move provides the beleaguered Argentine government some
breathing room as it battles to contain a run on the banks which
some believe could trigger a total financial meltdown.


ARGENTINE BANKS: Fundacion Economist Balks at New Law
-----------------------------------------------------
Dardo Ferrer, an economist at Fundacion Mercado, issued the
following comments in reference to the new Argentine Banking Law
passed by the Congress, relates Bloomberg.

"This is a band-aid. It's a second-class law that won't solve the
banks' financial problems," said Ferrer. "They are buying time to
see if they can find funds to pay the savers their deposits. But
they are winning very little time."

According to Mr. Ferrer, "The only way to stop a run on banks is
to return the confidence in the banks. People have bought dollars
because there is a total loss of confidence. Banks have to return
deposits that they don't have. Part of the problem is that they
are owed money by a government that is in default."

On the government's plan to re-peg the peso to the dollar after
abandoning a decade-old fixed rate in January, Ferrer's
skepticism was clear:

"To maintain a fixed rate, you have to have a stable economy and
a realistic rate, and the central bank has to have sufficient
reserves. If the rate is too low it will be impossible to
maintain. If it is higher, they are going to have very high
inflation."



METRO INTERNATIONAL: 2Q02 Results Improve, Argentina Abandoned
--------------------------------------------------------------
Metro International S.A., the world's largest free newspaper,
announced Thursday its financial results for the three months
ended 31 March 2002.

OPERATING REVIEW

International sales for the 19 current operations outside Sweden
were up 63% at constant exchange rates in the quarter, and by 58%
to U.S. $16.8 million (U.S. $10.6 million) at reported rates.
International sales accounted for 59% of group advertising sales,
compared to 46% for the same period last year at reported rates.
Total group net sales increased by 8.2% in the first quarter at
constant 2001 exchange rates, compared to the same period of last
year.

This result has been achieved at a time when global advertising
markets have been in continued decline.

Metro continued to out-perform its peers in Sweden, reporting a
16.4% decline in net sales (at constant 2001 exchange rates) in
the quarter, in a market that is estimated to have fallen by over
25% year on year, according to the independent 'Mediebyraernas
Mediebarometer' survey of first quarter advertising sales for the
major Swedish 'daily morning newspapers'. Metro's sales volumes
did however improve significantly towards the end of the quarter
and are now approaching last year's levels in the second quarter.

Due to Metro's mature market position in Stockholm, the operation
registered a substantial reduction in recruitment advertising
revenues. This loss was partly compensated for by targeted new
efforts in the display advertising segment, where the Stockholm
edition increased revenues by 13% year on year in a market where
the traditional morning papers showed declines of 10%. Metro
Stockholm's market share therefore reached a record 26% in the
first quarter, compared to 24% during 2001.

Three new Metros were successfully launched in France during the
first quarter. The editions in Paris, Marseille and Lyon have a
combined target circulation of 500,000 copies, making Metro the
largest national newspaper in Europe's third largest advertising
market, which generated newspaper advertising spend of US$1.7
billion in 2000. An initial dispute with a local union in Paris
regarding the printing and distribution of Metro was resolved
within seven weeks.

The cost reduction program continued into 2002 with the ongoing
impact of the centralization of paper buying in a falling price
environment, more efficient distribution, headcount reduction,
and increasing usage of Metro World News content. The average
cost per copy, calculated on the basis of an average 24-page
edition and including all Group costs except headquarter
expenses, fell by 5% year on year in the first quarter, despite
the launch of eight new editions since the beginning of 2001.

Metro also closed down two operations during the first quarter,
for very different reasons. The closure of the Zurich operation
was announced on 13 February 2002. Zurich was closed because it
would not have reached a satisfactory level of profitability in
the target time frame that is applied as a Group wide discipline.
Due to the economic deterioration in Argentina, the Buenos Aires
edition was also discontinued during the quarter in order to
protect shareholders' funds in an unstable environment. Both
these actions will serve to reduce Group losses significantly
moving forward.

EBITDA losses for all operations (excluding headquarter expenses)
decreased to U.S. $13.1 million (U.S. $14.0 million) in the first
quarter, despite the launch of eight new editions since the
beginning of 2001, the particular impact of the launch of three
new editions in France during the quarter, and the US$4.4 million
of site closure costs

EBITDA losses for the operations launched before 2001 were down
by 51% to U.S. $6.5 million (U.S. $13.3 million) for the quarter,
clearly showing the rapid migration to profitability of the
operations that reported full quarter results for the first
quarter of 2001. This again included the US$4.4 million of site
closure costs in the first quarter of 2002.

Excluding the discontinued editions in Buenos Aires, the combined
EBITDA loss for all editions launched before 2001 was therefore
U.S. $2.1 million (U.S. $6.2 million).

Excluding the three new launches in France in 2002, the total
Group reported an EBITDA loss of only U.S. $1 million in the
month of March.

After the end of the quarter, Metro launched its first Asian
edition. Metro Hong Kong was introduced on 15 April 2002 with a
target daily circulation of 300,000 copies, making Metro the
third largest newspaper in the territory. Hong Kong is one of the
world's major cities with a population of 6.5 million and one of
the world's major commercial centers, attracting annual print
advertising spend of U.S. $1.3 billion. Metro has now also formed
a successful recruitment advertising sales partnership with The
Boston Globe, and launched Metro Radio in Stockholm, a low cost
venture to extend the Metro brand in Sweden and generate
additional high margin revenue streams.

New Ventures

Metro's new ventures comprise the twelve wholly owned
subsidiaries that have been started up less than three years ago
(Holland, Malmo, Helsinki, Philadelphia, Santiago, Rome, Athens,
Warsaw, Milan, Barcelona, Boston, Madrid, Copenhagen, Paris,
Marseille and Lyon) and the two joint venture operations in
Toronto and Montreal in which Metro has 50% interests.

Net sales for the new ventures increased by 63% in the first
quarter at constant exchange rates. At reported exchange rates,
net sales were up 55% to U.S. $15.0 million (U.S. $9.7 million)
in the first quarter, equivalent to 54% of Group revenues for the
period.

EBITDA losses for the new ventures totaled U.S. $12.0 million
(U.S. $11.4 million) for the first quarter, an increase of only
U.S. $0.6 million despite launching eight new editions since the
beginning of 2001. This means that the reduction in EBITDA losses
for the 10 ventures launched in 1999 and 2000 was almost
equivalent to the total investment in the eight new editions
launched in 2001 and the first quarter of this year.

The Santiago edition reported operating profits for the second
consecutive quarter, due both to significant sales growth and
strict cost control. The operation is consequently ahead of the
three year target time frame for new operations to reach annual
profitability. The same is true for Malmo and Athens, which both
posted operating profits in March. The two U.S. operations, in
Philadelphia and Boston, have also produced strong performances,
with sales in Philadelphia increasing by 52% and EBITDA losses
reduced by 35% year on year in the first quarter.

The Copenhagen edition continued to perform above expectations to
the extent that the operation was expanded after the end of the
quarter to cover Denmark's second largest city, Aarhus, and the
Eastern part of Jutland, by printing an additional 65,000 copies.
The daily circulation of 235,000 copies makes MetroXpress the
largest daily newspaper in the Denmark and its distribution now
covers an area that accounts for 70% of the US$480 million annual
newspaper advertising market. The investment required for the
expansion has been covered within the original budget plans.

Headquarters The Headquarters reporting item relates to the
general & administration expenses incurred by the headquarter
operations and Metro World News, as well as investments relating
to business development, cities under development (but not yet
launched) and Group marketing. Headquarter costs were down 13% to
U.S.$4.7 million (U.S.$5.4 million) in the first quarter, in line
with the Group commitment to significantly reduce these costs
during 2002, but also including pre-launch costs incurred in
establishing the Hong Kong operations prior to launch in the
second quarter.

FINANCIAL REVIEW

The U.S. dollar strengthened year on year against most of Metro's
reporting currencies during the quarter. Group net sales would
have been 4.8% higher at U.S. $29.8 million on the basis of the
exchange rates for the same period of 2001.

Metro's joint ventures in Toronto and Montreal are treated as
affiliate companies, with the consolidation of 25% of the
earnings of each operation in the first quarter of 2002, in line
with the equity participation. However, 100% of the results for
the Toronto operation were consolidated to Group net sales and
income in the first quarter of 2001, because the merger with the
local partner was not approved until 5 July 2001.

Goodwill, which relates predominantly to the buyout of minority
interests in Metro Sweden, is no longer allocated to the Swedish
operations, but is separately disclosed as a distinct item within
the segmental analysis in the notes in order to improve clarity.
The comparative numbers for 2001 have been restated accordingly,
as if this treatment had been applied from 1 January 2001.

The operating results from the three operations launched in
France during the first quarter are included in the Rest of
Europe reporting segment, and also include the pre-launch
investments made in the operations during the quarter.

Site closure costs relating to the discontinued Zurich and Buenos
Aires operations amounted to U.S. $4.4 million in the first
quarter and constituted a full provision for all costs related to
the discontinuation of the two editions as well as operational
losses incurred up until the closure decision was made.

Metro's working capital requirements and operating cash flows
continue to improve, as a result of the ongoing implementation of
measures to reduce debtor days and manage supplier relationships
and procurement more efficiently.

At 31 March 2002, Metro had liquid funds of U.S. $19.9 million.
Long-term debt amounted to U.S. $90.2 million on 31 March 2002.
Adjusted for the exercise of the Millicom option and the
conversion of the U.S. $22.1 million convertible debenture loan
from Modern Times Group MTG AB, long- term debt would have
totaled U.S. $67.5 million.

CONTACT:  Pelle Tornberg, President & CEO             
          Tel: +44 (0) 20 7408 0230

          Matthew Hooper, Investor & Press Relations
          Tel: +44 (0) 20 7321 5010


REPSOL YPF: Moody's Reviewing For Possible Downgrade
----------------------------------------------------
Moody's Investors Service said it placed under review for
possible downgrade the long-term Baa2-rated debt, Ba1-rated
preferred stock and short-term Prime-2 ratings of Repsol YPF and
its guaranteed subsidiaries.

It also placed under review for possible downgrade the Baa3 local
currency issuer rating of Repsol YPF's subsidiary, YPF S.A., as
well as the B1 foreign currency debt rating of YPF and its
guaranteed subsidiaries.

Moody's is putting these ratings under review due to the ongoing
deterioration in the economic situation in Argentina and
uncertainty over the Argentine Government's ability to come to an
agreement with the International Monetary Fund (IMF).

Moody's said that the present ratings of the Repsol YPF group and
YPF reflect the existing framework of fiscal and currency
controls in Argentina. YPF represents over 40 percent of Repsol
YPF group's operating profit, a very large part of which is
generated in Argentina from domestic sales and exports.

YPF is currently paying a 20-percent tax on crude oil exports (to
be reduced to 10 percent from January 2003), as well as 5 percent
on oil product sales. Under existing legislation YPF retains
control over 70 percent of its export proceeds of around US$1.5
billion per annum pre-tax, an important pre-crisis source of cash
flow for heavily-indebted Repsol YPF, its parent company, to help
meet its debt service obligations.

Moody's said it believes it will not be politically viable for
YPF to make a dividend to Repsol YPF for some time, although it
may be legally possible.

Repsol YPF's current ratings take account of its own liquidity
position and encompass the expectation that cash flow streams
from YPF will resume at some stage in the intermediate term.

Moody's is increasingly concerned that the deterioration of the
Argentine economy means a growing likelihood that fiscal and
currency control measures applied to YPF could be increased. YPF
is a major source of tax and hard currency revenues to Argentina.

This could happen either within the framework of an IMF agreement
or, even more likely, should Argentina fail to reach agreement
with the IMF.

Moody's continues to consider the potential renationalization of
YPF, triggering material adverse change clauses in some of Repsol
YPF's bank lines and leading to a significant deterioration in
its liquidity and rating -- a relatively remote possibility.

Barring such an event, Repsol YPF's liquidity position remains
acceptable and should remain so over the next 18 months. Any
downgrade of Repsol YPF is likely to be limited to one notch,
leaving Repsol YPF's senior debt within investment grade.

CONTACT:  London
          Stuart Lawton
          Managing Director
          Corporate Finance Group
          Moody's Investors Service Ltd.
          Phone: 44 20 7772 5454
         
          London
          Jeremy Hawes
          Senior Vice President
          Corporate Finance Group
          Moody's Investors Service Ltd.
          Phone: 44 20 7772 5454


TELEFONICA DE ARGENTINA: Moody's Drops Ratings On Argentine Woes
----------------------------------------------------------------
Argentina's ongoing deterioration has taken its toll on
Telefonica de Argentina Sociedad Anonima (TASA). Moody's
Investors Service downgraded Thursday the long-term foreign
currency debt ratings of TASA from B2 to Caa1 and kept the
ratings on review for possible further downgrade.

Moody's believes that TASA is very likely to default on its
foreign currency bonds as the economy worsens and uncertainties
about the regulatory framework affecting tariffs persist.

Moody's continues to assess the increased uncertainty about
TASA's ability to make dollar-denominated payments under the
restrictive regulations, which preclude Argentina-domiciled
companies from making any payments in foreign currency.

Given the slow pace in the talks on the tariff structure for the
Company and the risk of hyperinflation in Argentina, Moody's is
increasingly concerned about the ability of TASA to obtain US
dollars for its foreign currency payments, which include the
maturity of the 9.98 percent US$100-million bond in July 2002.

The rating service pointed out that TASA's Caa1 foreign currency
bond rating is above Argentina's Ca long-term foreign currency
ceiling for bonds and notes.

Moody's allowed the Company to pierce the Argentine country
sovereign ceiling based on the perceived implicit support from 98
percent parent Telefonica SA, and the strategic value of TASA.

The downgrades and the ongoing ratings review process affect
TASA's medium-term note program and all drawdowns, issuer ratings
and senior implied ratings.

CONTACT:  London
          Stuart Lawton
          Managing Director
          Corporate Finance
          Moody's Investors Service Ltd.
          Phone: 44 20 7772 5454

          London
          Carlos Winzer
          Senior Vice President
          Corporate Finance
          Moody's Investors Service Ltd.
          Phone: 44 20 7772 5454


TRANSENER: Missed Payment Goes Uncured, Fitch Drops To 'DD'
-----------------------------------------------------------
Fitch Ratings has downgraded the foreign and local currency
ratings of Transener S.A. to 'DD' from 'C'. The rating action
follows Transener's default on an interest payment due under the
company's US$250 million notes on April 1, 2002. While the cure
period on this security has not yet expired, the company has
stated on April 22, 2002, its intention not to pay any principal
or interest services on all of its financial indebtedness. Thus,
Fitch Ratings has downgraded to 'DD' all of Transener's rated
debt.

The company's decision follows the alteration of its concession
agreement by the Argentine Public Emergency Law No. 25.561, which
includes the suspension of tariff adjustments and the tariff's
pesofication. These changes combined with the devaluation impact,
have materially affected the financial condition of Transener,
given the mismatch between its income in pesos and its debt in
hard currency. The exchange rate was Arg$3.1:US$1 on April 25,
2002.

At present, Transener, as well as other regulated market
participants, is negotiating its concession contract with the
Argentine government in the hope of recovering the already lost
economic equilibrium, but the outcome of negotiations is
uncertain. Fitch does not believe that the negotiations will
result in the immediate increase in tariffs necessary to
compensate for the combined impact of devaluation and
pesofication of tariffs. Transener has retained Morgan Stanley &
Co. for the purpose developing of a debt-restructuring plan.

Transener has an exclusive concession to operate high-voltage
electricity transmission assets in Argentina's major
interconnected electric grid, SIN, and owns a 90% share of
Transba, the system serving the Province of Buenos Aires.
Transener is owned by Citelec (65%), the public (25%) and
employees (10%). Citelec's main shareholders are subsidiaries of
National Grid (42.5%) and Pecom Energia S.A. (Pecom) (42.5%).
National Grid and Pecom are the technical operators of the grid.

CONTACT:  Fitch Ratings
          Giovanny Grosso, 312/368-2074 or
          Jason T. Todd, 312/368-3217, Chicago;
          Ana Paula Ares, +54 11 4327-2444, Buenos Aires
          Media Relations:
          James Jockle, 212/908-0547, New York



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

TYCO INTERNATIONAL: Posts 96 Cents/Share 2Q02 Loss
--------------------------------------------------
Tyco International Ltd., a diversified manufacturing and service
company, reported today a 96 cent loss per share, before
extraordinary items, for the quarter ended March 31, 2002. These
results include $1.61 per share of impairment, restructuring and
other unusual charges, which are discussed below. Current year
figures include the effects of SAB 101 and SFAS 142. Results for
the quarter ended March 31, 2001, restated for SAB 101 but not
for SFAS 142, were 63 cents per fully diluted share, before
extraordinary items. SFAS 142 does not allow for prior period
restatement, but as a supplemental disclosure, earnings for the
quarter ended March 31, 2001, including all accounting rule
changes and including all impairment, restructuring and other
unusual charges, but before extraordinary items, were 70 cents
per share. Free cash flow, including spending on the Tyco Global
Network (TGN), totaled $1.03 billion in the second quarter of
fiscal 2002 compared to $645 million for the same period last
year.

Earnings were hurt by the severe downturn in the
telecommunications and electronics markets. Also, as described
below, results were negatively impacted by reduced revenues and
substantial costs incurred as a result of the wave of rumors and
misleading press reports during the past quarter, as well as from
uncertainties arising from our announced break-up plan, which
distracted employees, customers, and vendors, and increased our
borrowing costs.

"I am disappointed that our ten year/forty quarter string of
consistent earnings improvements has been broken. While our
results before charges are in line with our previously stated
expectations for the quarter, we met those expectations with a
lower tax rate for the quarter," commented L. Dennis Kozlowski,
Chairman and Chief Executive Officer. "While we cannot precisely
quantify the distraction costs, their impact is obvious in
segment margins and is particularly frustrating. I believe that
they are contained and should fade in the coming quarters, but
they are likely to approximate $0.25 to $0.30 per share as
opposed to the $0.05-0.10 per share that we had initially
projected."

Mr. Kozlowski continued, "The near-term outlook remains
difficult. While there are some signs that the electronics
markets may improve in the coming quarters, the rebound is likely
to be slower than we had assumed in our prior guidance. And, I do
not expect a recovery in the sub-sea markets over the next few
years. We have begun implementing further facility consolidation
and cost reductions that not only reflect current market
conditions, but leave us better positioned for an eventual
rebound."

In addition to the distraction costs, the results also include
several items of a one-time or unusual nature, which are
described below. Mr. Kozlowski noted that, "We are highlighting
these items, many of which are non-cash asset write-downs, to
assist in assessing the underlying performance of Tyco's
businesses. They are real costs, and they will be included in our
compensation calculations. As a result, senior corporate
management will not receive bonuses this year."

Mr. Kozlowski concluded, "While I and the rest of the team are
disappointed with our earnings, our solid free cash flow
generation demonstrates the underlying strength of our
businesses. We expect this period of weakness to be short lived
and expect to return Tyco to a growth track by focusing on
organic growth, return on capital, and acquisitions where
appropriate."

IMPAIRMENT, RESTRUCTURING AND OTHER UNUSUAL CHARGES

The impairment, restructuring and other unusual charges consisted
of the following:

* Impairment of long-lived assets -- $2.41 billion pre-tax, or
$1.25 per share after-tax, of which $2.34 billion relates to the
write-down of the carrying value of the TGN.  This is a non-cash
charge.  The fierce decline in the telecommunications market,
coupled with the bankruptcies of virtually all of our sub-sea
competitors and the subsequent market valuation of their assets,
requires us to carry our network at a lower value.

* Inventory write-off -- $251.3 million pre-tax or $0.09 per
share after-tax.  This is a non-cash charge.  This charge is
primarily related to disposing of excess inventory at the sub-sea
manufacturing business.

* FLAG Telecom and other equity investments -- $180.6 million
pre-tax or $0.09 per share after-tax.  This is a non-cash charge.  
Tyco's 11% investment in FLAG's common stock accounted for
approximately $114 million while the remaining amount consisted
of several venture capital investments.  The actual impact to
Tyco's equity is only a $56 million reduction, as the holdings
had been marked-to-market on the December balance sheet.

* Reserve for credit losses on Argentine receivables at CIT --
$95.0 million pre-tax or $0.03 per share after-tax.  This is a
non-cash charge.  Economic reforms instituted by the Argentine
government resulted in the conversion of CIT's U.S. dollar-
denominated receivables into Argentine pesos. The sudden
devaluation of the Argentine peso requires us to build reserves
against the small Latin American portfolio at CIT.  This reserve
equates to approximately 50% of the total exposure to Argentine
loans.

* Other restructuring and unusual costs -- $403.8 million pre-tax
or $0.15 per share after-tax. Approximately 84% of the charge is
a cash charge, and is related primarily to severance and facility
closings mostly due to the severe downturn in both the
electronics and telecommunications markets. The plan involves the
closure of 24 facilities and the termination of approximately
7,100 employees.

FREE CASH FLOW

Free cash flow, after deducting $288 million in spending on the
TGN, was approximately $1.03 billion in the quarter. This
compares to prior year results of $645 million, after deducting
$439 million spent on the TGN. In the prior year, TGN spending
was not included in the definition of free cash flow. If TGN
spending from both periods were excluded, free cash flow would
have totaled approximately $1.31 billion in the second quarter of
fiscal 2002, compared to free cash flow of approximately $1.08
billion in the second quarter of fiscal 2001.

"Free cash flow" is not a substitute for cash flow from operating
activities as determined in accordance with generally accepted
accounting principles (GAAP). Tyco refers to the net amount of
cash generated from operating activities (as defined by GAAP),
excluding those of CIT, less capital expenditures and dividends,
as "free cash flow." Included as a reduction of operating cash
flows in the second quarter of fiscal 2002 is $91 million related
to cash spending on restructuring and other unusual items, as
compared with $44 million in the second quarter of fiscal 2001.

The Company paid $1.45 billion in cash for acquisitions in the
quarter, including $142 million relating to purchase accounting
liabilities. Tyco spent $2.36 billion in cash for acquisitions,
including $140 million related to purchase accounting
liabilities, in the same period in fiscal 2001. Free cash flow is
calculated before these expenditures.

QUARTERLY RESULTS

Quarterly segment profits and margins for the Company's
Electronics, Healthcare and Specialty Products, and Fire and
Security Services segments that are presented in the discussions
below are operating profits before impairment, restructuring and
other unusual charges and credits and goodwill amortization.
Results for CIT are pre-tax profits before unusual charges.
Results before impairment, restructuring and other unusual
charges are commonly used as a basis for operating performance,
but should not be considered an alternative to operating income
determined in accordance with GAAP. All dollar amounts are stated
in millions.

    ELECTRONICS
                             March 31, 2002       March 31, 2001

    Segment revenues             $ 2,834.7            $ 4,159.9
    Segment profit               $   423.6            $ 1,002.3
    Segment margins                   14.9%                24.1%

The decrease in revenues resulted from a further softening in
demand in the end markets the Company serves, and weak conditions
across all geographic regions. The business units most severely
impacted serve the telecommunications, power systems,
communications, printed circuit, and computer and consumer
electronics end markets of Electronics. Sales and margins were
also impacted by the business distraction associated with the
rumors and negative press surrounding the Company during the
quarter, which led to pricing and productivity issues. The
outlook for the Electronics end markets remains tough for the
foreseeable future, though there has been some sequential growth
in the automotive and industrial consumer businesses. Revenues at
Tyco Telecommunications decreased over 70%, to $162 million, as
compared to $566 million in the second quarter of fiscal 2001,
due to fewer third-party manufacturing contracts as the Company
focused on the construction of the TGN, and a very weak undersea
capacity sales market. This market is not expected to show signs
of recovery over the next few years. Revenues at Tyco Electrical
and Metal Products were flat, as sales from acquisitions were
offset by lower raw material prices and lower volume in the
commercial construction market in North America. Distractions and
the lack of stability in raw materials markets caused short-term
impacts on supplies and pricing. Current market conditions seem
to indicate some improvement going into the third quarter.

As noted in the detail of impairment, restructuring and unusual
charges for the quarter, the Company has begun to implement
restructuring actions in these areas to reduce the number of
manufacturing and office facilities and employees to a size
appropriate for market conditions, while maintaining the
flexibility for an eventual upturn.

    HEALTHCARE AND SPECIALTY PRODUCTS

                             March 31, 2002       March 31, 2001

  Segment revenues             $ 2,446.8            $ 2,219.9
  Segment profit               $   505.1            $   493.8
  Segment margins                   20.6%                22.2%

Tyco Healthcare and Specialty Products showed a revenue increase
of 10%. Within Tyco Healthcare, the revenue increase was driven
by the acquisition of Paragon Trade Brands in January of 2002,
strong growth in the international healthcare businesses, most
notably in Europe, and new product introductions. These increases
were partially offset by declines in certain product lines as a
result of competitive pressures, exiting of certain businesses,
and general business distractions caused by the events during the
quarter. Margins decreased in the healthcare business as the
benefits of on going cost reduction plans were offset by margins
at Paragon, which are lower than the segment average, unfavorable
manufacturing variances due to volume declines in certain product
lines, and pricing issues resulting from the business disruptions
discussed above. Tyco Plastics and Adhesives revenues increased
year over year primarily due to acquisitions, partially offset by
the impact of raw materials prices. The group also had volume
declines with certain customers as a result of business
distractions. Margins were down substantially in the group as a
result of the volume shortfalls and pricing issues resulting from
the distractions.

    FIRE AND SECURITY SERVICES

                             March 31, 2002       March 31, 2001

  Segment revenues             $ 3,380.0            $ 2,430.0
  Segment profit               $   527.6            $   404.3
  Segment margins                   15.6%                16.6%

Tyco Fire and Security achieved year over year revenue increases
in each of its businesses -- fire, security and valves. General
market softness is being offset by increased emphasis on fire and
security products in the wake of September 11. New product
introductions by Ansul, Scott, SimplexGrinnell and ADT, as well
as the acquisitions of SecurityLink and Sensormatic, also
contributed to the increase. Backlog, margin in backlog and the
recurring and service revenue component of the segment continues
to increase, although the fire protection business is seeing the
impact of weakening commercial markets in both the United States
and Europe.

At the valve businesses, revenues increased year over year as
acquisitions and new product introductions offset competitiveness
in weak market conditions and the impact of business distractions
caused by the events of the quarter. However, on a sequential
basis, revenues were flat in most product and geographic areas
reflecting competitive pressure on selling prices and weak
commercial construction markets in North America and parts of
Europe.

Margins were down across the segment as a result of business
distractions, pricing pressures, and lower initial profitability
levels of acquired companies.

    CIT
                                March 31, 2002

     Segment revenues               $ 1,338.7
     Segment pre-tax earnings       $   342.3

Earnings and profitability were strong, showing an increase over
the prior year, though down sequentially from the first quarter,
primarily as a result of increased costs associated with the draw
down of bank lines and higher levels of liquidity. Non-spread
revenue increased over the year ago quarter, with higher fees and
other income in Commercial Finance and Specialty Finance offset
by lower equipment gains and losses in Venture Capital.
Securitization gains were higher sequentially, due to the Home
Equity Securitization executed for liquidity purposes, but flat
year over year. Credit costs trended similar to the first
quarter, driven mainly by higher losses in the liquidating
portfolios: trucking, manufactured housing, and franchise.
Operating efficiencies improved significantly as a result of the
reduction of corporate overhead and consolidation of operational
centers subsequent to its acquisition by Tyco.

ACCOUNTING CHANGES

The Company adopted the provisions of SAB 101, related to revenue
recognition, in the fourth quarter of fiscal 2001. Accounting
rules required that the Company adopt the provisions effective as
of October 1, 2000, and results for the first three quarters of
fiscal 2001 be restated. The results for the second quarter
reflect the impact of SAB 101 in both periods presented. In
addition, we recorded an adjustment of approximately $683 million
for the cumulative effect of accounting changes as of the
beginning of the 2001 fiscal year ($654 million related to the
adoption of SAB 101 and $30 million related to the adoption of
SFAS 133, "Accounting for Derivative Instruments and Hedging
Activities").

In June 2001, the U.S. Financial Accounting Standards Board
issued SFAS 142. As of October 1, 2001, goodwill amortization was
no longer permitted under this standard. Prior year results are
not to be restated, but pro forma presentation excluding goodwill
is required.

FISCAL 2002 GUIDANCE

Tyco is reducing its earnings per share and free cash flow
guidance for fiscal 2002. Earnings per share are expected to be
in a range of $2.60 to $2.70, before charges, and $0.98 to $1.08
after impairment, restructuring, and other unusual charges. These
figures assume CIT's results are included in the results of Tyco
for all of fiscal 2002. Earnings guidance for the third quarter
of fiscal 2002 is $0.58 to $0.62 per share. The earnings estimate
reflects continued downturn in the electronics and
telecommunications markets as well as some lingering disruption
costs. The estimates also assume a tax rate of approximately 18
to 18.5 percent for the year, reflecting reduced profits in high
tax jurisdictions. Free cash flow, after deducting spending on
the TGN, is expected to approximate $900 million to $1.1 billion
in the third quarter of fiscal 2002 and $3 billion to $3.5
billion for the full fiscal year.

Tyco International Ltd. is a diversified manufacturing and
service company. Tyco is the world's largest manufacturer and
servicer of electrical and electronic components; the world's
largest designer, manufacturer, installer and servicer of
undersea telecommunications systems; the world's largest
manufacturer, installer and provider of fire protection systems
and electronic security services and the world's largest
manufacturer of specialty valves. Tyco also holds strong
leadership positions in medical device products, financing and
leasing capital, and plastics and adhesives. Tyco operates in
more than 100 countries and had fiscal 2001 revenues of
approximately $36 billion.

To see financial statements:  http://bankrupt.com/misc/Tyco.txt

CONTACT:  TYCO INTERNATIONAL INC.
          Media Relations:
          J. Brad McGee or Peter Ferris
          +1-212-424-1300

          Investor Relations:
          R. Jackson Blackstock
          +1-212-424-1344


TYCO INTERNATIONAL: Details "No Breakup" Rationale in Letter
------------------------------------------------------------
Tyco International Ltd. announced Thursday that it has terminated
its plan and is taking steps to further strengthen the long-term
prospects of the company.

In a letter below, L. Dennis Kozlowski, Tyco's chairman and chief
executive, outlines the rationale behind the decision to keep the
businesses together, and discusses the strategy and near-term
steps the company will take going forward.

Highlights:

* Monetize CIT through a 100% public offering - S-1 registration
statement to be filed today

* Reduce debt to further enhance balance sheet

* Commence share repurchase after monetization of CIT to take
advantage of market valuations and strong free cash flow

* Retain the rest of the Tyco businesses, including the Plastics
and Adhesives business

* Explicitly focus on improving Return on Capital (ROC) as a
management goal alongside EPS and cash flow growth

* Realign management compensation to reflect heightened focus on
ROC beginning in FY 2003.  Based on this year's anticipated
results, no bonuses will be paid to senior corporate management
for FY 2002

* Continue to implement cost-cutting initiatives - restructuring
charges taken today in the electronics segment

* Provide unprecedented disclosure at the business segment level

To All Tyco Shareholders:

On January 22nd, Tyco announced a plan to unlock shareholder
value by separating into four independent, public companies.
Today, we are announcing the termination of that plan. I am
writing this letter to explain why we are returning to our
original strategy for Tyco, and why we have so much confidence in
Tyco and its future.

Over the past 10 years our shareholders have seen Tyco grow into
one of the largest industrial companies in the world. We have
built industry-leading businesses as a result of our organic
growth, a strong commitment to cost control and long-term
investment in innovation and product development, as well as our
ability to strategically acquire and successfully integrate
companies into our core businesses. These businesses can stand on
their own feet -- and they are led by highly experienced managers
who are more than capable of running large public companies.

Our rationale for the break-up plan was based on a simple
premise. Despite superior growth in earnings and cash flow, Tyco
was being valued at a significant discount to its peers. Among
the reasons for the discount was the market's unease with highly
complex companies that are in multiple business lines with few
obvious synergies. By splitting up the company, we saw an
opportunity to address these concerns and accelerate the creation
of value for our shareholders. But we know now it was a mistake,
and it is time for us to return our focus to what we do best.

While our goal in changing the strategy was to do right by our
shareholders, we came up with the wrong solution. In retrospect,
it is now clear that we took the market by surprise with our
announcement, and failed adequately to take into account the
extraordinarily fragile market psychology and hostile environment
that has distracted and damaged our business in recent months. We
compounded the problem by delivering some incremental bad news,
especially lower earnings expectations tied to both the
distraction as well as the continued downturn in the electronics
and telecom industries. As your chief executive officer, I take
full responsibility and am aware that Tyco's management has let
you down.

Having said that, it's been upsetting to see inaccurate reporting
and unsubstantiated rumors about Tyco given such a public
platform. As stewards of a public company we know we are subject
to scrutiny every day and the current climate is one in which all
companies are under a microscope. We have always tried to be as
transparent in our accounting as possible. Indeed, I consider our
disclosure to be second to none among our peer companies. That
some in the media would compare us to companies that may have
intentionally misled investors through the use of financial
chicanery is insulting and inaccurate. To be thrown into stories
about "accounting scandals" damages our reputation and casts
aspersions on our employees. Yes, critics have raised questions
about our accounting, which is why we initiated weekly conference
calls to address questions from analysts, investors, and even
short-sellers who benefit from a stock's decline. We took all
questions asked and didn't shy away from answering them. While
we've tried to address the inaccurate reporting, of primary
concern to me is how we communicate to you, our shareholders.
That's one reason why I am writing to you today.

Right or wrong, one thing is certain: we pursued the break-up
plan because we believed it was the best way to unlock value for
our shareholders. As anyone who has invested in Tyco over the
past decade knows, that is the principle that guides every
decision we make. It guided our decision to break up the company.
And now, as circumstances have changed, it is guiding our
decision to keep it together and take the break up off the table
-- and to change the way we operate in certain fundamental ways.

The Disposition of CIT

We announced today the registration of the sale of 100% of CIT
through an initial public offering, although we remain in
discussions with potential strategic acquirers. Now that we have
decided to retain our businesses, why sell CIT? As I stated,
while the break-up was driven by the desire to unlock shareholder
value, as we reviewed the strategy we concluded that the sale of
CIT would reduce our vulnerability to the debt markets and make
the company less complex.

By fully monetizing CIT, we can eliminate any lingering
perceptions about the company's short-term financial position and
create a strong foundation for the future. The divestiture of CIT
also simplifies Tyco's business model and returns us to the same
core businesses with which we created substantial shareholder
value over the past decade.

Tyco Going Forward: A Strong Focus on Return on Capital

Going forward, we will continue to create shareholder value by
building on Tyco's strengths as a world-class operating company
using our time-tested and highly successful operating strategies.
We remain sharply focused on costs, which has made us the low
cost producer in virtually all of our businesses. We will
continue to drive organic growth through product innovation,
superior service, and geographic expansion. Acquisitions are
expected to make up a lower proportion of this growth, although
Tyco plans to continue to make strategic acquisitions where they
add to the core strength of a division, and meet stringent
financial criteria.

We will approach our businesses with heightened emphasis on
Return on Capital (ROC). To underscore this commitment, we are in
the process of amending our compensation system for fiscal year
2003 such that a meaningful level of management compensation is
explicitly tied to ROC. Of course, earnings per share growth and
cash flow generation will also remain key measures. In addition,
the senior corporate management team will not receive bonuses
this year. However, the operating managers will continue to
receive bonuses based on the performance of their divisions.

In the near-term, in order to take advantage of the current
valuation, Tyco will repurchase stock following the monetization
of CIT. As we put a greater focus on ROC, we will deploy a
greater proportion of our substantial free cash flow towards
retiring debt and repurchasing stock.

The stepped-up focus on ROC supports our decision not to sell
Tyco Plastics. We were selling Plastics and Adhesives only
because it did not fit with our other companies in a break-up
scenario. Tyco Plastics' operations generate excellent returns
and significant amounts of free cash flow that can now be used to
grow our businesses and improve ROC. These returns would be far
greater than any benefits we would achieve by using the proceeds
of a sale to repay debt.

Let me make three final points about Tyco going forward. First,
one of the benefits of a break-up that we pointed to in January
was the increased transparency that you get from smaller
companies -- simply because the materiality threshold is so much
lower. Despite our plan to retain the Tyco Industrial companies,
we remain committed to increased transparency. I believe that
Tyco has the most detailed financial and operational disclosure
of any of our peers. But because we believe that superior
disclosure is a basic requirement for a fair valuation (now more
than ever), we will be providing even greater detail on
performance and balance sheet items by segment than we have in
the past.

Second, we will continue to be relentless and opportunistic in
the pursuit of shareholder value. Now that we have ruled out a
break-up, Tyco -- as well as its employees, customers, vendors
and investors -- will have a stable planning horizon.

Third, we have warned investors that our 25% to 40% earnings
growth rates were unsustainable, especially as Tyco grew to
become a larger and larger company. I expect our evolved strategy
with an explicit emphasis on ROC -- in addition to Tyco's sheer
size - will yield 10% to 15% growth in earnings and cash flow per
share, with rising returns on capital. This is still superior
performance, and sustainable for the long term.

Let's not forget that we have one of the best track records of
companies our size when it comes to delivering shareholder value.
According to The Wall Street Journal's annual shareholder
scoreboard, Tyco delivered average annualized returns of 30.5%
for the 10 years ending December 31, 2001. That's the exact same
figure the Journal cited for Microsoft's returns over the same
time period. We can't lose sight of the enviable performance of
this company over the years. Even including this year's decline
in the share price, over 10 years the Company's total return is
535%, compared to the Standard & Poor's 500 stock index return of
225%. During my tenure as CEO, we have increased our cash flow
per share by 29% annually and our earnings per share by 27%.

Current Outlook

Tyco also reported earnings today. While our earnings before
charges are in line with the consensus estimates, they are less
than initially expected. This performance is a clear reflection
of the severe weakness in our electronics and telecom businesses,
and the impact of disruptions to our other businesses over the
past three months.

We also announced today that we took a $3.3 billion charge during
the quarter for a series of items, which result from the fierce
decline in the electronics and telecom markets. We will spend
around $331 million to reduce headcount by 7,100 and close 24
facilities, primarily in the electronics and telecom operations.
While this is painful, there really is no other alternative given
the state of these markets. We are writing down the carrying
value of our investment in the Tyco Global Network. The
bankruptcies of virtually all of our sub-sea competitors and the
subsequent market valuations of their assets, in addition to the
telecommunications market outlook, require us to carry our
network at a lower value. This said, I remain confident that our
investment in the network will pay off: the Tyco Global Network
(TGN) is the most technologically advanced system in the water
and I believe that demand will continue to grow and ultimately
catch up with the available capacity.

The near-term outlook for earnings is very challenging. We now
expect fiscal 2002 earnings, before charges, to total around
$2.60 -2.70 per share. This includes earnings from CIT for the
full year.

Our reduced expectations reflect the continued downturn in the
electronics and telecom markets. They also reflect what we call
the 'distraction costs' caused by the announcement of our break-
up plan, as well as by a wave of negative -- and too often,
inaccurate or simply unfounded -- media reports and rumors.
Customers, suppliers and employees were put on hold by what they
read. While I believe the disruptions are short lived, they are
significant. But I expect the costs are temporary and will fade
in the coming months.

The Future

This brings me full-circle to where I started the letter -- the
decision to keep Tyco together and pursue time-tested strategies
to restore earnings and growth.

Tyco is a collection of great businesses. We are a leader in each
-- and by this I mean not only in size, but also in terms of
being the lowest cost, most innovative and best positioned in
their industries. We have nurtured these from a small base and
have grown them into world-class businesses headed by leaders in
their respective fields.

* Tyco Electronics continues to gain market share through its
development of new, innovative products and superior service.
This, combined with a highly successful strategy to become a one-
stop source in response to customer demand, has made Tyco
Electronics the trusted supplier to many world-class companies.  
Our products support the increased amount of electronics related
to automotive GPS, adaptive cruise control, park distance control
and entertainment systems.  As an example, we are providing two
optical interconnection networks for the new BMW 7 Series. Tyco
Electronics has become the unchallenged world leader in
electronic components, relays, and switches in just a few short
years -- the result of carefully executed acquisitions, as well
as outstanding operating performance.  We have taken the right
steps during the current soft market conditions to ensure that we
are attractively positioned to benefit significantly from
improving industry conditions.  Virtually any product that uses
electrical or electronic components contains parts manufactured
by Tyco Electronics.  From our roots in manufacturing printed
circuit boards since 1967, we have grown this business into a
powerhouse generating over $10 billion in annual revenues. Tyco
Telecommunications, formerly TyCom Ltd., has been the leading
provider of undersea systems for over 45 years.  As the provider
of both transoceanic systems and wholesale bandwidth on the TGN,
Tyco Telecommunications is the only full-spectrum provider of
global optical networks and is uniquely positioned to leverage
this position of strength when the market for undersea systems
and capacity rebounds.

* Tyco Healthcare and Specialty Products grew from a relatively
small base of disposable medical products several years ago to
become Tyco Healthcare, which has emerged as one of the largest
medical device companies in the world, competing with companies
such as Johnson & Johnson, Baxter and Abbott Laboratories.  We've
increased our sales from $600 million in 1994 to $7 billion in
2001. As a global disposable medical products company offering a
full line of products, we hold the number one or two global
positions in our markets.  Brands include Kendall, U.S. Surgical,
Valleylab and Mallinckrodt. Our healthcare business is driven by
consumables, which makes it extremely stable regardless of the
economic environment. In an industry where product quality can
mean the difference between life and death, Tyco Healthcare is a
trusted supplier to medical centers, professional healthcare
providers, nursing homes, and other purchasers of healthcare
supplies and equipment. Tyco Plastics and Adhesives is an
industry leader, a low cost supplier, and a generator of healthy
returns and strong free cash flow.

* Tyco Fire and Security Services is the largest single provider
of total security solutions to residential, business and
governmental customers and is the world's largest fire protection
company.  Since 1997, Tyco Fire & Security Services has increased
revenues from $3.9 billion to $10 billion in 2001.  Tyco Fire &
Security Services is recognized as a leading innovator across its
global markets and owns some of the most highly respected brands
in fire protection equipment including Ansul, Grinnell, Simplex,
and Scott.  Scott is launching SEMS, the first airpack for
firefighters with an integrated communications system. Against
the backdrop of rising security concerns around the world, ADT
continues to thrive with over seven million customers worldwide,
which is an increase of 400% from the customer base of ADT when
it combined with Tyco in 1997. Sensormatic, which was recently
acquired by Tyco Fire & Security, was the official electronic
security supplier for the Winter Olympic Games. During the second
quarter, literally millions of visitors, athletes and dignitaries
were protected by our integrated security systems installed in
Salt Lake City.  This protection area covered over 30 venues and
included more than 500 video surveillance cameras all networked
together. The worldwide base of recurring monitoring revenues
from these businesses continues to grow and demand for high-end
commercial and government systems is robust.  Recent contracts
include the protection of the U.S. Capitol building, Germany's
new parliament in Berlin, one of New Zealand's most important
tunnels, a major Science and Technology complex in Hong Kong, and
Tokyo's central data center.

* Tyco Engineered Products and Services, a segment which will be
broken out beginning with the June quarter, is the leading valve
and pipe manufacturer in the world.  From a relatively limited
line of valves ten years ago, Tyco Engineered Products and
Services has evolved into the world's largest valve company and a
single source for the largest selection of valves in the world.
Revenues have grown from $1.1 billion in 1997, at the time of the
Keystone acquisition, to $2.8 billion in 2001.  Its low cost
position generates superior returns and healthy free cash flow.  
Comprised of most of the businesses of the old Flow Control
segment, Tyco Engineered Products and Services manufactures and
distributes products that move, control, and sample liquids,
gases, powders, and other substances. These products include
valves, pipe, couplings, fittings, meters, pipe hangers, steel
fence posts, steel channel and other related products. Examples
of recent large projects awarded include the design, supply and
installation of heat management systems for Shell Oil in western
Canada and valves for the Berri Ethane Gas Plant in Saudi Arabia.
Its Tyco Infrastructure division is a leading global engineering
firm, ranked by Engineering News Record as the number one company
in water and wastewater.

In sum, Tyco has great people and great businesses that make the
world safer, healthier and cleaner. We have first-class
anufacturing and service operations, bound by a cost-conscious,
entrepreneurial culture. Following the monetization of CIT, run
by Al Gamper and his experienced management team, we will have
easier and lower cost access to capital and an enhanced balance
sheet.

In the past four months, we have taken the opportunity to come
forward and present our accounting practices and answer any and
all questions. We hope our willingness to open ourselves to an
unprecedented degree of scrutiny -- and the quality of our
answers -- gives investors confidence as they consider making
future investments in Tyco.

My excitement about Tyco's prospects is not limited to our mix of
business or their market positions. I am enthusiastic because of
our people. I would like to thank Mark Swartz, our chief
financial officer, and the corporate team for their hard work and
support. I am especially grateful to our operating managers.
These are people like Rich Meelia, President of Tyco Healthcare
and Speciality Products; Jerry Boggess, President of Tyco Fire &
Security Services; Juergen Gromer, President of Tyco Electronics;
and Bob Mead, President of Tyco Engineered Products and Services.
These are the leaders who helped grow Tyco's free cash flow from
$90 million in 1992 to over $3 billion in fiscal year 2002 -- and
who continue to drive Tyco's superior performance today, despite
the recent distractions.

Unlike conglomerates that frequently shift managers from division
to division, Tyco encourages a strong sense of ownership in its
management teams. The result is a group of highly experienced
leaders, each an expert in their respective businesses who could
be leading large public companies. They want to work at Tyco
because they like the strategic freedom offered by Tyco, our pay-
for-performance philosophy, and the opportunity to build
something great. My enthusiasm for Tyco is based on my confidence
in this talented team.

The past few months have been difficult for Tyco's shareholders
and employees. For me personally, they have been the most
difficult of my career. But the issues are temporary and
solvable. I am proud of our workforce. Despite the distractions,
the men and women who have made Tyco a great company have proven
to be resilient and remain committed to delivering quality
services and products to our valued customers.

We know we have some work to do if we are to regain your trust
and confidence -- and we are committed to returning Tyco to the
track of superior performance and shareholder value creation that
it delivered in the past decade. Our watchwords for the future
are performance, communication and execution.

    L. Dennis Kozlowski

    Chairman of the Board and Chief Executive Officer


TYCO INTERNATIONAL: Moody's Lowers After Breakup Plans Reversed
---------------------------------------------------------------
Moody's Investors Service downgraded the long-term debt ratings
of Tyco International Ltd to Baa2 from Baa1. The rating action
came Tyco announced it no longer plans to pursue its breakup
strategy into four separate businesses, as well as sell its
plastics division.

The company's new restructuring actions and its announcement that
its earnings and cash flow will be lower than originally planned
due to weakness in certain end markets, also prompted the
downgrade.

The ratings remain under review for possible downgrade.

Meanwhile, Tyco's Prime-2 short-term debt rating was placed under
review for a likely reduction. Moody's said, while Tyco's near-
term liquidity position, overall earnings and free cash flow
remain strong, weakness in the electronics and telecommunications
businesses is hurting the Company's performance, and has resulted
in a decrease in Company guidance in earnings and free cash flow
for the year.

Moody's is concerned that the softness in these markets could be
protracted, and that confidence issues and competitive pressures
in the marketplace could place additional pressure on other Tyco
businesses, such as Healthcare.

Contact:  New York
          Michael J. Mulvaney
          Managing Director
          Corporate Finance
          Moody's Investors Service
          JOURNALISTS: 212-553-0376
          SUBSCRIBERS: 212-553-1653

          New York
          George A. Meyers
          VP - Senior Credit Officer
          Corporate Finance
          Moody's Investors Service
          JOURNALISTS: 212-553-0376
          SUBSCRIBERS: 212-553-1653



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

AES CORP.: Announces Improving First Quarter Financial Results
--------------------------------------------------------------
The AES Corporation announced Wednesday earnings from recurring
operations of $194 million or $.36 per share for the first
quarter ended March 31. First quarter revenues rose to $2.7
billion. In the first quarter of 2001, AES reported earnings from
recurring operations of $231 million, or $.43 per share and
revenues of $2.5 billion.

The Company also announced that for the first quarter of 2002
parent company operating cash flow was $331 million and
accordingly reached $1.3 billion for the twelve months then
ended. Comparable amounts for 2001 were $180 million and $965
million, respectively.

First quarter earnings from recurring operations in 2002 exclude
a net after tax charge of $(.06) per share related to the impacts
of foreign currency transaction gains and losses, FAS 133, the
sale of assets and the results of discontinued operations during
the quarter. Including those items, per share earnings according
to generally accepted accounting principles (GAAP) were $.30 per
share for the first quarter of 2002 (before the cumulative effect
of the change in the accounting principle related to goodwill) as
compared to $.21 per share for the first quarter of 2001. The
Company also recorded a provision of $(.88) per share to reflect
the cumulative effect of change in the accounting principle for
the impairment of goodwill effective as of January 1, 2002. This
one-time charge of $473 million is required under changes in
financial accounting standards that affect all U.S. companies,
relates to some of the Company's operations in South America and
has no effect on AES's cash or liquidity.

Dennis W. Bakke, President and Chief Executive Officer,
commented, "We are encouraged by the resilience of AES's global
portfolio during the first quarter. Earnings and operating cash
flow for the period were ahead of our expectations. This
performance was achieved despite adverse weather conditions, low
wholesale electricity prices in the U.S. and Great Britain and
economic and political instability in South America. Significant
progress was also made to improve the efficiency of our
operations around the world and to increase our financial
flexibility and balance sheet strength. Additionally, we are
ahead of our goal of reducing operating expenses worldwide by
over $100 million in 2002. With a sustainable and diversified
strategy, AES is performing on its promise to profitably deliver
safe, clean, reliable, and reasonably priced electricity in the
global marketplace." Barry J. Sharp, Chief Financial Officer
added, "Our cash flow for the quarter was on target and we are on
track to exceed our cash flow and liquidity expectations for
2002. By reducing operating costs and improving operating cash
flow, executing the additional financing in Puerto Rico,
significantly reducing parent investments and completing our
expected sale of CILCORP, we will continue to strengthen the
liquidity of the Company." Other selected first quarter
highlights included:

    --  AES attained its goal of reducing forecasted parent
        investments by $500 million.
    --  Total assets increased to over $40 billion.
    --  The consolidated cash balances at the end of the first
        quarter amounted to approximately $1.3 billion, of which
        $250 million is at the parent company.
    --  Approximately 56% of parent company operating cash flow
        for the last twelve months was generated from businesses
        in North America.
    --  Earnings before tax of AES's Growth Distribution segment,
        representing businesses in the Caribbean, Europe, Asia,
        Africa and South America increased significantly to $43
        million as compared to the first quarter of 2001, despite
        economic turmoil in Argentina.
    --  The Company expects to complete additional financing in
        the near-term associated with its soon to be completed
        454 MW coal-fired plant in Puerto Rico, that will result
        in net financing proceeds to AES of approximately $200
        million.

AES also announced that it currently expects earnings from
recurring operations for 2002 to be between $1.35 and $1.45 per
share. This estimate reflects reductions from including the
estimated impacts of recent decisions that have positive effects
on liquidity but that have near-term negative impacts on earnings
(such as additional financing at Puerto Rico), the estimated
operating losses of the Company's operations in Argentina (that
were previously excluded) and continued lower pricing in
wholesale merchant markets. The estimate excludes the potential
impacts of foreign currency transaction gains and losses, FAS
133, the sale of assets and the results of discontinued
operations during the year, as well as the cumulative effect of
change in the accounting principle for goodwill.

AES is a leading global power company comprised of competitive
generation, distribution and retail supply businesses in
Argentina, Australia, Bangladesh, Brazil, Cameroon, Canada,
Chile, China, Colombia, Czech Republic, Dominican Republic, El
Salvador, Georgia, Germany, Hungary, India, Italy, Kazakhstan,
the Netherlands, Nigeria, Mexico, Oman, Pakistan, Panama, Qatar,
Sri Lanka, Tanzania, Uganda, Ukraine, the United Kingdom, the
United States and Venezuela.

The company's generating assets include interests in 181
facilities totaling over 63 gigawatts of capacity. AES's
electricity distribution network has over 946,000 km of conductor
and associated rights of way and sells over 135,000 gigawatt
hours per year to over 19 million end-use customers.
AES is dedicated to providing electricity worldwide in a socially
responsible way.

To see financial statements:
http://bankrupt.com/misc/AES_Corp.txt

CONTACT:          AES Corporation
                  Kenneth R. Woodcock, 703/522-1315


Telecom Americas: Parent Warns Debt Refinancing May Be Difficult
----------------------------------------------------------------
Parent company Bell Canada International Inc. told investors that
its Brazilian wireless subsidiary, Telecom Americas, may have a
hard time refinancing its US$1.1-billion short-term debt due
during the next 12 months.

According to a report released by the Financial Post, BCI's chief
financial officer Howard Hendrick said credit in Latin America
has tightened, particularly since Brazilian wireless carrier BCP
SA defaulted on a US$375-million payment last month.

"BCP has made it more problematic," Hendrick said. "We have paid
down debt a fair bit since the end of the [first] quarter, and we
are cautiously optimistic that we can roll it over. We wanted to
make sure that everyone was aware that the climate down there
wasn't particularly favorable."

If, for some reason, the BCI unit is unable to roll over its
short-term debt, the Company could look to shareholders or other
sources of financing.

The Company's investors include BCI, which is controlled by BCE
Inc., and Mexico's Telecom Movil.

BCI recently posted a first-quarter net loss from continuing
operations of US$69.7-million compared with a net loss of
US$148.8-million a year earlier. After a one-time gain, the
Company said it had net income of US$603.7-million, or 25 cents a
share, compared with US$156.3-million (US$1.98).


CEMIG: Financing New Hydro Project with BRL90M Debentures Issue
---------------------------------------------------------------
Cemig and its controller, Brazil's Minas Gerais state, reached an
agreement to issue BRL90 million in debentures, says Business
News Americas, citing a Cemig source.

The debenture issue is aimed at helping finance the US$170-
million, 360MW Irape hydroelectric project, the operations of
which has been put on hold due to environmental issues, suggests
Business News Americas.

The government of Minas Gerais will use Cemig dividends to
finance the work, in exchange for bonds from the Company, thereby
making the project feasible.

The agreement refers to the private issue of bonds by Cemig in
the name of the government of Minas Gerais, which will be for 25
years and at 0 percent interest, only affected by currency
correction, the source said.

The issue is referred to as private because bonds will be issued
exclusively in the name of the government of Minas Gerais.

Irape is 100-percent owned by Cemig, which is 51-percent
controlled by the Minas Gerais government, with 33 percent of
shares held by the US' AES and Mirant, and the Opportunity fund.
A consortium of Andrade Gutierrez, Voith Siemens and Odebrecht is
constructing the project.

Meanwhile, Cemig shareholders are to vote on April 30 a plan to
up its capital by BRL30 million (US$12.8mn). The operation is
scheduled to take place in May on a proposal that would give
shareholders two shares for each hundred they currently own.

The move is part of a payment by the government of Minas Gerais
of the CRC account that existed up to 1993 to compensate
companies for cost fluctuations.

Minas Gerais state owes almost BRL1.5 billion from the CRC, and
Cemig is negotiating this debt with the federal government with a
view to receiving federal funds to cover losses due to
electricity rationing.

CONTACT:  CEMIG
          Avenida Barbacena, 1200
          Sto Agostinho  30123-970 Belo Horizonte - MG
          Brazil
          Phone   +55 31 299 4900
          Home Page http://www.cemig.com.br
          Contacts:
          Djalma Bastos De Morais, Chairman
          Geraldo De Oliveira Faria, Vice Chairman
          Cristiano Correa De Barros, Finance Director


EMBRATEL: Shares Trading Higher On Sale Speculations
----------------------------------------------------
Embratel Participacoes SA's shares rallied Thursday after
troubled parent WorldCom Inc. indicated it might sell the
Brazilian long-distance carrier, Dow Jones relates.

As reported, WorldCom Chief Executive Bernie Ebbers said Thursday
the company could sell several of its assets, including Embratel,
to meet its debt obligations if necessary. However, finding a
buyer in the face of intensifying competition could be a
difficult proposition.

In late afternoon trading, Embratel's American Depositary
Receipts in New York were rising 6.0 percent to US$2.64 on
463,600 shares traded. Its local preferred shares in Sao Paulo
were gaining 5.4 percent to BRL6.22 (US$2.63). The ADRs are still
down 24 percent over the last month.

To see financial statements:
http://bankrupt.com/misc/Embratel.txt

CONTACT:  EMBRATEL PARTICIPACOES S.A.
          Investor Relations
          Silvia Pereira
          Tel. (55 21) 2519-9662
          Fax: (55 21) 2519-6388
          Email: Silvia.Pereira@embratel.com.br
                 invest@embratel.com.br
                  or
          Press Relations:
          Helena Duncan/Mariana Palmeira
          Tel: (55 21) 2519-3653/3654
          Fax: (55 21) 2519-8010
          Email: hduncan@embratel.com.br
                 mpalm@embratel.com.br



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

AHMSA: Committee Representing Creditors Abandons Debt Talks
-----------------------------------------------------------
The steering committee representing creditor banks of Mexican
steel company Ahmsa have broken off debt-restructuring talks with
the firm's directors after almost three years off stonewalling,
reports Business News Americas, citing steering committee
spokesperson Ronald Dickens.

Some 500 creditors walked away from the drawn-out negotiations
because Ahmsa directors, headed by Alonso Ancira, didn't supply
enough information about its financial operations.

Ahmsa, based in northern Mexico's Coahuila state, has outstanding
debts of some US$1.85 billion. The Company has been protected by
a suspension of payments order for almost three years.

Both parties had reached a preliminary agreement whereby the
banks would convert US$530 million of debt for a substantial
stake in the company, with the rest being paid back through asset
sales and a restructured eight-year repayment plan.

However, the agreement was not executed because it depended on a
lifting of the suspension of debt payments that was still being
negotiated.

Meanwhile, Francisco Orduna, communication director for Ahmsa,
issued a statement saying the creditors' decision to walk away
from the drawn-out restructuring talks would not affect the
Company's operations and that it was still in suspension of debt
payments.

Orduna said Ahmsa's financial situation is picking up, and the
Company is stepping up production due to recently improved access
to U.S. steel markets.

Orduna said Ahmsa has complied with all the requirements to make
restructuring agreements work, and the bank committee's auditing
team has "full and permanent access to information about the
financial and industrial operation of the Company."

CONTACTS:  Alonso Ancira Elizondo, CEO, Vice Chairman, Pres.&CEO
           Jorge Ancira Elizondo, Chief Financial Officer
           Manuel Ancira Elizondo, Chief Operating Officer

           Their Address:
           Prolongacion B. Juarez s/n,
           Monclova , Coahuila 25770
           Mexico
           http://www.ahmsa.com
           Phone: +52 86 33 81 72
           Fax: +52 86 33 65 66

CREDITORS:  GRUPO FINANCIERO BBVA BANCOMER
            Av. Universidad 1200,
            Col. Xoco, Mexico, D.F.
            Tel: (52) (55) 5621-4938
                 (52) (55) 5621-4966
            Fax: (52) (55) 5621-7912
            Email: investor.relations@bbva.bancomer.com
            Contacts: David Sanchez-Tembleque
                
            Banamex-Citibank
            Banorte


SAVIA: Reports Mixed First Quarter 2002 Results
-----------------------------------------------
Savia, S.A. de C.V. announced Thursday results for the first
quarter of 2002. Results of Seguros Comercial America and
Empaques Ponderosa are reported as discontinued operations in the
charts corresponding to fiscal year 2001.

                              Business Indicators
                  (Millions of Dollars as of March 2002)

                       Jan Mar 2002   Jan Mar 2001   Variation %
Sales                       209            237        (11.6)
Gross Profit                105            110         (4.6)
Gross Margin                 50%            47%           7.7
Operating Expenses           69             86          20.5
Operating Income             36             24          53.9
Operating Cash Flow          42             30          40.6
Consolidated Net Income      19              1       2,782.7
Net Majority Income           8            (18)         146.1

                          FIRST QUARTER RESULTS 2002

Net Consolidated Sales

The consolidated net sales reached US$209 million, a reduction of
11.6% in comparison to the same period of last year. The
reduction is a result of the sale of non-strategic assets in
Bionova and Savia, and a decrease in sales of agriculture related
businesses. Dollar denominated sales accounted for 48% of the
sales of the period, Euros accounted for 24%, Pesos for 6% and
other currencies for the remaining 22%.

Consolidated Operating Income

Consolidated operating income for the first quarter of 2002
reached US$36 million, an increase of 53.9% or US$12 million,
with regard to the first quarter of 2001. This considerable
increase has been achieved by a reduction in operating expenses
in Savia and its subsidiaries. The operating cash flow recovered
US$12 million (40.6%) and reported 42 million Dollars during the
quarter.

Net Consolidated Income

In this period majority net income reverted its negative result
by recovering US$26 million or 146.1%, and reached the amount of
US$8 million. The consolidated net income ascended to US$19
million in comparison to the US$1 million obtained in the same
period of 2001. This achievement is the result of a significant
reduction in operating expenses and interest payments, due to an
important debt reduction in Savia and in Seminis. During the last
year, Savia prepaid close to one billion Dollars to its creditors
and Seminis reduced its consolidated debt by US$55 million.

                    RESULTS FOR THE FIRST QUARTER OF 2002
                          FOR THE MAIN SUBSIDIARIES
Seminis

Total sales for the first quarter of 2002 reached US$153 million,
figure similar to the one reported in the same period of 2001.
The operating gross profit continued to rise and reached 63% of
the business sales. Operating expenses decreased by 10.0% and
reported US$54 million for the first quarter of 2002. Operating
income reached US$42 million, result that reflects an increase of
27% in comparison to US$33 million reached in 2001. The cash flow
from operations for the period registered US$46 million, a 23%
growth in comparison to the same period of 2001. These results
show the effect of the initiatives implemented by Seminis since
September of 2000, which continue to strengthen its operations.

Bionova

Bionova sales for the first quarter of 2002 totaled US$47
million, figure that represents a decrease of 31% as compared to
last year's sales. This reduction is the result of the sale of
non-strategic assets, which included Interfruver de Mexico.
Despite the sale of these assets the company maintained an
operating income and net cash flow similar to the one achieved in
the same period of 2001. Net cash flow from operation reached
US$3 million.

Savia (www.savia.com.mx) participates in industries that offer
high growth potential in Mexico and internationally. Among its
main subsidiaries are: Seminis a global leader in the
development, production and commercialization of fruit and
vegetable seeds; Bionova, a company focused in plant science for
the development and improvement of fruit and vegetable seeds; and
Omega, a real estate development company.

To see financial statements: http://bankrupt.com/misc/Savia.txt

CONTACT:  SAVIA, S.A. DE C.V.
          Investors: Francisco Garza
          011-5281-81735500
          Fax: 011-5281-81735508
          E-mail: fjgarza@savia.com.mx

          Media:
          Francisco del Cueto,
          Tel: 011-52555-6623198
          Fax: 011-52555-6628544, or e-mail,
          Email: delcueto@mail.internet.com.mx



===========
P A N A M A
===========

BLADEX: S&P Cuts Senior Unsecured Ratings To BBB-
-------------------------------------------------
Standard & Poor's said Friday that it downgraded its counterparty
credit, CD, and senior unsecured debt ratings on Banco Latino-
americano de Exportaciones S.A. (Bladex) to triple-'B'-minus/'A-
3' from triple-'B'/'A-2'. The outlook remains negative.

The rating action reflects the pressures on the bank's financial
position, derived from its Argentine credit exposure and the
still-great uncertainty and turmoil surrounding events in that
country. Even though in the past few months Bladex has been able
to reduce its credit book to Argentine entities and is actively
managing it to contain losses, it still maintains an exposure
that, at $1 billion, represents 1.7 times its equity of $600
million. So far, the bank has allocated $255 million in general
loan loss reserves, which are expected to increase, and could be
used to offset losses from the Argentine portfolio.

The investment-grade rating reflects Bladex's institutional role
in the Latin American region as a premier source of trade
financing; its strong knowledge and relationships in the region;
the transparency and disclosure with which the bank has
historically conducted its operations; and the benefits derived
from its shareholder base, particularly the regional Central
banks, which have demonstrated commitment to Bladex by actively
participating in decisions, by providing contacts, and more
importantly, by helping the bank sort out difficult situations in
times of stress.

"For example," credit analyst Ursula Wilhelm points out, "just
recently the Central Bank of Argentina granted Bladex preferred
creditor status. This has the immediate benefit of allowing the
bank's Argentine borrowers not to require central bank
authorization to transfer loan payments to Bladex." During the
past several months, the bank has increased its balance sheet
liquidity by maintaining liquid assets on the order of $600
million. Also, the bank maintains a positive gap position, which
reduces risks to its assets-and-liabilities structure.

The ratings could come under pressure if there were further
deterioration in the bank's exposure to Argentina, in light of
the tremedous uncertainty regarding the evolution of the crisis
there. Furthermore, as most of the economies in the region are,
to varying degrees, facing important challenges, additional asset
quality pressures in the bank's non-Argentine credit exposures
could also have an impact on the rating, although this is
considered less likely.



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

AEROCONTINENTE: Suing To Recoup Losses From Criminal Probe
----------------------------------------------------------
In an effort to recover financial losses incurred when its planes
were grounded in Chile for 37 days last year during a drug-
related investigation, Peru's largest airline AeroContinente SA
filed a suit against the Chilean attorney general's office.

In the suit filed with the appeals court of Santiago,
AeroContinente President Lupe Zevallos claimed that the attorney
general's office exceeded its authority when it seized six of the
Company's aircraft in July last year.

"We estimate that the damage caused to the Company was $1
billion," Zevallos said. The company had previously estimated
losses linked to its planes grounding at US$37 million, excluding
compensation for damage to its image.

Aerocontinente's share of the Chilean domestic air travel market
fell to 5 to 7 percent from 16 percent after Chilean authorities
seized the Company's planes and didn't allow them to resume
flights until August 20.

CONTACT:  AEROCONTINENTE AIRLINES
          Jr. Moyobamba 101
          Tarapoto, Peru
          Phone: (094) 524332
          Fax: (094) 523704
          Home Page: http://www.aerocontinente.com/
          Contact: Sr. ZadI Desme, Vice President  





               ***********


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
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