TCRLA_Public/050117.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

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

            Monday, January 17, 2005, Vol. 6, Issue 11


                            Headlines


A R G E N T I N A

AUTOTRANSPORTES SAN JUAN: Reports Submission Set
BANCO BISEL: Former Parent Wins Court Battle vs. Former Clients
BANCO DE CORDOBA: Sale Likely to Attract Owners of Local Banks
DISTRIBUIDORA DON BOSCO: Verification Deadline Approaches
REPSOL YPF: Revises Organizational Structure

YACYRETA: BICE Wins Bid to Administer Expansion Fund
* ARGENTINA: Fitch Lowers Rating To 'D' From 'DD'
* ARGENTINA: Shalov Stone Initiates Bondholder Class Action


B E R M U D A

ANNUITY & LIFE: Pays $2.5M Settlement Balance
MONARCH CAPITAL: Names Robin Mayor as Trustee
NEXT MEDIA: Members Agree to Wind-Up Company


B R A Z I L

CSN: Moody's Issues New Outlook on B1 FC Note Ratings
IPIRANGA: Moody's Assigns Positive Outlook to B1 Notes Rating


G U A T E M A L A

CORPORACION UBC: S&P Releases Report on Ratings


M E X I C O

EMPRESAS ICA: To Build $690M Refinery for Pemex
GRUPO POSADAS: S&P Affirms Ratings; Outlook Still Stable
GRUPO POSADAS: Moody's Rates $75M Notes `Ba3'
GRUPO TMM: Shareholders Approve TFM Sale to KCS
UNEFON: Supreme Court Tosses Lawsuit Out


U R U G U A Y

BANCO COMERCIAL: Creditor Wins First Round in Legal Battle
* Uruguay: R&I Upgrades FCLT Debt to B


V E N E Z U E L A

PDVSA: Business Review Includes Board Membership Overhaul


     - - - - - - - - - -

                            
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A R G E N T I N A
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AUTOTRANSPORTES SAN JUAN: Reports Submission Set
------------------------------------------------
Accounting firm "Estudio Lopez, Gomez y Asociados", the trustee
assigned to supervise the liquidation of Autotransportes San
Juan S.A., will submit the validated individual claims for court
approval on March 10. These reports explain the basis for the
accepted and rejected claims. The firm is also required to
submit a general report on April 21.

Infobae reports that Court No. 1 of San Juan's civil and
commercial tribunal has jurisdiction over this bankruptcy case.

CONTACT: "Estudio Lopez, Gomez y Asociados"
         Rivadavia 522
         Este (San Juan)


BANCO BISEL: Former Parent Wins Court Battle vs. Former Clients
---------------------------------------------------------------
The former clients of Argentine bank Banco Bisel lost their case
against the bank's former parent, French banking giant Credit
Agricole (CA), reports Business News Americas.

In May 2003, thirty-seven former Bisel clients filed a suit
against CA in a Paris court following the latter's withdrawal
from Argentina during the height of the country's economic and
financial crisis in 2002, as well as its decision to close down
Bisel's branches in the country.

The 37 complainants had argued that CA had given them the
impression that its international standing would protect them
from the financial crisis.

But the Paris court ruled that it was not possible to show that
CA's exit had affected the Bisel clients negatively.

CONTACT:  Banco Bisel S.A.
          Mitre 602 Rosario
          2000 Santa Fe
          Argentina
          Phone: 0341-4200300

          Web Site: http://www.bancobisel.com.ar/



BANCO DE CORDOBA: Sale Likely to Attract Owners of Local Banks
--------------------------------------------------------------
The upcoming sale of a 40% stake in Argentine provincial bank
Banco de Cordoba is expected to attract the owners of local
banks Macro Bansud, Comafi and Banco Santa Fe, says Business
News Americas.

According to Eduardo Blasco, partner at local consultancy
Maxinver, and an executive close to the sale process, these
likely contenders stand most to gain from investing in the
Cordoba bank because it fits well into their growth strategies.

The sale of Banco de Cordoba forms part of a restructuring
program that was approved recently by Argentina's central bank
and is supported by the World Bank. Bancor's management will
present the sales model and timetable this month or in February
with several sales options being evaluated, such as a stock
market sale and a public tender.

The sale is estimated to bring in ARS90 million (US$30 million)
that will be used to capitalize Bancor. The Cordoba province is
also slated to inject another US$30 million into the bank -
probably in March - which together with the money from the sale
will bring the bank's capital to ARS310 million.


DISTRIBUIDORA DON BOSCO: Verification Deadline Approaches
---------------------------------------------------------
The verification of claims for the Distribuidora Don Bosco
S.R.L. liquidation will end on February 15 according to Infobae.
Creditors with claims against the bankrupt Company must present
proof of the liabilities to Ms. Liliana Graciela Paloschi, the
court-appointed trustee, before the deadline.

Court No. 4 of Mar del Plata's civil and commercial tribunal
handles the Company's case with the assistance of Clerk No. 7.
The proceedings will conclude with the liquidation of the
Company's assets to pay its creditors.

CONTACT: Distribuidora Don Bosco S.R.L.
         Italia 3529
         Mar del Plata

         Ms. Liliana Graciela Paloschi, Trustee
         Avda Luro 3894
         Mar del Plata


REPSOL YPF: Revises Organizational Structure
--------------------------------------------
The multinational energy Company Repsol YPF announced Thursday
its new organizational structure, which is designed to enable
the elaboration and attainment of the objectives in the
Company's upcoming Strategic Plan. Repsol YPF's new organigram,
under the leadership of its Chairman and Chief Executive
Officer, Antonio Brufau, responds to the following four key
points:

1. Orientate and move organization closer to markets
2. Decentralize and speed up decision-making process
3. Establish direct responsibility for managers to earnings
4. Increase efficiency and reduce weight of corporate areas

The new organization emphasizes the Company's major managerial
priorities: the business areas of Exploration, Production and
LNG (Upstream), and those of Refining, Marketing, Chemicals and
LPG (Downstream), as well as its leading position in Latin
America, where 50% of Repsol YPF's assets are concentrated. In
particular, the Company will strengthen its management and
institutional presence in Argentina, given the special relevance
that country has for Repsol YPF.

Therefore, the new organigram creates three large Strategic
Business Areas, directed by professionals who have many years of
experience inside the Company, and who will be completely
responsible with respect to earnings. At the same time, the
Corporate Center of the Company will be streamlined.

Strategic Business Areas:

1. Executive Director for Corporate Division of Argentina,
Brazil and Bolivia, Enrique Locutura, who until recently was Gas
Natural's Chief Executive Officer, will be responsible for the
integrated chain of value (exploration, production, refining,
logistics, marketing and chemicals) in the said countries.
Locutura will, besides being the maximum person responsible for
the earnings of the mentioned geographical region, assume the
institutional representation of Repsol YPF in Argentina.
The creation of this division, which will have five business
areas, as well as the support functions necessary to realize an
integral management, reflects the importance of this
geographical area for Repsol YPF.

2. Executive Director for Corporate Division of Upstream,
Nemesio Fernandez-Cuesta, will lead the division that will be
the principal vector of growth for the Company in the upcoming
Strategic Plan. He will have direct responsibility for the
businesses of exploration and production (except for Argentina,
Brazil and Bolivia), as well as those of midstream and marketing
of LNG on a worldwide scale.

The regional managing of the operations for this division will
be realized via the areas of Spain and North Africa, USA-Mexico,
Caribbean, Pacific and Rest of the World.

3. Executive Director for Corporate Division of Downstream,
Pedro Fernandez Frial, will manage the business portfolios of
refining, marketing and chemicals in Europe and the rest of the
world, as well as the worldwide activities of LPG, trading and
transport.

This division will have six business areas: Refining Spain,
Marketing Europe, Refining and Marketing Rest of World (Peru,
Ecuador and Chile), Chemicals Europe and Rest of World, LPG
Worldwide, and Transport and Trading Worldwide.

Corporate Center

The new organization of Repsol YPF, which simplifies the
Company's old corporate structure, transfers to the business
areas the functions and resources linked to planning and
budgets, and has five divisions:

- Executive Director for Corporate Division of Secretary
General, Luis Suarez de Lezo, will be responsible for, besides
the Secretary for the Board of Directors, the Division of Legal
Affairs (Rafael Piqueras) and the area of managing patrimony,
amongst others.  

- Executive Director for Corporate Division of Economic-
Financial Affairs, Fernando Ramirez, will integrate financial
management, investor relations and the elaboration of all
economic information (Luis Manas), as well as the systems for
information, engineering, environment, technology, contracts,
and security (Cristina Sanz), as well as the area related to
taxes.

- Executive Director for Corporate Division of Management And
Development Control, Miguel Martinez, will provide support to
the Chairman and the Executive Committee, and will be a key
element in monitoring that the performance of the business areas
are in line with the Company's culture of efficiency and
responsibility.  The new corporate division will be responsible
for the areas of Management Control, Corporate Strategy and
Development, and Research Services.

- Executive Director for Corporate Division of Human Resources,
Jesus Fernandez de la Vega, will center activities around the
definition of the organization's policies, development, planning
and remuneration, as well as providing support with respect to
the operative management of human resources in the business
areas.

- Executive Director for Corporate Division of Communication and
Chairman's Office, under the leadership of Jaume Giro, will be
responsible for the Company's external relations, publicity,
sponsorships, branding and brandname, and institutional affairs.
Committees and Management Change

The new organization simplifies and streamlines the structure of
the Company's committees, reduces collective decision-making,
and favors that of taking direct responsibilities. The new
organigram, which is more agile and orientated to the market,
reduces the number of committees to four. These committees will
be presided over by Antonio Brufau and will meet alternatively
in Spain and Argentina.

Executive Committee. Includes the Chairman and Chief Executive
Officer and the eight Executive Directors who report to the
Chairman and Chief Executive Officer, as well as the Corporate
Financial Director, Luis Manas, and constitutes the highest
level of management. This committee is responsible for defining
strategy and monitoring the Company's operations.

Worldwide Exploration and Production Committee. Has as its
objective the coordination of Exploration and Production
activities, which requires an integrated vision of the Company,
as well as global planning with respect to the Company's
technical and human resources.

Worldwide Downstream Committee.  Has the mission to assure
synergies in the Company's downstream businesses, and to approve
key policies to ensure its development and to guarantee the
transfer of knowledge and best practices.  

Human Resources Committee. Its primary function is the
discussion and monitoring of the Human Resources policies, with
the objective to make all assets and talents available to meet
Repsol YPF's strategy, and at the same time reinforcing the
organization's goal of placing a high value on people.

In this new organizational structure, an Office of Management
Change will be created and which will have the purpose of
activating principals of efficiency and responsibility
throughout the entire organization. This Office, under the
Corporate Division of Human Resources, will periodically report
to the Executive Committee on the progress with respect to this
process.

Strengthen functions of Board of Directors

In line with the best corporate governance practices, Repsol YPF
will strengthen the controls of Repsol YPF's Board of Directors.
The Company's Chairman and Chief Executive Officer, Antonio
Brufau, has proposed that the Auditing Committee and the Control
of the Board of Directors will receive complete and independent
information with respect to the areas of Auditing, Control of
Reserves and Security and Environment. With these measures,
Repsol YPF will be in the vanguard of the world's largest energy
companies in its application of good corporate governance
practices.

Repsol YPF and CLH

Repsol YPF will propose in the next meeting of Compania
Logistica de Hidrocarburos' (CLH) board of directors that Ramon
Blanco Balin be named as Chairman and Chief Executive Officer of
that Company. Until recently, Ramon Blanco was Repsol YPF's
chief operating officer.

CONTACT: Repsol YPF, S.A.
         Paseo de la Castellana 278
         Madrid, 28046
         Spain
         Phone: 34-1-348-8100
         Web site: http://www.repsol.com


YACYRETA: BICE Wins Bid to Administer Expansion Fund
----------------------------------------------------
The Entidad Binacional Yacyreta (EBY) joint venture that
administers the Yacyreta hydroelectric project on the border of
Argentina and Paraguay awarded the administration of a trust
fund for the project's completion to Argentine bank BICE.

According to Business News Americas, BICE will receive a
US$60,000 payment to manage the US$650 million fund and a fee of
US$9,000 a month.

The governments of Argentina and Paraguay recently signed an
accord to raise water levels and finally complete work on the
project by 2008.

Yacyreta has been operating with a water level of 76m above sea
level for years, although 83m is the final level.

EBY awarded a US$30-million construction contract as part of the
expansion to a consortium led by Argentine Company Iecsa, whose
partner is Paraguayan Company CDD. The contract is to build an
alternative channel for the Aguapey River in Paraguayan
territory.

Work is scheduled to start before March 30.


* ARGENTINA: Fitch Lowers Rating To 'D' From 'DD'
-------------------------------------------------
Fitch Ratings, the international rating agency, revised
Argentina's rating on foreign currency bonds eligible for the
debt exchange announced Wednesday downward to 'D' from 'DD'. The
terms of the exchange imply a recovery of well below 50% of
outstanding principal and accrued interest. Fitch also said that
the new bonds resulting from the debt exchange, expected to
commence Jan. 14 and close Feb. 25, 2005, covering about US$102
billion in defaulted bonds (including past-due interest), would
be assigned a nondefault rating, likely in the 'CCC' category.
The level of participation of bondholders, both international
and Argentine, in the exchange will be key to determining the
ratings on the new bonds.

According to Fitch's ratings definitions, 'DDD' obligations have
the highest potential for recovery (in the default category),
around 90%-100% of outstanding amounts and accrued interest.
'DD' indicates potential recoveries in the range of 50%-90% and
'D' the lowest recovery potential, i.e. below 50%.

Macroeconomic performance has improved in Argentina, though
still remains fragile; moreover, Argentina's debt restructuring
could imply significant savings in debt service. Consequently,
the level of bondholder participation in the debt exchange will
determine the ratings of the new bonds. Given that past
sovereign restructurings that have ultimately led to a
normalization of creditor relations have had only a small
percentage of 'holdouts,' and given that market sources suggest
that participation levels in the Argentine exchange of around
70% might be achieved, it appears likely, based on currently
available information, that Fitch will assign a rating to the
new foreign currency-denominated securities in the 'CCC'
category. A level of participation broad enough to lead to a
near-term normalization of Argentina's relations with its
private creditors could warrant a higher rating.

Whether the Argentine issuer rating and the ratings on the
securities eligible for the exchange but not tendered are raised
out of default will also depend on the degree of participation,
as well as the government's willingness to service this debt.
Based on public comments by the government, which are included
in the prospectus for the new securities, it has no intention of
servicing debt not tendered in the exchange, indicating that the
rating on these bonds is likely to remain in default
indefinitely. If amounts of this defaulted debt remain sizable,
then the issuer rating is also likely to remain in default. The
long-term local currency rating was lifted out of default to 'C'
in January 2002 given the government's willingness to service
the subsequently pesofied guaranteed loans and new local
currency debt issuance since the default event occurred. As the
sovereign's financial profile improved and debt service on local
currency instruments was maintained, Fitch upgraded the long-
term local currency rating to 'CC' in January 2003 and 'B-' in
April 2004. In line with our current local currency rating,
Fitch expects to rate the new peso-denominated securities issued
as a result of the debt exchange at 'B-', as well.

Macroeconomic performance has improved in Argentina, and the
federal government is expected to have achieved a primary
surplus of 4% of GDP in 2004, exceeding the target it agreed
upon with the IMF. However, thus far, progress on the structural
reform front has been limited. The key aspects of the
government's program include fiscal reform, reforms to
facilitate the restructuring of the corporate and financial
sectors, and institutional reforms, including but not limited to
increasing the independence of the central bank and providing a
more predictable legal framework. Successful implementation of
these reforms, combined with a sufficient decline in public debt
following the restructuring and a normalization of relations
with private creditors, would put public finances on a
sustainable path and pave the way to support economic recovery,
as well as future improvements in sovereign creditworthiness.


* ARGENTINA: Shalov Stone Initiates Bondholder Class Action
-----------------------------------------------------------
Shalov Stone & Bonner LLP announced Friday that it has begun to
distribute a Notice of Class Action in a Court-certified class
action on behalf of certain holders of bonds issued by the
Republic of Argentina. The case, entitled Urban GmbH v. Republic
of Argentina (Case No. 02 Civ. 5699 (TPG)), pending in the
United States District Court for the Southern District of New
York, was formally certified by the Court as a class action on
behalf of all persons who:

(i) purchased either of the following bonds on or before July
22, 2002, and
(ii) hold them continuously through the date of any final
judgment as to liability:

- Republic of Argentina Bonds, due January 30, 2017, bearing
interest at a rate of 11 3/8% per year (CUSIP No. 040114AR1,
ISIN No. US040114AR16, WKN No. 189518); or

- Republic of Argentina Bonds, due April 7, 2009, bearing
interest at a rate of 11 3/4 % per year (CUSIP No. 040114BE9,
ISIN No. US04011BE93, WKN No. 299266).

Recently, the Court directed that plaintiff proceed with giving
notice of the class action to class members. A copy of the
Court-approved Notice of Class Action can be downloaded at the
website www.argentinaclassaction.com

The lawsuit alleges that the Republic of Argentina's default is
a breach of contract. The lawsuit seeks to recover unpaid past
due interest. Plaintiff and the class are represented by Shalov
Stone & Bonner LLP, a law firm based in New York City.

The website (www.argentinaclassaction.com) includes information
about the class action and an appendix to the notice, which
includes important information that holders of Republic of
Argentina bonds should consider in connection with making a
decision about whether to participate in the class action or
whether to participate in Argentina's current exchange offer. By
accepting the exchange offer, class members will be foregoing
the right to join the class action. The appendix to the notice
was not approved or disapproved by the court.

CONTACT: Mr. Thomas G. Ciarlone, Jr.
         Shalov Stone & Bonner LLP
         485 Seventh Avenue, Suite 1000
         New York, New York 10018
         Phone: (212) 239-4340;
         e-mail: tciarlone@lawssb.com

         Web site: http://www.argentinaclassaction.com



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B E R M U D A
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ANNUITY & LIFE: Pays $2.5M Settlement Balance
---------------------------------------------
On July 20, 2004, Annuity and Life Re (Holdings), Ltd. (the
"Company") announced that it had reached an agreement in
principle to settle the shareholder lawsuit pending against it
and certain of its present and former directors and officers in
the United States District Court for the District of
Connecticut.

The Company's share of the settlement was $5.0 million, of which
$2.5 million was payable in cash and the remaining $2.5 million
was payable in cash or Company common shares at the election of
the Company. On January 10, 2005, the Company elected to pay the
remaining $2.5 million in cash. The settlement requires Court
approval and cannot be consummated unless and until such
approval is obtained.

CONTACT: Annuity & Life Re (Holdings), Ltd.
         Cumberland House
         1 Victoria St.
         P.O. Box HM 98
         Hamilton, HM AX
         Bermuda
         Phone: 441-296-7667



MONARCH CAPITAL: Names Robin Mayor as Trustee
---------------------------------------------
            IN THE MATTER OF THE COMPANIES ACT 1981

                           And

             IN THE MATTER OF Monarch Capital Ltd.

The Sole Member of Monarch Capital Ltd., acting by written
consent without a meeting on 29th December 2004 passed the
following resolutions:

(1) That the Company be wound up voluntarily, pursuant to the
provisions of the Companies Act 1981;

(2) That Robin J. Mayor be and is hereby appointed Liquidator
for the purposes of such winding-up, such appointment to be
effective forthwith.

The Liquidator informs that:

- Creditors of Monarch Capital Ltd., which is being voluntarily
wound up, are required, on or before January 26, 2005 to send
their full Christian and Surnames, their addresses and
descriptions, full particulars of their debts or claims, and the
names and addresses of their lawyers (if any) to Robin J Mayor
at Messrs. Conyers Dill & Pearman, Clarendon House, Church
Street, Hamilton, HM DX, Bermuda, the Liquidator of the said
Company, and if so required by notice in writing from the said
Liquidator, and personally or by their lawyers, to come in and
prove their debts or claims at such time and place as shall be
specified in such notice, or in default thereof they will be
excluded from the benefit of any distribution made before such
debts are proved.

- A final general meeting of the Sole Member of Monarch Capital
Ltd. will be held at the offices of Messrs. Conyers Dill &
Pearman, Clarendon House, Church Street, Hamilton, Bermuda on
February 16, 2005 at 9:30 a.m., or as soon as possible
thereafter, for the purposes of:

(1) receiving an account laid before them showing the manner in
which the winding-up of the Company has been conducted and its
property disposed of and of hearing any explanation that may be
given by the Liquidator; and

(2) by resolution determining the manner in which the books,
accounts and documents of the Company and of the Liquidator
shall be disposed of; and

(3) by resolution dissolving the Company.

CONTACT: Mr. Robin J. Mayor, Liquidator
         Clarendon House
         Church Street
         Hamilton, Bermuda


NEXT MEDIA: Members Agree to Wind-Up Company
--------------------------------------------
         IN THE MATTER OF THE COMPANIES ACT 1981

                        And

        IN THE MATTER OF Next Media Group Limited

The Members of Next Media Group Limited, acting by written
consent without a meeting on December 30, 2004, passed the
following resolutions:

(1) That the Company be wound up voluntarily, pursuant to the
provisions of the Companies Act 1981;

(2) That Robin J. Mayor be and is hereby appointed Liquidator
for the purposes of such winding-up, such appointment to be
effective forthwith.

The Liquidator informs that:

- Creditors of Next Media Group Limited, which is being
voluntarily wound up, are required, on or before January 26,
2005, to send their full Christian and Surnames, their addresses
and descriptions, full particulars of their debts or claims, and
the names and addresses of their solicitors (if any) to Robin J.
Mayor at Messrs. Conyers Dill & Pearman, Clarendon House, Church
Street, Hamilton, HM DX, Bermuda, the Liquidator of the said
Company, and if so required by notice in writing from the said
Liquidator, and personally or by their solicitors, to come in
and prove their debts or claims at such time and place as shall
be specified in such notice, or in default thereof they will be
excluded from the benefit of any distribution made before such
debts are proved.

- A final general meeting of the Member(s) of Next Media Group
Limited will be held at the offices of Messrs. Conyers Dill &
Pearman, Clarendon House, Church Street, Hamilton, Bermuda on
February 9, 2005 at 9:00 a.m., or as soon as possible
thereafter, for the purposes of:

(1) receiving an account laid before them showing the manner in
which the winding-up of the Company has been conducted and its
property disposed of and of hearing any explanation that may be
given by the Liquidator; and

(2) by resolution determining the manner in which the books,
accounts and documents of the Company and of the Liquidator
shall be disposed of; and

(3) by resolution dissolving the Company.

CONTACT: Mr. Robin J. Mayor. Liquidator
         Clarendon House
         Church Street
         Hamilton, Bermuda



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CSN: Moody's Issues New Outlook on B1 FC Note Ratings
-----------------------------------------------------
Moody's Investors Service changed to positive from stable its
rating outlook on the B1 foreign currency note ratings of
Companhia Siderurgica Nacional (CSN), CSN Iron, S.A., guaranteed
by CSN, CSN Islands VIII Corp., guaranteed by CSN and CSN
Islands IX Corp, guaranteed by CSN.

The action follows the agency's move to assign a positive
outlook Brazil's B1 long-term foreign currency ceiling for bonds
and notes.

CSN is an integrated steel producer headquartered in Rio de
Janeiro, Brazil.


IPIRANGA: Moody's Assigns Positive Outlook to B1 Notes Rating
-------------------------------------------------------------
Moody's Investor's Service revised the rating outlook for the B1
senior unsecured step-up notes of Companhia Brasileira de
Petroleo Ipiranga ("Ipiranga") to positive from stable.

The rating action follows the agency's move to assign a positive
outlook Brazil's B1 long-term foreign currency ceiling for bonds
and notes, which constrains the ratings of Ipiranga.

Rio de Janeiro-based Ipiranga is engaged in the distribution and
marketing of petroleum products, fuel alcohol and vehicular
natural gas throughout Brazil, excluding the State of Rio Grade
do Sul, and the western portion of the State of Santa Catarina.



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G U A T E M A L A
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CORPORACION UBC: S&P Releases Report on Ratings
-----------------------------------------------

CREDIT RATING:                BB-/Stable/B

Outstanding Rating:
Counterparty Credit           BB-/Stable/B

Major Rating Factors

Strengths:
    * Increasing regional diversification
    * Important position in Central America
    * Adequate integration of acquisitions

Weaknesses:
    * Some profitability measures follow a downward trend
    * Low capitalization level compared to those of rated peers
    * Low economic growth prospects for the region

Rationale

The ratings on Corporacion UBC Internacional S.A. (UBCI)
incorporate the holding Company's structural subordination to
its subsidiaries. The ratings consider the increased presence in
economically more volatile markets such as Guatemala and Costa
Rica and strong banking competition in Panama. The ratings are
underpinned by increasing expansion of the Cuscatlan brand in
Central America and good earnings generation capacity of UBCI's
subsidiaries.

UBCI is a holding Company incorporated in Panama, with
investments in banking and other financial subsidiaries in El
Salvador, Panama, Guatemala, Costa Rica, and Honduras. These
subsidiaries operate under the Cuscatlan brand name, being the
largest operations in El Salvador, where the group was founded.
On a consolidated basis, UBCI had total assets of $4.4 billion
at June 2004, making it the second-largest financial
conglomerate in Central America (including Panama). The ratings
assigned to the holding Company, one notch below its main
subsidiary Banco Cuscatlan in El Salvador (BB/Stable/B), reflect
the structural subordination of the holding Company to this
subsidiary. Banco Cuscatlan in El Salvador and its intermediate
holding Company, Inversiones Financieras Cuscatlan, represent
59% of investments and profits for UBCI.

The group's future strategy is to enhance its presence in
Central America; therefore, Standard & Poor's Ratings Services
expects that the holding Company's reliance on its Salvadorian
operation will be reduced as operations in other countries grow.
Thus, over time, the assigned rating could evolve to reflect
greater operating diversity. The group's future growth is
expected to be a mix of further acquisitions and organic
expansion. We expect that additional capital will be required.
But given that in this context UBCI has been successful in
raising capital, by increasing its shareholder base outside of
El Salvador, additional capital needs should be overcome.

Since its inception, UBCI has exhibited ROE between 10% and 15%,
which are comparable levels to those of other financial
institutions. We expect future ROE targeted at 15% to be
feasible even with the integration and development costs of the
acquisitions. The mix of revenues has improved as fee income
from banking and other financial services increases its
participation of total revenues. Also, geographic expansion has
helped to mitigate the reduction in margins in El Salvador, with
higher margins from other countries. On an unconsolidated basis,
UBCI's only source of revenue is dividends from its
subsidiaries, which at June 2004 amounted to $25 million.

Although UBCI and its subsidiaries have adequate standards in
origination and prudent management of provisions, UBCI is
entering banking markets, namely Costa Rica and Guatemala, that
we view as economically more volatile than El Salvador. Risks in
these two countries include a high degree of foreign exchange
exposure on the loan book, as most loans are granted in dollars
to borrowers with limited dollar income; the use of less
transparent off-shore vehicles to register banking transactions;
less rigorous regulation; and less experienced supervision than
in El Salvador. Until now UBCI has followed an adequate approach
to integrate its subsidiaries, permeating the Cuscatlan culture
and policies. The group has established operating limits that
shape and manage these risks well.

Outlook

The stable outlook reflects our expectation that the group will
be successful in strengthening its position in the Central
American market and that its increasing diversification will
mitigate country-specific risks. An adjustment period while the
acquisitions are fully integrated is anticipated, yet without
disruption of operations or client relations. In the meantime,
the group should maintain adequate earnings and not allow asset
quality to deteriorate. The ratings could be pressured, however,
in the event that the integration of its recent acquisitions
does not proceed as expected, or if the regional economic
environment deteriorates, hurting the banking environment.
Although its reliance on El Salvador's operations will be
reduced further as a result of acquisitions, to date the group
continues to generate significant earnings there, and El
Salvador therefore remains a key element in the ratings on the
holding Company.

Primary Credit Analyst: Leonardo Bravo, Mexico City (52)55-5081-
4406; leonardo_bravo@standardandpoors.com

Secondary Credit Analyst: Ursula M Wilhelm, Mexico City (52) 55-
5081-4407; ursula_wilhelm@standardandpoors.com



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

EMPRESAS ICA: To Build $690M Refinery for Pemex
-----------------------------------------------
Empresas ICA Sociedad Controladora, S.A. de C.V. (BMV and NYSE:
ICA), the largest engineering, construction, and procurement
Company in Mexico and Fluor Corporation (NYSE: FLR) announced
that the contract for the previously disclosed Minatitlan
refinery reconfiguration project for PEMEX Refining was signed
during the fourth quarter of 2004. The project includes the
engineering, procurement and construction services for Package
II of the Lazaro Cardenas refinery complex located in
Minatitlan, Veracruz. The total contract value for Package II is
$690 million, and will be included in backlog as of December 31,
2004.

Package II includes three main work areas: auxiliary services, a
water treatment plant and works to integrate all services of the
refinery. The contract is based in part unit prices and part
fixed prices, and is scheduled to be carried out over 43 months.

"This contract demonstrates the leadership and competitiveness
of our Company, as well as Pemex's confidence in ICA Fluor's
high-quality engineering, and will provide almost four years of
continuous work for Mexican workers and engineers," said Jorge
orja, ICA Fluor's general director.

Pemex Refining is a subsidiary of PEMEX, Mexico's state-owned
petroleum Company.

ICA Fluor is the leading industrial engineering Company in
Mexico, dedicated to the engineering, procurement, and
construction of oil, gas, electricity generation, petrochemical
and chemical plants, as well as automotive and telecommunication
installations.

ICA was founded in Mexico 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.

Fluor Corporation (NYSE:FLR) provides services on a global basis
in the fields of engineering, procurement, construction,
operations, maintenance and project management. Headquartered in
Aliso Viejo, Calif., Fluor is a Fortune 500 Company with
revenues of almost US$ 9 billion in 2003.

CONTACT: Empresas ICA Sociedad Controladora S.A. de C.V.
         Col. Escandon Del Migual Hidalgo
         Mexico City, 11800
         Mexico
         Phone: 525-272-9991
         Web sites: http://www.ica.com.mx
                    http://www.fluor.com


GRUPO POSADAS: S&P Affirms Ratings; Outlook Still Stable
--------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB-' local and
foreign currency corporate credit ratings on Grupo Posadas S.A.
de C.V. (Posadas). The outlook remains stable. Concurrently, the
rating on Posadas' 8.75% senior unsecured notes due 2011 was
also affirmed at 'BB-' following the reopening of the notes,
whereby they were increased by US$50 million for a total
outstanding amount of US$200 million.

"The rating on Posadas reflects its somewhat high financial
leverage, the cyclicality of the hotel industry, and geographic
concentration within Mexico," said Standard & Poor's credit
analyst Fabiola Ortiz. "These factors are offset by the
Company's position as the largest hotel operator in Mexico, a
diversified hotel portfolio with well-recognized brands, and the
development of competitive advantage through technology."

As of September 2004, Posadas operated 87 hotels with a total of
16,487 rooms. The Company's operations are concentrated in
Mexico, where it runs 69 hotels (80% of rooms, generating 85% of
the EBITDA). It also operates 11 hotels in Brazil, six in the
U.S., and one in Argentina.

Margins are expected to improve in the medium term as a result
of the Company's potential to operate hotels with minimum
capital investment and the efficiencies obtained by applying the
technology that has already helped the Company reduce costs and
improve distribution.

The stable outlook reflects our perception that the Company will
continue improving its operating performance gradually and that
it will be able to generate stable cash flows, even under
adverse economic conditions.


GRUPO POSADAS: Moody's Rates $75M Notes `Ba3'
---------------------------------------------
Grupo Posadas obtained a Ba3 rating from Moody's Investors
Service on its US$75 million of add-on 8.75% senior unsecured
guaranteed note, due 2011. The notes offering is a mirror image
of the outstanding 8.75% senior unsecured guaranteed note issue,
which increases to US$225 million post this transaction.

All proceeds from the new offering will be used to repay
outstanding secured and unsecured debt and extend the Company's
maturity profile.

At the same time, Moody's affirmed the Ba3 rating on the hotel
chain's US$150 million senior unsecured guaranteed notes, due
2011, the Ba3 senior implied rating and B1 issuer rating.

The outlook is stable.

The Ba3 senior implied rating is supported by Grupo Posadas'
leading position in the Mexican hotel industry, strong brand
name recognition, etc. However, the ratings are constrained by
its high leverage, moderate coverage of fixed charges, tight
liquidity, tough competitive environment and relatively small
size.

The stable outlook reflects Moody's expectation that Posadas
will remain Mexico's leading hotel chain; see an improvement in
its sales and EBITDA; that the Company will maintain a prudent
investment strategy with limited contributions to new wholly
owned hotels or real estate properties; and that most of the
available free cash flow will be used to further reduce debt.


GRUPO TMM: Shareholders Approve TFM Sale to KCS
-----------------------------------------------
Grupo TMM, S.A. (NYSE:TMM) and (BMV:TMM A) (or "the Company")
announced that its shareholders unanimously approved the board
of directors' recommendation to sell TMM's 51 percent voting
interest in Grupo Transportacion Ferroviaria Mexicana, S.A. de
C.V. ("TFM") to Kansas City Southern ("KCS") at a shareholder
meeting held on January 11. As previously announced, under the
proposed transaction, the Company will receive $200 million in
cash, 18 million shares of KCS common stock, $47 million in a
two-year promissory note, and up to $110 million payable in a
combination of cash and KCS common stock upon successful
resolution of pending issues.

Jose F. Serrano, chairman and CEO stated, "The sale of our
interest in TFM will open the door to a new phase in TMM's
history. By significantly reducing our debt, we will once again
have access to working and growth capital. We believe that upon
completion of this sale, Grupo TMM will be in a position to
focus on its operations and to improve cash flow and operating
performance. This transaction is truly in the best interests of
TMM's shareholders and will ensure long-term growth and
flexibility at TMM."

Javier Segovia, president of TMM added, "The combination of KCS
and TFM creates an efficient shipping route between the U.S. and
Mexico, a truly integrated railroad service, from Mexico's
Pacific coast up to the Great Lakes. Through its ownership in
Kansas City Southern shares, TMM will have an estimated 22
percent interest in a valuable franchise and a strong rail
alternative with more than 5,281 miles of main track to service
its clients. This transaction will provide significant
opportunities to both KCS and TMM."

Consummation of the transaction remains subject to the
satisfaction of certain conditions, including KCS shareholder
approval and satisfaction of the requirements of the U.S. Hart-
Scott-Rodino Antitrust Improvements Act of 1976, which had been
obtained prior but expired and were re-filed in December 2004.


UNEFON: Supreme Court Tosses Lawsuit Out
----------------------------------------
Cellular phone Company Unefon failed in its lawsuit arguing
against the constitutionality of Article 41 of the Federal
Telecommunications Law after The Supreme Court of Justice (SCJN)
affirmed the ruling handed down by Judge Jose Ramon Cossio Diaz.

El Economista reports that the Company had filed a request for
protection from the courts after claiming that Article 41
granted too many powers to the Federal Telecommunication
Commission (Cofetel).

Unefon stated in its complaint that the precept allows the
communications secretariat to create fundamental technical plans
however it chooses. Thus, it violates the principle of legality
in Article 16 of the constitution.

However, Judge Cossio Diaz explained in his decision that
Article 41 does not contravene the guarantee of legality because
it in fact establishes parameters that have to be met before a
plan is implemented. He adds that non-compliance of these
parameters could render an administrative act illegal but it
does not affect the constitutionality of Article 41.



=============
U R U G U A Y
=============

BANCO COMERCIAL: Creditor Wins First Round in Legal Battle
----------------------------------------------------------
The International Court of Arbitration of the Paris-based
International Chamber of Commerce ordered the Uruguayan
government to pay US$100 million plus fees and interest to three
major investment banks that were shareholders in the defunct
Banco Comercial del Uruguay.

The entity ruled in favor of JP Morgan, Credit Suisse First
Boston and Dresdner Bank, obliging the Uruguayan government to
repay the international creditors for a US$100 million capital
injection given to Banco Comercial during the financial crisis
that ravaged the local financial system in 2002.

Media reports suggested that the contract between the three
banks and the Uruguayan government committed the state to either
keep the bank functioning or return the US$100 million if the
bank folded. Banco Comercial ended up going bankrupt following a
run on bank deposits, and later underwent a restructuring that
joined it with other insolvent banks to form a fresh entity,
Nuevo Banco Comercial.

According to an AP report, the Uruguayan government can appeal
the ICC ruling. Government officials have also said they are
planning to sue JP Morgan, Credit Suisse and Dresdner Bank for
their role in Banco Comercial's collapse.


* Uruguay: R&I Upgrades FCLT Debt to B
--------------------------------------
Rating and Investment Information, Inc. (R&I) has upgraded the
Oriental Republic of Uruguay's credit rating from B- to B. The
rating action affects the foreign currency long-term credit
rating as well as the long-term bond (1 Series) rating. The
rating outlook is stable.

RATIONALE:
Uruguay's economic activity is accelerating, fiscal performance
has improved and public debt has declined relative to the size
of Uruguay's economy. Stability of international reserves and
balance of payments also has increased. In light of these
factors, R&I has upgraded its Foreign Currency Long-term Credit
Rating from B- to B. The Rating Outlook is Stable.

Along with positive developments in employment and income,
consumption is growing, and exports including agricultural and
livestock products are also strong. During 2004, real gross
domestic product (GDP) rose vigorously, growing by over 10%.
Together with Argentina and Brazil, two countries with which
Uruguay has strong economic relationships, economic expansion is
expected to continue in 2005 and beyond. Tax revenue has
increased, and the government has achieved a primary fiscal
surplus in excess of the target of 3.4% of GDP agreed upon with
the International Monetary Fund (IMF). Public debt outstanding,
70% of which is denominated in U.S. dollars, had risen to 108%
of GDP at the end of 2003. Thanks to government efforts,
however, which were also boosted by the effects of the weak
dollar, public debt declined to less than 100% of GDP by the end
of 2004, and this percentage is expected to continue shrinking
gradually. With the trade surplus and tourism revenues
expanding, the probability of running a large deficit in the
balance of current account is minimal for the immediate future.

Dr. Tabare Vazquez, leader of the Progressive Encounter-Broad
Front coalition, will assume the presidency in March 2005.
Although the new government will become Uruguay's first left-
leaning administration since the country gained independence,
R&I evaluates Dr. Vazquez basically will pursue economic
policies that maintain fiscal discipline while cooperating with
international financial institutions such as the IMF.

Because of the narrow base of its domestic market, however,
Uruguay's economy is easily affected by the external
environment. Public debt outstanding remains at a high level,
and at 6% of GDP interest payments are a heavy burden. Although
the financial sector continues to improve asset quality, new
lending growth is sluggish, and profitability is also low. R&I
will continue to pay attention whether the new administration
implements policies that can boost the economy's ability to grow
over the medium to long term and overcome these structural
weaknesses.

CONTACTS: Rating and Investment Information, Inc.
          Nihonbashi 1-chome Bldg., 1-4-1, Nihonbashi,
          Chuo-ku, Tokyo 103-0027, Japan
          International Division TEL.03-3276-3426
          FAX.03-3276-3427
          URL: http://www.r-i.co.jp



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

PDVSA: Business Review Includes Board Membership Overhaul
---------------------------------------------------------
State oil giant Petroleos de Venezuela (PdVSA) gave a face-lift
to its board by changing eight of its 11 members, reports Dow
Jones. PDVSA President Rafael Ramirez announced that Luis
Vierma, a former deputy oil minister who is now PDVSA's vice
president of exploration and production, and Dester Rodriguez, a
military officer, would remain on the board. As the president of
PDVSA, Mr. Ramirez also remains on the board.

New board members include Ivan Orellana, Venezuela's governor to
the Organization of Petroleum Exporting Countries, or OPEC, and
Bernard Mommer, a managing director at PDVSA's London office.

The board revamp comes a time the Company is reviewing its
entire business portfolio.

"We have a plan to review all of PdVSA's businesses," said Mr.
Ramirez, who is also Venezuela's oil minister.



                            ***********


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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