TCRLA_Public/021213.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

           Friday, December 13, 2002, Vol. 3, Issue 247



ARGENTINE UTILITIES: Court Overturns Rate Hike Decree
GRUPO GALICIA: Complies With All Nasdaq Listing Terms
REPSOL YPF: Safe From Possible 100% Repatriation Requirement
* Argentina May Make WB Payment This Month


ENRON: IDB Approves $132M Loan To Finance Bolivian Expansion


CESP: May Profit From Sabesp's Measure To Cut Power Expenditure
ELETROPAULO METROPOLITANA: Suspending Debt Payments Above BRL30M
EMBRATEL: Anatel Downplays Future Financial Collapse Potential
KLABIN: Adopts Top Level Corporate Governance Standards - BOVESPA
TUPY: WTO Rejects Complaints Vs. EU


ENERSIS/ENDESA CHILE: S&P Downgrades Ratings to 'BBB'
ENERSIS: Cut Moves S&P To Place Parent's Ratings On CreditWatch


CABLE & WIRELESS: Jamaican Operations Hammered by Competition


CINTRA: United Airline's Bankruptcy Threatens Sale
EMPRESAS ICA: Rolls Over Debts With New MXP$1,180M 10-year Loan
MEXICANA: Puts Positive Spin On UAL's Restructuring

P U E R T O   R I C O

* S&P Puts Country's Debt on CreditWatch; Negative Implications

     - - - - - - - - - -


ARGENTINE UTILITIES: Court Overturns Rate Hike Decree
An Argentine court ruled that the presidential decree ordering an
increase in utility rates was illegal in Buenos Aires, reports
Reuters. The story cites a spokesman for the plaintiff saying
that the ruling would soon be applied to the entire country.
The initial decree provided for increases of 9 percent in
electricity rates and 7 percent in natural gas rates.

Utility companies have been petitioning for an increase of as
much as 30 percent to shore up losses from currency devaluation.
The IMF was also demanding more than what the decree had allowed
as a stipulation to further financial guarantees.

The ruling was unwelcome news to mostly foreign-owed utilities.
The companies had argued that increases were essential to
maintain the quality of their services.

Earlier reports reveal that utility rates in Argentina were
frozen at their January rates, and utilities with dollar-
denominated debts had suffered many losses when the local
currency lost more than 70 percent of its value against the
dollar this year. In fact, many firms with large foreign debts
have already defaulted.

GRUPO GALICIA: Complies With All Nasdaq Listing Terms
Grupo Financiero Galicia SA received Tuesday a notice from Nasdaq
stating that the Company has met all information requirements
necessary for continued listing and that the Company's hearing
file has been closed. Subsequently, Grupo Galicia returned to
full listing on the Nasdaq exchange Wednesday and is now trading
under its old GGAL ticker again.

Grupo Galicia is one of Argentina's largest financial groups,
with banking unit Banco Galicia its most important asset. The
group's biggest borrower is the Argentine government, which
defaulted on $95 billion of bonds in December last year and
devalued the peso.

          Teniente General Juan D. Per>n 456, Piso 3
          1038 Buenos Aires, Argentina
          Phone: (54 11) 4343 7528 / 9475
          Home Page:
          Eduardo J. Escasany,  Chairman and CEO
          Sergio Grinenco, CFO, Banco de Galicia y Buenos Aires

REPSOL YPF: Safe From Possible 100% Repatriation Requirement
A federal court in Argentina ruled that the government and the
central bank must "abstain from dictating any measure which
affects YPF's access to currencies", reported Spanish daily
Expansion. Business News Americas reported in its Wednesday
edition that Spanish oil and gas company Repsol YPF will not be
forced to keep 100 percent of its Argentina-generated oil export
revenues in Argentina.

A spokesperson from Repsol said that this is just a protective
measure in case the central bank pushed through with the rumored
increase in repatriation. The spokesperson also added that both
the government and Repsol would be better off to maintain the
status quo.

Argentina's outgoing central bank chief Aldo Pignanelli said had
submitted a letter to the government recommending that oil
companies in the country be forced to monetize 100 percent of
their export earnings in the country.

The Spanish newspaper also reported that other oil companies are
seeking a legal injunction to protect themselves from possible
decision by the central bank to remove the concession under which
they currently operate. Right now, Argentine oil companies are
allowed to keep 70 percent of their export earnings offshore.

Repsol YPF generate an average of 445,00 barrels of oil per day
in Argentina. About a quarter of this figure is exported at about
US$20 per barrel. This converts to around US$812 million in
export earnings for the Company every year.

         Head Office
         Paseo de la Castellana 278
         28046 Madrid
         Tel  +34 91 348 81 00
         Fax  +34 91 348 28 21
         Telex  48162 RESOLE
         Alfonso Cortina de Alcocer, Chairman
         Jose Vilarasu Salat, Vice Chairman
         Antonio Hernandez, Vice Chairman

* Argentina May Make WB Payment This Month
Argentina may make a payment to the World Bank as early as
Monday, December 16, as the 60-day grace period on a payment due
to the lender ends on December 14. However, reports vary as to
exactly how much the country would be paying the lender.

A report from Infobae newspaper on Wednesday indicated that
Argentina may pay US$593 million, while local paper El Cronista
reported that US$250 million may be made. Dow Jones Newswires
said that it was not clear whether the US$250 million would be
paid on top of the amount mentioned by Infobae, adding that
officials from the Economy Ministry were not available for
comment on the matter.

The World Bank was forced to pay investors on bonds when the
government of Argentina failed to make a US$805 million payment
due in October. Instead, the country paid the lender only US$79
million in interest in November.

Newspapers report that the government wants to ensure the World
Bank guarantee rolls over to the succeeding series of bonds
maturing in a year.

The country's failure to make another payment in November had
disqualified it from obtaining new loans from the World Bank.
Another payment would be due again this month, and the country is
still in arrears.  The situation may trigger lenders to stop
making disbursements on existing loans to the country.

The report also indicated that the World Bank would declare the
default to be in "nonaccrual" status, meaning the bank doesn't
expect to be repaid, if Argentina fails to pay up by April 14
next year.


ENRON: IDB Approves $132M Loan To Finance Bolivian Expansion
Enron Corp. obtained approval from the Inter-American Development
Bank for a US$132-million loan to finance its Bolivian unit's
expansion project. Citing a statement prepared by IDB, Dow Jones
relates that the financing includes a US$75-million direct IDB
loan and a US$57-million syndicated loan arranged by ABN Amro and
Banco Bilbao Vizcaya Argentaria (BBV). The Andean Development
Corporation will co-finance $88 million, the statement added.

The project will raise Transredes S.A.'s export pipeline capacity
to 1.06 billion cubic feet a day from the current 460 million
cubic feet a day to meet growing demand in Brazil as well as
higher demand in Bolivia. It would also raise capacity to
transport natural gas liquids to 71,000 barrels a day from the
current 55,000 b/d.

Enron, which filed Chapter 11 bankruptcy in December 2001, said
earlier that it was considering selling its stake in the unit if
it gets an offer "consistent with its value," to help pay its

Royal Dutch Petroleum Co., pension funds and private investors
own the rest of Transredes.


CESP: May Profit From Sabesp's Measure To Cut Power Expenditure
Sao Paulo state generator, CESP, will be benefited if state water
company Sabesp becomes an unregulated power consumer in order to
cut its power bills. CESP is trying to sell as much power as
possible in order to guarantee payments on its debts.

Sao Paulo state energy secretary Mauro Arce, who has also been
president of Sabesp since Ariovaldo Carmignani resigned at end-
November, revealed that electricity is Sabesp's third largest
expense after human resources and water treatment. In the third
quarter, Sabesp paid BRL71 million (US$18.8mn) in electricity
costs. The figure was 45% higher than the same period in 2001.

Business News Americas reports that Sabesp currently buys power
from the various distributors across the state. But, according to
Mr. Arce, it could choose to purchase all its power from a single
generator and simply pay local distributors for the capacity
charge and transmission tolls. Although Sabesp is examining a
number of self-generation projects, Arce implied this strategy of
becoming a free consumer could allow Sabesp to purchase its power
from CESP.

From January 1, 2003, 25% of CESP's power currently tied down in
the initial contracts becomes available. The company is trying to
sell this power through a public auction, but the prospects are
poor. Not much more encouraging are the options of selling that
power through bilateral contracts before the end of the year, Mr.
Arce said. CESP needs to sell the power to be able to guarantee
payments on its debts, which total about US$3 billion.

"We survived 2002, now we must deal with 2003," according to Mr.
Arce, referring to the company's debt situation, which account
for about 90% of CESP 's annual budget. The company's operating
costs account for just 10% of the annual spending, he said.

Most of CESP 's debts are with the federal government, and around
90% of them are in US dollars, Mr. Arce said. The company is also
considering its options for dealing with a US$150 million issue
from 2001, for which there is a put option in May 2003, he added.
Depending on the success of the power auction, Cesp will have to
resort to seeking bilateral contracts to place the power.

CONTACT:    Companhia Energetica De Sao Paulo (CESP)
            Rua da ConsolaĜ o, 1.875
            CEP 01301 -100 S o Paulo, Brazil
            Phone: +55-11-234-6322
            Fax: +55-11-287-0871
            Home Page:
            Mauro G. Jardim Arce, Chairman
            Ruy M. Altenfelder Silva, Vice Chairman
            Vicente Kazuhiro Okazaki, Finance Director

ELETROPAULO METROPOLITANA: Suspending Debt Payments Above BRL30M
Brazil's power distributor Eletropaulo Metropolitana proposed to
cease any debt payments higher than BRL30 million, reports Dow
Jones. In a statement sent Wednesday to the stock exchange, the
Company managed to obtain approval for its proposal from holders
of a debenture issue of BRL700 million. Debt that has been
renegotiated or which is under a refinancing process is excluded
from the decision, the official statement added.

Meanwhile, Eletropaulo revealed it managed to roll over until
February 24 the payment of US$100-million in commercial paper
that came due Monday. Merrill Lynch recently downgraded its stock
recommendation on the Brazilian utility to `sell' from `neutral'
on expectation that "debt issues are likely to continue to weigh
on the stock."

Although Eletropaulo's future financing needs "should be sharply
lower" than the nearly US$665 million of debt that it had to
repay this year. Merrill's analysis also said that the utility
has "increasingly little room to maneuver." The Brazilian economy
is shrouded with uncertainty and this puts pressure on
Eletropaulo's earnings.

"While the most likely outcome is that the company eventually
gets an extension (on its debt deadlines,) and, in the end, is
able to refinance (the debt), this is not assured. And, continued
difficult access to the capital markets could be problematic,"
Merrill's report indicated.

Eletropaulo has already managed to extend the deadlines on
hundreds of millions of debt that came due earlier this year.

          Avenida Alfredo Egidio de Souza Aranha 100-B,
          13 andar 04726-270 San Paulo
          Phone: +55-11-548-9461, +55 11 5696 3595
          Fax: +55-11-546-1933
          Luiz D. Travesso, Chairman and President
          Orestes Gonzalves Jr., VP Finance/Investor Relations

EMBRATEL: Anatel Downplays Future Financial Collapse Potential
Although Embratel has been dealing with big losses in the last
seven quarters and debt totaling BRL5.2 billion at the end of the
third quarter, Brazil's telecoms regulator Anatel doesn't
perceive the country's largest long distance operator is on the
verge of collapsing.

"Embratel does not present this frightening situation that is
being described. I cannot see this supposed collapse," Anatel
chairman Luis Schymura de Oliveira said, adding that Embratel's
investment plan is being deployed as previously outlined by the

Meanwhile, Mr. Schymura slammed reports that Embratel is likely
to be taken over by three fixed-line incumbents - Telemar,
Telefonica and Brasil Telecom. Under Brazilian law, fixed line
incumbents cannot buy Embratel until after July 2003, and only if
antitrust legislation is lifted. Mr. Schymura, however, has
admitted in previous interviews those regulations could be

Embratel is controlled by bankrupt U.S-based WorldCom.

            Investor Relations
            Silvia Pereira
            Tel. (55 21) 2519-9662
            Fax: (55 21) 2519-6388
            Press Relations:
            Helena Duncan/Mariana Palmeira
            Tel: (55 21) 2519-3653/3654
            Fax: (55 21) 2519-8010

KLABIN: Adopts Top Level Corporate Governance Standards - BOVESPA
BOVESPA announces that KLABIN S.A. (negotiation code KLBN) joined
the Level 1 Program of Corporate Governance. KLABIN is one more
company to adopt best practices of Corporate Governance, through
BOVESPA's special trading segments, designed for the listing of
companies whose administrators and controlling shareholders have
made a voluntary commitment to meeting requirements in addition
to those already requested by the Brazilian legislation.

Once listed, the commitments taken on will become part of the
daily routine and the investors will be able to check their
enforcement at the company's Website
(,where a section has
been set up to divulge the information provided by the companies.

Some of these commitments are listed bellow:

- Maintenance of a free-float of at least 25% of the capital;
- A minimum notice period of 15 days must be given for calls to
general meetings;
- Improved disclosure of quarterly information including the
obligation of reporting consolidated figures and special audit
- Joining the disclosure rules for transactions involving assets
issued by the company on the part of the controlling shareholders
or company management;
- Disclosure of shareholder agreements and stock option programs
and contracts with related parties;
- The holding of annual meetings with analysts and any other
interested parties;
- Provision of an annual calendar of corporate events; and
- The holding of public offerings for placing shares through
mechanisms that favor capital dispersion to a broader spectrum of

The IGC Special Corporate Governance Stock Index

KLABIN (KLBN) is now included in the IGC - Corporate Governance
Index - with a participation of 1.0%. This index serves as a
benchmark for the performance of stocks listed under the Special
Corporate Governance Program.


KLABIN is the Brazilian leading company in the integrated
production of market pulp, paper and paper products. Its yearly
production amounts to 2.1 million tons, 40% of which is exported,
and its net revenue surpasses R$ 2 billion. At year's end, Klabin
provided 16 thousand direct and indirect jobs in its forestry and
28 industrial operations (26 in Brazil and 2 in Argentina).

Its preferential shares participate in the actual portfolio of

          Rua Formosa, 367 - 12o Andar
          01075-900 Sao Paulo - SP
          Tel  +55 11 3225-4000
          Fax  +55 11 3225-4241
          Pedro Franco Piva, Chairman

TUPY: WTO Rejects Complaints Vs. EU
The majority of the complaints against the European Union filed
by Brazilian diplomats in defense of iron and steel foundry Tupy
were turned down by the World Trade Organization, according to a
local daily Gazeta Mercantil story. The report indicated that 16
out of the 18 filings, which were mainly concerned with anti-
dumping surtaxes of 34.8% on Tupy's products the imposed by EU
since 2000, were turned down.

Every year, Tupy, one of the largest foundries in Latin America,
lost US$13 million from the surtaxes, said the report. However,
the WTO decided that the EU had indeed "acted improperly" in the
calculation of anti-dumping margins.

According to the report, EU officials initially based the anti-
dumping tariff only on those cases in which Tupy sold its
products at below prices charged in Brazil - which constitutes
dumping - and did not include prices the Company charged that
were above the domestic rate. By combining the whole set of
prices, duties would fall.

The WTO told the EU to recalculate the anti-dumping duties, which
sources say could fall to 32.8 percent.

          Head Office
          Rua Albano Schmidt 3,400
          Boa Vista
          89206-900 Joinville - SC
          Tel  +55 47 441-8514
          Fax  +55 47 441-8321
          Mario Fernando Engelke, Chairman
          Francisco Parra Valderrama, BOD Member
          Norberto J Hoffmann, BOD Member


ENERSIS/ENDESA CHILE: S&P Downgrades Ratings to 'BBB'
Standard & Poor's Ratings Services said Wednesday that it lowered
its long-term corporate credit and debt ratings on Chile-based
electricity provider Enersis S.A. (Enersis) and its 60%-owned
subsidiary Empresa Nacional de Electricidad S.A. (Endesa Chile)
to 'BBB' from 'BBB+' based on continued weak financial
performance for the rating category. The outlooks on both Enersis
and Endesa Chile are negative.

"We expected Enersis and Endesa to improve their financial
ratios, helped by the high level of hydro generation in Chile,"
said credit analyst Sergio Fuentes. "However, the devaluation
that affected their subsidiaries, mainly in Argentina and Brazil,
and the reduction in the node price in dollars in Chile during
2002 hindered the improvement in the financial performance of
both companies. In addition, the environment in the region caused
a delay in some of the group's projected asset divestitures,
which were also expected to help reduce debt, somewhat relieving
the company's leveraged capital structure. At the same time, the
concentration of debt maturities in 2003 and 2004 continues being
a concern," continued Mr. Fuentes.

The negative outlook reflects the liquidity challenges faced by
Enersis and Endesa Chile, resulting from the high concentration
of debt maturities in 2003 and 2004, which amount to
approximately US$3.8 billion. These maturities present a
relatively high refinancing risk, exacerbated by the difficult
economic environment in Latin America, mainly in Argentina and
Brazil, which derives in a lower cash flow from their
subsidiaries to Enersis and Endesa Chile. Standard & Poor's will
re-evaluate Enersis' and Endesa Chile's credit quality once the
renegotiation of the maturing debt terms is completed. In
Standard & Poor's view, a significant reduction in the companies'
refinancing risk, as well as the strengthening in financial
ratios, is necessary for rating stability.

Enersis is one of the largest electricity providers in the
region, with 100% of its investments in Latin America (Argentina,
Brazil, Chile, Colombia, and Per£). Overall, Enersis and its
subsidiaries distribute approximately 50,000 Gwh to about 10
million customers and, through Endesa Chile, it owns about
12,300MW of power generation capacity that provides an annual
generation of around 40,000 Gwh. As of September 2002, the group
had about US$7.5 billion in debt with third parties plus a US$1.4
billion debt with Endesa Spain. Approximately US$3.8 billion of
external debt matures in 2003 and 2004.

Enersis' consolidated financial ratios slightly weakened in 2002
in spite of the better performance of power generation assets in
Chile due to the high level of water in the Central
Interconnected System (SIC). Funds from operations interest and
debt coverage reached 2.7x and 12% in the 12 months ended
September 2002, compared with 2.8x and 16%, respectively, during
fiscal 2001. In addition, Endesa Chile's higher-than-average cash
generation in Chile was offset by the weaker cash generation at
the level of its subsidiaries mainly due to devaluation. As a
result, funds from operations interest coverage and cash flow-to-
total debt remained flat in the last 12 months ended in September
2002 at 2.4x and 9.5%, respectively.

ANALYSTS:  Sergio Fuentes, Buenos Aires (54) 114-891-2131
           Marta Castelli, Buenos Aires (54) 114-891-2128

ENERSIS: Cut Moves S&P To Place Parent's Ratings On CreditWatch
Standard & Poor's Ratings Services said Wednesday it placed its
'A' long-term and 'A-1' short-term corporate credit ratings on
the Spanish utility Endesa S.A on CreditWatch with negative
implications. The 'A' debt ratings on Endesa's guaranteed
subsidiary, International Endesa B.V., were also placed on
CreditWatch with negative implications.

The CreditWatch placement follows the downgrade of Endesa's 64%-
owned Chile-based subsidiary Enersis S.A. to 'BBB' from 'BBB+'
(see "Enersis and Endesa Chile Downgraded to 'BBB', Outlooks
Remain Negative", published on December 11, 2002, on
RatingsDirect, Standard & Poor's Web-based credit analysis

"The CreditWatch on Endesa reflects the impact on its
consolidated risk profile of the economic and political
deterioration in some Latin American countries where the group
has significant operations and the weak cash flow generation and
refinancing risk at Enersis," said Standard & Poor's
Infrastructure Finance credit analyst Ana Nogales.

The CreditWatch will be resolved once Standard & Poor's completes
its full review of Endesa, which will take into account proposed
changes in the Spanish electricity regulatory framework, the
revised investment program, planned asset disposals, and Enersis'
weakened profile. A deterioration of Endesa's prospective debt
protection measures or any indication that it will increase
support to its Latin American subsidiaries would be likely to
result in the lowering of the ratings. Any rating reduction is
likely to be limited to one notch.

The ratings on Endesa reflect the balance between its strong
business and moderate financial profile in Spain, and the risk
from its exposure to Latin America. Standard & Poor's applies a
significant degree of rating separation between the Spanish and
Latin American operations. This is reinforced by the lack of
guarantees and cross-default clauses between the groups, and by
the financing of the Latin American operations largely by
Enersis, which implies that Endesa's debt is serviced from its
Spanish operations.

ANALYST:  Ana Nogales, London (44) 20-7826-3619,

          Lidia Polakovic, Madrid (34) 91-389-6951,


CABLE & WIRELESS: Jamaican Operations Hammered by Competition
The Jamaican operations of troubled carrier Cable & Wireless Plc
is losing out badly to new rival Digicel, the Financial Times
reports, citing an internal report released by the Company. To
add to the Company's woes, its stock market valuation dropped to
a new low of US$1.5 billion from US$12.2 billion in the previous
year. A report from the ComputerWire shows that Digicel now has a
65 percent market share in Jamaica.

C&W has only 122 cell sites using TDMA technology, while
Digicel's GSM networks have 230 cell sites. The report also
indicated that Digicel plans to extend its services to other
islands. In a bid to cope with the competition, C&W had announced
that next year, its Caribbean operations would be using GSM.

According to the report, the Company's senior management may need
to be replaced judging from the fact that it had allowed a
competitor to grab a 65 percent market share. Meanwhile, the
Company said that it is rearranging its global operations
management to give it more focus as it pushes through with a
US$1.3 billion downsizing plan.

According to the report, Global chief executive Don Reed will be
based in the US. All non-US operations would be under the
leadership of Adrian Chamberlain, who is director of group
strategy and corporate development.

CONTACT:  Cable & Wireless PLC
          Head Office
          124 Theobalds Road
          WC1X 8RX
          Tel  +44 (0)20 7315 4000
          Fax  +44 (0)20 7315 5000
          Sir Ralph Robins, Non Executive Chairman
          Sir Winfried W. Bischoff, Non Executive Deputy Chairman
          Graham M. Wallace, Chief Executive
          Robert E. Lerwill, Executive Director Finance


CINTRA: United Airline's Bankruptcy Threatens Sale
The sale of Cintra, the government-owned holding company that
controls Aeromexico and Mexicana, has been suspended repeatedly
due to the global crisis in the aviation industry. Now, with the
recent Chapter 11 bankruptcy filing by United Airlines, the
prospect of selling Cintra gets even gloomier, analysts say.

Five years could pass without a sale, independent aviation
consultant Simon Garcia said, explaining that the situation at
United is a sign of the weakness of the global market.

"With estimated losses of between MXN1.4 billion and MXN1.6
billion to the close of 2002, Cintra is waiting for the
international aeronautical industry to improve a little before
looking for a buyer," said Mr. Garcia.

"The company, which has faced strong pressure to split since
1997, should have been sold in early 2001; nevertheless, all
signs indicate that all of 2003 could pass without a buyer."

He added, "surely it will be mid-2003 when the global aviation
crisis begins to bottom out and at least six or eight months will
have to pass before the airlines begin to see healthy profits

          Xola 535, Piso 16, Col. del Valle
          03100 M,xico, D.F., Mexico
          Phone: +52-5-448-8050
          Fax: +52-5-448-8055
          Jaime Corredor Esnaola, Chairman
          Juan Dez-Canedo Ruiz, CEO
          Rodrigo Ocejo Rojo, CFO
          C.P. Francisco Cuevas Feliu, Investor Relations
          Xola 535, Piso 16
          Col. del Valle
          03100 M,xico, D.F.
          Tel. (52) 5 448 80 50
          Fax (52) 5 448 80 55


          MERRILL LYNCH & CO., INC.
          World Financial Center,
          North Tower, 250 Vesey St.
          New York, NY 10281
          Phone: 212-449-1000
          Toll Free: 800-637-7455
          Home Page:
          David H. Komansky, Chairman and CEO
          E. Stanley O'Neal, President, COO, and Director
          Thomas H. Patrick, EVP and CFO

          Paseo de las Palmas No. 405
          Piso 8
          Col. Lomas de Chapultepec
          11000 Mexico City, Mexico
          Phone: 5255-5201-3200
          Fax: 5255-5201-3222

EMPRESAS ICA: Rolls Over Debts With New MXP$1,180M 10-year Loan
Empresas ICA Sociedad Controladora, S.A. de C.V. (BMV y NYSE:
ICA), announced Tuesday the signing, with Inbursa, S.A.
Instituci˘n de Banca M£ltiple, Grupo Financiero Inbursa, of a Ps.
1,180 million 10-year guaranteed loan with a step-up, fixed
interest rate. The Company will use these funds to refinance
outstanding short- and medium-term debt and for working capital

"This loan enables us to improve our debt maturity profile and to
continue implementing adjustment measures, which focus on
reducing operating costs and improving profitability," stated
Jos‚ Luis Guerrero, ICA's CFO. "The signing of this loan reflects
the confidence Mexican financial institutions have in ICA's
ability to face the difficult environment in which we are
operating," he added.

Founded in 1947, ICA has completed construction and engineering
projects in 21 countries. ICA's principal business units include
Civil Construction and Industrial Construction. Through its
subsidiaries, ICA also develops housing, manages airports and
operates tunnels, highways and municipal services under
government concession contracts and/or partial sale of long term
contract rights.

MEXICANA: Puts Positive Spin On UAL's Restructuring
Mexicana Airlines expressed its confidence in that United
Airlines' decision to file under Chapter 11 of the U. S.
Bankruptcy Code will be successful. "This will give our Star
Alliance partner, a member of the largest airline network in the
world, the opportunity to restore its financial situation without
affecting their national or international operations, including
our combined services," said Fabricio Cojuc Wolfowitz, Strategic
Alliance and Network Planning Director for Mexicana Airlines.

Mr. Cojuc assured that no passengers would be affected since
United Airlines will continue with its regular operations. The
frequent flyer programs and code-share operations will also
remain unchanged. "Of course, Mexicana will continue to promote
the services and operations both companies offer their clients,"
affirmed Mr. Cojuc.

Mr. Cojuc stated that the difficult economic situation troubling
the aeronautical industry on a global scale would not have an
impact on Mexico. "Mexicana has taken all the necessary measures
in order to guarantee an efficient operation which will allow us
to remain a market leader and continue to offer the security and
services our passengers demand," said Mr. Cojuc.

Finally, Mr. Cojuc expressed Mexicana Airlines' support and
solidarity to United Airlines. He stated that Mexicana Airlines'
trust is founded on the strength of United Airlines and its
worldwide coverage which will allow it to overcome its financial
difficulties and once again become a successful participant in
the marketplace.

About Mexicana:

Mexicana Airlines is the leading international airline of Mexico.
Its fleet is considered one of the youngest in the world, serving
53 destinations in North, Central and South America, as well as
the Caribbean. As a member of Star Alliance, the largest airline
network in the world, Mexicana Airlines offers its passengers
great benefits such as the accumulation and use of frequent flyer
mileage, access to Executive Lounges, and efficient flight
schedules allowing effective connections to over 720 destinations
around the world.

Media Contact: Mexicana Airlines

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* S&P Puts Country's Debt on CreditWatch; Negative Implications
Standard & Poor's Ratings Services placed Wednesday its ratings
and underlying ratings on the Commonwealth of Puerto Rico's
outstanding debt on Credit Watch with negative implications,
reflecting concerns over its general ability to enforce
appropriate accounting, fiscal, and management controls. The
laxity of such controls has been noted in three instances
involving unrated financial obligations of Commonwealth agencies
and a local government, where the Commonwealth may have been
incorrectly represented as the obligations' ultimate obligor.

Under a 1993 executive order, the authorization of the Government
Development Bank of Puerto Rico, as fiscal agent for the
Commonwealth, is required as a necessary condition for the
implication of the Commonwealth's credit in support of such
obligations. The development bank authorizations were not secured
on certain lease purchase obligations involving the
Commonwealth's Departments of Education and Natural Resources and
the municipal government of Rio Grande. Standard & Poor's
understands that some of these obligations may be held by U.S.
institutional investors. The Commonwealth represents that it will
make good on defaulted transactions that were not formally
entered into.

Standard & Poor's further understands that, to date,
approximately $55 million of transactions have been identified as
potentially having been issued by Commonwealth agencies or
municipalities without appropriate development bank
authorization. Standard & Poor's understands that a department-
by-department audit is currently being conducted. The Puerto Rico
Department of Justice and legal counsel are also reportedly
investigating matters.

The above transactions raise credit issues about the extent of
the problem as well the development bank's ability to enforce
appropriate accounting, fiscal, and management controls.
Proportionally, even $55 million of potentially defaulted
obligations may not seen significant in comparison to the
Commonwealth's total debt outstanding. However, it is unclear
whether the $55 million figure is accurate pending the outcome of
investigations. Of equal concern are the controls and practices
that have given rise to this situation. Standard & Poor's expects
to receive documents and substantial information in the next few
weeks that will clarify the extent of additional transactions and
outline what changes to management controls will be implemented.
Should these concerns not be speedily resolved, rating action may

Approximately $21.4 billion of debt is affected.

Analyst:  Kenneth A Gear
          Washington D.C.
          Tel (1) 202-383-3540

          Philip Shapiro
          Tel (1) 617-371-0310


S U B S C R I P T I O N   I N F O R M A T I O N

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