TCRLA_Public/050427.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

           Wednesday, April 27, 2005, Vol. 6, Issue 82



ACINDAR: $100M of Bonds Rated 'D(arg)' by Local Fitch
AGRONORD S.A.: Court Favors Creditor's Bankruptcy Motion
BLANQUITA S.A.: Receives Liquidation Order
DUQUE SEGURIDAD: Court Order Initiates Bankruptcy Proceeding
DUQUE SUR: Court Rules Liquidation Required

EMPRENDIMIENTOS INMOB.: Moody's Reaffirms Bonds' Default Rating
EUROMAYOR: $10M of Bonds Get Junk Rating From Moody's
FALBRUK S.A.: Court Declares Company Bankrupt
GAMAP S.R.L.: Debts To Be Paid Via Asset Liquidation
HECBI PRODUCCIONES: Court Converts Reorganization to Bankruptcy

HIDROELECTRICA PIEDRA: Moody's Issues Default Rating on Bonds
IMPSA: Moody's Leaves Default Rating Unchanged on Bonds
PERBAL S.R.L.: Seeks Court Authority to Reorganize
TORPEDOS S.R.L.: Enters Bankruptcy on Court Orders
WINDEL S.A.: Proceeds With Liquidation


C&W BARBADOS: Senator Backs FTC's Price Cap Plan


LOCALIZA RENT: S&P Publishes Ratings Report
PRIDE INTERNATIONAL: Completes Conversion of 2.5% Senior Notes


SR TELECOM: Gets Wavers on Debenture Maturity, CTR Debt
SR TELECOM: Inks Agreement in Principle With Debenture Holders
SR TELECOM: S&P Cuts Ratings to 'D' on Missed Payment

C O S T A   R I C A

BANCO BAC: S&P Details Ratings' Basis


* ECUADOR: Fitch Details Concerns Over Political Implications

E L   S A L V A D O R

BANCO SALVADORENO: S&P Analysis Indicates Vulnerabilities


AHMSA: 1Q05 Net Income Climbs on Higher Revenues
CORPORACION GEO: S&P Favorable Ratings
CORPORACION GEO: Reports 25% EBITDA Increase in 1Q05
DIRECTV GROUP: Sells 50% of Hughes Network to SkyTerra
EMPRESAS ICA: Amends Bylaws to Prevent Hostile Takeover

EMPRESAS ICA: S&P Details Negative Ratings Rationale
GRUPO DESC: Independent Auditor Issues Statement
XIGNUX: S&P Releases Report on Ratings

P U E R T O   R I C O

DORAL FINANCIAL: S&P Cuts Ratings, Places On CreditWatch Neg.


PDVSA: 29 Companies Ratify Participation in Rafael Urdaneta Bid
PDVSA: Cuban Operations to Commence Today
PDVSA: President Reveals Ongoing Inquiry Into Alleged Corruption
PDVSA: New Brazilian Refinery to Top $3B

     - - - - - - - - - -


ACINDAR: $100M of Bonds Rated 'D(arg)' by Local Fitch
Fitch Argentina Calificadora de Riesgo S.A. maintained the
'D(arg)' rating given to a total of US$100 million of corporate
bonds issued by Acindar Industria Argentina de Aceros.

Comision Nacional Valores(CNV), the country's securities
regulator, relates that the rating was based on the Company's
finances as of December 31, 2004.

The bonds, which matured in February 16 last year, were
described as "Obligaciones Negociables simples, no 5.8.96."

The Company is involved in the production of non-flat steel
products such as steel pipe, cable, hot-rolled and cold-drawn
steels for concrete, forged bars and blocks for distributors of
steel products, other steel companies, manufacturers of original
equipment for several industrial sectors including the
automotive and the oil and gas industries and end users, mainly
in the construction and agricultural sectors of the economy. Its
principal market is Argentina, although it exports its products
to Brazil, Chile and the United States, Bolivia and Uruguay
through its sales office, said the Financial Times.

CONTACT: Acindar Industria Argentina de Aceros S.A.
         2739 Estanislao Zeballos Beccar
         Buenos Aires
         Argentina B1643AGY
         Phone: +54 11 4719 8500
         Fax: +54 11 4719 8501
         Web site:

AGRONORD S.A.: Court Favors Creditor's Bankruptcy Motion
Court No. 14 of Buenos Aires' civil and commercial tribunal
declared Agronord S.A. bankrupt, says La Nacion. The ruling
comes in approval of the petition filed by the Company's
creditor, Kosturat S.R.L., for nonpayment of US$9,924.86 in

Trustee Alberto Buceta will examine and authenticate creditors'
claims until June 22. This is done to determine the nature and
amount of the Company's debts. Creditors must have their claims
authenticated by the said date in order to qualify for the
payments that will be made after the Company's assets are

Mr. Buceta will submit the validated individual claims for court
approval on August 18. These reports explain the basis for the
accepted and rejected claims. The trustee will also submit a
general report of the case on September 29.

The city's Clerk No. 27 assists the court on the case that will
conclude with the liquidation of the Company's assets.

CONTACT: Agronord S.A.
         Teniente General Juan Domingo Peron 1730
         Buenos Aires

BLANQUITA S.A.: Receives Liquidation Order
Transport company Blanquita S.A. entered bankruptcy after Court
No. 6 of Buenos Aires' civil and commercial tribunal approved a
liquidation motion filed by Mr. Hector Mangieri, reports La
Nacion. The Company's failure to pay $12,887.52 in debt prompted
the creditor to file the petition.

Working with the city's Clerk No. 12, the court assigned Mr.
Marcelo Liderman as trustee for the bankruptcy process. The
trustee's duties include the authentication of the Company's
debts and the preparation of the individual and general reports.
Creditors are required to present proofs of their claims to the
trustee before July 1.

The Company's assets will be liquidated at the end of the
bankruptcy process to repay creditors. Payments will be based on
the results of the verification process.

CONTACT: Blanquita S.A.
         Lima 543
         Buenos Aires

         Mr. Marcelo Liderman, Trustee
         Pinzo 1555
         Buenos Aires

DUQUE SEGURIDAD: Court Order Initiates Bankruptcy Proceeding
Court No. 5 of Buenos Aires' civil and commercial tribunal
declared Duque Seguridad S.A. bankrupt after the company
defaulted on its debt payments. The order effectively places the
company's affairs as well as its assets under the control of
court-appointed trustee Guillermo Alejandro Torres.

As trustee, Mr. Torres is tasked with verifying the authenticity
of claims presented by the company's creditors. The verification
phase is ongoing until June 23.

Following claims verification, the trustee will submit the
individual reports based on the forwarded claims for final
approval by the court on August 22. A general report will also
be submitted on October 3.

Infobae reports that Clerk No. 9 assists the court on this case.

CONTACT: Mr. Guillermo Alejandro Torres, Trustee
         Avda Corrientes 922
         Buenos Aires

DUQUE SUR: Court Rules Liquidation Required
Court No. 5 of Buenos Aires' civil and commercial tribunal
ordered the liquidation of Duque Sur S.A. after the company
defaulted on its obligations, Infobae reveals. The liquidation
mandate will effectively place the company's affairs as well as
its assets under the control of Mr. Guillermo Alejandro Torres,
the court-appointed trustee.

Mr. Torres will verify creditors' proofs of claims until June
23. The verified claims will serve as basis for the individual
reports to be submitted in court on August 22. The submission of
the general report follows on October 3.

Clerk No. 9 assists the court on this case that will close with
the sale of the company's assets. Proceeds from the sale will be
used to repay the company's debts.

CONTACT: Mr. Guillermo Alejandro Torres, Trustee
         Avda Corrientes 922
         Buenos Aires

EMPRENDIMIENTOS INMOB.: Moody's Reaffirms Bonds' Default Rating
Moody's Latin America Calificadora de Riesgo reaffirmed the 'D'
rating for US$1.6 million worth of corporate bonds issued by
Emprendimientos Inmob. y Financieros S.A., formerly ECIPSA.

The rating affected bonds described as "Obligaciones Negociables
Clase B," says the CNV, without revealing the bonds' maturity
date. The issued rating was based on the Company's finances as
of January 31, 2005.

EUROMAYOR: $10M of Bonds Get Junk Rating From Moody's
Some US$10 million worth of Euromayor S.A. de Inversiones'
corporate bonds received junk ratings from Moody's Latin America
Calificadora de Riesgo S.A. The issued rating was based on the
Company's financial situation as of January 31 this year.

Argentina's securities regulator, the Comision Nacional de
Valores relates that the bonds are called "Primera Serie por 10
milliones de US$ dentro de un Programa Global". The bonds, which
matured in April 28, 2003, were classified under "Series and/or

The `C' rating is assigned to financial obligations that have a
risk of nonpayment.

FALBRUK S.A.: Court Declares Company Bankrupt
Court No. 12 of Buenos Aires' civil and commercial tribunal
declared local company Falbruk S.A. "Quiebra", relates La
Nacion. The court approved the bankruptcy petition filed by
Conesa Seguros S.A., whom the Company has debts amounting to

The Company will undergo the bankruptcy process with Mr. Antonio
Canada as trustee. Creditors are required to present proof of
their claims to Mr. Canada for verification by June 7. Creditors
who fail to submit the required documents by the said date will
not qualify for any post-liquidation distributions.

Individual reports from the case are due for court submission on
August 2 while a general report will be presented on September

Clerk No. 24 assists the court on the case.

CONTACT: Falbruk S.A.
         Viamonte 1381
         Buenos Aires
         Mr. Antonio Canada, Trustee
         Doctor Luis Belaustegui 4531
         Buenos Aires

GAMAP S.R.L.: Debts To Be Paid Via Asset Liquidation
Buenos Aires-based Gamap S.R.L. will begin liquidating its
assets following the pronouncement of the city's Court No. 22
that the company is bankrupt, reports Infobae.

The ruling places the company under the supervision of court-
appointed trustee Hector Francisco Presta. The trustee will
verify creditors' proofs of claims until June 2. The validated
claims will be presented in court as individual reports on July

The trustee will also submit a general report, containing a
summary of the company's financial status as well as relevant
events pertaining to the bankruptcy, on September 12.

The bankruptcy process will end with the disposal of the
company's assets in favor of its creditors.

CONTACT: Mr. Hector Francisco Presta, Trustee
         Parana 467
         Buenos Aires

HECBI PRODUCCIONES: Court Converts Reorganization to Bankruptcy
Hecbi Producciones S.R.L., which was undergoing reorganization,
entered bankruptcy on orders from Court No. 14 of Buenos Aires'
civil and commercial tribunal, according to Infobae. The court
assigned Ms. Susana Graciela Marino as the Company's trustee.

The credit verification process will be done "por via
incidental", says the report, adding that the court ordered the
trustee to submit the general report on September 12.

CONTACT: Ms. Susana Graciela Marino, Trustee
         Uruguay 560
         Buenos Aires

HIDROELECTRICA PIEDRA: Moody's Issues Default Rating on Bonds
Moody's Latin America Calificadora de Riesgo S.A. assigned a 'D'
rating to various bonds issued by Hidroelectrica Piedra del
Aguila S.A.

Moody's assigns `D' ratings to bonds that are in payment default
and have a poor prospect of repaying all obligations.

The affected bonds are:

- US$97.3 million worth of bonds described as "Clase I dentro
del Programa de U$S 300 millones" maturing on July 31, 2009.

- US$97.3 million worth of "Clase II dentro del Programa de U$S
300 millones" maturing on June 30, 2009.

- US$62.5 million worth of "Clase III dentro del Programa de U$S
300 millones" maturing on December 31, 2023.

- US$35 million worth of "Clase V subordinada dentro del
Programa de U$S 300 millones" maturing on December 31, 2023.

The Comision Nacional de Valores (CNV), Argentina's securities
egulator, reports that the action was based on the Company's
financial status as of December 31, 2004.

IMPSA: Moody's Leaves Default Rating Unchanged on Bonds
Argentina's securities regulator, CNV, reports that Moody's
Latin America Calificadora de Riesgo S.A. is maintaining a 'D'
rating on US$150 million worth of bonds issued by Industrias
Metalurgicas Pescarmona.

The affected bonds are described as "2Y Serie emitida por U$150
millones del Programa Global de U$S 250 millones " that matured
on May 30 2002.

The rating action was taken based on the Company's financial
status as of January 31, 2005.

CONTACT: Industrias Metalurgicas Pescarmona
         Rodriguez Pena 2451
         Godoy Cruz, Mendoza

         Telephone: 54 1 315 2400
         Fax: 54 1 315 2388

PERBAL S.R.L.: Seeks Court Authority to Reorganize
Perbal S.R.L., a garments manufacturer operating in Buenos
Aires, requested for reorganization after failing to pay its
liabilities since March last year.

The reorganization petition, once approved by the court, will
allow the company to negotiate a settlement with its creditors
in order to avoid a straight liquidation.

The case is pending before Court No. 25 of Buenos Aires' civil
and commercial tribunal. The city's Clerk No. 49 assists the
court on this case.

CONTACT: Perbal S.R.L.
         Avellaneda 777  
         Buenos Aires

TORPEDOS S.R.L.: Enters Bankruptcy on Court Orders
Torpedos S.R.L. bankruptcy protection is initiated following a
ruling from Court No. 3 of Buenos Aires' civil and commercial
tribunal, with the assistance of Clerk No. 6, ordering the
company's liquidation. The order effectively transfers control
of the company's assets to a court-appointed trustee who will
supervise the liquidation proceedings.

Infobae reports that the court selected Ms. Beatriz Susana
Stachesky as trustee. Ms. Stachesky be verifying creditors'
proofs of claims until the end of the verification phase on June

Argentine bankruptcy law requires the trustee to provide the
court with individual reports on the forwarded claims and a
general report containing an audit of the company's accounting
and business records. The individual reports will be submitted
on August 24 followed by the general report that is due on
October 5.

CONTACT: Torpedos S.R.L.
         25 de Mayo 597
         Buenos Aires

         Ms. Beatriz Susana Stachesky, Trustee
         Avda Cordoba 817
         Buenos Aires

WINDEL S.A.: Proceeds With Liquidation
Roch S.A. successfully sought a bankruptcy judgement of Windel
S.A.. Court No. 18 of Buenos Aires' civil and commercial
tribunal declared the Company "Quiebra," reports La Nacion.
Accordingly, the company will now start the bankruptcy process
with Mr. Carlos Alberto Chaud Perez as trustee.

Creditors must submit proofs of their claim to the trustee by
June 1 for authentication. Failure to comply with this
requirement will mean disqualification from the payments that
will be made after the Company's assets are liquidated.

The city's Clerk No. 36 assists the court on the case that will
close with the sale of all of its assets.

CONTACT: Windel S.A.
         Bernardo de Irigoyen 722
         Buenos Aires

         Mr. Carlos Alberto Chaud Perez, Trustee
         Tacuari 643
         Buenos Aires


C&W BARBADOS: Senator Backs FTC's Price Cap Plan
A senator applauded the procedure used by the Fair Trading
Commission (FTC) to come up with a price cap plan for incumbent
fixed line operator C&W (Barbados) Ltd., saying it is fair and
above board, relates the Barbados Daily Nation.

"I am happy with the procedure that was used," Senator Lynette
Eastmond, Minister of Commerce, Consumer Affairs and Business
Development, said of FTC's decision that allowed C&W to increase
basic telephone rates by 7% each year for the next three years.

According to the Senator, the FTC used local expertise and
foreign consultants who were experienced in determining price
cap mechanisms in other jurisdictions.

Eastmond stressed she had no power to alter the FTC decision.

"It is not my role to change the decision or to say that it is a
good decision or a bad decision," she said.

To see summary of the Price Cap Plan:


LOCALIZA RENT: S&P Publishes Ratings Report
Localiza Rent a Car S.A.
  Corporate Credit Rating (Local currency):  BB-/Positive/--
Corporate Credit Rating (Foreign currency):  BB-/Stable/--

Localiza Rent a Car S.A.
  Sr unsecd debt (Foreign currency):  BB-

Major Rating Factors

    * Strong business position and brand recognition in the car
rental industry in Brazil
    * Conservative financial policy based on low debt and strong
    * Efficient fleet administration strategy that combines the
rental operations (diversified between individuals and
corporations) with the used-car sales business
    * Used cars and efficient selling channels provide the
company with a source of liquidity, especially during economic

    * Car rental business still under development in Brazil,
with a significant level of fragmented competition
    * Demand partially linked to economic conditions in Brazil
(especially car rental business), which remain somewhat
constrained and volatile
    * Somewhat limited capacity to increase geographic
diversification, considering the complexity of market
intelligence required to expand internationally
    * While not a relevant short-term threat, larger
multinational competitors have deeper financial pockets to
compete for market share in the long term

The ratings on Brazil's car rental company, Localiza Rent a Car
S.A. (Localiza) reflect the relatively early stages of the car
rental industry in its home and predominant local market, in
that it is smaller and much more fragmented than in other more
matured and developed economies, and the company's exposure to
volatile daily car rental demand in Brazil, which has a strong
correlation with the country's level of economic activity.
Potentially erratic demand patterns require Localiza to
efficiently plan fleet size and vehicle profiles ahead of time,
as well as to adequately manage working capital, as both the
acquisition of new cars and the sale of used ones through its
own sales channels have a direct effect on liquidity and
operating cash flow. These risks are partially offset by the
company's dominant position in its home market of Brazil, its
strong brand name, its expertise in weathering volatility, and a
conservative financial profile based on relatively high
liquidity and low leverage compared to cash flow, the latter of
which has proven stable and strong despite Brazil's constant
economic swings during the past couple of years.

Localiza is the leading car rental company in Brazil and
benefits from an efficient distribution network with about 80
key locations in the country. A well-balanced portfolio
combining the daily car rental, fleet management, and used car
sales businesses has allowed the company to report strong cash
generation, even under fairly stressful economic conditions.

Localiza's revenues in full-year 2004 reached a strong $211
million (25% higher than the revenues reported in the same
period last year), prompted by stronger demand mostly in car
rental and used car sale businesses, which benefited from a more
favorable economic environment in Brazil (GDP growth of 5.2% in
2004 compared to 0.5% growth in 2003). Having adequately faced
the negative environment in 2003 and benefited from the ramp-up
of the market in 2004, Localiza is expected to continue
reporting sound results in 2005, following positive-to-stable
expectations for the country. Localiza's strategy, based on
efficient management of its vehicles and pricing policies,
should continue to compensate for market volatility in the long
term. Although the fleet-management business (which is much more
stable than the daily rental business and accounts for a
significant portion of the company's consolidated EBITDA) has
been essentially flat to slightly declining in the recent past,
it is still a key factor in stabilizing Localiza's cash flows.

The company's EBITDA margin in 2004 improved to 34.1% from 29.5%
in 2003. Funds from operations to total debt, however, declined
to 44.3% from 60.9% in the same period, mainly due to a
temporary increase in total debt (to finance a seasonal fleet
expansion). The company's credit measures are expected to remain
solid given its conservative financial policy and strong cash
flow. Localiza's EBITDA to interest reached 5.5x in 2004 (above
the average of 4.5x in the past three years); Standard & Poor's
Ratings Services expects the company to continue reporting
strong interest coverage thanks to its relatively low
indebtedness and satisfactory financial cost.

Localiza increased its fleet to a high 28,699 cars as of
December 2004 (from 22,355 in December 2003) as a response to
and reflection of the stronger economic environment in Brazil,
together with the expected strong first-quarter 2005 (seasonal
summer peak) demand. We believe that fleet size may well
decrease after that due to seasonal effects, reaching an average
of 25,000 cars for full-year 2005, also freeing up some working
capital currently trapped in its cars, and reducing short-term
debt. Utilization rates at the company's car rental business
declined to 60.5% during 2004, compared to 62.9% in the same
period of the previous year. We expect a pick-up in this ratio
in first-quarter 2005 as higher demand offsets the increase in
the fleet size.

Localiza's liquidity is one of the key sustaining factors of the
ratings. The company had a relatively high cash position of $49
million as of December 2004. Localiza's only major debt was the
$100 million senior notes due Oct. 1, 2005, whose refinancing
has been already secured by short-term bank loans that will be
ultimately replaced by a debentures issuance in the domestic
market (with a tenor of five years and bullet maturity).
Additional short-term debt has been used to finance a superior
fleet expansion for the seasonal car rental business peak, and
to support a shorter period of fleet renewal policy in daily car
rental (an average fleet age of five months in 2004 compared to
six months in 2003), optimizing treasury and cash management.
Those loans are expected to be fully paid throughout the next
quarters as part of the fleet begins to be sold. We are
comfortable with the company's refinancing strategy for the
senior notes and believe that the company's capital structure
will in fact improve after the debentures replace the original
notes and the repayment of temporarily increased short-term

Localiza's management has demonstrated prudence in expanding the
fleet during times of economic volatility, and no major leverage
should be demanded to fund the company's operations. Localiza
has planned only minor capital expenditures, while the
renovation and occasional increase of the automotive fleet is
financed primarily through the sale of used cars and internal
cash generation. Consequently, the company's ability to manage
its used car sales business effectively is critical for Localiza
to adequately finance its car rental business and remain

The positive local currency outlook reflects our assessment of
Localiza's improving financial flexibility and capital
structure, with a more active presence in the domestic capital
markets and the resolution of refinancing risks. The company has
already secured the refinancing of its senior notes due October
2005 with bank loans that will be ultimately replaced by a
debentures issuance in the domestic market. The outlook also
incorporates expectations that favorable market conditions will
allow the company to report strong cash generation in 2005, and
thus reduce short-term debt throughout the year. A positive
rating action could result from further improvement in the
company's capital structure and liquidity after the conclusion
of the debentures issuance and reduction of short-term debt, in
the context of robust operating performance throughout 2005.
Nevertheless, the ratings could face downward pressure if the
company does not reduce short-term debt or if the used car
operation ability to finance the fleet renewal declines
substantially. The stable foreign currency outlook reflects that
of the foreign currency sovereign rating on the Federative
Republic of Brazil.

CONTACT:  Primary Credit Analyst:
          Beatriz Degani, Sao Paulo
          Tel: (55) 11-5501-8933

          Secondary Credit Analyst(s):
          Reginaldo Takara, Sao Paulo
          Tel: (55) 11-5501-8932

PRIDE INTERNATIONAL: Completes Conversion of 2.5% Senior Notes
Pride International, Inc. (NYSE: PDE) reported Monday that
substantially all notes outstanding under the Company's 2.5%
Convertible Senior Notes Due 2007 have been tendered for

As previously announced, the Company issued a call notice to
redeem the notes on March 25, 2005, at which time $298.6 million
principal was outstanding. The tendered notes have been
converted into approximately 18.1 million shares of common
stock, and the Company has redeemed in cash the remaining
$31,000 principal balance.

Pride International, Inc., headquartered in Houston, Texas, is
one of the world's largest drilling contractors. The Company
provides onshore and offshore drilling and related services in
more than 30 countries.

CONTACT: Mr. Robert E. Warren
         Mr. Steven D. Oldham
         Pride International, Inc.
         Phone: +1-713-789-1400


SR TELECOM: Gets Wavers on Debenture Maturity, CTR Debt
SR Telecom(TM) Inc. (TSX: SRX; Nasdaq: SRXA) announced Monday
that it has received a waiver from the required majority of its
Debenture holders extending the maturity date of the
Corporation's 8.15% Debentures, due April 22, 2005, to June 30,
2005, unless otherwise agreed to by the required majority of the
Debenture holders. SR Telecom has also received a waiver from
the lenders to its service provider subsidiary in Chile,
Comunicacion y Telefonia Rural S.A. (CTR). CTR's lenders, Export
Development Canada and the Inter-American Development Bank, have
waived compliance with certain financial and operational
covenants contained in CTR's loan documents to May 1, 2005.

The waivers have been granted pending final agreements from the
restricted group of Debenture holders and CTR's lenders with
respect to the Corporation's proposed recapitalization
initiative, which was announced on April 18, 2005.

SR TELECOM: Inks Agreement in Principle With Debenture Holders
SR Telecom Inc. (TSX: SRX; Nasdaq: SRXA) announced on April 18,
2005 that it has entered into an agreement in principle with a
group representing the required majority of its outstanding
8.15% Debentures due April 22, 2005, regarding its proposed
recapitalization plan.

"This proposed recapitalization will provide the basis for the
strengthening of our operations going forward, and will ensure
that we have the capacity to continue to fully satisfy the needs
of our global customer base," said Pierre St-Arnaud, SR
Telecom's President and Chief Executive Officer.

Pursuant to the terms of the agreement in principle, SR Telecom
will exchange the outstanding $71 million in principal amount of
its 8.15% Debentures, due April 22, 2005 and all accrued
interest of approximately $2.9 million into 47,266,512 common
shares and approximately $63.9 million new 10% Convertible
Redeemable Secured Debentures, due 2010. Interest on the new
Convertible Debentures is payable in cash or in kind at the
option of the Corporation. The common shares issued to the
Debenture holders will represent approximately 73% of the issued
and outstanding common shares of SR Telecom. In addition, each
$1,000 in principal amount of new Convertible Debentures will be
convertible into 4,727 (the "Conversion Rate") common shares,
representing a conversion price at closing of approximately
$0.21 per common share. The Conversion Rate may be adjusted to
account for interest accrued pending closing such that the
aggregate equity holding represented by the common shares issued
together with the new Convertible Debentures will not exceed
95.2% of the issued and outstanding common shares of the
Corporation on a fully diluted basis before giving effect to the
Rights Offering described below.

The restricted group of Debenture holders has also agreed,
subject to execution of final documentation, to provide a five-
year $50 million secured Credit Facility to the Corporation of
which $20 million will be available as soon as loan
documentation and registrations are in place, with the balance
to be available over the next three quarters, subject to certain
conditions. Based on the current agreement in principle, the
financial terms include the following: a 2% up-front facility
fee (based on the full $50 million facility amount) and interest
paid partly in cash at a rate equal to the greater of 6.5% and
the three-month Canadian Dollar LIBOR rate plus 3.85% and partly
paid in kind at a rate equal to the greater of 7.5% and three-
month Canadian Dollar LIBOR plus 4.85%. In addition the facility
contemplates a payout fee of 5% (based on $50 million facility
amount) or 2% of distributable value at maturity.

The Debenture exchange and the Credit Facility are subject to
numerous conditions, including the execution of definitive
documentation satisfactory to the lenders under the Credit
Facility, the approval by the holders of at least 66 2/3% of the
outstanding Debentures, and regulatory approval. Debenture
holders representing approximately 75% of the outstanding
Debentures have indicated in writing their support for the
Debenture exchange. The Credit Facility is expected to close as
soon as loan documentation and registrations are in place and
the Debenture exchange is expected to close on or about May 9,
2005 although there can be no assurance that such conditions
will be satisfied by such date.

Additionally, it is a condition of the recapitalization that the
lenders to the Corporation's Chilean subsidiary, CTR, will
restructure CTR's outstanding debt and amortization schedule and
provide an extended waiver of at least three years, subject to
final negotiations and the receipt of credit approvals. CTR's
lenders had previously waived compliance with certain financial
and operational covenants of CTR until April 22, 2005.

The Corporation is free to accept an alternative transaction,
which must provide for the payment of all amounts due to the
Debenture holders plus expenses, unless otherwise agreed to by
the Debenture holders. However, if the Corporation accepts an
alternative transaction after the later of two weeks from today
or the date on which the Credit Facility becomes binding, such
acceptance would result in the payment of $1 million to the
lenders providing the Credit Facility.

The maximum number of common shares that may be issued, assuming
all of the new Convertible Debentures are converted into common
shares at the Conversion Rate, is approximately 302,001,106
common shares, which, together with the issuance of 47,266,512
common shares in exchange for a portion of the outstanding 8.15%
Debentures, represents a total potential dilution of 1,983% over
the currently outstanding common shares, without taking into
account the Rights Offering.

As the aggregate number of common shares issuable in connection
with the Debenture exchange will exceed the maximum number of
securities issuable without security holder approval under the
rules of the Toronto Stock Exchange (the "TSX"), SR Telecom
intends to rely on an exemption from the security holder
approval requirements provided for under Section 604(e) of the
TSX Company Manual on the basis of its serious financial
difficulty. Upon the recommendation of a special committee of
independent directors of SR Telecom, who are free from any
interest in the transactions and are unrelated to any of the
parties involved in the transactions, the Board of Directors of
SR Telecom has determined that SR Telecom is in serious
financial difficulty, that the transactions are designed to
improve its financial situation and are reasonable in the
circumstances, and has authorized SR Telecom to make the
application to the TSX.

Rights Offering
In addition, as soon as practicable following the closing of the
Debenture exchange, the Corporation intends to file a
preliminary prospectus relating to a Rights Offering to its
shareholders.  Pursuant to the Rights Offering, the Corporation
will offer to shareholders holding its currently outstanding
common shares, the right to subscribe to up to $40 million of
new common shares at a price to be determined, but no less than
$0.254 per share.

The Rights Offering will be structured to result in a
proportionate reduction of the participation of the new
Convertible Debentures which will vary with the price and amount
of the rights exercised. For example, assuming a subscription
price of $0.254 and that the full amount of $40 million is
subscribed for, the shareholders holding the Corporation's
currently outstanding common shares would own approximately 36%
of the Corporation's common shares on a fully diluted basis. The
first $25 million raised under the Rights Offering will be used
for working capital and general corporate purposes and all
amounts raised in excess of $25 million will be applied 50% to
working capital and general corporate purposes and 50% to a pro
rata redemption of the new Convertible Debentures at 95% of
their face value.

Executive Appointment
SR Telecom also announced today that is has engaged Mr. William
Aziz, Managing Partner of Blue Tree Advisors, as Chief
Restructuring Officer on a contract basis to assist senior
management in identifying and implementing strategies to
capitalize on opportunities for the enhancement of operating
performance. He will report to the CEO and the Board of

Financial Advisor
Genuity Capital Markets advised SR Telecom on the
recapitalization plan and led negotiations with the Debenture

SR TELECOM (TSX: SRX, Nasdaq: SRXA) designs, manufactures and
deploys versatile, Broadband Fixed Wireless Access solutions.
For over two decades, carriers have used SR Telecom's products
to provide field-proven data and carrier-class voice services to
end-users in both urban and remote areas around the globe. SR
Telecom's products have helped to connect millions of people
throughout the world.

A pioneer in the industry, SR Telecom works closely with
carriers to ensure that its broadband wireless access solutions
directly respond to evolving customer needs. Its turnkey
solutions include equipment, network planning, project
management, installation and maintenance.

SR Telecom is a principal member of WiMAX Forum, a cooperative
industry initiative which promotes the deployment of broadband
wireless access networks by using a global standard and
certifying interoperability of products and technologies.

         David Adams
         Senior Vice-President, Finance and CFO
         Tel: (514) 335-4035

         Scott Lawrence
         Maison Brison
         Tel: (514) 731.0000

SR TELECOM: S&P Cuts Ratings to 'D' on Missed Payment
Standard & Poor's Ratings Services lowered its corporate credit
rating and senior unsecured debt ratings on telecommunications
equipment provider SR Telecom Inc. to 'D' from 'CC' following
the missed principal and interest payments on the company's C$71
million 8.15% debentures that were due April 22, 2005. At the
same time, the ratings were removed from CreditWatch, where they
were placed Jan. 20, 2005.

"Irrespective of whether SR Telecom is successful in its efforts
to recapitalize the company, a payment default has occurred,"
said Standard & Poor's credit analyst Joe Morin.

Although SR Telecom has reached an agreement in principle to
exchange the debentures for a combination of new convertible
secured debentures and common shares, the recapitalization is
subject to final documentation and a number of conditions,
including a restructuring of debt at Chilean subsidiary CTR.  

CONTACT: Primary Credit Analyst:
         Joe Morin, Toronto
         Tel: (1) 416-507-2508

         Secondary Credit Analyst:
         Don P Povilaitis, Toronto
         Tel: (1) 416-507-2578

C O S T A   R I C A

BANCO BAC: S&P Details Ratings' Basis
  Foreign Currency: BB/Negative/B
  Local Currency: BB+/Negative/B


The ratings on Banco BAC San Jose S.A. reflect the risks
inherent to a highly dollarized balance sheet and the small size
of the Costa Rican economy. The ratings on Banco BAC San Jose
S.A. are underpinned by the bank's good financial profile, the
benefits from its ownership by the largest Central American
credit card issuer, Credomatic International Corp. (CIC; BBB-
/Stable/A-3), and its increasing position in the growing retail
sector in Costa Rica.

The increasing dollarization of the economy is a factor that
could affect asset quality in the system in general, and BAC San
Jose in particular. In this sense, the bank and the system are
exposed to foreign exchange currency risk in the case of a
devaluation of the Costa Rican colon, as more than 50% of their
loan portfolios are dollar-denominated and most of their clients
are not net dollar generators. The bank's capital adequacy could
also be compromised, as the capital is denominated in colones,
yet the majority of risk-weighted assets are in dollars. In
addition, as there is no deposit insurance in Costa Rica for
private banks, and as the government is the guarantor of
deposits held at public banks, in a systemic crisis, there is a
potential risk that the clients transfer their deposits to
public from private banks, inducing fragility for the private

Ratings are underpinned by Banco BAC San Jose's good financial
profile. Profitability has been high, with ROAs of more than
2.4% in the past four years thanks to its business mix and
decreasing funding costs. In addition to being profitable, asset
quality has been adequate, as nonperforming assets (NPAs) have
been low, thanks to a diversified loan portfolio with no
significant concentrations by industry, economic group, or
individual exposures, which is unusual for a bank operating in a
small market. NPAs decreased to 0.4% in 2004 from 2.3% in 2003
as a consequence of conservative underwriting policies and
adequate collection. At the same time, loan-loss reserves
improved to 4.1x in 2004 from 0.9x in 2003. Adequate asset
quality is expected to continue in the future. Nevertheless, the
high exposure to dollar-denominated loans continues to be an
important risk to the overall loan portfolio.

The ownership of CIC gives BAC San Jose access to a common brand
and regional presence. In addition, BAC San Jose's increasing
participation in cash management services has provided an edge
in the market, as this participation, along with its credit card
business, allows the bank to generate a significant amount of
fee income. BAC San Jose is increasing its position in the
growing retail sector in Costa Rica, mainly in high-end mortgage
loans and credit cards with conservative loan-to-values and
revenues-to-debt ratios.

The bank run that BAC San Jose suffered in August 2004,
precipitated by false rumors in the market, was successfully
surpassed, satisfying payment of depositors' monies in full. As
of December 2004, deposits were 28% higher than in 2003 and 21%
higher than those held in June 2004. Liquid assets represented
by cash and securities continue to make up more than 30% of
total assets in 2004 and were strengthened during the second
half of 2004 by 15%. Stronger liquidity management policies at
the bank should slightly decrease its profitability in 2005, but
overall profitability should remain adequate.

The negative outlook mirrors the outlook on the sovereign
ratings assigned to Costa Rica. All things being equal, a rating
or outlook change on the sovereign would prompt a similar change
on the ratings or outlook on the bank.

CONTACT:  Primary Credit Analyst:
          Leonardo Bravo, Mexico City
          Tel: (52)55-5081-4406

          Secondary Credit Analyst:
          Francisco Suarez, Mexico City
          Tel: (52) 55-5081-4474


* ECUADOR: Fitch Details Concerns Over Political Implications
Fitch Ratings said that the political crisis in Ecuador raises
uncertainty about policy commitment and continuity, pressuring
sovereign creditworthiness. Ecuador's long-term foreign currency
rating is 'B-' and the Outlook is Stable. The rating takes into
account the country's chronic governability problems and an
expectation of ongoing political instability.

'Fitch will be monitoring events closely to determine whether
economic policy and market conditions deteriorate to a point
that would warrant a downgrade,' said Fitch Senior Director
Morgan Harting, 'but in and of itself, the change in government
last week does not automatically require one.'

Near term, Harting said, 'Fitch will be watching three key areas
closely: the ongoing political crisis, the availability of oil
receipts for debt service, and banking system stability.
Setbacks in any of these areas could trigger a downgrade.'

Prospects for near-term capital markets financing have clearly
worsened in recent days. This is not expected to have an
immediate impact on public finances, however, as Fitch was
expecting less than 10% of 2005 requirements (US$200 million, or
about 0.7% of GDP) to be sourced from international capital
markets, an amount that could be sourced in the domestic market.
Alternatively, authorities could run a lower deficit. Remaining
external market amortizations this year equal US$37.8 million
and remaining external market interest equals US$269.7 million.
The finance minister has affirmed that the US$75 million May
bond coupon will be paid.

The president has stated his intention to focus government
resources on social programs, a position he had advocated as
vice president and one that protesters have encouraged in recent
weeks. Just how these new policies might be articulated and
whether or not President Palacio will serve long enough to enact
them remain open questions, which is one of the reasons why
Fitch has elected to maintain the ratings at current levels for
the time being.

The finance minister's intention to propose a change in the law
governing the fund for excess oil revenues (FEIREP) has clear
negative credit implications. The FEIREP has been an important
source of financing for the government, particularly in light of
its limited access to capital markets. The FEIREP was created as
part of the fiscal responsibility law and it remains too soon to
tell what changes in the law the Congress might be willing to
accept. The president's party has minimal representation in the
Congress and some legislators may resist changes because they
could imply more discretionary resources for the executive

E L   S A L V A D O R

BANCO SALVADORENO: S&P Analysis Indicates Vulnerabilities
Counterparty credit ratings: BB/Stable/B

The ratings on Banco Salvadoreno S.A. are constrained by its
vulnerable asset quality, characterized by flexible
restructuring standards and low reserve coverage of
nonperforming assets (NPAs), as is also the case of other banks
in the country. The ratings are also constrained by the
relatively small size and limited diversification of El
Salvador's economy. Ratings are supported by the bank's
satisfactory market position, diversified portfolio, adequate
performance, and lower exposure to real state-related loans than
that of peers.

Asset quality is regarded as vulnerable due to the bank's
flexible practices of restructuring problematic loans, the risk
of operating in a relatively small and undiversified economy,
and the shortage of provisions to fully cover loans that have
proven problematic. Although historically the bank has reported
adequate indicators of nonperforming loans (NPLs), the balance
of gross problematic assets conformed by NPLs, restructured
loans, and repossessed assets reached 13% of total loans at
December 2004. Nevertheless, Banco Salvadoreno has a lower
exposure to real estate-related loans, including mortgages and
construction loans, which Standard & Poor's Ratings Services
views as riskier than commercial loans. We maintain our concern
regarding Banco Salvadoreno's reserve shortage to fully cover
potential losses related to the significant balance of NPAs. In
this context, although reserves fully covered delinquent loans,
this ratio weakens to 19% if restructured loans and repossessed
assets are included. Under market turmoil, asset quality could
be pressured further, affecting profitability and operational

Banco Salvadoreno's loan portfolio is diversified by type and
industry. Slow growth El Salvador has slowed down the bank's
credit expansion, particularly in the commercial segment. To
compensate that, the bank has focused on increasing its consumer
business. In our view, slow loan growth will continue as the
market is relatively mature and the economy is expected to
expand moderately. Although Banco Salvadoreno faces important
competition, mainly from the two largest banks in the country-
Banco Agricola and Banco Cuscatlan-it has been able to maintain
its position as the third-largest commercial bank in El Salvador
with a 17% market share in terms of deposits and loans.
Nevertheless, Banco de Comercio's acquisition by Scotiabank at
the end of 2004 is going to intensify competition in the market
and will reduce the market share gap between them.

Profitability is adequate for the rating level and ROA has been
sustained around 1% in the past three years despite decreasing
net interest margins-by increasing fees and commissions;
however, it remains lower than that of its closest peers. A more
conservative policy toward provisioning the balance of
problematic assets would result in lower profitability levels.
Internally generated funds have been sufficient to increase the
adjusted common equity-to-assets ratio to 9.7% in December 2004
from 8.7% in 2003, to cover high-dividend payouts, and have
supported capital growth to comply with increasing regulatory
capitalization levels.

The outlook reflects our opinion that the bank's strategies and
adequate operations should maintain profitability at adequate
levels in a stable economic environment. An economic downturn or
the continuation of low growing prospects of the Salvadorian
economy, however, could affect the bank's overall performance,
putting pressure on the ratings. Ratings could go up if there is
a strong development in economic conditions, along with a
sustainable improvement in asset quality (including restructured
loans and repossessed assets) and profitability, and if capital
ratios are higher than those of its closest peers.

CONTACT:  Primary Credit Analyst:
          Leonardo Bravo, Mexico City
          Tel: (52)55-5081-4406

          Secondary Credit Analyst:
          Angelica Bala, Mexico City
          Tel: (52) 55-5081-4405


AHMSA: 1Q05 Net Income Climbs on Higher Revenues
Steelmaker Ahmsa (Altos Hornos de Mexic SA) saw its net income
soar 1,318% in the first quarter of 2005 compared to the same
period in the previous year, reports Business News Americas.

In a filing with the Mexico City stock exchange (BMV), the
Company revealed a net income of MXN1.7 billion (US$158 million)
in the 1Q05 versus a net income of MXN123 million in the 1Q04.

Sales of steel during the period stood at 645,000t, a 3%
increase from the same period last year. Sales revenues
increased 55.5% to MXN5.8 billion during the same period.

Ebitda was up 396% to MXN2.1 billion.

Ahmsa attributed the positive results to the competitive
advantage it gets from being an integrated steelmaker with its
own iron and coal deposits, which significantly reduces the
rising cost of energy and raw materials.

The steel company plans to meet with creditors in New York this
month to present to them its new debt proposal. The Monclova-
based company has been in default on US$1.8 billion in debt
April 1999 and has yet to resume payments after reneging on a
2001 restructuring deal in order to seek better terms.

Last year, the Company appointed the Vector brokerage to
represent it in debt talks.

         International Operations
         Prolongacion Juarez s/n
         Monclova, Coah., 25770
         Phone: + 52 (866) 649 34 00
         Fax: + 52 (866) 649 23 10
         Web site:

CORPORACION GEO: S&P Favorable Ratings
Corporacion GEO
  Corporate Credit Rating:  BB/Stable/--

Major Ratings Factors

    * Largest homebuilder in Mexico
    * Nationwide presence

    * Concentration of mortgage origination in the public
housing agencies.
    * Increased competition.
    * Relatively high financial costs for the Mexican
homebuilding industry.
    * Intense working capital requirements.

The rating on Corporacion Geo (Geo) reflects Geo's position as
the largest homebuilder in Mexico and its nationwide presence.
These factors are partially offset by the concentration of
mortgage origination in the public housing agencies, increased
competition, relatively high financial costs for the Mexican
homebuilding industry, and intense working capital requirements.

Headquartered in Mexico City, Geo is the largest homebuilder in
Mexico with operations in 19 states. Geo's market position and
its nationwide presence grant the company more stability and
diversification of its cash flow generation and facilitate
access to financing in order to develop its projects. This
position partially offsets its dependency on the public housing
agencies, increased competition from small and midsize
homebuilders, relatively high financial costs for the
homebuilding industry versus those of other industries in
Mexico, and intense working capital requirements (especially for
land acquisitions).

In 2004, Geo sold 33,228 units and titled about 29,000 units.
The company achieved a 20% increase in EBITDA after a 13%
increase in units sold and a 4% increase in its average sales
price. The aforementioned reflects higher sales across all of
the company's product lines, particularly in the middle income
and residential segment. Financial performance was in line with
expectations. In 2004, the company posted EBITDA interest
coverage and total debt-to-EBITDA ratios of 3.1x and 1.4x. In
2005, we expect that Geo will continue its efforts to increase
its presence in the middle income and residential market through
its G-Homes brand. We also anticipate that Geo will continue its
efforts to reduce net debt to improve its key financial

Geo's liquidity is adequate. As of Dec. 30, 2004, the company
held approximately $165 million in cash and equivalents and had
available about $270 million in uncommitted credit facilities,
which compares favorably to its short-term debt of $158 million,
which is primarily composed of bridge loans.

The outlook is stable. The rating anticipates that Geo will
maintain financial indicators and liquidity adequate for its
current rating.

CONTACT:  Primary Credit Analyst:
          Jose Coballasi, Mexico City
          Tel: (52)55-5081-4414

          Secondary Credit Analyst:
          Raul Marquez, Mexico City
          Tel: (52) 55-5081-4437

CORPORACION GEO: Reports 25% EBITDA Increase in 1Q05
Corporacion Geo, S.A. de C.V. (OTC Bulletin Board: CVGFY) (BMV:
GEOB; CORPGEO MX, ADR Level I CUSIP: 21986V204), the largest
builder of affordable low to middle-income and residential
housing in Latin America and the leading homebuilder in Mexico,
reported Monday its first quarter 2005 earnings results. Growth
in Operating Results with Margin expansion, very good collection
and a Balance Sheet structure that shows the Company's strategy
of Net Debt reduction are the highlights of the first quarter

Luis Orvananos, Founder and President of Corporacion Geo,
commented: "Thanks to the Company's adequate planning, the
strong results of Geo this quarter confirm its continued
tendency of profitable and sustainable growth, demonstrating
margin expansion and strengthening its financial structure,
taking advantage of every opportunity and initiative offered by
the market."

For the fifteenth consecutive quarter, 1Q2005 operating results
increased in all the lines of P&L. Units sold grew 13.4%,
totaling 7,018 homes sold during the quarter, while Revenue grew
18.2% year-over-year, reaching $1,830.6 million pesos. In
addition, Gross Profit increased by 20.0%, with a Gross Margin
of 26.6% compared to 26.2%, in the 1Q2004. Operating Profit
increased 21.5% with an Operating Margin of 15.6%, versus 15.2%
in 1Q2004.

At the same time, EBITDA increased 25.1% in comparison to 1Q2004
with an important Margin expansion moving from 21.7% in 1Q04 to
23.0% in this quarter. Finally, Net Profit grew by 59.1%,
totaling $176.4 million, compared to $110.9 million in 1Q2004,
with a Net Margin of 9.6% in 1Q2005.

Regarding Financial Structure, during the first quarter of 2005,
Geo generated $-845.1 million in operating free cash flow,
representing an improvement of $32.3 million year-over-year,
compared to $-877.4 million reported in the first quarter of

The reduction shown in Accounts Receivable this quarter was
caused principally by our product diversification strategy by
greatly participating in the middle and residential housing
segment, as well as in the economic segment. The Co-financing
Program proved equally important for achieving such levels,
which ended the quarter at 40.0%, a decrease of -11.4 percentage
points against the 51.4% level of 1Q2004.

The increase in Inventories of 35.9% resulted mainly from the
investments made by Geo in Work in Process, given that due to
its association with PREI it becomes important to assure the
growth of the Company, not only for this year but also for
subsequent ones, which is also in line with the strategy of
increasing production from the beginning of the year. On the
other hand, the level of Cash and Cash Equivalents increased
123.7% when compared to the first quarter of 2004, going from
$524.9 million to $1,174.1 million pesos in the 1Q2005. The
difference was mainly due to better collection, which showed an
increase of 70.6%, moving from $899 million pesos in 1Q04 to
$1,534 million in this quarter.

With the purpose of assuring a sustainable growth for coming
years, Geo has invested in Working Capital, as shown in the
turnover of Inventories and the Inventories plus Accounts
Receivable turnover, ending at 250 days and in 328 days,

Net Debt showed a -21.1% reduction, equivalent to $-474.0
million pesos in relation to the first quarter of 2004, reaching
a level of $1,777.4 million pesos versus the $2,251.3 million
pesos reported in 1Q2004, while Debt to Capitalization ratio
observed a decrease over 1Q2004 moving from 36.2% to 32.3% in

Finally, the debt risk profile significantly improved during the
quarter, especially considering the fact that U.S. dollar-debt
exposure is less than 1.9% of total financial liabilities. The
composition of the debt was 77.5% short term and 22.5% long


  Jorge Perez                       Kenia Vargas / Eduardo Muniz
  Investor Relations Officer        Investor Relations
  Corporacion Geo                   Corporacion Geo
  Ph.  +(52) 55-5480-5071           Ph. +(52) 55-5480-5078
  Fax  +(52) 55-5554-6064           Fax +(52) 55-5554-6064    

To see income statement:

DIRECTV GROUP: Sells 50% of Hughes Network to SkyTerra
The DIRECTV Group, Inc. (NYSE: DTV) and SkyTerra Communications,
Inc. (OTCBB: SKYT), an affiliate of Apollo Management, L.P., a
New York-based private equity firm, announced Monday the
completion of transactions that resulted in SkyTerra acquiring a
50 percent interest in a new entity, Hughes Network Systems LLC
(HNS LLC), that in turn had acquired substantially all of the
remaining assets of Hughes Network Systems, Inc., a wholly-owned
subsidiary of The DIRECTV Group.

HNS LLC is primarily focused on providing broadband satellite
networks and services to enterprises via its core enterprise
Very Small Aperture Terminal (VSAT) business. Its other
businesses include Consumer DIRECWAY, Mobile Satellite and
Carrier Networks, as well as the portion of the Spaceway
satellite platform that is under development and that will not
be used in DIRECTV's direct-to-home satellite video broadcasting
business. Approximately 1,360 HNS employees transferred to HNS
LLC. In connection with the transactions, SkyTerra will be
responsible for day-to-day management of HNS LLC.

The DIRECTV Group received approximately $246 million in cash at
closing, and 300,000 shares of SkyTerra common stock, and will
retain a 50 percent interest in HNS LLC.

The DIRECTV Group, Inc. is a world-leading provider of digital
multichannel television entertainment, broadband satellite
networks and services. The DIRECTV Group is 34 percent owned by
Fox Entertainment Group, which is approximately 82 percent owned
by News Corporation.

         Mr. Bob Marsocci
         Phone: 310-726-4656
         SkyTerra Communications
         Mr. Rob Lewis
         Phone: 212-730-7540

EMPRESAS ICA: Amends Bylaws to Prevent Hostile Takeover
Empresas ICA, an engineering and construction outfit, approved
at last week's shareholders' meeting amendments to the Company's
bylaws designed to discourage the possibility of a hostile
takeover. Dow Jones Newswires indicates that the changes will
take effect pending approval from the securities regulators.

In a press release, ICA said the amendments were drawn up "in
order to prevent the purchase of shares that would result in
change of control of the company without the prior approval of
the board of directors or of an extraordinary shareholders'
meeting," and that they "create mechanisms designed to regulate
the purchase of shares that would result in control of the

The mechanisms would give existing shareholders the option to
keep or to sell their shares at the highest price offered in the
event of such a transaction, ICA said.

The latest measure follows a recent turnaround, renewed investor
interest, and the fact that 100% of its shares trade on the
Mexican Stock Exchange.

The engineering firm began to see net profits last year after a
major restructuring that included asset sales and debt
reductions over several years.

CONTACT: Empresas ICA Sociedad Controladora S.A. de C.V.
         Col. Escandon Del Migual Hidalgo
         Mexico City, 11800
         Phone: 525-272-9991
         Web site:

EMPRESAS ICA: S&P Details Negative Ratings Rationale
Empresas ICA
  Corporate Credit Rating:  B-/Negative/--

Major Rating Factors

    * Largest engineering, construction, and procurement concern
in Mexico
    * Increased backlog

    * Tight liquidity
    * Weak financial profile

The ratings on Empresas ICA Sociedad Controladora S.A. de C.V.
(ICA) reflect ICA's tight liquidity and weak financial profile.
The ratings also consider the company's position as the largest
engineering, construction, and procurement concern in Mexico.
The ratings show the expectation that, during the next 12
months, ICA's liquidity will remain tight and that corporate
debt payments depend on the company's ability to finish its
asset sale program and financial restructuring. The ratings also
reflect the risk of operating losses and swings in working
capital associated with cost overruns that have hurt the
company's financial performance and liquidity in recent years.
Nevertheless, the improvement in the company's backlog,
particularly its ability to secure works from Petroleos
Mexicanos (PEMEX) and Comision Federal de Electricidad (CFE),
provides evidence of its standing as the leading engineering and
construction concern in Mexico.

ICA's operating and financial performance has improved during
the past months and reflects an increase in revenues of nearly
40% that has had a positive effect on its key financial ratios.
During 2004, ICA posted EBITDA interest coverage, total debt-to-
EBITDA, and funds from operations-to-total debt ratios of 3.6x,
5.7x, and 10.8%, respectively, which compare favorably to the
1.4x, 9.3x, and (1.2%) posted in 2003. The aforementioned ratios
reflect the analytical adjustments to account for the
capitalization of interest for El Cajon hydroelectric project.
Revenues have been driven by the increase in the company's
backlog, which stood at 18 months of construction equivalent as
of Dec. 31, 2004, and the progress of the El Cajon, which
accounted for 20% of consolidated revenues in fourth-quarter
2004 and is now 38% complete. The $694 million contract for the
reconfiguration of PEMEX's Minatitlan refinery was an important
addition to the company's backlog and reflects a more favorable
operating environment for ICA in Mexico. Also, CFE has already
recognized additional costs of $35 million due to the increases
in the price of steel for El Cajon, which greatly reduces the
impact of the increase on ICA's results. Nevertheless, the
company continues its efforts to obtain an additional $15
million from CFE. ICA has indicated that it has petitioned for
the intervention of Mexico's Comptroller's Office (Secretaria de
la Funcion Publica) to reach a resolution.

ICA's liquidity is tight. The company faces significant
investments in working capital, particularly for El Cajon, that
will lead to a deficit in free operating cash flow that will be
met with additional debt and asset sales. ICA has indicated that
the Minatitlan project will require working capital investments
that are significantly lower than those required by El Cajon,
and this should benefit the company's liquidity. The company has
been able to secure credit for its works in progress; during
fourth-quarter 2004, the company closed working capital loans
for a total of $70 million to finance the construction of four
marine drilling platforms for PEMEX. Nevertheless, corporate
expenses and debt service depend on the successful completion of
the company's asset sale program (which raised $10 million in
the fourth quarter) and the successful restructuring/refinancing
of $35 million of outstanding bank debt. Liquid assets are
scarce, as ICA's unrestricted cash has been depleted by the need
to post cash as collateral to obtain LOCs to support working
capital investments. In addition, the company does not have
corporate credit lines available, and practically all of its
assets have been pledged to current debt holders.

The negative outlook reflects the expectation that ICA's
liquidity will remain tight during the next 12 months and that
ratings could be lowered if the company's liquidity weakens
further. A positive rating action would need to be preceded by a
significant improvement in liquidity and a sustained improvement
in the company's financial and operating performance.

CONTACT:  Primary Credit Analyst:
          Jose Coballasi, Mexico City
          Tel: (52)55-5081-4414

          Secondary Credit Analyst:
          Santiago Carniado, Mexico City
          Tel: (52) 55-5081-4413

GRUPO DESC: Independent Auditor Issues Statement
DESC, S.A. de C.V. (BMV: DESC) informs about the Independent
Auditors' Report to the Board of Directors and Stockholders of
Desc, S.A. de C.V.

Independent Auditors' Report to the Board of Directors and
Stockholders of Desc, S.A. de C.V.:

We have audited the accompanying consolidated balance sheets of
Desc, S.A de C.V. and subsidiaries (collectively referred to as
the "Company") as of December 31, 2004, and 2003, and the
related consolidated statements of operations, changes in
stockholders' equity and changes in financial position for the
years then ended.

These financial statements are the responsibility of the
Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We did not audit the financial statements of certain companies
of the chemical and food segments, which statements reflect
total assets constituting 36% and 42% of consolidated total
assets as of December 31, 2004, and 2003, and total revenues
constituting 47% and 49%, respectively, of consolidated total
revenues for the years then ended.

Those statements were audited by other auditors whose reports
have been furnished to us, and our opinion, insofar as it
relates to the amounts included for those entities, is based
solely on the reports of such other auditors.

We conducted our audits in accordance with auditing standards
generally accepted in Mexico. Those standards require that we
plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.
We believe that our audits and the reports of the other auditors
provide a reasonable basis for our opinion.

As of December 31, 2003 the Company early adopted the provisions
of new Bulletin C-15, "Impairment of the Value of Long-lived
Assets and their Disposal". The effect derived from the
application of this principle is indicated in the Note 4.a.

In our opinion, based on our audit and the reports of the other
auditors, such consolidated financial statements present fairly,
in all material respects, the financial position of Desc, S.A.
de C.V. and subsidiaries as of December 31, 2004, and 2003, and
the results of their operations, changes in their stockholders'
equity and changes in their financial position for the years
then ended in conformity with accounting principles generally
accepted in Mexico.

DESC, S.A. de C.V. (BMV: DESC) is one of the largest industrial
groups in Mexico, with 2004 sales of approximately US$ 2 billon
and nearly 14,000 employees, which through its subsidiaries is a
leader in the Automobile Parts, Chemical, Food and Property

CONTACT: Ms. Maria Barona
         Ms. Melanie Carpenter
         Phone: 212-406-3690

         Ms. Marisol Vazquez-Mellado
         Mr. Jorge Padilla
         Phone: (5255) 5261-8044
         Web site:

XIGNUX: S&P Releases Report on Ratings

Xignux S.A. de C.V.
  Corporate Credit Rating:  BB-/Stable/--

Xignux S.A. de C.V.
  Sr unsecd debt Foreign currency:  B+

Major Rating Factors

    * Significant market-share positions
    * Product diversity
    * Vertical integration

    * High leverage
    * Cyclical nature of some of its end markets

The ratings on Xignux S.A. de C.V. (Xignux) reflect its high
leverage, the cyclical nature of some of its end markets, and
increasing costs as a result of the strength of the Mexican peso
in recent years. The ratings also consider Xignux's significant
market-share positions, product diversity, and vertical
integration. Its emphasis on high quality has attracted world-
recognized joint-venture partners, providing Xignux, a
diversified holding company, with low-cost access to state-of-
the-art technology and enhancement of its export possibilities.

The 'B+' rating assigned to Xignux's notes due 2009 reflects the
structural subordination of the issue relative to the company's
priority liabilities. Despite the debt at the holding company
being guaranteed by some of the subholding and operating
subsidiaries, the proportion of priority liabilities (i.e.,
current and long-term liabilities, in addition to short- and
long-term debt, at the operating company level) relative to
consolidated total assets is significant (about 30%), leading to
a possible low residual claim for Xignux's holding company

Xignux is a diversified holding company whose subsidiaries
manufacture a variety of products, mostly for industrial
markets. The company sells auto parts, chemicals, food, cable,
foundry, power, and distribution transformers.

Despite the continued weakness in the food business, Xignux's
financial performance continued to show improvement in 2004. Top
line and EBITDA growth was driven by the wire & cable, auto
parts, and petrochemical businesses, which more than offset the
negative performance of the food business. The arrival of a new
management team at the food business is expected to improve the
operating performance of the business during 2005, and this
should drive EBITDA growth on a consolidated basis. The
company's high leverage is reflected in its key financial
ratios. For the 12 months ended Dec. 30, 2004, Xignux posted
EBITDA interest coverage, total debt-to-EBITDA, and funds from
operations-to-total debt ratios of 3.7x, 3.0x, and 20.1%,
respectively. The aforementioned ratios compare favorably to the
3.8x, 4.1x and 12.5% posted in 2003.

Xignux's liquidity is adequate. As of Dec. 30, 2004, Xignux held
about $97 million in cash and equivalents, which compares
favorably to short-term debt of $99 million. During 2005, free
operating cash flow is expected to reach about $40 million, and
the focus of the company's financing plans will be the extension
of debt maturities due 2006 and 2007, given that dividend
payments of about $30 million are expected during the year.

The stable outlook on the global scale ratings and the positive
outlook on the national scale rating anticipate that Xignux's
financial performance and liquidity will continue to improve.
The aforementioned improvement will result in a one-notch
upgrade in the national scale. A significant improvement in
financial performance could lead to a positive rating action in
the global scale. Weakness in the company's financial and
operating performance could lead to a negative rating action.

CONTACT:  Primary Credit Analyst:
          Jose Coballasi, Mexico City
          Tel: (52)55-5081-4414

          Secondary Credit Analyst:
          Federico Mora, Mexico City
          Tel: (52) 55-5081-4436

P U E R T O   R I C O

DORAL FINANCIAL: S&P Cuts Ratings, Places On CreditWatch Neg.
Standard & Poor's Ratings Services lowered its long-term ratings
on Puerto Rico's largest mortgage lender Doral Financial Corp.
(Doral; NYSE:DRL), including Doral's long-term counterparty
credit rating, which was lowered to 'BB+' from 'BBB-'. At the
same time, Doral's ratings were placed on CreditWatch Negative.

"The ratings actions are based on Doral's statement that it is
writing down the value of its interest-only strips by $400
million to $600 million, which will result in a noncash after-
tax charge to earnings of between $290 million and $435
million," said Standard & Poor's credit analyst Michael
Driscoll. "Consequently, Doral must restate its financial
statements back to 2000 and will delay the release of its first-
quarter 2005 earnings.

"The CreditWatch listing reflects Standard & Poor's concerns
over Doral's levels of profitability while it adjusts to a new
business model," Mr. Driscoll said. "Standard & Poor's expects
to meet shortly with the company's management to discuss recent
events and the new business model."

CONTACT:  Primary Credit Analyst:
          Michael Driscoll, New York
          Tel: (1) 212-438-1787

          Secondary Credit Analyst:
          Victoria Wagner, New York
          Tel: (1) 212-438-7406


PDVSA: 29 Companies Ratify Participation in Rafael Urdaneta Bid
A total of 29 national and international companies ratified
their interest in investing in Venezuela by acquiring the data
pack and signing confidentiality and participation letters for
Phase A of the Rafael Urdaneta Project, the company selection
process of the bid for non-associated gas licenses over 6 blocks
offshore the Gulf of Venezuela and Northeast Falcon.

This level of participation is seen as quite a success for this
process that began last March 31st, in Los Taques, state of
Falcon, for they are ratifying their confidence in the actions
the Ministry of Energy and Petroleum has been undertaking.

These oil companies are from 16 countries: Australia, Argentina,
United States of America, China, England, Russia, Japan, France,
Brazil, Spain, Norway, Netherlands, Italy, Canada and Venezuela.

Licenses to be awarded by the Ministry of Energy and Petroleum
will have a duration of 25 years and the State may participate
through Petroleos de Venezuela, up to a maximum share of 35
percent, once the marketability has been declared. The gas
produced will be mainly devoted to meet domestic demand, while
any surplus can be exported, as set forth in the Organic Law on
Gaseous Hydrocarbons. License awards are scheduled to be issued
in September of this year.

The Rafael Urdaneta Project is made up by a total of 29 blocks,
18 located in the Gulf of Venezuela and 11 in Northeast Falcon.
Together, they cover an area of approximately 30,000 square
kilometers, where probable gas reserves are estimated at 26
trillion cubic feet (TCF).

The data pack contains information about the blocks up for bid,
the license model, and basis for the selection process, as well
as the Health, Safety, and Environment description, and
geodesic, geologic, and geochemical data, location map,
gravimetric and seismic surveys, among other aspects.

The minimum exploration program to be undertaken in the blocks
is also described. It should include doing seismic survey and
drilling a well, in a maximum period of time of 32 months.

The blocks that make up the Rafael Urdaneta Project are in low
exploratory risk areas and their geologic characteristics make
them potentially prolific in gaseous hydrocarbons, in addition
to being close to currently productive reservoirs . The blocks
have been located in shallow waters and in areas where there is
oil industry infrastructure

It should be mentioned that domestic gas demand is expected to
increase, as a result of growing demand from the oil, power
supply, and petrochemical sectors, as well as from international
markets. Within this context, the Ministry of Energy and Oil
wants to promote the development of the country's gas potential,
in order to improve the quality of life of Venezuelans and
leverage industrial park development, pursuant to the Law on
Gaseous Hydrocarbons, the National Development Plan, and the
National Gas Plan

Among the objectives of the Rafael Urdaneta Project we have the
search for gas needed to meet domestic demand for the expansion
of the Paraguana Refining Complex - the petrochemical center
located in the Paraguana peninsula, the reactivation of El
Tablazo, electric power generation, enhanced oil recovery, and
household and industrial gas consumption in the region. It will
also provide more geologic information about the region and
foster the endogenous development of the Western region of the

Additionally, this effort will further the business
opportunities of the Transguajiro Gas Pipeline, which will
ultimately allow to transport gas to Colombia and Central
America, areas where we are implementing energy integration
processes to promote the sustainable development of these fellow
peoples of the region.

Participating Companies:

Amerada Hess, Anadarko, BHP Billigton, Bp, British Gas,
ChevronTexaco, CNPC, ConocoPhillps, Eni, ExxonMobil, Gazprom
(through its affiliate Zao Zarubezhneftegaz), Inelectra, Lukoil,
Nimir, Occidental Petroleum, ONGC, Perenco, Petrobras,
Petrocanada, Pluspetrol, Repsol, Shell, Statoil, Suelopetrol,
Tecpetrol, Teikoku Dil, Total, Vinccler Oil and West Falcon

PDVSA: Cuban Operations to Commence Today
PDVSA is scheduled to open its branch in the Cuban capital
Havana today. According to Business News Americas, Venezuela's
President Hugo Chavez will be the one to initiate the
inauguration ceremony.

Energy and oil minister and PDVSA president Rafael Ramirez
cancelled a previous engagement to meet with officials from
Brazil's federal energy company Petrobras (NYSE: PBR) to travel
to Cuba with Mr. Chavez.

Cuba receives 53,000 barrels a day (b/d) of Venezuelan oil in
exchange for technical assistance in the fields of health care,
physical education, agriculture, animal husbandry and illiteracy

PDVSA is also assisting Cuba in the operation of the Cienfuegos

CONTACT: Petroleos de Venezuela S.A.
         Edificio Petroleos de Venezuela
         Avenida Libertador, La Campina, Apartado 169
         Caracas, 1010-A, Venezuela
         Phone: +58-212-708-4111
         Fax: +58-212-708-4661
         Web site:

PDVSA: President Reveals Ongoing Inquiry Into Alleged Corruption
An investigation into alleged corruption at PDVSA is underway, reports, citing company president Rafael

"We are investigating and punishing (alleged culprits). We are
firing several managers, not all of them for corruption, but for
their performance when managing the company; we took them to the
Attorney General Office," the Union Radio station quoted Mr.

Mr. Rodriguez also announced that the Company has also started
legal proceedings against US Spanish-language newspaper El Nuevo
Herald for alleged defamation.

The Miami newspaper earned the ire of the company president when
it published an article alleging that PDVSA is unlawfully paying
commissions to oil traders, a practice Ramirez had expressly
vowed never to engage in.

"We reserve any legal act because we will not accept continuing
defamation of our PDVSA managers," Rodriguez said earlier in
response to the newspaper report. He stressed that the
corporation stopped using middlemen to sell Venezuelan oil and
advised of ongoing investigations into any wrongdoing. "Indeed,
our mechanisms to grant agreements do not back this."

PDVSA: New Brazilian Refinery to Top $3B
PDVSA and Brazil's federal energy company Petrobras are expected
to spend more than US$3 billion in a new refinery that the two
companies will jointly build in Brazil, according to Business
News Americas.

"We are defining the profile of the refinery," PDVSA internal
director Eulogio del Pino told reporters. When asked about a
previous estimate of US$3 billion for the project, he said:
"Refineries are costly, it will surely be more than that."

Petrobras and PDVSA signed a memorandum of understanding (MOU)
in February to carry out feasibility studies for the refinery,
which is expected to have processing capacity of 150,000-200,000
barrels of oil a day.

Mr. del Pino traveled to Brazil at the weekend to discuss with
Petrobras officials the progress that has been made since the
signing of the MOU.


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 America is a daily newsletter
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Copyright 2005.  All rights reserved.  ISSN 1529-2746.

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