TCRLA_Public/050831.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, August 31, 2005, Vol. 6, Issue 172

                            Headlines


A R G E N T I N A

ALIMENTOS FARGO: Evaluadora Maintains `D' Rating on $120M Bonds
CLUB ATLETICO: Court Converts Bankruptcy to Reorganization
CONARTE CONSTRUCCIONES: Individual Reports Due for Submission
CONSORCIO OLIVARERO: Verification Phase Ends
DELTAGRAF S.A.: Individual Creditors' Claims Due Sept. 1

HUMBERTO NICOLAS: Deadline for General Report Approaches
LUMICOLOR S.A.: Court Declares Company Bankrupt
PETROBRAS ENERGIA: More Info on "Settlement Agreement"
PLASTICOS STOLL: Proceeds With Liquidation
PROTELIA S.A.: Judge Approves Bankruptcy

SUROIL S.A.: Declared Bankrupt by Court
WALCAR S.R.L.: Trustee to Present General Report in Court


B E R M U D A

INTELSAT: To Merge With PanAmSat
INTELSAT: S&P Places `BB-' Rating on CreditWAtch Negative


B R A Z I L

VARIG: Local Court Blocks VarigLog Sale to U.S. Equity Firm


C H I L E

MANQUEHUE NET: Unites With DirecTV to Offer Triconexion


C O L O M B I A

TERMOEMCALI FUNDING: Soliciting Consents on Chapter 11 Prepack


D O M I N I C A N   R E P U B L I C

* DOMINICAN REPUBLIC: 2006 Fiscal Policy Framework to be Defined


E C U A D O R

BANCO DEL PICHINCHA: Ratings Remain Unchanged Despite Turmoil
PRODUBANCO: Fitch Affirms Ratings Despite Political Turmoil
* ECUADOR: Fitch Revises Outlook on Political, Fiscal Concerns


J A M A I C A

AIR JAMAICA: Losses Outweigh Possible High Load Factor Profits


M E X I C O

ASARCO: Wants to Enter Into Bank One Credit Card Pact
ASARCO: Wants Approval of Reclamation Claim Procedures
ASARCO: Utilities Want Court Order Vacated


P A N A M A

BANISTMO: Solid Operating Performance Prompts 'BB+/B' Rating
PANAMSAT: Ratings Put on Watch Negative on Merger Announcement


U R U G U A Y

NBC: Advent Seen Likely to Acquire Bank

     -  -  -  -  -  -  -  -

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

ALIMENTOS FARGO: Evaluadora Maintains `D' Rating on $120M Bonds
---------------------------------------------------------------
Ratings agency Evaluadora Latinoamericana S.A. Calificadora de
Riesgo maintained its `D' rating on US$120 million worth of
bonds issued by Compania de Alimentos Fargo SA, the country's
leading maker of packaged bread.

The bonds, according to securities regulator, the CNV, carry the
description "Obligaciones negociables Simples for US$
120.000.000" and are classified under "Simple Issue." The bonds
will mature on July 24, 2008.

The Company's financial situation as of June 30, 2005 determined
the action rating.


CLUB ATLETICO: Court Converts Bankruptcy to Reorganization
----------------------------------------------------------
Club Atletico, Biblioteca y Mutual San Martin, which was
declared "Quiebra" earlier, entered reorganization on orders
from Court No. 1 of Marcos Juarez's civil and commercial
tribunal, according to Infobae. The court assigned Mercedes
Catalina Barovero as the Company's receiver.

The credit verification process will be done "por via
incidental", says the report, adding that the court ordered the
receiver to submit the general report on Sep. 19, 2005.

An informative assembly is scheduled for March 23 next year.

CONTACT: Club Atletico, Biblioteca y Mutual San Martin
         Alem y Santa Fe
         Marcos Juarez (Cordoba)

         Ms. Mercedes Catalina Barovero, Trustee
         Pellegrini 1059
         Marcos Juarez (Cordoba)


CONARTE CONSTRUCCIONES: Individual Reports Due for Submission
-------------------------------------------------------------
The individual reports on the claims of the creditors against
Buenos Aires-based Conarte Construcciones S.R.L. will be
submitted tomorrow, Sep. 1, 2005. The claims underwent
verification phase until July 7, 2005.

A general report containing a summary of the Company's financial
status as well as relevant events pertaining to the bankruptcy
will be submitted on Oct. 13, 2005.

Conarte Construcciones S.R.L. was declared bankrupt by the
city's Court No. 16 that the company is bankrupt. The ruling
placed the company under the supervision of court-appointed
trustee Nora Cristina Roger. The bankruptcy process will end
with the disposal of Company assets in favor of its creditors.

CONTACT: Conarte Construcciones S.R.L.
         Avda Rivadavia 5474
         Buenos Aires

         Ms. Nora Cristina Roger, Trustee
         Hipolito Yrigoyen 1349
         Buenos Aires


CONSORCIO OLIVARERO: Verification Phase Ends
--------------------------------------------
The verification of claims submitted by creditors of Consorcio
Olivarero Argentino S.A., a company operating in Buenos Aires,
will end tomorrow, Sep. 1, 2005.

The claims will be presented in court as individual reports by
court-appointed trustee Norberto Jorge Volpe on Oct. 14, 2005.

An audit of the Company's accounting and business records is
expected on Nov. 25, 2005. They will constitute the general
report.

Creditors will also vote to ratify the Company's completed
settlement plan during the informative assembly on April 8 next
year.

Consorcio Olivarero Argentino S.A. began reorganization
proceedings after the city's Court No. 22, with assistance from
Clerk No. 44, granted its petition for "concurso preventivo".

CONTACT: Mr. Norberto Jorge Volpe, Trustee
         Maipu 859
         Buenos Aires


DELTAGRAF S.A.: Individual Creditors' Claims Due Sept. 1
--------------------------------------------------------
The creditors' individual claims against bankrupt company
Deltagraf S.A. will be submitted tomorrow, Sep. 1, 2005. The
said claims were authenticated by court appointed trustee Elisa
Esther Tomattis until June 27, 2005.

After the submission of the claims to court, a general report on
the Company's bankruptcy will be expected on Oct. 20, 2005.

Court No. 9 of Buenos Aires' civil and commercial tribunal
ordered the liquidation of Deltagraf S.A. after the Company
defaulted on its debt obligations. The city's Clerk No. 17
assists the court on this case.

CONTACT: Ms. Elisa Esther Tomattis, Trustee
         Rodriguez Pena 110
         Buenos Aires


HUMBERTO NICOLAS: Deadline for General Report Approaches
--------------------------------------------------------
The deadline for the general report on the insolvency case of
Humberto Nicolas Fontana S.A.C. will be tomorrow, Sep. 1, 2005.

Mr. Fernando Jose Marziale, the trustee selected by the court,
stopped accepting creditors' claims on May 23, 2005 and prepared
individual reports out of those claims. The said reports were
submitted on June 6, 2005.

The Company began reorganization following the approval of its
petition by Court No. 3 of Buenos Aires' civil and commercial
tribunal.

An Informative Assembly, the final stage of a reorganization
where the settlement proposal is presented to the Company's
creditors for approval, is scheduled on June 13, 2006.

Clerk No. 6 assists the court on this case.

CONTACT: Mr. Fernando Jose Marziale, Trustee
         Avda Callao 930
         Buenos Aires


LUMICOLOR S.A.: Court Declares Company Bankrupt
-----------------------------------------------
Court No. 15 of Buenos Aires' civil and commercial tribunal
declared local company Lumicolor S.A. "Quiebra", relates La
Nacion. The court approved the bankruptcy petition filed by Mr.
Hector Mendez.

The Company will undergo the bankruptcy process with Ms.
Graciela Caccavallo as trustee. Creditors are required to
present proofs of claim to Ms. Caccavallo for verification
before Nov. 8, 2005. Creditors who fail to submit the required
documents by the said date will not qualify for any post-
liquidation distributions.

Clerk No. 30 assists the court on the case.

CONTACT: Lumicolor S.A.
         Apolinario Figueroa 527
         Buenos Aires

         Ms. Graciela Caccavallo, Trustee
         Estados Unidos 2552
         Buenos Aires


PETROBRAS ENERGIA: More Info on "Settlement Agreement"
------------------------------------------------------
Petrobras Energia Participaciones S.A. (Buenos Aires: PBE, NYSE:
PZE), controlling company of Petrobras Energia S.A. (Buenos
Aires: PESA), announced that pursuant to the Master Settlement
and Mutual Release Agreement (the "Settlement Agreement")
entered into by and between Petrobras Energia S.A. (together
with certain affiliates) and certain affiliates of Enron Corp
(collectively, "Enron") in April 2004, (i) Petrobras Energia
S.A. and the controlling company of the latter, Petrobras
Hispano Argentina S.A., transferred in favor of certain
affiliates of Enron 58,410,452 Class B Shares issued by
Transportadora de Gas del Sur S.A. (TGS), representing
approximately 7.35% of TGS's share capital and (ii)
simultaneously Enron transferred approximately 40% of the share
capital of Compa¤ia de Inversiones de Energia S.A. (CIESA) -
controlling company of TGS -, to a trust,  whose trustee is ABN
AMRO BANK N.V., Argentine Branch, (the Trustee), that will
administer them and place them at the disposal of whom CIESA may
designate.

Said transfers, as provided for in the Settlement Agreement,
will provide for the flexibility necessary to progress with the
restructuring of CIESA's financial debt with a view to designing
a capital structure in line with the strategy of business
development, with the subsequent creation of value in PESA's
equity interest in CIESA. Under the terms and conditions of the
Settlement Agreement, should refinancing of CIESA's financial
debt be agreed upon with creditors, in a second stage Enron will
transfer the remaining 10% of its shareholding in CIESA to said
creditors, the Trustee or to an alternative entity, as provided
in the pertinent CIESA's debt restructuring agreement, subject
to the simultaneous transfer to Enron of TGS's Class B common
shares currently held by CIESA and representing approximately
4.3% of TGS's share capital .

CONTACT: Petrobras Energia Participaciones S.A.
         Edificio Perez Companc
         Maipu 1
         Buenos Aires, C 1084 ABA
         Argentina
         Phone: 54-11-4344-6000
         Website: http://www.petrobrasenergia.com


PLASTICOS STOLL: Proceeds With Liquidation
------------------------------------------
Union Obreros y Empleados Plasticos successfully sought for the
bankruptcy of Plasticos Stoll S.R.L. after Court No. 14 of
Buenos Aires' civil and commercial tribunal declared the Company
"Quiebra," reports La Nacion.

As such, Plasticos Stoll S.R.L. will now start the process with
Ms. Marcela Vainberg as trustee. Creditors must submit proofs of
claim to the trustee by Nov. 8 for authentication. Failure to
comply with this requirement will mean a disqualification from
the payments that will be made after the Company's assets are
liquidated.

The creditor sought for the Company's liquidation after the
latter failed to pay debts amounting to $3,061.20.

The city's Clerk No. 28 assists the court on the case that will
close with the sale of all of its assets.

CONTACT: Plasticos Stoll S.R.L.
         Av. Santa Fe 4922
         Buenos Aires

         Ms. Marcela Vainberg, Trustee
         Lavalle 2024
         Buenos Aires


PROTELIA S.A.: Judge Approves Bankruptcy
----------------------------------------
Construction company Protelia S.A. was declared bankrupt after
Court No. 14 of Buenos Aires' civil and commercial tribunal
endorsed the petition of Neumasur S.A. for the Company's
liquidation. Argentine daily La Nacion reports that Neumasur
S.A. has claims totaling $11,443.17 against Protelia S.A.

The court assigned Carlos Perez to supervise the liquidation
process as trustee. Mr. Perez will validate creditors' proofs of
claim until Oct. 31, 2005.

The city's Clerk No. 27 assists the court in resolving this
case.

CONTACT: Protelia S.A.
         San Martin 793
         Buenos Aires

         Mr. Carlos Perez, Trustee
         Larrea 785
         Buenos Aires


SUROIL S.A.: Declared Bankrupt by Court
---------------------------------------
Court No. 17 of Buenos Aires' civil and commercial tribunal
declared Suroil S.A. bankrupt, says La Nacion. The ruling grants
a petition filed by the Company's creditor, Mr. Pablo Puzino,
for nonpayment of $109,782 in debt.

Trustee Angel Vello Vazquez will review titles, balances and
excuses for absence until Nov. 22, 2005.

Clerk No. 33 assists the court on the case, which will conclude
with the liquidation of the Company's assets.

CONTACT: Suroil S.A.
         Osvaldo Cruz 1936
         Buenos Aires

         Ms. Angel Vello Vazquez, Trustee
         Parana 275
         Buenos Aires


WALCAR S.R.L.: Trustee to Present General Report in Court
---------------------------------------------------------
Court-appointed trustee Marcela Ingrid Vainberg will present the
general report on the Walcar S.R.L. bankruptcy tomorrow, Sep. 1,
2005.

On July 5, 2005, Ms. Vainberg submitted the individual reports
on the claims of the Company's creditors. The claims were
verified until May 23, 2005.

Walcar S.R.L. was declared "Quiebra" by Buenos Aires' civi and
commercial Court No. 14.  Clerk No. 27 assists the court on this
case that will end with the sale of the Company's assets.

CONTACT: Mr. Marcela Ingrid Vainberg, Trustee
         Mahatma Gandhi 419
         Buenos Aires



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

INTELSAT: To Merge With PanAmSat
--------------------------------
Intelsat, Ltd. and PanAmSat Holding Corporation (NYSE: PA)
announced Monday that the two companies have signed a definitive
merger agreement under which Intelsat will acquire PanAmSat for
$25 per share in cash, or $3.2 billion. The transaction will
create a premier satellite company that will be a leader in the
digital delivery of video content, the transmission of corporate
data and the provisioning of government communications
solutions.

The new company will offer its customers expanded coverage with
additional back-up satellites, supporting fiber networks and
enhanced operational capabilities for the provision of an
unparalleled level of services. With an increased focus on
developing advanced communications technologies, the company
will meet the needs of cable TV programmers, broadcasters,
businesses, governments and consumers worldwide.

Using a combined fleet of 53 satellites, the company will serve
customers in more than 220 countries and territories. Driven by
the core strengths of the two companies and their employees'
commitment to quality in operations and customer service,
Intelsat will have a portfolio of customers not only in the
developed world, but also in emerging nations and remote areas
where satellites are critical to providing communications
infrastructure for economic development.

"The combination of Intelsat and PanAmSat creates an industry
leader with the ability to provide competitive communications
and video services to consumers and businesses," said David
McGlade, Chief Executive Officer of Intelsat. "The two companies
are complementary in customer, geographic and product focus.
Together, we will continue providing the highest level of
service to existing customers while growing new business in
rapidly expanding communications markets."

Mr. McGlade will continue to serve as Chief Executive Officer
and a Director of the company upon closing. Joseph Wright,
currently Chief Executive Officer of PanAmSat, is expected to
become Chairman of the Board upon completion of the transaction.

"Today [August 29], PanAmSat offers its video, data and
government customers a highly reliable level of service that
only a technically advanced and financially strong satellite
operator can provide," said Mr. Wright. "Now, we will combine
the best from both companies and bring a professional business
approach to the new enterprise to benefit our customers,
employees and shareholders. This is a 'win-win' for both
companies, and a terrific outcome for all of PanAmSat's
shareholders, who will receive $25 per share in cash -- a
significant premium over the recent stock price and nearly a 40%
premium over the IPO price of about six months ago. In addition,
our shareholders will continue to receive dividends, at the
current annual rate or higher, until we close the transaction."

PanAmSat brings a strong, video-centric customer base, including
leading providers of cable TV programming, while Intelsat's
historical strength has been in providing core telephony and
advanced data services to developing and underserved regions
around the world. Over the long term, the company will
consolidate best practices from the two respective
organizations. "We will leverage our combined intellectual,
material and people assets to continue the high-quality service
Intelsat and PanAmSat customers have come to expect," said David
McGlade.

Following the transaction, the company will have enhanced
financial strength and revenue and free cash flow growth
opportunities. The company is expected to have pro forma annual
revenues of more than $1.9 billion and to maintain significant
free cash flow from operations, providing significant resources
for capital expenditures and debt service.

Under the agreement, which was approved unanimously by the
Boards of Directors of both companies, Intelsat will acquire all
outstanding common shares of PanAmSat, and additionally Intelsat
will either refinance or assume approximately $3.2 billion in
debt of PanAmSat Holding Corporation and its subsidiaries.
Shareholders owning approximately 58% of PanAmSat's shares have
agreed to vote in favor of the combination.

Intelsat has received financing commitments for the full amount
of the purchase price from a group of financial institutions led
by Deutsche Bank Securities Inc., Citigroup Global Markets Inc.,
Credit Suisse First Boston LLC and Lehman Brothers Inc. A
substantial portion of the financing for the transaction is
expected to be raised at Intelsat (Bermuda), Ltd., with
additional financing expected to be raised at PanAmSat Holding
Corporation, PanAmSat Corporation, and Intelsat Subsidiary
Holding Company, Ltd. Prior to this financing and the closing of
the transaction, Intelsat (Bermuda), Ltd. is expected to
transfer substantially all of its assets and liabilities
(including its 9-1/4% Senior Discount Notes due 2015) to a
newly-formed wholly-owned subsidiary. Upon completion of the
transaction, both PanAmSat Holding Corporation and Intelsat
Subsidiary Holding Company, Ltd will be direct or indirect
wholly-owned subsidiaries of Intelsat (Bermuda), Ltd., and
PanAmSat Holding Corporation and its subsidiaries will continue
as separate corporate entities. The transaction is expected to
result in a Change of Control, as defined in the indenture
governing PanAmSat Holding Corporation's outstanding bonds and
certain of the indentures governing PanAmSat Corporation's
outstanding bonds.

The transaction is conditioned upon PanAmSat Holding Corporation
shareholder approval, customary closing conditions and
clearances from relevant regulatory agencies, including the
appropriate U.S. government antitrust authorities and the
Federal Communications Commission. The companies anticipate that
the transaction could close in approximately six to 12 months.

Credit Suisse First Boston LLC is serving as Intelsat's
financial advisor, and Wachtell, Lipton, Rosen & Katz, Paul,
Weiss, Rifkind, Wharton & Garrison LLP, and Milbank, Tweed,
Hadley & McCloy LLP are serving as Intelsat's legal advisors.
Morgan Stanley is serving as PanAmSat's financial advisor, and
Simpson Thacher & Bartlett LLP is serving as PanAmSat's legal
advisor.

Intelsat is a global communications provider offering flexible
and secure services to customers in over 220 countries and
territories. Intelsat has maintained a leadership position for
over 40 years by distributing video, voice, and data for
television and content providers, government and military
entities, major corporations, telecommunications carriers, and
Internet service providers. Intelsat's reach, power and
expanding solutions portfolio deliver information reliably and
quickly to every corner of the globe.

Through its owned and operated fleet of 25 satellites, PanAmSat
(NYSE: PA) is a leading global provider of video, broadcasting
and network distribution and delivery services. It transmits
1,991 television channels worldwide and, as such, is the leading
carrier of standard and high-definition signals. In total, the
Company's in-orbit fleet is capable of reaching over 98 percent
of the world's population through cable television systems,
broadcast affiliates, direct-to-home operators, Internet service
providers and telecommunications companies. In addition,
PanAmSat supports satellite-based business networks in the U.S.,
as well as specialized communications services in remote areas
throughout the world. More information can be obtained at
www.panamsat.com.

CONTACT: Intelsat
         E-mail: media.relations@intelsat.com
         Phone: 1 202-944-7500


INTELSAT: S&P Places `BB-' Rating on CreditWAtch Negative
---------------------------------------------------------
Standard & Poor's Ratings Services placed Intelsat Ltd.'s 'BB-'
corporate credit rating, the third highest junk level, on
CreditWatch with negative implications.

The action follows the announcement of a definitive merger
agreement between Intelsat and PanAmSat Holding Corp., the
parent of PanAmSat Corp.

An aggregate of nearly US$8 billion in debt is affected. Under
terms of the agreement, Intelsat will acquire PanAmSat Holding's
equity for $3.2 billion cash and will assume or refinance $3.2
billion in existing debt.

"The CreditWatch listing is based on the elevated financial risk
of the combined entity, which has an estimated (consolidated)
debt-to-EBITDA ratio in the mid-7x area, based on annualized
results for the first six months of 2005 (and assuming an all-
debt financing of the acquisition)," explained Standard & Poor's
credit analyst Eric Geil. "We expect to resolve the CreditWatch
listing after reviewing the transaction financing plans and
business prospects for the combined company."

The merged company will have a combined fleet of 53 satellites,
making it the largest fixed satellite services operator. The
resulting entity will benefit from PanAmSat's strong presence in
the North American video distribution market, in which expanding
high-definition TV services are bolstering transponder demand,
and Intelsat's good global presence. The large fleet should
improve the combined company's satellite backup capabilities and
facilitate more efficient satellite capital expenditures.
Nevertheless, industry growth prospects are mature, contract
lengths are shortening, and newer managed services businesses
important to growth are less profitable than traditional
transponder leasing. A meaningful portion of Intelsat's business
is from point-to-point carrier services, which are being
supplanted by fiber optic networks.

Primary Credit Analyst: Eric Geil, New York (1) 212-438-7833;
eric_geil@standardandpoors.com



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

VARIG: Local Court Blocks VarigLog Sale to U.S. Equity Firm
-----------------------------------------------------------
A Rio de Janeiro court barred debt-ridden airline Varig from
selling its cargo unit to U.S. private equity firm Matlin
Patterson Global Advisers LLC, Dow Jones Newswires reports,
citing a spokesman.

Federal Labor Judge Giselle Bondim Lopes Ribeiro's ruling came
at the behest of the national federation of civil aviation
workers (Fentac), which claims the sale of VarigLog was
fraudulent and harmful to workers.

"I accept (Fentac's) allegations and rule that the company
shouldn't be sold," the judge said.

According to the court, VarigLog's value is estimated at US$300
million, which is three times higher than the US$100 million
valuation agreed by Varig and Matlin Patterson. The deal with
Matlin, which includes the VarigLog sale, would generate a total
of about US$103 million in cash to cover overdue debts, which
threaten to shut down its operations.

Meanwhile, a New York bankruptcy court is scheduled to hear on
Aug. 31 requests from a number of creditors, primarily aircraft
and engine leasing firms, to freeze Varig's airplanes for
defaulting on payments.



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

MANQUEHUE NET: Unites With DirecTV to Offer Triconexion
-------------------------------------------------------
Manquehue Net has agreed to team up with regional pay-TV
provider DirecTV to offer a triple play solution called
Triconexion, offering broadband, satellite TV and telephony,
Business News Americas reports, citing Manquehue Net general
manager Jorge Troncoso.

Through the agreement, Manquehue Net will provide its clients in
Chile's metropolitan region, which encompasses capital Santiago,
the option to access satellite TV services from DirecTV.

Troncoso declined to provide sales forecasts for Triconexion,
although he said: "This is not a fight to steal clients from
[Chilean triple play provider] VTR, but a bid to open a new
option for clients."

Local telecoms holding company Grupo GTD expects to assume
control of Manquehue Net on August 31 in an operation worth a
total of US$27 million.

GTD will acquire 49% of Manquehue's shares and in a separate
contract plans to acquire 100% of the telco's debt.

Even after the operation is completed, GTD and Manquehue Net
will continue to operate as independent companies, mostly
because of Manquehue's strength in the residential segment,
according to previous reports.

GTD will continue to be a corporate orientated brand, while
Manquehue plans to fortify its presence with greater penetration
in the broadband market, specifically in the higher income
segments.



===============
C O L O M B I A
===============

TERMOEMCALI FUNDING: Soliciting Consents on Chapter 11 Prepack
--------------------------------------------------------------
TermoEmcali Funding Corp. launched an offer to exchange all
outstanding 10.125% Senior Secured Notes Due 2014 for Senior
Secured Notes Due 2019, a consent solicitation and solicitation
of acceptances of a prepackaged plan of reorganization, on Aug.
11, 2005.

The out-of-court restructuring will consist of an offer to
exchange each $1,000 of outstanding principal amount of 10-1/8%
Senior Secured Notes Due 2014 for $968.58 in principal amount of
new Restructured Senior Secured Notes Due 2019.  The
Restructured Notes will bear interest rates escalating from 6%
per annum effective as of the first day of the month in which
the exchange offer is effective to 10-1/8% per annum effective
from July 1, 2009, plus $31.42 in Cash.  The payment recognizes
that if $1,000 principal amount of Existing Senior Secured Notes
had been exchanged for $1,000 principal amount of Restructured
Senior Secured Notes on June 16, 2004, an additional $31.42 in
principal would have been amortized since that exchange is based
on the actual interest payments exceeding the interest that
would have been paid at the applicable restructured interest
rates to the holders of the Existing Senior Secured Notes since
June 16, 2004.  The Restructured Senior Secured Notes are
expected to have the opportunity for principal prepayments,
monthly installment payments, and certain security that would
not be available to the Existing Senior Secured Notes.

The financial restructuring will also consist of a consent
solicitation for the New Indenture, the New Common Agreement and
to amend, waive or terminate certain agreements or provisions
thereof, including, but not limited to, the Existing Indenture
and the Existing Common Agreement applicable to the Existing
Senior Secured Notes.  By validly tendering the Existing Senior
Secured Notes, noteholders will automatically be deemed to have:

      (a) given consent to the proposed amendments, waivers and
          terminations with respect to all of the Existing
          Senior Secured Notes tendered;

      (b) agreed to the exchange;

      (c) authorized and directed the Existing Indenture Trustee
          to execute the proposed amendments, waivers and
          terminations and to take such further necessary action
          to effectuate the exchange, including directing the
          Collateral Agent to execute the amendments, waivers
          and terminations and to take such further action
          necessary on its part to effectuate the exchange;

      (d) accepted the Prepackaged Plan and

      (e) accepted the releases.

The proposed amendments, waivers and terminations will become
operative only if the Exchange Offer closes.  Obtaining the
requisite consent of the holders of at least 94.5% of the
aggregate outstanding principal balance of the Existing Senior
Secured Notes is one of the conditions to the closing of the
Exchange Offer.

            Existing vs. Restructured Senior Secured Notes

If the Exchange Offer is completed, there will be a number of
differences between the Existing Senior Secured Notes that are
not tendered in the Exchange Offer and the Restructured Senior
Secured Notes that will be issued through the Exchange Offer,
including:

                   Non-Tendering Existing Restructured Sr.
Characteristic    Sr. Secured Notes      Secured Notes
--------------    ---------------------  ----------------
Payment Frequency     Quarterly           Monthly

Interest Rate         10-1/8%             Escalating from 6% at
per annum                                 closing of the
                                           Exchange Offer or the
                                           effectiveness of the
                                           Prepackaged Plan to
                                           10-1/8% commencing
                                           July 1, 2009

Maturity              2014                2019, subject to
                                           potential shortening
                                           of maturity through
                                           mandatory prepayments

Principal
prepayment at         No                  Yes
closing

Opportunity for
mandatory principal   No                  Yes
prepayments after
closing

Additional security   No                  Yes
through equity
pledge

Guarantee of          Yes, but the right  Yes
underlying cash       to the proceeds of
flow by Emcali        any draw will fall
                       below those of the
                       holders of
                       Restructured Senior
                       Secured Notes

Rated                 No                  Yes, expected from
                                           Fitch and/or
                                           Standard & Poor's

Luxembourg            No, such a listing  Yes, such a listing
Listing               is not to be        is expected to be
                       retained for        obtained for the
                       the Existing        Restructured Senior
                       Senior Secured      Secured Notes
                       Notes

Benefits of
continuing
affirmative and
negative covenants    No                  Yes

Redemption            Yes                 No
premium

Holder receives       No, except through    Yes
releases on           the Prepackaged Plan
exchange

As of Aug. 11, 2005, there is a total of $144,080,024 in
aggregate principal amount of Existing Senior Secured Notes
outstanding.  Delivery of the Restructured Senior Secured Notes
and payment to tendering holders will be made promptly following
the expiration date and the satisfaction or waiver of all
conditions to the Exchange Offer.

                    The Prepackaged Plan

The Claims held by holders of its Existing Senior Secured Notes
constitute the only impaired class under the Prepackaged Plan.
In the event that less than 94.5% of the aggregate outstanding
principal balance of the Existing Senior Secured Notes are
tendered in connection with the Exchange Offer, but if the
Prepackaged Plan is accepted by holders of at least 66% of the
aggregate principal amount of the Existing Senior Secured Notes
who vote and who represent at least 50% of the total number of
beneficial holders of the Existing Senior Secured Notes who
vote, the Company may commence a voluntary case under Chapter 11
of the Bankruptcy Code for purposes of effectuating the
restructuring through the Prepackaged Plan.

The exchange offer and consent solicitation will expire at 5:00
p.m. on Sept. 9, 2005.

Deutsche Bank Trust Company Americas serves as the Indenture
Trustee for the Restructured Senior Secured Notes.

The Company and Emcali are parties to a 20-year power purchase
agreement pursuant to which the Company sold electric generating
capacity and energy to Emcali.  The Power Purchase Agreement has
been suspended pending the effectiveness of the exchange offer
and the issuance of notes payable by Emcali to TermoEmcali.  At
such time, the PPA is to be terminated.

Full-text copies of the Company's Offering Memorandum and
Disclosure Statement and related documents are available at no
charge at its exchange agent's website at
http://www.bondcom.com/termoemcalior at these addresses:

        Bondholder Communications Group -- New York
        Attn:  Trina Caliveri
        30 Broad Street, 46th Floor
        New York, NY  10004
        Telephone:  (212) 809-2663
        Fax:  (212) 437-8727
        E-mail:   tcaliveri@bondcom.com

        Bondholder Communications Group -- London
        Attn:  Trina Caliveri
        3rd Floor, Prince Rupert House
        64 Queen Street
        London, EC4R 1AD
        Telephone:  +44 20 7236 0788
        Fax:  +44 20 7236 0779
        E-mail:  tcaliveri@bondcom.com

TermoEmcali Funding Corp. was formed to develop, construct, own
and operate a natural gas-fired electric power generation
facility, which is located near Cali, Colombia.  The Company is
owned by Leaseco, Cauca Valley Holdings Ltd., TermoEmcali
Holdings Ltd., Emcali E.I.C.E. E.S.P., and Inversiones Inca S.A.
Leaseco, a Cayman Islands company, is owned and controlled by
Cauca Valley and Holdings, both of which are Cayman Islands
companies.

                        *     *     *

As reported in the Troubled Company Reporter-Latin America on
July 28, 2005, Standard & Poor's 'D' rating on TermoEmcali
Funding Corp.'s US$165 million senior secured notes due 2014
reflects the Colombian company's failure to make its September
2004 debt-service payment.  Since then, the project-financed
entity also failed to make its debt-service payments through
June 2005.

TermoEmcali operates a 234 MW combined-cycle, natural-gas-fired
power generation facility, and sells capacity and energy to
Empresas Municipales de Cali (Emcali), a Colombian municipal
utility that provides diversified services to two million
residents in and around Santiago de Cali.

TermoEmcali entered a 20-year purchased-power agreement (PPA)
with Emcali to provide capacity and energy, and eventually
transfer the facility to Emcali at no cost. However, after
Emcali defaulted on March 6, 2003, the PPA has not been honored.
As of June 2005, Emcali continues to fail to meet its financial
obligations due under the PPA for more than $85 million.

In November 2003, TermoEmcali and Emcali, the project's
offtaker, signed a memorandum of understanding (MOU) while
pursuing an orderly restructuring of the obligations under the
PPA. The MOU expired on June 2004, and although the parties
discussed extending it, Emcali indicated it would not continue
payments under the MOU until an energy-purchase agreement (EPA),
replacing the former PPA, is signed.

Despite the expiration of the MOU and Emcali's failure to
perform its obligations under the PPA, Emcali and TermoEmcali
continued to negotiate a restructuring of the PPA. On June 2005,
TermoEmcali reached agreement to restructure Emcali's
obligations to the project and settle certain disputes with
Emcali. The deadline to achieve the restructuring is May 17,
2006. In parallel with those negotiations, TermoEmcali and a
committee of restricted bondholders and other lenders have held
discussions about restructuring the financing documents on a
basis consistent with cash flows anticipated under a
restructured PPA. After the restructuring of the financing
documents is finalized Standard & Poor's Ratings Services will
reassess the transaction's credit rating.(Troubled Company
Reporter, Tuesday, August 30, 2005, Vol. 9, No. 205)



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

* DOMINICAN REPUBLIC: 2006 Fiscal Policy Framework to be Defined
----------------------------------------------------------------
The International Monetary Fund announced Monday that the fiscal
policy framework for 2006 is expected to be defined in the
coming days.

On Monday in Washington, D.C., International Monetary Fund's
(IMF) mission chief for the Dominican Republic Mr. Guy Meredith
stated:

"The IMF mission, which visited Santo Domingo during August 17-
26, 2005, made important progress towards completing, at the
staff level, the first and second reviews of the Dominican
Republic's program supported by a Stand-By Arrangement from the
IMF.

"Developments under the program remain favorable, and
preliminary information suggests that the end-March and end-June
2005 quantitative performance criteria have been met with
comfortable margins. The continued implementation of cautious
fiscal and monetary policies has contributed to strengthening
confidence, reducing inflation and lowering interest rates,
while economic activity continues to improve. Progress has been
made in the area of structural reforms, including in drafting
legislation to enhance fiscal management and strengthen the
structure of monetary and financial institutions.

"The authorities are expected to define in the coming days the
fiscal policy framework for 2006, consistent with program
objectives. Once this is in place, the authorities' Letter of
Intent describing the government's policies will be reviewed by
Fund staff and Management," Mr. Meredith said.

CONTACT: IMF - International Monetary Fund
         External Relations Department
         Public Affairs
         Phone: 202-623-7300
         Fax: 202-623-6278
         Media Relations
         Phone: 202-623-7100
         Fax: 202-623-6772



=============
E C U A D O R
=============

BANCO DEL PICHINCHA: Ratings Remain Unchanged Despite Turmoil
-------------------------------------------------------------
Fitch Ratings affirmed Ecuadorian bank Banco del Pichincha y
Subsidiarias' ratings below and revised the outlook on the long-
term foreign currency rating to Negative:

--Long-term foreign currency 'B-'
--Short-term foreign currency 'B';
--Support '5'.

This change follows a similar action taken on Ecuador's
sovereign ratings and reflects increased sovereign credit risk
due to greater political instability and added fiscal
rigidities.

Despite the recent political turmoil, the performance of the
banking sector has remained stable and banks have reported
steady deposit growth and high liquidity levels.

CONTACT: Linda Hammel +1-212-908-0303, New York
         Peter Shaw +1-212-908-0553, New York
         Patricio Baus +5932 222-2323, Quito

MEDIA RELATIONS: Kenneth Reed +1-212-908-0540, New York


PRODUBANCO: Fitch Affirms Ratings Despite Political Turmoil
-----------------------------------------------------------
Fitch Ratings affirmed Ecuadorian bank Produbanco's ratings
below and revised the outlook on the long-term foreign currency
rating to Negative:

--Long-term foreign currency 'B-';
--Short-term foreign currency 'B';
--Support '5'.

This change follows a similar action taken on Ecuador's
sovereign ratings and reflects increased sovereign credit risk
due to greater political instability and added fiscal
rigidities.

Despite the recent political turmoil, the performance of the
banking sector has remained stable and banks have reported
steady deposit growth and high liquidity levels.

CONTACT: Linda Hammel +1-212-908-0303, New York
         Peter Shaw +1-212-908-0553, New York
         Patricio Baus +5932 222-2323, Quito

MEDIA RELATIONS: Kenneth Reed +1-212-908-0540, New York


* ECUADOR: Fitch Revises Outlook on Political, Fiscal Concerns
--------------------------------------------------------------
Fitch Ratings, the international credit rating agency, has
revised the Outlook on Ecuador's sovereign ratings to Negative
from Stable. The long-term foreign currency rating is affirmed
at 'B-' and the country ceiling is affirmed at 'B-'. The short-
term foreign currency rating is likewise affirmed at 'B'.

Sovereign credit risk has increased recently on greater
political instability and concerns about related fiscal
pressures. Changes to laws governing the FEIREP oil
stabilization fund and the 'Fondo de Reservas' social security
program have effectively reduced the pool of local financing
available to the government. The oil production interruption
that began in mid-August has left public finances more
vulnerable to a decline in oil prices and to spending increases.

According to Fitch Senior Director and lead Ecuador Sovereign
analyst, Morgan Harting, 'there is a plausible 'muddle through'
scenario in which Ecuador will be able cover its roughly US$3
billion in financing needs through end-2006, but this will
require reasonable fiscal performance underpinned by oil
revenues, the availability of financing from multilateral
lenders and other governments, and relative stability in the
financial system and capital account.' Risks to the credit over
this period include potential spending pressures related to next
year's election and higher scheduled bond debt service in 2006.
Harting stated that 'these risks will all be more difficult to
mitigate in light of the current uncertainty about Ecuadoran
politics.'

The issuer rating could be downgraded in the event that oil
production is not fully restored quickly, that fiscal
performance suffers, that the 2006 budget threatens debt
service, or that actual disbursements from official creditors
are below estimates. The rating could stabilize if the oil
production interruption proves transitory, if adequate financing
is secured from bilateral and multilateral sources, and if
appears feasible that government balances will be held in check.

CONTACT: Morgan C. Harting, CFA, New York
         +1-212-908-0820

         Roger M. Scher, New York
         +1-212-908-0240

MEDIA RELATIONS: Kenneth Reed +1-212-908-0540, New York



=============
J A M A I C A
=============

AIR JAMAICA: Losses Outweigh Possible High Load Factor Profits
--------------------------------------------------------------
National carrier Air Jamaica reached in July this year its
highest load factor for any single month in five months, having
filled 80% of its seat capacity, but lost around US$1 million,
says Observer Business Reporter.

Air Jamaica flew 150,000 passengers in July 2005, about 70,000
or 30% less than the 220,000 in 2004 that brought US$3 million
profit. This means that the airline has cut its capacity by 40%.

The airline operated 35% less flights, but achieved 12% boost in
its yield or earning per flight to reach its highest yield ever.

July's performance indicates clearly that cutting loss making
routes and consolidating marginal ones is a good strategy,
Executive Chairman Dr. Vincent Lawrence said.

The airline did not make clear what revenues were reaped for
July.

However, even with Air Jamaica's proclamation of a highest
passenger load factor in five years, the airline continues to
lose money.

The airline is expected to record a US$160 million loss by the
end of the year, having already lost US$72 million for the first
six months.

With increased competition, escalating jet fuel costs, pilots
leaving to join the more lucrative airlines of the Middle East,
Far East and India, and a yet to be declared business model,
prospects look far from encouraging.

Also, tourism arrivals are currently down and the September-
October period is fallow. July and August may be the best months
for the national carrier but by the end of September, Air
Jamaica is expected to lose further US$30 million.

An Air Jamaica spokesperson said, "There are these figures being
thrown about which we don't know for a fact are true or will
ever be made true. What we do know is that we are now trying to
restructure the airline in order to return it to profitability.
Now that will take time. Let's not lose sight of the fact that
Air Jamaica changed both ownership and management less than a
year ago."



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

ASARCO: Wants to Enter Into Bank One Credit Card Pact
-----------------------------------------------------
ASARCO LLC seeks authority from the U.S. Bankruptcy Court for
the Southern District of Texas pursuant to Section 364(c)(2) of
the Bankruptcy Code to enter into a corporate credit card
agreement with Bank One and grant a lien on a newly created
segregated cash account to secure obligations arising under the
credit card program.

                   The American Express Program

Before the Petition Date, ASARCO had a company credit card
program sponsored by American Express Company, which provided
business credit cards to certain key employees of the Debtor for
their business-related expenses and for purchasing necessary
goods and services.  Upon learning of the Chapter 11 filing,
American Express cancelled ASARCO's credit card program,
freezing all cards under it.

James R. Prince, Esq., at Baker Botts L.L.P., in Dallas, Texas,
states that even before the Petition Date the Debtor was
unsatisfied with the credit card program offered by American
Express.  According to Mr. Prince, ASARCO had contacted other
providers, prepetition, including Bank One, one of ASARCO's main
banking and financial institutions, about the possibility of
migrating ASARCO's credit card program to another provider.  Due
to American Express' cancellation of the existing credit card
program, the Debtor found it necessary to expedite its
negotiations for a replacement credit card program.

                     Migration to Bank One

ASARCO has selected Bank One's $250,000 Commercial Card Classic
program, which will provide key employees with up to 100
business charge cards to replace the cancelled American Express
program. Annual fees for the credit cards vary depending on
annual usage, but in no event are the fees greater than $35 per
card.  The finance charge rate, which applies only to past-due
accounts, is equal to the prime rate plus 2%.

As a condition to entering into the credit card agreement, Bank
One is requiring ASARCO to:

(a) set aside $250,000 in a segregated savings account at
     Bank One; and

(b) grant Bank One a lien against the segregated savings
     account to secure ASARCO's obligations arising under the
     credit card program.

ASARCO will fund the account with unencumbered cash, not cash
collateral.  The segregated savings account will remain in
ASARCO's name and control.

            Bank One Credit Card Program Is Necessary

ASARCO believes that the credit agreement with Bank One is
necessary for the operation of its business and is in the best
interest of the estate.  Mr. Prince explains that the Debtor
needs to provide certain of its key employees with a business
charge card to be used:

(1) for the purchase of supplies used in the daily operations
     of the business;

(2) for business-related travel expenses; and

(3) other business-related needs.

Section 364 authorizes a debtor who is unable to obtain
unsecured credit to obtain credit, after notice and a hearing,
secured by a lien on property of the estate that is not
otherwise subject to a lien.  Mr. Prince notes that ASARCO has
otherwise been unable to obtain the type of credit that Bank One
is offering on an unsecured basis.  In fact, even American
Express sought similar protections in order to continue to
service ASARCO's procurement card program postpetition.

Mr. Prince further informs the Court that, unless the Debtor is
authorized to enter into the credit arrangement with Bank One
and grant a lien on a $250,000 segregated cash account, ASARCO's
business operations will be disrupted by the loss of its
corporate credit card program.

                     Texas Commission Objects

The Texas Commission on Environmental Quality contests ASARCO's
request to migrate its Credit Card Program to Bank One on the
grounds that the Commission's counsel did not receive notice of
the emergency hearing on the Motion until August 18, 2005, at
5:33 p.m., after close of business, when he received an e-mail
from an employee of the Debtor's counsel.

ASARCO has sought expedited consideration of the request.  A
hearing on the Motion was scheduled for August 19, 2005.

The Texas Commission asserts that it is inappropriate for its
counsel to receive less than one business day's notice of a
hearing without a true emergency.  The Commission's counsel is
extremely concerned that the expedited consideration of the
Debtor's request is a window into what creditors can expect in
the case.

"The Debtor should not be permitted to abuse the Court's
graciousness with respect to the setting of emergency hearings,"
Hal F. Morris, Esq., Assistant Attorneys General, Bankruptcy &
Collections Division, in Austin, Texas, argues, "unless they can
demonstrate a true emergency which would require immediate court
action and justify the denial of due process to other parties in
interest."

The Texas Commission also asserts that the Debtor's Motion lacks
sufficient detail about the nature of the alleged emergency,
stating that the Motion itself does not contain substance
creating a problem with regard to the employees' inability to
avail of Credit Card Services.  Mr. Morris points out that one
of the key facts the Debtor should disclose is the date and time
it received notice that its account was being frozen by American
Express.

The Texas Commission requests that any order entered by the
Court on less than one day's notice to parties-in-interest, be
an interim order.  This would allow all parties-in-interest an
opportunity to review the Debtor's pleading and consider the
Debtor's request.

The Texas Commission also asks the Court to establish a
procedure for the setting of emergency hearings in the
bankruptcy proceedings, stating that not all requests by the
Debtor are true emergencies and that the due process rights of
parties-in-interest must be balanced against the Debtor's desire
for expeditious resolution of its motions.

The Texas Commission suggests a procedure for the Court's
consideration:

(1) Any order entered on an emergency motion be interim;

(2) Parties-in-interest have 20 days to challenge the entry of
     the interim order;

(3) If an objection is filed, the matter be requested by the
     Debtor be set for hearing within 20 days of the date the
     objection was filed; and

(4) If there are no objections filed, the order becomes final
     in 25 days of the entry of the interim order.

                             Notice

James R. Prince, Esq., at Baker Botts L.L.P., in Dallas, Texas,
advises parties-in-interest that the hearing to consider the
Debtor's request, originally scheduled for Aug. 19, 2005, has
been adjourned to a later date still to be set.

Headquartered in Tucson, Arizona, ASARCO LLC --
http://www.asarco.com/-- is an integrated copper mining,
smelting and refining company.  Grupo Mexico S.A. de C.V. is
ASARCO's ultimate parent.  The Company filed for chapter 11
protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207).
James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A.
Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter
Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble,
Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the
Debtor in its restructuring efforts.  When the Debtor filed for
protection from its creditors, it listed $600 million in total
assets and $1 billion in total debts.

The Debtor has five affiliates that filed for chapter 11
protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-
20521 thru 05-20525).  They are Lac d'Amiante Du Quebec Ltee,
CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake
Asbestos Of Quebec, Ltd., and LAQ Canada, Ltd.  Details about
their asbestos-driven chapter 11 filings have appeared in the
Troubled Company Reporter since Apr. 18, 2005.  ASARCO has asked
that the five subsidiary cases be jointly administered with its
chapter 11 case. (ASARCO Bankruptcy News, Issue No. 3;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


ASARCO: Wants Approval of Reclamation Claim Procedures
------------------------------------------------------
Since filing for bankruptcy, ASARCO LLC has received reclamation
demands from various suppliers and other creditors.  ASARCO
expects to receive more of these demands.

Pursuant to Section 546(c) of the Bankruptcy Code, the Debtors
ask the Court to establish these guidelines and procedures for
the treatment of timely asserted reclamation claims:

(a) Any supplier or other creditor asserting a reclamation
     claim must do so in compliance with the requirements of
     Section 546(c) and applicable state law;

(b) Notwithstanding any reclamation demand that would require
     ASARCO to segregate the assets subject to the reclamation
     demand, ASARCO would be authorized to use the goods,
     products, and raw materials provided by suppliers and
     other trade creditors that may be subject to reclamation
     claims;

(c) In lieu of physical reclamation, if ASARCO determines that
     a particular supplier or other trade creditor has a valid
     reclamation claim and ASARCO desires to pay the creditor
     on account of the goods, then ASARCO will provide written
     notice of its intent, along with the supporting invoices,
     to:

        (i) the official committee of unsecured creditors
            appointed in ASARCO's case;

       (ii) the official committee of unsecured creditors
            appointed in the Subsidiary Cases; and

      (iii) the United States Trustee.

     Unless a written objection is filed and served on ASARCO
     within five business days from the date of delivery of the
     notice, the creditor will be deemed to hold an
     administrative expense claim under Section 503(b), and
     ASARCO is authorized to pay the creditor without further
     Court order;

(d) In lieu of physical reclamation, if the Court determines,
     upon request of a particular supplier or other trade
     creditor, and after notice and a hearing, that a creditor
     has asserted a valid reclamation claim, then the creditor
     will be granted an administrative expense claim under
     Section 503(b) for the amount of the reclamation claim;
     and

(e) In any proceeding commenced to determine the validity or
     amount of any reclamation claim, the supplier or the trade
     creditor asserting the claim will bear the initial
     evidentiary burden of establishing the validity of its
     reclamation claim under Section 546(c) and applicable
     state law by a preponderance of the evidence.

Jack L. Kinzie, Esq., at Baker Botts LLP, in Dallas, Texas,
tells the Court that the procedures for resolving reclamation
claims are necessary to prevent supply interruptions and severe
and irreparable injury to the Debtors' business operations.  The
success and ultimate viability of the Debtors' businesses depend
on the immediate utilization of the goods, products, and raw
materials that may be the subject of reclamation claims.

"If suppliers or other trade creditors are allowed to reclaim
certain assets or if the Debtors are required to segregate those
assets, there could be disastrous interruption in the Debtors'
business operations," Mr. Kinzie says.

Mr. Kinzie further asserts that the disruption and adverse
publicity that would result could impact the Debtors'
relationship with other trade creditors and force an effective
shut down of their business operations, which could severely
impair, or possibly eliminate, any possibility for a successful
reorganization.  Any payment to be made will be subject to any
cash collateral or postpetition financing documents or orders
approved or entered in the Debtors' cases. (ASARCO Bankruptcy
News, Issue No. 3; Bankruptcy Creditors' Service, Inc., 215/945-
7000)


ASARCO: Utilities Want Court Order Vacated
------------------------------------------
ASARCO LLC obtains electricity, water, natural gas, telephone
services, and similar services through accounts with numerous
utility companies in connection with the normal operation of its
business.

Under Section 366 of the Bankruptcy Code, utility companies are
prohibited from discontinuing, altering, or refusing service to
a debtor during the first 20 days of the bankruptcy case.  Upon
expiration of the Stay Period, however, a Utility Company has
the option of terminating its services if a debtor has not
furnished adequate assurance of payment.

Karen C. Paul, Senior Assistant General Counsel of ASARCO,
relates that it is vitally important to the Debtor's business,
and thus to the Debtor's successful reorganization, that utility
services continue uninterrupted after the expiration of the Stay
Period.  If utility services were discontinued or altered, even
briefly, the Debtor's ongoing operations would be severely
disrupted, causing substantial and perhaps irreparable harm, and
the Debtor's reorganization efforts would be jeopardized.

For this reason, the Debtor wants to prevent Utility Companies
from terminating services or requiring additional deposits in
connection with their provision of services.

The Utility Companies would not be prejudiced by the absence of
additional deposits, Ms. Paul says.  ASARCO has timely paid most
of its undisputed prepetition invoices, and is prepared to pay
all undisputed postpetition charges for Utility Services.

The timely payment of prepetition invoices and prompt payment of
all undisputed postpetition invoices for Utility Services after
the Petition Date, together with existing deposits and the
statutory administrative priority provisions constitute adequate
assurance of payment under the Bankruptcy Code, Ms. Paul
asserts.  Moreover, if the Utility Companies require additional
deposits to secure continued services, the Debtor may face a
severe cash shortage.

Shelby A. Jordan, Esq., at Jordan, Hyden, Womble & Culbreth,
P.C., in Corpus Christi, Texas, points out that courts have held
that a debtor's ability to pay postpetition bills promptly is
most determinative of adequate assurances for utility companies.

In In re George C. Frye Co., 7 B.R. 856 (Bankr. D. Me. 1980),
Mr. Jordan says the court found that a utility company's demand
that a Chapter 11 debtor post a deposit or suffer termination of
service, if permitted, would jeopardize the debtor's
reorganization efforts.  Additionally, the court noted that the
administrative expense priority provisions of Sections 503(b)
and 507(a) constituted adequate assurance of payment to the
utility.

At the Debtor's behest, the U.S. Bankruptcy Court for the
Southern District of Texas enjoins and restrains Utility
Companies from discontinuing, altering, or otherwise refusing
service on account of any unpaid prepetition charges.

A Utility Company, however, may request additional assurances of
payment in the form of deposits or other security within 30 days
after the Court enters a Utility Injunction Order.  If the
Debtor believes that the Additional Assurance Request is not
reasonable, the Debtor may schedule a hearing to determine if
additional assurances are necessary.

Judge Schmidt holds that a Utility Company will be deemed to
have adequate assurance of payment until a further Court order
is entered in connection with a Determination Hearing.

Utility Companies will be prohibited from applying any
prepetition deposit to a postpetition invoice, but instead be
required to hold any deposits postpetition as additional
adequate assurance.

A schedule of the Debtor's utility service accounts is available
at no charge at:

      http://bankrupt.com/misc/Utility_Service_Accounts.pdf

                   Utilities Want Order Vacated

(1) Chevron

Rhett G. Campbell, Esq., at Thompson & Knight LLP, in Houston,
Texas, informs the Court that Chevron Natural Gas, a division of
Chevron U.S.A. Inc., is not a utility but rather a forward
contract merchant entitled to the protection of Section 556 of
the Bankruptcy Code.

Before the Petition Date, Chevron and the Debtor had entered
into a Base Contract for Sale and Purchase of Natural Gas dated
April 1, 2003, by which Chevron agreed to deliver natural gas to
the Debtor.  Pursuant to the terms of the contract and Tex. Bus.
Com. Code section 2.702(a), the Debtor was prepaying for the gas
prior to delivery.

Section 556 expressly provides that a forward contract may not
be "stayed, avoided or otherwise limited by operation of any
provision of this title or by order of a court in any proceeding
under [the Bankruptcy Code]."

The Utility Order seeks to modify Chevron's contractual rights
with respect to payment and dispute resolution pursuant to the
provision of Section 366, Mr. Campbell points out.  That action
is expressly forbidden by the provision of Section 556.

Accordingly, Chevron asks the Court to modify the Utility Order
to delete Chevron from the list of Utility Companies or to
provide that the Order does not apply to Chevron.

(2) El Paso

Philip G. Eisenberg, Esq., at Locke Liddell & Sapp LLP, in
Houston, Texas, asserts that El Paso Natural Gas Company is not
a utility company subject to the provision of Section 366 of the
Bankruptcy Code.

Mr. Eisenberg notes that "utility," as used in Section 366, is
not defined in the Bankruptcy Code.  However, the legislative
history of Section 366 contemplates application only to
utilities that are "monopolies in the area" and debtors who
"cannot easily obtain comparable service."

In this regard, Mr. Eisenberg says the Debtor has wholly failed
to meet its burden of proving that El Paso is a monopoly, and
proving that it has no choice but to enter into gas supply
contracts with El Paso because it could not otherwise obtain
comparable service.  Moreover, the Debtor has disclosed in an
exhibit to the Utility Motion that it obtains natural gas from
seven suppliers.

"El Paso expressly avers that it is not a monopoly in any of the
areas where the Debtors operate, and the Debtors could (and did)
obtain comparable service from other natural gas suppliers," Mr.
Eisenberg tells Judge Schmidt.  "If the Debtors, or their
affiliates who have actually contracted with El Paso, did not
find the terms and condition of the Gas Supply Contracts
acceptable, it could have negotiated with another natural gas
supplier."

Mr. Eisenberg further notes that El Paso's records indicate that
its gas supply contract is with ASARCO, Inc., not the Debtor.

Mr. Eisenberg also contends that the Gas Supply Contracts are
forward contracts subject to termination or liquidation under
Section 556.  By classifying El Paso as a utility, Mr. Eisenberg
says, the Debtor is merely attempting to avoid the possibility
of termination or liquidation of the Gas Supply Contracts or its
obligations to cure prepetition defaults in the event of
assumption of the Gas Supply Contracts, as would be required by
Section 365(b)(1)(A).

Furthermore, Section 365 does not enjoin the alteration, refusal
or discontinuation of service to, or discrimination against, the
Debtor, as does the Utility Order relying upon Section 366, Mr.
Eisenberg adds.

The Debtor should be required on rehearing to substantiate its
claim that El Paso should be subject to the Utility Order, Mr.
Eisenberg argues.  The Utility Order should be vacated to
provide El Paso an adequate opportunity to demonstrate that the
Order is inapplicable.

Absent the Court vacating the Utility Order, El Paso will be
subjected to the provisions of Section 366, without the Debtor
having first put to the task of demonstrating that it is
entitled to any of the protections provided.(ASARCO Bankruptcy
News, Issue No. 3; Bankruptcy Creditors' Service, Inc.,
215/945-7000)



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

BANISTMO: Solid Operating Performance Prompts 'BB+/B' Rating
------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB+/B'
counterparty credit rating to Primer Banco del Istmo S.A.
(Banistmo). The outlook is stable.

"Ratings reflect Banistmo's solid operating performance and the
fact that the bank is the leading financial group in Central
America, which in turn results in a good degree of
diversification in the region," said Standard & Poor's credit
analyst Jaime Carreno. Offsetting these positives is the bank's
aggressive expansion strategy based in mergers and acquisitions.

Banistmo's strategy toward becoming the leading commercial bank
in Central America has proven successful in terms of market
penetration and expansion of its business franchise. The
strategy followed by the bank is considered aggressive as it
implies strong growth in locations that pose operating risks
that are relatively higher than those faced in Panama, and by
the fact that some acquisitions added temporary pressures on the
bank's efficiency levels and asset quality indicators.
Nevertheless, the strategy has been successful and its track
record after acquisitions shows that the bank has had the
ability to turn the acquired entities to the group's efficiency
and good asset quality levels in a reasonable time frame.

Banistmo's solid operating performance largely reflects its
capacity to increase its revenue base through acquisitions that
have resulted earnings accretive. Interest margin represents the
bulk of revenues. Although results are somewhat sensitive to
trends in interest rates, the bank benefits from the fact that
it operates within diverse interest rate environments, which in
turn adds consistency to margins on a consolidated level.

The stable outlook incorporates the expectation that Banistmo
will continue with an aggressive expansion strategy to
consolidate its leading position in the Central American region.
Temporary effects on efficiency, asset quality, and capital
indicators are already built into the current rating levels, and
are not expected to be material. Organic growth has been
somewhat limited, as the bank has directed resources to tune up
its recent acquisitions, so it faces the challenge of
replicating the group's performance and business model in future
acquisitions as track record shows. Successful amalgamation of
acquisitions, together with resumed organic growth and stability
of profitability, capital, and asset quality ratios will be
considered as factors that would support a positive outlook for
the ratings. On the other side, lack of capacity to control
operating risks derived from acquisitions or the deterioration
of the financial profile of the bank will likely result in a
negative action over the ratings. The stable outlook also
reflects that on the sovereign credit ratings of Panama. We do
not believe that the risk of exchange controls being imposed in
the country is material, because of the effective "monetary
union" that Panama is part of due to its long-standing use of
the U.S. dollar. Therefore, there is no specified constraint on
the foreign currency ratings on entities domiciled there;
however, in our opinion, the economic situation of a country has
a direct effect on the performance of the banking system.

Primary Credit Analyst: Jaime Carreno, Mexico City (52) 55-5081-
4417; jaime_carreno@standardandpoors.com

Secondary Credit Analyst: Michael T DeStefano, New York
(1) 212-438-7372; mike_destefano@standardandpoors.com


PANAMSAT: Ratings Put on Watch Negative on Merger Announcement
--------------------------------------------------------------
Standard & Poor's Ratings Services placed PanAmSat's `BB'
corporate credit rating, the second highest junk level, on
CreditWatch with negative implications.

The action follows the announcement of a definitive merger
agreement between Intelsat and PanAmSat Holding Corp., the
parent of PanAmSat Corp.

An aggregate of nearly $8 billion in debt is affected. Under
terms of the agreement, Intelsat will acquire PanAmSat Holding's
equity for $3.2 billion cash and will assume or refinance $3.2
billion in existing debt.

"The CreditWatch listing is based on the elevated financial risk
of the combined entity, which has an estimated (consolidated)
debt-to-EBITDA ratio in the mid-7x area, based on annualized
results for the first six months of 2005 (and assuming an all-
debt financing of the acquisition)," explained Standard & Poor's
credit analyst Eric Geil. "We expect to resolve the CreditWatch
listing after reviewing the transaction financing plans and
business prospects for the combined company."

The merged company will have a combined fleet of 53 satellites,
making it the largest fixed satellite services operator. The
resulting entity will benefit from PanAmSat's strong presence in
the North American video distribution market, in which expanding
high-definition TV services are bolstering transponder demand,
and Intelsat's good global presence. The large fleet should
improve the combined company's satellite backup capabilities and
facilitate more efficient satellite capital expenditures.
Nevertheless, industry growth prospects are mature, contract
lengths are shortening, and newer managed services businesses
important to growth are less profitable than traditional
transponder leasing. A meaningful portion of Intelsat's business
is from point-to-point carrier services, which are being
supplanted by fiber optic networks.

Primary Credit Analyst: Eric Geil, New York (1) 212-438-7833;
eric_geil@standardandpoors.com



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

NBC: Advent Seen Likely to Acquire Bank
---------------------------------------
U.S. investment fund Advent International is likely to beat
Chilean financial holding Corp Group in the race for Uruguay's
state-owned bank Nuevo Banco Comercial (NBC), Business News
Americas suggests in a report.

The Uruguayan government is seeking to privatize NBC by the end
of the year. Advent and Corp Group, the only two firms vying for
NBC, have offered some US$250 million each for the bank, a
source close to the negotiations said.

But Advent, which is reportedly being advised by the
Ficuscapital group on the NBC purchase, plans to improve and
expand NBC's operations with the aim of selling it to an
international or Brazilian bank in some five years.

Advent is a US private investment fund that manages some US$6
billion in assets. Corp Group, on the other hand, runs Corpbanca
(NYSE: BCA) in Chile and Venezuela.

NBC was created in March 2003 from the assets of local banks
Banco Comercial, Banco Montevideo and Banco Caja Obrera. The
three banks were intervened and suspended as a result of a run
on deposits during the country's financial crisis in 2002.



                            ***********


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