TCRLA_Public/020815.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

           Thursday, August 15, 2002, Vol. 3, Issue 161

                           Headlines


A R G E N T I N A

AT&T LATIN AMERICA: Outlines Progress Toward Profitability
MOLINOS RIO: Fitch Ratings Comments On Repurchase of SENs
SCOTIABANK QUILMES: Fate Hinges On Central Bank's Decision
TURBINE POWER CO: Defaults On Last Three Payments


B E R M U D A

ESG REINSURANCE: S&P Puts Subsidiaries on Watch Negative
FLAG TELECOM: Delays Filing of Interim Financial Statements
TYCO INTERNATIONAL: Mallinckrodt Cleared of Patent Suit
TYCO INTERNATIONAL: Dumping Telecom Center At Firesale Prices


B R A Z I L

ABN AMRO: Moody's Lowers Deposit Ratings To B3
AES CORP.: Fitch Provides Liquidity Update
BANCO BARCLAYS: Sovereign Ratings Cut Lowers Deposit Ratings
BANCO BILBAO: Deposit and Debt Ratings Lowered by Moody's
BANCO BRADESCO: Moody's Cuts Currency Ratings, Stable Outlook

BANCO DE INVESTIMENTOS: Moody's Lowers Ratings
BANCO DO BRASIL: Moody's Takes Rating Actions
BANCO DO NORDESTE: Moody's Cuts Ratings; Outlook Stable
BANCO HSBC: Foreign Currency Deposit Ratings Downgraded to B3
BANCO ITAU: Currency Ratings Lowered in Moody's Downgrade

BANCO PACTUAL: Moody's Lowers Deposit Ratings To B3
BANCO SAFRA: Moody's Lowers Debt, Deposit Ratings
BANCO SANTANDER: Sovereign Rating Cut Drags Down Ratings
BANCO SUDAMERIS: Moody's Lowers Debt and Deposit Ratings
BANCO VOTORANTIM: Moody's Lowers After Cutting Sovereign Ratings

BANESPA: Moody's Cuts Long-term Foreign Currency Deposit Ratings
BANKBOSTON: Moody's Downgrades Ratings; Outlook Stable
BNDES: Moody's Downgrades, Affirms Ratings
CITIBANK: Ratings Lowered; Outlook Stable
CSN: Investors Remain Skeptical on Planned Merger with Corus

LLOYDS BANK TSB: Moody's Lowers Deposit, Debt Ratings
PETROBRAS: Moody's Slashes Ratings Following Sovereign Rate Cut
SPANISH MEDIA FIRMS: LatAm Woes Expected to Hurt Local Units
UNIBANCO: Ratings Downgraded Following Sovereign Rating Cuts
VARIG: Union To Submit Own Restructuring Plan


C H I L E

MADECO: Shareholders Approve Revisions To $90M Equity Issue


D O M I N I C A N   R E P U B L I C

LA COMPANIA: Fitch Places Ratings on Watch Negative


M E X I C O

GRUPO MEXICO: ASARCO, Justice Department Agree To Stipulation
GRUPO MEXICO: SPCC Shareholders Elect Directors; Ratify Auditors
TV AZTECA/AZTECA HOLDINGS: Moody's Ups Ratings on Improvement

     - - - - - - - - - -

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

AT&T LATIN AMERICA: Outlines Progress Toward Profitability
----------------------------------------------------------
AT&T Latin America Corp. (Nasdaq: ATTL), a facilities-based
provider of integrated business communications services and
solutions in five Latin American countries, reported improved
profitability in the second quarter of 2002, reducing EBITDA loss
to $13.2 million, a reduction of 54.0% year-over-year and in line
with the first quarter of 2002. All country operations improved
EBITDA performance year-over-year.

Second quarter 2002 consolidated total revenue amounted to $42.0
million, representing growth of 24.7% from the same period in
2001 and a 5.0% decline from first quarter 2002. Sequential
revenue in 2Q02 was impacted by currency devaluations in
Argentina and Brazil and continued pricing pressure in Brazil as
well as lower wholesale volume in Chile.

Consolidated data/Internet services revenue grew 32.5% year-over-
year to $27.2 million in 2Q02. On a sequential quarterly basis,
data/Internet services revenue increased 2.5%.

"Despite the challenges presented by market uncertainties, we
continued to generate additional sales in strategic accounts and
made progress towards profitability," said Patricio E. Northland,
president and CEO. "In addition, I am excited about two important
initiatives that should help the company tremendously. First, we
have just announced a regionalization plan that we expect will
greatly improve our efficiency. Second, moving into local,
domestic and international long distance services in Brazil will
allow us to serve our corporate customers better and secure a
larger share of wallet, as well as to expand our reach into a
wider customer set with new offerings that complement our
advanced data and Internet offerings. Finally, we are one of the
few communications providers in the region with funding to
execute our plan. This positions us well for the future."

RECENT HIGHLIGHTS

ATTL Regionalization of Operations Expected to Result In Annual
Savings of $8 Million

AT&T Latin America announced on August 8, 2002 that it is
consolidating functions currently deployed in each country and
creating a leaner, more efficient organization that operates
regionally through standard processes. It is expected that the
company will realize approximately $8 million in annual savings
when the consolidation is completed. The regionalization will be
implemented, in part, by creating:

-- a Regional Commercial Organization (RCO) based in Washington,
D.C., which will centralize the development efforts for all
products and services for the region and leverage AT&T Corp.'s
product portfolio to better serve multinational and strategic
customers;

-- a Regional Service Center (RSC) in Chile which will provide
seamless and consistent services to the operating entities,
consolidating key functions including engineering, operations,
customer care, information technology and human resources; and,

-- a Regional Finance Organization (RFO) in Washington, D.C.
which will strengthen accountability and controls, reduce
purchasing and operational costs and allow for enhanced
allocation of capital across the business.

AT&T Latin America to Become Full Service Provider in Brazil

AT&T Latin America recently announced plans to become a full-
service provider in Brazil by obtaining local telephony,
multimedia and long distance licenses, which will enhance its
data/Internet corporate solutions portfolio with high-quality,
integrated offers.

-- On July 24, 2002, AT&T Latin America announced that it had
obtained licenses from Anatel (Agencia Nacional de
Telecomunicacoes), Brazil's telecom regulatory agency, to provide
local Switched Fixed Telephony

Service (STFC) and domestic and international Multimedia
Communications Services (SCM). The STFC license for local service
includes the seven largest business centers in the country, where
the company already has a presence - Sao Paulo, Campinas, Rio de
Janeiro, Brasilia, Belo Horizonte, Curitiba and Porto Alegre.

-- On July 25, 2002, AT&T Latin America announced that it had
filed an application with Anatel to obtain a license to provide
domestic and international long distance telephony services. The
license application is for the entire state of Sao Paulo (Region
3) and for the largest business centers outside of Region 3,
including Rio de Janeiro, Brasilia, Belo Horizonte, Curitiba and
Porto Alegre. Combined, these areas represent more than 60% of
Brazil's corporate long distance market. With the long distance
telephony license, AT&T Latin America expects to receive its own
Carrier Selection Code designation for the provision of services
in these cities, which the company will use to compete in the
domestic and international long distance market in Brazil. The
company expects Anatel to  award the long distance license in the
third quarter of 2002.

"The long distance, STFC and SCM licenses will enable AT&T Latin
America to offer corporate clients a complete bundled, integrated
offering and to expand its customer base while increasing the
utilization of the company's existing infrastructure," said
Northland.

ATTL Continues Momentum Acquiring New Strategic Accounts

AT&T Latin America continues to expand its roster of strategic
account customers with new contracts during the second quarter.
In the IT industry, ATTL increased its already impressive
portfolio signing companies such as Hewlett Packard in Chile to
provide international data services connecting regional and U.S.-
based offices. In the communications sector, ATTL is also
expanding its relationship with Reuters, a global provider of
news, information, and technology, to deliver connectivity,
traffic, and data management services to Reuters' customers in
Argentina and Colombia.

In addition, Kimberly Clark, a customer of ATTL in Colombia,
expanded its relationship to include ATM International services
in Chile. ATTL also added to its growing client base in the
pharmaceutical sector, signing on Ache Laboratorios Farmaceuticos
in Brazil and Inkafarma in Peru. Other blue chip accounts
obtained during the quarter include Chevron, Samsung Electronics,
Rolls Royce Marine Brasil Ltda., Kodak, Sony Corporation and
Panasonic.

"These new ATTL contracts underscore the fact that leading
companies across various industry sectors continue to view
communications solutions as a valuable tool to increase
efficiencies and manage costs. These companies want a stable
provider, and AT&T Latin America has stepped up to meet the need,
delivering reliable, cost-effective communications services to
the region," stated Northland.

Second Quarter 2002 Review

Consolidated Revenue

Consolidated revenue totaled $42.0 million in 2Q02, an increase
of 24.7% YoY from $33.7 million in 2Q01, and a decline of 5.0%
from $44.2 million in 1Q02. Primary contributors to total
consolidated revenue in 2Q02 were Brazil with $14.0 million
(33.2%); Peru with $10.8 million (25.8%); and Chile with $8.1
million (19.2%). Sequential quarterly total revenue growth in
Colombia and Peru was offset by lower total revenue in Argentina
and Brazil, mainly due to currency devaluations; lower wholesale
trading volume in Chile; and price erosion, primarily in Brazil.

Consolidated data/Internet services revenue totaled $27.2 million
in 2Q02, a 32.5% improvement from $20.5 million in 2Q01 and a
2.5% increase versus $26.5 million in 1Q02. Consolidated
data/Internet services revenue represented 64.7% of total
consolidated revenue in 2Q02. ATTL's Brazilian operations
contributed $12.0 million or 44.3% of consolidated data/Internet
services revenue.

Consolidated data/Internet revenue sequential growth in 2Q02
reflected increased volume offset by currency devaluations in
Argentina and Brazil.

Consolidated voice services revenue increased 12.7% to $14.8
million in 2Q02 compared to $13.2 million in 2Q01 and declined
16.1% from $17.7 million in 1Q02. Peru ($6.5 million or 43.6%),
Chile ($4.7 million or 31.9%), and Argentina ($2.8 million or
19.1%) were the main contributors to consolidated voice services
revenue.

The sequential decline in total consolidated voice services in
2Q02 also reflects the impact of management's continued effort to
focus on higher margin revenue streams, which resulted in lower
wholesale trading volume, particularly in Chile; currency
devaluation in Argentina; and, the entrance of multi-carrier
services competition in Peru.

Consolidated Operating Expenses

Consolidated cost of revenue totaled $26.5 million in 2Q02, an
improvement of 6.8% versus $28.4 million in 2Q01 and 7.1%
compared to $28.5 million in 1Q02. The reduction in cost of
revenue is mainly attributed to lower leased line expenses in
Argentina, Brazil and Colombia, and lower interconnection costs
in Chile, coupled with a positive impact of the currency
devaluations in Argentina and Brazil. Consolidated gross margin
was 36.9% in 2Q02 versus 15.6% in 2Q01 and 35.5% in 1Q02,
reflecting increased utilization of the company's existing
network and better pricing from third-party network providers.

Consolidated SG&A expenses declined 15.4% to $28.7 million in
2Q02 compared to $34.0 million in 2Q01 and decreased 1.6% from
$29.2 million in 1Q02. The decline in SG&A expenses resulted
primarily from the currency devaluations in Argentina and Brazil
and a 5.5% headcount reduction in 2Q02 versus 1Q02. As a
percentage of revenue, consolidated SG&A expenses were 68.4% in
2Q02 versus 100.9% in 2Q01 and 66.1% in 1Q02.

Consolidated EBITDA loss totaled $13.2 million in 2Q02, a 54.0%
improvement from a loss of $28.7 million in 2Q01 and a 2.1%
improvement from a loss of $13.5 million in 1Q02. Consolidated
EBITDA margin was -31.5% in 2Q02 as compared to

-85.3% in 2Q01 and -30.6% in 1Q02.
Depreciation and amortization expense totaled $25.2 million in
2Q02, a 1.7% increase versus $24.8 million in 2Q01 and a 46.5%
increase versus $17.2 million in 1Q02. Depreciation and
amortization expense in 2Q02 versus 2Q01 was impacted by the
adoption of SFAS 142 during 2002, under which we no longer
amortize goodwill, but instead review it annually (or more
frequently if impairment indicators arise) for impairment, offset
by increased depreciation expense from our deployed network
infrastructure as well as one-time incremental depreciation
expense of approximately $6.0 million on certain non-core assets
that were fully depreciated during 2Q02. If SFAS 142 had been
adopted in 2Q01, depreciation and amortization in 2Q01 would have
been $13.9 million compared to $24.8 million.

Interest expense amounted to $32.4 million in 2Q02 versus $18.9
million in 2Q01 and $21.8 million in 1Q02. The 48.8% sequential
quarterly increase was mainly due to higher debt outstanding
during the period and higher interest rates on the restructured
facilities with AT&T Corp. partially offset with lower interest
rates with our Senior Secured Vendor Financing.

Other expense, net totaled $34.5 million in 2Q02 versus $1.4
million in 2Q01 and $19.1 million in 1Q02. In 2Q02 other expense,
net mainly reflected foreign currency transaction losses,
amortization of forward points on hedge contracts and the re-
designation of certain forward contracts resulting in a one-time,
non-cash charge to other expenses of $12.6 million.

Net Loss totaled $103.3 million in 2Q02 compared to $73.1 million
in 2Q01 and $77.5 million in 1Q02. Net loss without other
expense, net totaled $68.8 million in 2Q02 compared to $71.7
million in 2Q01 and $58.5 million in 1Q02. The 2Q02 loss was
adversely impacted by $18.6 million in one-time, non-cash
affecting items mentioned above under depreciation and
amortization and other expenses, net.

Net loss per share amounted to $0.87 in 2Q02 versus $0.63 in 2Q01
and $0.65 in 1Q02. Net loss per share excluding other expense,
net was $0.58 in 2Q02 versus $0.62 in 2Q01 and $0.49 in 1Q02


Total Debt and Capital Expenditures

Total debt amounted to $842.9 million as of June 30, 2002 versus
$662.1 million as of December 31, 2001. As of June 30, 2002,
total debt extended by AT&T Corp. consisted of $603.9 million and
amounts outstanding under our senior secured vendor financing
totaled $150.6 million. Additionally, $52.4 million corresponds
to other bank facilities and $35.9 million to other vendor notes.

Capital expenditures totaled $12.8 million in 2Q02 compared to
$55.8 million in 2Q01 and $7.3 million in 1Q02. Capital
expenditures allocation by country in 2Q02 included $6.0 million
or 47.0% in Brazil, $1.5 million or 12.0% in Chile, and $2.0
million or 15.6% in Peru. Capital expenditures declined year over
year as ATTL continued to maximize the utilization of its
existing infrastructure.

To see financial results: http://bankrupt.com/misc/AT&TLatAm.htm

CONTACT:  AT&T LATIN AMERICA
          Investor Relations
          Nancy Anderson
          Phone: +1-305-459-6424,
          E-mail: nancy.anderson@attla.com

         Catherine Castro
         Phone: +1-305-459-6336,
         E-mail: catherine.castro@attla.com


MOLINOS RIO: Fitch Ratings Comments On Repurchase of SENs
---------------------------------------------------------
On August 1, 2002, Molinos Rio de la Plata (Molinos) announced
the partial repurchase of its US$150 million Senior Secured
Export Notes (SENs) due 2006. The notes are rated 'B-' by Fitch
Ratings and are currently on Rating Watch Negative.

Molinos repurchased US$31.4 million face value of the notes at a
25% discount, using available cash balances. Following the
repurchase, the amount outstanding on the SENs is US$52.6
million.

Fitch believes the debt repurchase does not constitute a default
on the securitization. The terms of the repurchase offer were
completely voluntary. In addition, while certain investors were
willing to take a loss in order to reduce their Argentine
exposure, the limited acceptance underscores a general investor
approval of future flow securitization as a means to mitigate
certain sovereign related risks, a position that Fitch has
supported throughout the Argentine crisis.

The transaction has improved Molinos' financial profile by
reducing the debt burden and lowering debt servicing costs.
Molinos remains current on its scheduled debt payments.
Notwithstanding, Molinos' credit risk remains high due to the
negative financial ramifications of the peso's devaluation and
the adverse economic environment in the country. On a pro forma
basis at June 30, 2002, after accounting for the repurchase,
Molinos' total consolidated financial debt reached Arg$718.8
million (approximately US$188 million at a US$1: Arg$3.82
exchange rate), mainly comprised of a balance outstanding on its
SENs of US$52.6 million and US$84 million in working capital
finance, most of it dollar denominated.

Molinos Rio de la Plata is Argentina's largest branded food
products company. The company is a large exporter of sunflower
processed oil and is one of Argentina's main exporters of bottled
oil. Molinos also produces a wide range of packaged foods for
domestic consumption, including bottled oil, margarine, pasta,
pre-mixes, packaged flours, yerba mate, rice, cold cuts, and
frozen foods.

CONTACT:  FITCH RATINGS
          Roberto Guerra, 312/368-3343 (Chicago)
          Giovanna Caccialanza, 212/908-0898 (New York)
          Dolores Teran, 11-4327-2444 (Buenos Aires)
          Samuel Fox, 312/606-2307 (Structured Finance)(Chicago)
          Media Relations:
          James Jockle, 212/908-0547 (New York)

          MOLINOS RIO DE LA PLATA S.A.
          Uruguay 4075, Victoria
          B1644HKG Buenos Aires, Argentina
          Phone: +54-(0)11-4340-1100
          Fax: +54-(0)11-4340-1273
          URL: http://www.molinos.com.ar
          Contacts:
          Gregorio Perez Companc, Chairman
          Juan Manuel Forn, CEO
          Guillermo Garcia, COO
          Anibal Rodriguez Melgarejo, CFO


SCOTIABANK QUILMES: Fate Hinges On Central Bank's Decision
----------------------------------------------------------
The future of suspended Argentine bank Scotiabank Quilmes hangs
on the central bank's decision over a current offer made by a
fellow Argentine bank. Business News Americas reports that
Argentine bank Comafi, with the backing of the deposit insurance
agency Sedesa, the bank capitalization fiduciary fund FFCB (run
by federal bank Banco Nacion), and Comafi subsidiary Banco del
Tucuman, offered to take on the ARS456 million (US$125mn)
liabilities of Scotiabank.

The liabilities total ARS200 million in the form of open accounts
and ARS256 million pesos in funds, which depositors are unable to
withdraw because of the government mandated deposit freeze
implemented in December 2001.

Should the central bank decide to accept the offer, it must give
other potential bidders 48 hours to make rival bids. Otherwise,
Scotiabank Quilmes will be liquidated.

Scotiabank Quilmes's operations were suspended by the central
bank in April due to liquidity concerns after its Canadian
parent, Scotiabank, refused to inject money into the ailing unit.
The central bank can only suspend a bank for 120 days and, in
Scotiabank's case, the deadline is August 18. However, it is
possible the bank will be given a grace period until September
considering Argentina's emergency situation.

Scotiabank Quilmes' parent is in talks with the central bank to
negotiate terms for exiting Argentina, which so far include a
US$25-million payment to its unit's new owners, as well as an
assistance guarantee from monetary authorities.

LATIN AMERICAN CONTACTS:

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

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


TURBINE POWER CO: Defaults On Last Three Payments
-------------------------------------------------
Turbine Power Co. defaulted on its last installments on dollar-
denominated debts, Ambito Financiero reports. The payments are
the three last 6-month installments on the company's US$39.9
million debt from a group of French banks in 1994.

The company, which hasn't posted significant profit for years,
had energy sales of more than U$1.6 million (ARS$6 million) in
the first quarter of 2002. Its gross profits after taking in
production cost of over US$1.1 million (ARS$4 million) has been
cancelled by unpaid debts.

In 2001, after registering a profit of almost ARG 1.8 million
(US$ 497,237), the company had to reduce by 50% its tariffs
because of a court ruling.

On June 12, 2002, Fitch Argentina Calificadora de Riesgo SA
assigned a "D' rating to US$20 million worth of the company's
simple issue corporate bonds.  The bonds mature November 30,
2002.  The rating was based on the company's financial position
as of June 12, 2002.

TPC is owner of the Rock thermal power station.

To see the company's financial statements:
http://bankrupt.com/misc/TurbinePower.htm

CONTACT:  TURBINE POWER CO. S.A.
          Avda. del Libertador 602, Piso 4§
          Ciudad AutĒnoma de Buenos Aires



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B E R M U D A
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ESG REINSURANCE: S&P Puts Subsidiaries on Watch Negative
--------------------------------------------------------
Standard & Poor's Ratings Services said Tuesday it placed its
double-'B'-minus long-term counterparty credit and insurer
financial strength ratings on ESG Reinsurance Bermuda Ltd., ESG
Reinsurance Ireland Ltd., and European Specialty Ruckversicherung
AG on CreditWatch with negative implications.

These companies are the main operating entities of Bermuda-based
ESG Re Ltd. (ESG).

"The CreditWatch placement reflects ESG's weak operating
performance (just announced as part of its second-quarter
results), the consequent impact on capitalization, and the
potential for future additional provisions," said Standard &
Poor's credit analyst Manish Bakhda. The CreditWatch placement is
expected to be resolved in September 2002 following further
meetings with the company.

The second-quarter results, which include a pretax loss of $23.3
million, have been adversely affected by a poorly performing
Norwegian health insurance treaty and related foreign-exchange
losses. Uncertainties remain as to the ultimate losses payable
under this treaty.

The ratings also continue to be constrained by the ESG group's
modest business position and limited financial flexibility --
negative earnings and weak capital markets limit the company's
ability to increase capital.

Standard & Poor's intends to meet with ESG management to review
the treaty, prospects for future earnings, and capitalization.
"If a downgrade is required at the end of this review, Standard &
Poor's expects this to be limited to two notches," said Mr.
Bakhda.

A complete list of rating actions is available to subscribers of
RatingsDirect, Standard & Poor's Web-based credit analysis
system, at www.ratingsdirect.com. They are also available on
Standard & Poor's public Web site at www.standardandpoors.com;
under Rating Actions, select Newly Released Ratings Listings.
Alternatively, call the Standard & Poor's Ratings Desk in London
at (44) 20-7847-7400.

    ANALYTICAL E-MAIL ADDRESSES
    manish_bakhda@standardandpoors.com
    rob_jones@standardandpoors.com
    InsuranceInteractive_Europe@standardandpoors.com

CONTACT:  Standard & Poor's, London
          Manish Bakhda
          Phone: (44) 20-7847-7046
          Rob Jones
          Phone: (44) 20-7847-7041


FLAG TELECOM: Delays Filing of Interim Financial Statements
-----------------------------------------------------------
Telecom Holdings Limited (OTCBB: FTHLQ), along with its group
companies ("FLAG Telecom"), announced Monday that the filing of
its interim financial statement on Form 10-Q for the quarter
ended June 30, 2002 has been delayed due to the closure of Arthur
Andersen's UK Office.

As reported by FLAG Telecom in a Current Report on Form 8-K filed
on August 7, 2002, Arthur Andersen resigned as FLAG Telecom's
auditor effective July 31, 2002. Most of the staff and partners
of Arthur Andersen UK have agreed to join Deloitte & Touche, in
effect causing the closure of the Arthur Andersen UK office. The
Company is in the process of appointing new auditors and seeking
the required U.S. Bankruptcy Court ("Court") approval of the
appointment. FLAG Telecom anticipates that it will complete its
10-Q filing as soon as reasonably practical after the appointment
of its new auditors is approved by the Court. FLAG Telecom will
file a separate report on Form 8-K when a new auditor is
appointed.

FLAG Telecom's most recent financial information can be found in
the Disclosure Statement containing the Plan of Reorganisation
which was approved by the Court on August 8, 2002. FLAG Telecom
has filed Monday a Current Report on Form 8-K with the SEC,
incorporating the Disclosure Statement as an exhibit item.

About the FLAG Telecom Group

The FLAG Telecom Group is a leading global network services
provider and independent carriers' carrier providing an
innovative range of products and services to the international
carrier community, ASPs and ISPs across an international network
platform designed to support the next generation of IP over
optical data networks. On April 12 and April 23, 2002, FLAG
Telecom Holdings Limited and certain of its subsidiaries filed
voluntary petitions for reorganization under Chapter 11 of the
United States Bankruptcy Code in the United States Bankruptcy
Court for the Southern District of New York. Also, FLAG Telecom
Holdings Limited and the other companies continue to operate
their businesses as Debtors In Possession under Chapter 11
protection. FLAG Telecom Holdings Limited and certain of its
Bermuda-registered subsidiaries - FLAG Limited, FLAG Atlantic
Limited and FLAG Asia Limited - filed parallel proceedings in
Bermuda to seek the appointment of provisional liquidators to
obtain a moratorium to preserve the companies from creditor
actions. Provisional liquidators were appointed and part of their
role is to oversee and liaise with the directors of the companies
in effecting a reorganization under Chapter 11.

CONTACT:  FLAG TELECOM
          John Draheim
          Phone (+44 20 7317 0826)
          E-mail: Jdraheim@flagtelecom.com
              or
          David Morales
          Phone: (+44 20 7317 0837)
          E-mail: Dmorales@flagtelecom.com


TYCO INTERNATIONAL: Mallinckrodt Cleared of Patent Suit
-------------------------------------------------------
Mallinckrodt, business unit of Tyco Healthcare, announced Monday
that the Federal District Court of Delaware has granted a motion
to dismiss with prejudice all of the patent infringement claims
made by Augustine Medical, Inc. against Mallinckrodt and other
defendants under United States Patent 6,210,428 B1. Augustine had
claimed that Mallinckrodt's WarmTouch patient warming blankets
infringe its '428 patent. After certain discovery in the case,
Augustine filed a motion requesting the dismissal of its
infringement claims with prejudice, and the company has also
requested that the United States Patent Office reexamine the '428
patent.

The dismissal with prejudice provides Mallinckrodt with immunity
from suit for its current products under the claims of the '428
patent and any substantially identical claims that may issue
after reexamination or reissue. Mallinckrodt's antitrust
counterclaim, however, remains in the case, and Mallinckrodt
intends to continue to vigorously pursue its antitrust case based
on its allegations that Augustine improperly obtained and
asserted the '428 patent.

"When Augustine sued Mallinckrodt last year for patent
infringement, we had no doubt we would prevail, since it had been
determined in previous litigations in both the United States and
Europe that we had not infringed Augustine's earlier issued
patents," said Forrest Whittaker, President of Tyco Healthcare's
Respiratory Group. "We are pleased the Judge's order applies to
not only the '428 patent, but also to substantially identical
claims of any new patents Augustine may obtain through
reexamination or reissue."

Mallinckrodt's WarmTouch Convective Air Warming System, now
marketed by Nellcor, includes a variety of patient blankets that
are filled with warm air through a blower unit, creating a
warming system to help control patient body temperature. Medical
research has demonstrated that patients may benefit from such
warming, which can help to improve post-surgical recovery time
and reduce the incidence and severity of wound infection after
surgery.

About Mallinckrodt:

Mallinckrodt, a business unit of Tyco Healthcare, is a global
manufacturer and distributor of specialty medical products
designed to sustain breathing, diagnose disease and relieve pain.
As the industry leader in respiratory care, Mallinckrodt
manufactures and distributes products including Nellcorr pulse
oximeters used for oxygen monitoring, Puritan Bennettr critical
care ventilators and oxygen therapy systems, and Mallinckrodt
endotracheal tubes. In pharmaceuticals, Mallinckrodt is the
number one manufacturer of bulk narcotics and other drug
chemicals, as well as the world's largest producer of
acetaminophen. Mallinckrodt's dosage pharmaceuticals segment
focuses on pain management, addiction therapy, and attention
deficit hyperactivity disorder (ADHD). In diagnostic imaging,
Mallinckrodt maintains leadership positions in contrast agents
and radiopharmaceuticals, including brand names such as Optirayr
and OptiMARKr.

About Tyco Healthcare

Tyco Healthcare is one of the major business units of Tyco
International (NYSE: TYC; LSE: TYI; BSX: TYC). Tyco Healthcare is
a leading manufacturer, distributor and servicer of medical
devices worldwide. Its broad portfolio includes disposable
medical supplies, monitoring equipment, medical instruments and
bulk analgesic pharmaceuticals, sold under such names as Auto
Suture, Graphic Controls, Kendall, Mallinckrodt, Nellcor, Puritan
Bennett, Sherwood, United States Surgical, Valleylab and others.

CONTACT:  TYCO INTERNATIONAL LTD. (Corporate Offices)
          The Zurich Centre, Second Floor
          90 Pitts Bay Road
          Pembroke HM 08, Bermuda
          441-292-8674
          URL: http://www.tyco.com/main/index.jsp

          TYCO HEALTHCARE & SPECIALTY PRODUCTS
          15 Hampshire Street
          Mansfield, MA 02048
          Phone: 508-261-8000

INDEPENDENT ACCOUNTANT:  PricewaterhouseCoopers
                         Dorchester House
                         7 Church Street West
                         Hamilton HM11 Bermuda
                         PricewaterhouseCoopers
                         One Post Office Square
                         Boston, MA 02109 U.S.A.


TYCO INTERNATIONAL: Dumping Telecom Center At Firesale Prices
-------------------------------------------------------------
Tyco International Ltd. is selling an unused US$75 million state-
of-the-art global telecommunications switching center in Oahu's
Waianae Coast, AP reports. The facility is being offered for a
quarter less than its original price.

Even though the company is expected to lose from the sale, Tyco's
local broker, Andrew Conboy of commercial real estate firm Grubb
& Ellis admitted that the company badly needed money as it picks
itself up from its troubles.

The facility, which is in Oahu's Waianae Coast is part of the
conglomerate's expansion plans to build a US$1 billion undersea
fiber optic cable network linking East and West. However, the
laying of trans-Pacific cable that is expected to serve the Maili
center was halted early this year, as financial difficulties
mounted.  Some 60 employees were also laid off.

Although the facility was offered for a price less than a quarter
of its original price, people in the telecommunications industry
still consider the US$18 million as too high.

Burt Lum, president of NetEnterprises, a Honolulu network
services company believes Tyco is unlikely to find a buyer for
the building at such price. Lum's company passed on an offer for
facility unless the price were lowered.

The building has millions of dollars in top-of-the-line Tyco
equipment, air conditioners, diesel back-up generators, power
plants, switchboards and fiber hookups.

Tyco is based in Bermuda but has its U.S. headquarters in Exeter,
N.H. Shares of the company have fallen about 80 percent since
Jan. 1.

CONTACT:  TYCO INTERNATIONAL LTD.
          Walter Montgomery, +1-212-424-1314
          Investors: Kathy Manning, +1-603-778-9700



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

ABN AMRO: Moody's Lowers Deposit Ratings To B3
----------------------------------------------
Brazilian bank Banco ABN Amro Real S.A. saw its long-term foreign
currency deposit ratings downgraded to B3 from B2 by Moody's
Investors Service. The rating outlook is stable.

The downgraded follows Moody's downgrade of Brazil's foreign
currency country ceiling for bonds and notes to B2, from B1, as
well as of foreign currency country ceiling for bank deposits to
B3, from B2.

CONTACT:  BANCO ABN AMRO REAL S/A
          Av Paulista 1374 - 3 Andar - B Vista
          Sao Paulo - SP
          01310-916
          Phone: (+11) 3174-7195


AES CORP.: Fitch Provides Liquidity Update
------------------------------------------
Continuing Fitch Ratings' ongoing review of liquidity constraints
affecting participants in the wholesale power and gas market, the
following credit comments are provided on recent liquidity
developments since Fitch's July 26 conference call for investors.
Fitch will continue to comment on this and other companies in the
sector as a part of ongoing reviews of individual credits.

AES Corp. - Senior unsecured debt 'BB-', Rating Watch Negative.

The Rating Watch status relates to refinancing risk and the low
level of corporate liquidity. AES's main challenge in the near
term is to secure the renewal of its revolvers in 2003 and to
close its announced asset sales on time. The company expects to
have $350 million of liquidity at year-end after paying down $526
million of debt in the second half of 2002. In order to maintain
a positive liquidity position in 2003, AES needs to achieve
renewal of its $850 million bank revolver due in March 2003,
close the sale of New Energy in the fourth quarter of 2002 and
CILCORP in the first quarter of 2003, and roll over the $425
million term loan in August 2003.

In addition, the company's ability to collect the projected $1.2
billion of parent operating cash flow in 2003 will depend on a
stabilized if not improved business environment in LA, the US and
the UK. The recently announced financial assistance provided by
the International Monetary Fund to Brazil could stabilize the
nation's operating environment and therefore prove positive for
AES in the long run; however, it does not change AES's immediate
liquidity position.

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

CONTACT:  The AES Corporation, Arlington
          Investor Relations Contact Person:
          Kenneth R. Woodcock
           (703) 522 1315

          FITCH RATINGS
          Ellen Lapson, 212/908-0504
          Robert Hornick, 212/908-0523
          Hugh Welton, 212/908-0746
          Mona Yee, 212/908-0557 (New York)
          Media Relations:
          James Jockle, 212/908-0547 (New York)


BANCO BARCLAYS: Sovereign Ratings Cut Lowers Deposit Ratings
------------------------------------------------------------
Moody's cut Banco Barclays S.A.'s long-term foreign currency
deposit ratings to B3 from B2. Moreover, the ratings agency
downgraded the bank's long-term foreign currency debt ratings to
Ba3 from Ba2. The outlook on both ratings is stable.

These actions follow Moody's downgrade of Brazil's foreign
currency country ceiling for bonds and notes to B2, from B1, as
well as of foreign currency country ceiling for bank deposits to
B3, from B2.

CONTACT:  BANCO BARCLAYS E GALICIA
          S/A Av. Paulista,
          1842 - 24 e 25  Andar
          Torre Norte Cerqueira
          Cesar SP Sao Paulo 01310-200
          Phone: +55 11 269 2700
          Home Page: http://www.barclays.com


BANCO BILBAO: Deposit and Debt Ratings Lowered by Moody's
---------------------------------------------------------
Moody's lowered the ratings of Banco Bilbao Vizcaya S.A. Brazil
S.A. The ratings downgraded were (To/From):

- long-term foreign currency deposits         B3       B2
- long-term foreign currency debt             Ba3      Ba2

The rating outlook is stable.

These actions follow Moody's downgrade of Brazil's foreign
currency country ceiling for bonds and notes to B2, from B1, as
well as of foreign currency country ceiling for bank deposits to
B3, from B2.

CONTACT:  BANCO BILBAO VIZCAYA ARGENTARIA BRASIL
          R Cincinato Braga 340 - 16 Andar - B Vista
          Sao Paulo - SP
          01333-010
          Fax: (+11) 3149-3746
          Phone: (+11) 3149-3718


BANCO BRADESCO: Moody's Cuts Currency Ratings, Stable Outlook
-------------------------------------------------------------
Moody's Investors Service downgraded the ratings of Banco
Bradesco S.A. The ratings affected were (To/From):

- long-term foreign currency deposits       B3      B2
- long-term foreign currency debt           Ba3     Ba2

The rating outlook is stable.

At the same time, Moody's also affirmed Banco Bradesco S.A.'s A3
local currency deposit rating. The rating outlook is negative.

These actions follow Moody's downgrade of Brazil's foreign
currency country ceiling for bonds and notes to B2, from B1, as
well as of foreign currency country ceiling for bank deposits to
B3, from B2.

Banco Bradesco has a broad presence in Brazil. One of the
country's largest banks, it has more than 2,600 banking branches
throughout Brazil, along with one branch in New York and two in
the Cayman Islands. Banco Bradesco offers Internet banking,
insurance, pension plans, annuities, credit card services
(including football club affinity cards for soccer-mad
Brazilians), and free Internet access for customers. The bank
also provides personal and commercial loans, as well as leasing
services. The ever-acquisitive Banco Bradesco owns Banco
Mercantil de Sao Paulo.

CONTACT:  BANCO BRADESCO
          Avenida Ipiranga 282, 10 andar
          CEP 01046-920 Sao Paulo, Brazil
          Phone: +55-11-3235-9566
          Fax: +55-11-3235-9161
          Home Page:
          http://www.bradesco.com.br/
          Contacts:
          Jean Philippe Leroy
          Technical Director of Investor Relations
          Tel: (11) 3684-9229
          E-mail: 4260.jean@bradesco.com.br

          Bernardo Garcia
          Executive Manager of Investor Relations
          Tel: (11) 3684-9302
          E-mail: 4260.bernardo@bradesco.com.br


BANCO DE INVESTIMENTOS: Moody's Lowers Ratings
----------------------------------------------
Moody's Investors Service downgraded the ratings of Banco de
Investimentos CSFB S.A. The ratings affected were (To/From):

- long-term foreign currency deposits        B3       B2
- long-term foreign currency debt            Ba3      Ba2

The rating outlook is stable.

These actions follow Moody's downgrade of Brazil's foreign
currency country ceiling for bonds and notes to B2, from B1, as
well as of foreign currency country ceiling for bank deposits to
B3, from B2.

CONTACT:  BANCO INVESTIMENTOS CSFB
          Av Brig Faria Lima 3064 - 13 Andar - Jd Paulistano
          Sao Paulo - Sp
          01451-000
          Fax: (+11) 3841-6900
          Phone: (+11) 3841-6000


BANCO DO BRASIL: Moody's Takes Rating Actions
---------------------------------------------
Moody's Investors Service downgraded Banco do Brasil S.A.'s long-
term foreign currency deposit ratings to B3 from B2. The ratings
agency also downgraded by long-term foreign currency debt ratings
of Banco do Brasil to Ba3 from Ba2. The rating outlook is stable.

Simultaneously, Moody's affirmed Banco do Brasil S.A.'s A3 local
currency deposit rating with a negative outlook.

These actions follow Moody's downgrade of Brazil's foreign
currency country ceiling for bonds and notes to B2, from B1, as
well as of foreign currency country ceiling for bank deposits to
B3, from B2.

Banco do Brasil, a Brazilian government-controlled bank, has
almost 5,000 branches in Brazil, and about 30 offices in nearly
25 other countries. In addition to its traditional retail banking
services, Banco do Brasil underwrites and sells bonds, conducts
asset trading, offers investors portfolio management services,
conducts financial securities advising, and provides market
analysis and research. The bank also provides capital equipment
leasing to Brazilian companies through its BB Leasing subsidiary.
BB Securities is the bank's UK-based international securities
brokerage house. Banco do Brasil has more than 11,000 points of
sale in Brazil.

CONTACT:  BANCO DO BRASIL
          SBS Edificio Sede III, 24th Fl.
          70089-900 Brasilia, D.F., Brazil
          Phone: +55-61-310-3406
          Fax: +55-61-310-2563
          Home Page: http://www.bb.com.br
          Contact:
          Marco Geovanne Tobias da Silva, IR Manager
          Phone: 61-310-5920


BANCO DO NORDESTE: Moody's Cuts Ratings; Outlook Stable
-------------------------------------------------------
Moody's Investors Service downgraded Banco do Nordeste S.A.s
long-term foreign currency deposit ratings to B3 from B2. The
ratings agency also downgraded the bank's long-term foreign
currency debt ratings to Ba3 from Ba2. The outlook on the ratings
is stable.

These actions follow Moody's downgrade of Brazil's foreign
currency country ceiling for bonds and notes to B2, from B1, as
well as of foreign currency country ceiling for bank deposits to
B3, from B2.

Banco do Nordeste is the leading financial institution of the
Northeast region of Brazil. Its core purpose is to stimulate and
develop the potential of one of the most important emerging
markets in the hemisphere. Established in 1952 as one of the
three development banks in Brazil, today the Bank is a unique
combination of a development, investment and commercial bank with
174 branches covering over 1955 cities in the region. The Bank
finances over 77% of all the rural and industrial loans in the
Northeast. Its headquarters are in Fortaleza, in the state of
Ceara. The Bank is a mixed capital company with more than half of
its shares owned by the federal government, and the balance owned
by private shareholders.

CONTACT:  BANCO DO NORDESTE SA
          Rua Sete de Setembro, 86 - Centro
          Campina Grande/PB - CEP: 58100-030
          Phone: (83) 341-1620
          Fax: (83) 341-1588
          Home-page: www.bancodonordeste.gov.br


BANCO HSBC: Foreign Currency Deposit Ratings Downgraded to B3
-------------------------------------------------------------
Moody's Investors Service downgraded Banco HSBC S.A.'s long-term
foreign currency deposit rating to B3 from B2. The outlook on the
rating is stable.

The action follows Moody's downgrade of Brazil's foreign currency
country ceiling for bonds and notes to B2, from B1, as well as of
foreign currency country ceiling for bank deposits to B3, from
B2.

HSBC Bank Brasil, a member of the HSBC Group, is the second
largest private banking network in Brazil, with almost 1000
branches in more than 600 cities nation-wide. It provides clients
with superior products and services, while respecting the local
culture and contributing to the growth of the communities where
it operates.

CONTACT:  HSBC BANK BRASIL S.A. BANCO MULTIPLO
          Av Brig Faria Lima 3064 - 4 Andar - Jd Paulistano
          Sao Paulo - Sp
          01451-000
          Phone: (+11) 3847-5574
          Home Page: http://www.hsbc.com.br/english


BANCO ITAU: Currency Ratings Lowered in Moody's Downgrade
---------------------------------------------------------
Moody's Investors Service downgraded Banco Itau S.A.'s long-term
foreign currency deposits to B3 from B2 with a stable outlook.
Simultaneously, the ratings agency affirmed the Banco Itau's A3
local currency deposit rating, with a negative outlook.

These actions follow Moody's downgrade of Brazil's foreign
currency country ceiling for bonds and notes to B2, from B1, as
well as of foreign currency country ceiling for bank deposits to
B3, from B2.

Banco Itau is one way of saying "really big bank". The bank (one
of the largest in Brazil) offers a variety of standard retail and
commercial banking services, as well as consumer credit,
financial management services, leasing, and foreign exchange and
trade financing. Banco Itau also provides investment banking,
securities brokerage, and insurance to its consumer and business
customers. In addition to some 3,000 branches in Brazil, Banco
Itau has operations in North America and Europe. The bank has
used acquisitions to expand its international presence.

CONTACT:  BANCO ITAU, S.A.
          Rua Boa Vista, 176
          01014-919 Sao Paulo, Brazil
          Phone: +55-11-3247-3000
          Fax: +55-11-5582-1133
          URL: http://www.itau.com.br
          Contacts:
          Olavo Egydio Setubal, Chairman
          Robert Egydio Setubal, President and CEO
          Henri Penchas, SVP Accounting & Control Area


BANCO PACTUAL: Moody's Lowers Deposit Ratings To B3
---------------------------------------------------
Moody's downgraded Banco Pactual S.A.'s long-term foreign
currency deposit ratings to B3 from B2. The rating outlook is
stable.

The action follows Moody's downgrade of Brazil's foreign currency
country ceiling for bonds and notes to B2, from B1, as well as of
foreign currency country ceiling for bank deposits to B3, from
B2.

One of the foremost investment banks in Brazil, Banco Pactual
S.A. focuses mainly on the following activities: Asset
Management, Private Banking, Sales & Trading and Corporate
Finance. Pactual's fundamental principle is the quest for
differentiated returns with strict risk control and emphasis on
capital preservation. In order to put this principle into
practice, Pactual has a solid capital structure, state-of-the-art
technology, a high degree of internationalization, and highly
qualified human resources; an 18-year success story, which stands
out in the Brazilian financial market.

CONTACT:  BANCO PACTUAL S.A
          Rio de Janeiro (sede)
          Avenida Repœblica do Chile, 230 - 29  andar
          CEP 20031-170 Rio de Janeiro, RJ - Brasil
          Phone: (5521) 2514-9600 (5521) 2588-4900
          Fax: (5521) 2514-8600

          Sao Paulo
          Av. Brigadeiro Faria Lima, 3729/6  andar
          CEP 04538-905 Sao Paulo SP Brasil
          Tel.: (5511) 3046-2100 (5511) 3046-2000
          Fax: (5511) 3046-2001
          Home Page: http://www.pactual.com.br/


BANCO SAFRA: Moody's Lowers Debt, Deposit Ratings
-------------------------------------------------
Moody's slashed the long-term foreign currency deposits of Banco
Safra S.A. to B3 from B2, as well as the bank's long-term foreign
currency debt to Ba3 from Ba2. At the same time, Moody's also
slashed Safra Leasing S.A.'s long-term foreign currency debt to
Ba3 from Ba2. The outlook on the ratings is stable.

These actions follow Moody's downgrade of Brazil's foreign
currency country ceiling for bonds and notes to B2, from B1, as
well as of foreign currency country ceiling for bank deposits to
B3, from B2.

CONTACT:  BANCO SAFRA
          Av. Paulista, 2100 - Sao Paulo
          Brazil - 01310-930
          Phone: (11) 3175-7575
          Home Page: http://www.safra.com.br/ingles/index.asp
          Contact: Carlos Alberto Vieira, President

          SAFRA LEASING S/A ARRENDAMENTO MERCANTIL
          Rua Amazonas, 521 - 5  andar - cj. 51
          09520-070 - Sao Caetano do Sul - SP
          Phone: (11) 4224-6359
          Fax: (11) 4224.5903


BANCO SANTANDER: Sovereign Rating Cut Drags Down Ratings
--------------------------------------------------------
Banco Santander Meridional S.A. saw its long-term foreign
currency deposit ratings downgraded by B3 from B2 by Moody's
Investors Service. The outlook on the ratings is stable.

The cut on the rating came after Moody's downgraded Brazil's
foreign currency country ceiling for bonds and notes to B2, from
B1, as well as of foreign currency country ceiling for bank
deposits to B3, from B2.


BANCO SUDAMERIS: Moody's Lowers Debt and Deposit Ratings
--------------------------------------------------------
Moody's Investors Service downgraded the long-term foreign
currency deposit ratings of Banco Sudameris S.A. to B3 from B2.
The bank's long-term foreign currency debt ratings were also
downgraded to Ba3 from Ba2. The outlook on the ratings is stable.

The downgrades follow Moody's downgrade of Brazil's foreign
currency country ceiling for bonds and notes to B2, from B1, as
well as of foreign currency country ceiling for bank deposits to
B3, from B2.

CONTACT:  BANCO SUDAMERIS BRASIL S.A.
          Casa Central
          Avenida Paulista, 1000
          Cep. 01310-912
          Sao Paulo SP
          Phone: (55)(011)3170 9899
          Fax: (55) (011) 3170 1239
          Home Page: http://www.sudameris.com.br/


BANCO VOTORANTIM: Moody's Lowers After Cutting Sovereign Ratings
----------------------------------------------------------------
Moody's Investors Service downgraded the long-term foreign
currency deposit ratings of Banco Votorantim S.A. to B3 from B2.
The agency also downgraded the bank's long-term foreign currency
debt ratings to B1 from Ba3. The outlook on the ratings is
stable.

These actions follow Moody's downgrade of Brazil's foreign
currency country ceiling for bonds and notes to B2, from B1, as
well as of foreign currency country ceiling for bank deposits to
B3, from B2.

CONTACT:  BANCO VOTORANTIM S/A (37)
          Av Roque Petroni Junior 999-16
          Andar Vila Gertrudes
          Sao Paulo SP
          04707-910
          Fax: (+11) 5185-1900
          Phone: (+11) 5185-1700


BANESPA: Moody's Cuts Long-term Foreign Currency Deposit Ratings
----------------------------------------------------------------
Banco do Estado de Sao Paulo S.A. had its long-term foreign
currency deposit ratings downgraded to B3 from B2 by Moody's
Investors Service. The rating outlook is stable.

The downgrade follows Moody's cut on Brazil's foreign currency
country ceiling for bonds and notes to B2, from B1, as well as of
foreign currency country ceiling for bank deposits to B3, from
B2.

Banco do Estado de Sao Paulo (Banespa) has made a stunning
comeback from years of fiscal abuse by its former controlling
stockholder, the spendthrift State of Sao Paulo. It provides a
wide range of consumer and commercial banking services through
more than 1400 branches, primarily in Sao Paulo state. Banespa
also offers investments and insurance. Spain's Santander Central
Hispano owns more than 95% of Banespa. Since its takeover by
BSCH, Banespa has cut costs (almost 40% of its workforce took
early retirement), sold its printing press and security
businesses, and expanded its customer base.

CONTACT:  BANESPA (Banco do Estado de Sao Paulo S.A.)
          Praca Antonio Prado 6, 6 andar
          Sao Paulo, Brazil
          Phone: +55-11-3249-9090
          Fax: +55-11-3239-2414
          Home Page: http://www.banespa.com.br/
          Contact:
          Gabriel Jaramillo Sanint, Director-President
          Aurelio Velo Vallejo, Executive VP of Ways and
                                            Control


BANKBOSTON: Moody's Downgrades Ratings; Outlook Stable
------------------------------------------------------
Moody's Investors Service downgraded BankBoston Banco Multiplo
S.A.'s long-term foreign currency deposit ratings to B3 from B2,
as well as the bank's long-term foreign currency debt ratings to
Ba3 from Ba2. At the same time, Moody's also downgraded
BankBoston N.A.'s long-term foreign currency deposit ratings to
B3 from B2. The outlook on the ratings is stable.

These actions follow Moody's downgrade of Brazil's foreign
currency country ceiling for bonds and notes to B2, from B1, as
well as of foreign currency country ceiling for bank deposits to
B3, from B2.

CONTACT:  BANKBOSTON BANCO MULTIPLO S.A.
          R Libero Badaro 487 - 5 and -Centro
          Sao Paulo SP
          01009-000
          Fax: (+111) 3118-5528
          Phone: (+11) 3118-5327(+11) 3118-5757

          BANKBOSTON NA
          Rua Libero Badaro 633 * 3rd Floor * Sao Paulo
          Phone: (55 11) 3118-5123
          Fax: (55 11) 3118-5043
          Telex: 22285 FNBB BR * SWIFT: FNBB BR SP AICS
          Home Page: http://www.bankboston.com
          Email: slemosbriones@bkb.com


BNDES: Moody's Downgrades, Affirms Ratings
------------------------------------------
Moody's Investors Service cut some of the ratings of BNDES Banco
Nacional de Desenvolvimento Econ“mico e Social S.A. The ratings
downgraded were (To/From)

- long-term foreign currency deposits     B3      B2
- long-term foreign currency debt         B2      B1

The outlook on the ratings is stable.

At the same time, Moody's also affirmed BNDES' A3 local currency
deposit rating with a negative outlook.

These actions follow Moody's downgrade of Brazil's foreign
currency country ceiling for bonds and notes to B2, from B1, as
well as of foreign currency country ceiling for bank deposits to
B3, from B2.


CITIBANK: Ratings Lowered; Outlook Stable
-----------------------------------------
Moody's Investors Service lowered the long-term foreign currency
deposit ratings of Banco Citibank S.A. to B3 from B2, and its
long-term foreign currency debt rating to Ba3 from Ba2. At the
same time, Moody's also lowered Citibank N.A.'s long-term foreign
currency deposit ratings cut to B3 from B2. The outlook on the
ratings is stable.

These actions follow Moody's downgrade of Brazil's foreign
currency country ceiling for bonds and notes to B2, from B1, as
well as of foreign currency country ceiling for bank deposits to
B3, from B2.

CONTACT:  CITIBANK
          Avenida Paulista, 1111
          13th floor - room 5
          Sao Paulo 01311- 920
          Brazil
          Home Page: http://www.citibank.com.br
          Contact:
          Fernando Tafner
          Phone: 55-11-5576-2004
          E-mail: fernando.tafner@citicorp.com

          BANCO CITIBANK
          Av Paulista 1111 - 11 Andar - B Vista
          Sao Paulo - SP
          01311-920
          Fax: (+11) 5576-1291
          Phone: (+11) 5546-1201


CSN: Investors Remain Skeptical on Planned Merger with Corus
------------------------------------------------------------
Mounting concern that the planned merger between Rio de Janeiro-
based flat steel maker CSN and Anglo Dutch steel group Corus
won't materialize has dragged down both the companies' shares in
recent weeks, a steel analyst suggested to Business News
Americas.

"There are many variables involved including [mining giant] CVRD
and [state development bank] BNDES, but they all can be overcome.
It won't be easy, but I believe that it will be achieved," said
Luiz Caetanto, an analyst for Brascan investment bank.

Despite positive expectations, the analyst noted that the ADRs of
the two have fallen 23.5% between July 17, the day the merger was
announced, and August 9. The combined market value of the two
companies, which reached US$6.9 billion after the merger was
announced, had dropped to US$5bn by August 9.

The complexity of the merger, in which CSN's capital will be
placed in a holding company that will become the biggest
shareholder in the merged company, has raised doubts that the
accord can be closed.

Regulatory officials in both Europe and Brazil have to approve
the deal along with CSN's major creditors, including state-owned
development bank BNDES.

To see latest financial statements:
http://bankrupt.com/misc/CSN.pdf

CONTACT:  CIA SIDERURGICA NACIONAL (CSN)
          Rua Lauro Muller 116-36 Andar, PO Box 2736
          Rio De Janeiro, Brazil, 22299-900
          Phone: +011-55-21-2586-1442
                 +011-55-21-2586-1347
          Home Page: http://www.csn.com.br/english/index.htm
          Contact:
          Antonio Mary Ulrich, Exec. Officer - Investor Relations

          BNDES Main Office
          Av. Republica do Chile,
          100 Rio de Janeiro - RJ
          Phone: (021) 2277-7447/6978
          Home Page: http://www.bndes.gov.br/english/welcome.htm
          Contacts: Enterprise Information Center
          Main Office
          Av. Repœblica do Chile,
          100 - 13  andar - Sala 1301
          Tel.: (21)2277-8888
          Fax: (21) 2220-2615
          Email: contact@bndes.gov.br


LLOYDS BANK TSB: Moody's Lowers Deposit, Debt Ratings
-----------------------------------------------------
Moody's Investors Service lowered Lloyds Bank TSB's (Brasil)
long-term foreign currency deposit ratings to B3 from B2, and its
long-term foreign currency debt ratings to B3 from Ba2. The
outlook on the ratings is stable.

The cut on the ratings follow Moody's downgrade of Brazil's
foreign currency country ceiling for bonds and notes to B2, from
B1, as well as of foreign currency country ceiling for bank
deposits to B3, from B2.

CONTACT:  LLOYDS TSB BANK PLC (230)
          Av. Jurubatuba 73-7 Andar - VL Cordeiro
          Sao Paulo
          04583-100
          Fax: (+11) 5504-6447
          Phone: (+0) 375-5322


PETROBRAS: Moody's Slashes Ratings Following Sovereign Rate Cut
---------------------------------------------------------------
Rio de Janeiro-based Petroleo Brasileiro S.A. (Petrobras) had its
foreign currency bond rating downgraded by Moody's Investors
Service to `Ba2' from `Ba1' with a stable rating outlook.

The action follows Moody's downgrade of Brazil's long-term
foreign currency ceiling to B2 from B1.

The Ba2 foreign currency bond rating of Petrobras is a function
of its Baa1 global local currency rating, the high probability of
a sovereign default implied by the government's B2 foreign
currency bond rating, and the likelihood that the government
would impose a moratorium given a default, and, if it did, exempt
a strategically important issuer like Petrobras from such a debt
moratorium.

Integrated petroleum company Petrobras faces a relatively high
convertibility risk, as it is not a significant net exporter of
crude oil and most of its debt is denominated in US dollars,
while the bulk of its refined products are sold domestically.

Although Petrobras has access to dollars under Brazil's CC5
regulations, Moody's believes this market is subject to
regulatory risk, and thus cannot be viewed as a stable source of
foreign exchange.

Also, as Petrobras' dominant shareholder is the Brazilian
government, the company cannot rely on capital outside of Brazil
and must look primarily to its own resources for the foreseeable
future.

Petrobras is Brazil's largest industrial company. It engages in
exploration for oil and gas and in production, refining,
purchasing, and transportation of oil and gas products.

CONTACT:  PETROLEO BRASILEIRO (PETROBRAS)
          Avenida Republica do Chile 65, 23rd Fl.
          20035-900 Rio de Janeiro, Brazil
          Phone: +55-21-2534-1000
          Fax: +55-21-2534-0929
          URL: http://www.petrobras.com.br
          Contacts:
          Pedro Pullen Parente, Chairman
          Francisco Roberto Andre Gros, President/CEO
          Joao Pinheiro Nogueira Batista, Finance Director


SPANISH MEDIA FIRMS: LatAm Woes Expected to Hurt Local Units
------------------------------------------------------------
Troubles in Latin America are slowly taking their toll on Spanish
media firms. Evidence of the problems are highlighted by the
steady decline in the share value of Prisa and Recoletos Grupo de
Comunicacion for the past month. The two are among Spain's
biggest media companies.

Prisa, which owns Brazilian educational publisher Moderna saw its
share price dip 26% over the past three months as a result of the
country's weakening currency and rising debt.

Recoletos Grupo de Comunicacion, which publishes a financial
newspaper in Argentina and other business press in Latin America,
also sustained a decrease of 18.5% in its share price in three
months.  The publisher is off 63% from its initial public
offering in October 2000.

Prisa has been expanding into the radio sector in Latin America
and has plans of investing EUR 150 million building a network of
stations in the region. The company is under pressure to make
sure the return on investment for such project can compensate
with the investments.

In the parent country, Prisa's local television stations are
incurring big losses and are not expected to break even until
2005.  Its music business has also been dragged down by black-
market sales.

Recoletos' investments on the other hand, are either not
performing or performing badly, like troubled Veo TV, which has
been out on air, and telecom company Skypoint which was running
into losses.

WestLB's Mr. Koebernick according to Wall Street Journal, has
expressed opinion on how Recoletos will manage its investments.
He said, he was expecting the company to expand to other
businesses with "more stable circulation base", naming Latin
American sports, business and women's magazines as potentials.

Acquiring other businesses in Latin America may also also lower
the company's dependence on Marca, but again, it would still
raise issues about its exposure to the region.

Both companies have undertaken cost cutting measures, as they try
to increase earnings despite lack of enthusiasm in Spain's
advertising sector. The chances of recovery, according to
analysts, are largely dependent on factors beyond the companies'
control.


UNIBANCO: Ratings Downgraded Following Sovereign Rating Cuts
------------------------------------------------------------
Moody's Investors Service reduced the long-term foreign currency
deposit rating of Unibanco (Uniao de Bancos Brasileiros S.A.) to
B3 from B2, as well as its long-term foreign currency debt to Ba3
from Ba2. Moody's also reduced the long-term foreign currency
debt of Unibanco Leasing S.A. to Ba3 from Ba2. The outlook of the
ratings is stable.

At the same time, Moody's affirmed the A3 local currency deposit
rating of Unibanco, with a negative outlook.

These actions follow Moody's downgrade of Brazil's foreign
currency country ceiling for bonds and notes to B2, from B1, as
well as of foreign currency country ceiling for bank deposits to
B3, from B2.

Unibanco is a subsidiary of Unibanco Holdings S.A, one of
Brazil's largest banks with more than 1,000 branches throughout
the country.

CONTACT:  UNIBANCO
          Avenida Eusebio Matoso, 891, 22nd Fl.
          05423-901 Sao Paulo, Brazil
          Phone: +55-11-3097-1313
          Fax: +55-11-3813-6182
          URL: http://www.unibanco.com.br
          Contacts:
          Pedro Moreira Salles, Chairman
          Geraldo Travaglia Filho, Executive Director and CFO


VARIG: Union To Submit Own Restructuring Plan
---------------------------------------------
The pilots' union of troubled Brazilian airline Varig SA (E.VAR)
will submit its own reorganization plan to the Company's lenders
and creditors, Dow Jones reports.

One of the proposals will reduce the stake of non-profit Rubem
Berta foundation from 87 to 10 percent, a move expected to bring
in new players to the Company.

The Company's original plan retains Rubem Berta as majority
shareholder, and calls for about BRL300 million assistance from
BNDES.

Bruno Rocha, a director at the union's advisor, GGR Finances sees
the management's plan as short term, one "that only would help
the Company until the end of the year"; although a Varig
spokesman, said the offer is actually a "financing plan."

Rocha sees that the solution to Varig problems is in drawing in
normal shareholders. According to him, the influence of airline
executives on the foundation is impeding corporate governance in
the airline.  He sees the changes in the Company's organizational
structure as a key to attracting in investors.

Also included in the proposal is the conversion of debts into
shares-- as a result 2.6 billion reals ($1=BRL3.1650) in pension
fund contributions and salaries owed to workers would be
converted to stock. This plan is still subject to the approval of
creditors.

In the first quarter ended March 31, Varig has total liabilities
of  about BRL3.7 billion. It posted a net loss for the quarter of
BRL135.2 million on revenue of BRL1.3 billion.

The Company has said it would miss the deadline for the posting
of second quarter results to the Brazilian securities regulatory
body.

The September 11 attacks, and the country's weaking currency,
together with tight market competition has lead Latin America's
largest airline in a difficult situation.

With the Company's uncertain financial standing, analysts are
expecting a potential bankruptcy for the airline.

CONTACT:  VARIG (Viacao Aerea Rio-Grandense, S.A.)
          Rua 18 de Novembro No. 800, Sao Joao
          90240-040 Porto Alegre,
          Rio Grande do Sul, Brazil
          Phone: (51) 358-7039/7040
                 (51) 358-7010/7042
          Fax: +55-51-358-7001
          Home Page: www.varig.com.br/english/
          Contacts:
          Dorival Ramos Schultz, EVP Finance and CFO
          E-mail: dorival.schultz@varig.com.br

          Investor Relations:
          Av. Almirante Silvio de Noronha,
          n  365-Bloco "B" - s/458 / Centro
          Rio de Janeiro, Brazil



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

MADECO: Shareholders Approve Revisions To $90M Equity Issue
-----------------------------------------------------------
Shareholders of Chilean company Madeco (NYSE:MAD) modified the
company's US$90 million equity issue as part of the company's
financial restructuring, Business News Americas reports. The
company will now issue 1.80 billion shares at 35 pesos each,
instead of 2.2 billion shares for 25 pesos each as agreed on
July.

Madeco is currently restructuring US$325 million debts, of which
US$100 million are in long term-bonds, US$120 million are in bank
loans, and US$100 million are related to the company's
subsidiaries.

The copper wire and tube manufacturer expects to pay US$120
million short-term bank debt from the offering, which is expected
to be finished in September.

The company has hired investment bank Salomon Smith Barney as
adviser for the restructuring process. It is planning to pay
US$30mn bank debt in seven years, with three years' grace, under
a deal previously reached with creditor banks.

Madeco is controlled by the Luksic group, which beneficially owns
approximately 56.5% of the Common Stock of the company.

Madeco posted a first-quarter loss of CLP10.22 billion
(US$1=CLP699.40), after the Company closed down part of its
Argentina-based operations in an attempt to minimize further
damage from the country's economic crisis.

To see latest financial statements:
http://bankrupt.com/misc/Madeco.doc

CONTACT:  MADECO S.A.
          Ureta Cox, 930
          San Miguel, Santiago, Chile
          Phone: 56-2 5201461
          Fax: 56-2 5516413
          E-mail: mfl@madeco.cl
          Home Page: http://www.madeco.cl
          Contacts:
          Oscar Ruiz-Tagle Humeres, Chairman
          Albert Cussen Mackenna, Chief Executive Officer

          Investor Relations
          Phone: 56-2 5201380
          Fax:   56-2 5201545
          E-mail: ir@madeco.cl

          SALOMON SMITH BARNEY HOLDINGS INC.
          388 Greenwich St.
          New York, NY 10013
          Phone: 212-816-6000
          Fax: 212-793-9086
          Home Page: http://www.smithbarney.com
          Contact:
          Michael A. Carpenter, Chairman and CEO
          Michael J. Day, EVP and Controller



===================================
D O M I N I C A N   R E P U B L I C
===================================

LA COMPANIA: Fitch Places Ratings on Watch Negative
---------------------------------------------------
Fitch Ratings placed the 'BBB' senior secured rating of La
Compania de Electricidad de San Pedro de Macoris (San Pedro) on
Rating Watch Negative. Approximately US$137.2 million of senior
secured debt is affected.

The senior secured notes are ultimately supported by an
irrevocable Partial-Risk Guarantee (PRG) from the Inter-American
Development Bank (IDB) up to US$144 million, which essentially
mitigates offtake risk of the project. Despite the recent delays
in payment by both the project's offtaker, Corporacion Dominicana
de Electricidad (CDE), and the Dominican government, the
principal and interest owed to the secured lenders will not be
affected due to the IDB support provided that appropriate and
timely steps are taken in accordance with the credit
documentation. Nevertheless, CDE and the government's non-payment
had led San Pedro in early August to shutdown its units, which
have since been restarted, and calls into question the financial
viability of the project as well as the entire Dominican
electricity sector.

Fitch's rating of the notes is predicated on the expectation that
the lenders exercise their rights under the financing
documentation in a timely manner to accept coverage by the IDB
guarantee, if necessary, to avoid a payment default by the
project and ensure full recovery of principal and accrued
interest. Failure to timely exercise these rights could
potentially result in a downgrade of the rating to a default
level should the project exhaust its financial liquidity prior to
termination of the power purchase agreement (PPA), a condition
precedent for a claim to IDB.

The project provides the power under a 20-year PPA which calls
for the project to supply all of its power to CDE. CDE has been
unable to collect sufficient amounts from the distributors, who
claim that the reduced payments to CDE offset amounts owed to
them by government entities within the distributors' respective
service territories. The delay in collection is being financed by
the project and could eventually lead to liquidity problems at
the project level. Despite reduced cash flow generation, the
project remains current on its interest payments to the
noteholders.

To backstop the PPA, the project has also entered into an
Implementation Agreement (IA) with the Dominican government. The
IA provides for full and timely payment of CDE's payment
obligations under the PPA and is supported by an unconditional
and irrevocable guarantee by the Dominican Republic. This
government guarantee has been called on by the project for the
March, April and May invoices after CDE failed pay the project in
full.

In the event of a payment default on a claim to Dominican
government guarantee, the PPA may be terminated by the project.
In the event of termination, the PPA provides that CDE must fully
compensate the project for all accrued interest and outstanding
principal. If CDE is unable to make the termination payment, the
Dominican government must make the required payment as specified
by the guarantee.

If following the termination of the PPA, CDE and the Dominican
government fail to make the necessary payment to the project, the
government will be in default under the IA. The lenders must then
file a claim to the IDB, which will then pay to the guaranteed
lenders the total outstanding principal and accrued interest owed
by the project, up to US$144 million. Given the current level of
debt is US$137.2 million, at no time will total principal and
accrued interest exceed US$144 million without the occurrence of
an event of default, and therefore an opportunity to terminate
the PPA.

The notes rated by Fitch are currently in the construction loan
phase and continue to benefit from their structural enhancement.
The construction loan is scheduled to be converted to term in
September 2002. Upon conversion to a term loan, the project will
prospectively benefit from a six-month debt service reserve
account to cover the waiting period for any potential claim on
the IDB guarantee.

CONTACT:  FITCH RATINGS
          Jason Todd, 312/368-3217
          Daniel Kastholm, 312/368-2070 (Chicago)
          Media Relations:
          James Jockle, 212/908-0547 (New York)



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

GRUPO MEXICO: ASARCO, Justice Department Agree To Stipulation
-------------------------------------------------------------
Grupo Mexico subsidiary ASARCO Inc. and the Justice Department
agreed Tuesday to a stipulation that blocks the unit from selling
or transferring Southern Peru Copper Corp. until at least late
September, reports the AP.

ASARCO is looking to sell its 54% majority stake in SPCC, to its
parent, the holding company America's Mining Corp. All are owned
by Mexico City-based Grupo Mexico, which acquired New York-based
ASARCO in late 1999 for US$2.2 billion. The SPCC sale is part of
Grupo Mexico's financial restructuring. The funds raised would be
used to pay off a US$450-million loan facility. The restructuring
involves bringing all the group's mining operations under the
umbrella of Americas Mining Corp, and ASARCO focusing on its US
interests, which include three mines and a copper smelter-
refinery.

However, the Justice Department moved to block the proposed sale
Friday, calling it an attempt to duck hundreds of millions of
dollars in Superfund cleanup obligations around the country. The
stipulation was filed in U.S. District Court in Tacoma, where
ASARCO is liable for an estimated $60 million cleanup of arsenic
contamination in Commencement Bay and neighborhoods around the
former site of a copper smelter that operated for more than a
century.

The sale is blocked until there is a ruling on the Justice
Department's motion for preliminary injunction. If a ruling does
not occur before Sept. 20, ASARCO and the Justice Department will
meet to establish when the stipulation ends.

CONTACTS:  GRUPO MEXICO S.A. DE C.V
           Avenida Baja California 200,
           Colonia Roma Sur
           06760 Mexico, D.F.
           Mexico
           Phone: +52-55-5264-7775
           Fax: +52-55-5264-7769
           http://www.gmexico.com
           Contacts:
           German Larrea Mota-Velasco, Chairman & CEO
           Xavier Garcia de Quevedo Topete, President & COO

           SOUTHERN PERU COPPER CORPORATION
           Ave. Caminos del Inca 171
           Urb. Chacarilla del Estanque
           Santiago de Surco
           Lima 33, Peru
           Tel: +51 1 372 1414
           Fax: +51 1 372 0238
           Home Page: http://www.southernperu.com
           Contacts:
           German Larrea Mota-Velasco, Chairman & CEO
           Oscar Gonzalez Rocha, President & Director General
           Daniel Tellechea Salido, VP - Finance

           ASARCO, INC.
           2575 E. Camelback Rd., Ste. 500
           Phoenix, AZ 85016
           Phone: 602-977-6500
           Fax: 602-977-6701
           Home Page: http://www.asarco.com
           Contacts:
           German Larea Mota-Velasco, Chairman & CEO
           Genaro Larrea Mota-Velasco, President
           Daniel Tellechea Salido, VP & CFO


GRUPO MEXICO: SPCC Shareholders Elect Directors; Ratify Auditors
----------------------------------------------------------------
Shareholders of Southern Peru Copper Corp. (NYSE:PCU) and (LSE:
PCU1) recently elected 15 directors and ratified the selection by
the board of directors of Deloitte & Touche LLP as independent
accountants at SPCC's annual meeting in Mexico City. Elected
directors to represent common shareholders of SPCC are John F.
McGillicuddy and Gilberto Perezalonso Cifuentes.

Elected to represent the Class A shareholders are: German Larrea
Mota-Velasco, Oscar Gonzalez Rocha, Manuel Calderon Cardenas,
Jaime Claro, Hector Garcia de Quevedo Topete, Xavier Garcia de
Quevedo Topete, Harold S. Handelsman, Genaro Larrea Mota-Velasco,
Armando Ortega Gomez, Ramiro G. Peru, Jaime Serra Puche, Daniel
Tellechea Salido, and J. Steven Whisler.

Proposals of stockholders intended to be presented at the
company's 2003 annual meeting of stockholders must be received by
the company at its principal executive office (2575 E. Camelback
Rd. Suite 500, Phoenix, AZ 85016) by March 17, 2003, in order to
be considered for inclusion in the company's proxy statement and
proxy form.

SPCC is one of Peru's largest companies and one of the 10-largest
copper producers worldwide. The ownership of SPCC shares, either
directly or through subsidiaries, is as follows: Grupo Mexico
(54.2 percent), Cerro Trading Co. (14.2 percent), Phelps Dodge
Corp. (14.0 percent) and other shareholders (17.6 percent).

CONTACTS:  GRUPO MEXICO S.A. DE C.V
           Avenida Baja California 200,
           Colonia Roma Sur
           06760 Mexico, D.F.
           Mexico
           Phone: +52-55-5264-7775
           Fax: +52-55-5264-7769
           http://www.gmexico.com
           Contacts:
           German Larrea Mota-Velasco, Chairman & CEO
           Xavier Garcia de Quevedo Topete, President & COO

           SOUTHERN PERU COPPER CORPORATION
           Ave. Caminos del Inca 171
           Urb. Chacarilla del Estanque
           Santiago de Surco
           Lima 33, Peru
           Tel: +51 1 372 1414
           Fax: +51 1 372 0238
           Home Page: http://www.southernperu.com
           Contacts: Clay Allen, 602/977-6515


TV AZTECA/AZTECA HOLDINGS: Moody's Ups Ratings on Improvement
-------------------------------------------------------------
Moody's Investors Service upgraded the ratings of Azteca
Holdings, S.A. de C.V. (Holdings) and TV Azteca, S.A. de C.V. (TV
Azteca. The ratings affected are:

- US$179 million of senior secured notes due 2003 and 2005 of
Holdings to B2 from B3,
- US$425 million of senior unsecured notes due 2004 and 2007 of
Azteca to Ba3 from B1,
- Senior implied rating to Ba3 from B1, and
- Holdings' senior unsecured issuer rating to B3 from Caa1.

The rating outlook is stable.

Moody's attributed the ratings to the material improvement in
Azteca's financial performance, particularly the reduction in
leverage to approximately 3 times and an increase in interest
coverage to about 2.5 times after capital expenditures. Azteca's
strong position in Mexican television broadcasting was also being
considered.

However, Moody's said that these ratings continue to be
constrained by the potential for the company to make investments
outside its Mexican broadcasting base and the likelihood that it
will face increasing competition as it attempts to broaden its
coverage of the US-Hispanic market.

The ratings also incorporate the company's head-on competition
with the leading Mexican broadcaster, Televisa, and its foreign
exchange exposure, as the company's revenue and cash flow are
peso-denominated and its debt is mostly in US dollars. Further,
the company's vulnerability to the economic volatility of Mexico
is also considered.

But given the material progress Azteca continues to make in its
financial performance further enhancement in the company's
ratings is possible. If, in the future, Unefon were to be spun
off and the US$177 million returned to Azteca, an upgrade would
be likely.

However, the ratings remain inhibited by concerns regarding
management's consistent adherence to its articulated long-term
goals. The Ba3 rating on Azteca's notes reflects the unsecured
status of this debt class and the benefits of subsidiary
guarantees. The B2 rating on Holdings' notes reflects their
structural subordination to the operating company debt and their
security interest in the stock of the operating company and
Unefon.

Azteca Holdings, S.A. de C.V. owns approximately 56% of TV
Azteca. TV Azteca is the second largest television company in
Mexico with two television networks, Azteca 7 and Azteca 13,
operating 315 stations throughout Mexico.

New York
Russell Solomon
Senior Vice President
Corporate Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

New York
Christina Padgett
VP - Senior Credit Officer
Corporate Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653



               ***********


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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Information contained herein is obtained from sources believed to
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