TCRLA_Public/050908.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

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

          Thursday, September 8, 2005, Vol. 6, Issue 178

                            Headlines


A R G E N T I N A

ABARCAL S.A.: General Report Filing Deadline Approaches
ALUNAMAR S.A.: Trustee to Submit General Report Sep. 9
CLUB ITALIANO: Court Authorizes Reorganization
DISCO AHOLD: D&S Appeals First Instance Ruling in Lawsuit
GIAPPON S.A: Declared Bankrupt by Court

IMPRESORES INTEGRADOS: General Report Due Tomorrow
INTERBAND S.A.: Claims Review Deadline Fixed
LIUN S.R.L.: Seeks Court Approval to Reorganize
MANDAR S.A.: Judge Orders Bankruptcy
MARIO BRAVO: Court Authorizes Plan, Finalizes Reorganization

METRO MEDICION: Deadline for General Report Nears
METROGAS: Ceases Debt Payments, Credit Ratings Suffer
PAMET S.A.: Set to Announce Settlement Plan to Creditors
PETROBRAS ENERGIA: Denies Plans to Hike Fuel Prices
SANCOR: Local Moody's Assigns Ba3 Rating on Bonds

TALLERES LEZAMA: Court Declares Company Bankrupt
TELECOM ARGENTINA: Fitch Ups Rating to 'B-' from 'DD'
TELEFONICA HOLDING: Regulatory Challenges Affect Ratings


B R A Z I L

GERDAU: Fitch Assigns 'BB-' Rating to Perpetual Bond Issuance
GERDAU: Judges Lift Injunction on Antitrust Case
UNIBANCO: Board Authorizes Securities Trading Policy
VARIG: Lessor Seeks Protective Ruling on Assets


C H I L E

AES GENER: Fitch Maintains 'BB' Ratings on $400M Senior Notes
MADECO: Prepaying Rescheduled Credit Agreements


C O L O M B I A

BANSUPERIOR: Larger Bank Buys 97.9% Stake for $197M


C O S T A   R I C A

ICE: Considers Extending Unisys Contract


D O M I N I C A N   R E P U B L I C

BANCO BHD: Fitch Upgrades LTFC Rating to 'B-'
EDENORTE/EDESUR: Weighs Benefits of Early Debt Repayment


M E X I C O

ASARCO: Court Approves 2005 Environmental Clean-Up Budget
AXTEL: Stron Sales Prompt Rating Upgrade from Moody's
BALLY TOTAL: Strikes Agreement with Coca-Cola North America
BANSI: S&P Upgrades Rating to 'BB-/B'; Outlook Stable
GRUPO MEXICO: Workers Approve New Contract Proposal

MINERA AUTLAN: Proposes Public Share Offer


P E R U

LUMINA COPPER: Details Recent Drill Results at Galeno


P U E R T O   R I C O

DORAL FINANCIAL: Moody's Lowers Senior Debt, Still On Review


U R U G U A Y

NBC: Advent International Agrees to $167M Acquisition


V E N E Z U E L A

H.J. HEINZ: Raises Concerns Over State's Asset Seizure
PDVSA: National Assembly Hears Out Sacked Workers' Complaints


     - - - - - - - - - -


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

ABARCAL S.A.: General Report Filing Deadline Approaches
-------------------------------------------------------
Buenos Aires accountant Luis Gabriel Plizzo, the assigned
trustee for the liquidation of Abarcal S.A., will present the
general report in court for approval tomorrow, Sep. 9, 2005.

Mr. Plizzo verified creditors' claims until June 3, 2005. After
that, he prepared individual reports, which were submitted in
court on July 15, 2005.

The city's civil and commercial Court No. 9 handles the
Company's case. Clerk No. 18 assists the court with the wind-up
proceedings.  
  
CONTACT: Abarcal S.A.  
         Azara 514  
         Buenos Aires
           
         Mr. Luis Gabriel Plizzo, Trustee  
         Roque Saenz Pena 651
         Buenos Aires


ALUNAMAR S.A.: Trustee to Submit General Report Sep. 9
------------------------------------------------------  
Local accounting firm "Estudio Mendez Scolnik y Asoc," the  
trustee assigned to supervise the reorganization of Alunamar  
S.A., will submit the general report tomorrow, Sep. 9, 2005.

The firm submitted on Aug. 3, 2005 the validated individual
claims in court. The said reports were based on the claims
forwarded by the Company's creditors.

Court No. 24 of Buenos Aires' civil and commercial tribunal has
jurisdiction over this case. The city's Clerk No. 47 assists the
court with the proceedings.  

CONTACT: "Estudio Mendez Scolnik y Asoc."  
         Trustee  
         Avda Segurola 1791
         Buenos Aires


CLUB ITALIANO: Court Authorizes Reorganization
----------------------------------------------
Club Italiano Asociacion Civil, a company operating in Buenos
Aires, begins reorganization proceedings after the city's civil
and commercial Court No. 22 granted its petition for "concurso
preventivo". The process will proceed with assistance from Clerk
No. 43.

During the reorganization, the Company will be able to negotiate
a settlement proposal for its creditors so as to avoid a
straight liquidation.  

According to Argentine news source Infobae, the reorganization
will be conducted under the direction of local accounting firm
"Oliveto, Paparatto y Asociados", the court-appointed trustee.

Creditors with claims against Club Italiano Asociacion Civil
must present proofs of the Company's indebtedness to "Oliveto,
Paparatto y Asociados" before Oct. 6, 2005. These claims will
constitute the individual reports to be submitted in court on
Nov. 17, 2005. The court also requires the trustee to present an
audit of the Company's accounting and business records through a
general report due on Feb. 29, 2006.

An informative assembly is set for May 31, 2006.

CONTACT: Club Italiano Asociacion Civil
         Avda. Rivadavia 4731
         Buenos Aires

         "Oliveto, Paparatto y Asociados"
         Trustee
         Blanco Encalada 3202
         Buenos Aires


DISCO AHOLD: D&S Appeals First Instance Ruling in Lawsuit
---------------------------------------------------------
The court of first instance of the Dutch Antilles rejected the
claim of D&S against Disco Ahold seeking the payment of the
unpaid balance of the sale price of the supermarkets Ekono in
Argentina, some 46 million dollars, plus interests. The claim is
based upon the fact that the Ahold group, buyer of the
supermarkets, invoked to its favor the pesificacion (the
conversion of certain US Dollar obligation into Argentine Peso
obligations) rules approved in Argentina, in circumstances that
in the purchase agreement it had freely assumed the obligation
to pay the total balance of 90 million dollars, even in those
conditions.

One should recall that D&S has filed two legal actions related
to the sale of its Ekono operation in Argentina:

The first one, a claim seeking payment of a security created by
Disco Ahold International Holdings N.V., company of the Antilles
and the parent company of. Disco S.A., the buyer of Ekono, and
also a subsidiary of Royal Ahold N.V., a Dutch company.

The second, a claim seeking compensation for damages filed
against Royal Ahold with documented bases -- both in writing and
in-court depositions, in which it is shown that Royal Ahold, as
the parent, instructed Disco and Disco Ahold not to comply with
the agreed upon agreement.

The base of legitimacy of these initiatives goes beyond
questioning the validity or not of the process of Argentine
pesificacion, since they seek 1) that the security created in
dollars by the parent Disco Ahold International Holdings N.V.,
be honored by it, as guarantor of the transaction validly
entered into and perfected by Disco S. A.; and, 2) the
compensation of the damages that have been caused to the company
by the conscious decision of the parent Royal Ahold not to
comply a valid and binding contract.

In opinion of Miguel Nunez, Corporate Finance Manager of D&S:
"We are fully convinced that this is a symbolic case for
corporate ethics, since the negotiation transcended the natural
territorial environments, they being part and guarantors of the
entire transaction, the controllers of Disco."

"On the other hand, the complexity of the matter debated in the
lawsuit, that never before had been presented in a court of the
Dutch Antilles, does that a panel court, as it is the Court of
Appeals of the Dutch Antilles, be an adequate jurisdictional
forum to know and to resolve it. It should be added that we have
recently initiated our action in The Netherlands, for which, in
as far as it concerns to us, this matter is just beginning," he
added.

Regarding the impact that this ruling may have Mr. Nunez
indicated: "while this matter is still pending to be resolved in
a final ruling, in our opinion and in that of our lawyers, the
sentence of first instance should not have no effect in the
results of the company." Finally, he indicated: "I should also
note that the Argentine, Dutch and Chileans lawyers maintain
their diagnosis to have solid grounds so that, finally, our
position shall prevail." Distribucion y Servicio D&S S.A.


GIAPPON S.A: Declared Bankrupt by Court
---------------------------------------
Court No. 2 of Buenos Aires' civil and commercial tribunal
declared Giappon S.A. (perpetuator of Daniel Cassin y Asociados
S.A.) bankrupt, says La Nacion. The ruling comes in approval of
the petition filed by the Company's creditor, Mr. Roberto Real,
for nonpayment of ARS57,500.02 in debt.

Trustee Eduardo Pronzky will examine and authenticate creditors'
claims until Nov. 11, 2005. This is done to determine the nature
and amount of the Company's debts. Creditors must have their
claims authenticated by the trustee by the said date in order to
qualify for the payments that will be made after the Company's
assets are liquidated.

Clerk No. 4 assists the court on the case, which will conclude
with the liquidation of the Company's assets.

CONTACT: Giappon S.A.
         Av. Cordoba 4538/40
         Buenos Aires

         Mr. Eduardo Pronzky, Trustee
         Parana 480
         Buenos Aires


IMPRESORES INTEGRADOS: General Report Due Tomorrow
--------------------------------------------------
The general report on the bankruptcy of Impresores Integrados
S.R.L. will be submitted tomorrow, Sep. 9, 2005. On May 24,
2005, court-appointed trustee Marcelo Carlos Rodriguez stopped
accepting creditors' claims. The verified claims were presented
in court as individual reports on July 7, 2005.

Court No. 5 of Buenos Aires' civil and commercial tribunal
declared Impresores Integrados S.R.L. bankrupt. Clerk No. 9
assists the court on this case that will end with the sale of
the company's assets.

CONTACT: Mr. Marcelo Carlos Rodriguez, Trustee
         Cerrito 146
         Buenos Aires


INTERBAND S.A.: Claims Review Deadline Fixed
--------------------------------------------
The verification of creditors' claims for the Interband S.A.
insolvency case is set to end on Oct. 10, 2005, states Infobae.
Mr. Julio Cesar Capovilla, the court-appointed trustee tasked
with examining the claims, will submit the validation results as
individual reports on Nov. 23, 2005. He will also present a
general report in court on Feb. 7, 2006.

On June 27 next year, the Company's creditors will vote on the
settlement proposal prepared by the company. Infobae adds that
Court No. 5 of Buenos Aires' civil and commercial tribunal
handles the Company's reorganization case. Clerk No. 9 assists
the court in the proceedings.

CONTACT: Interband S.A.
         Virrey Liniers 489
         Buenos Aires

         Mr. Julio Cesar Capovilla, Trustee
         Avda. Corrientes 3859
         Buenos Aires


LIUN S.R.L.: Seeks Court Approval to Reorganize
-----------------------------------------------
Liun S.R.L., a company operating in Buenos Aires, requested for
reorganization after failing to pay its liabilities since Aug.
31, 2004.

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. 23. Clerk of Court No. 46,
assists on this case.

CONTACT: Liun S.R.L.
         Viamonte 2506
         Buenos Aires


MANDAR S.A.: Judge Orders Bankruptcy
------------------------------------
Mandar S.A. was declared bankrupt after Court No. 15 of Buenos
Aires' civil and commercial tribunal endorsed the petition of
Ms. Olga Gualdoni for the Company's liquidation, Argentine daily
La Nacion reports.

The court assigned Ms. Marta Acuna to supervise the liquidation
process as trustee. Ms. Acuna will validate creditors' proofs of
claim until Nov. 8, 2005.

The city's Clerk No. 30 assists the court in resolving this
case.

CONTACT: Mandar S.A.
         Avenida Belgrano 355
         Buenos Aires

         Ms. Marta Acuna, Trustee
         Combate de los Pozos 129
         Buenos Aires


MARIO BRAVO: Court Authorizes Plan, Finalizes Reorganization
------------------------------------------------------------
Buenos Aires-based company Mario Bravo 605 S.A. concluded its
reorganization process, according to data released by Infobae on
its Web site. The conclusion came after the city's civil and
commercial Court No. 15, with assistance from Clerk No. 30,
homologated the debt plan signed between the Company and its
creditors.


METRO MEDICION: Deadline for General Report Nears
-------------------------------------------------  
The deadline for the general report on the liquidation of Metro
Medicion S.A. will be tomorrow, Sep. 9, 2005. Ms. Maria
Alejandra Barbieri, the court-appointed trustee, is tasked to
prepare the said report for submission.

On June 3, 2005, Ms. Barbieri stopped verifying creditors'
claims. The verified claims served as basis for the individual
reports, which were submitted in court on July 14, 2005.

Court No. 21 of Buenos Aires' civil and commercial tribunal
ordered the liquidation of Metro Medicion S.A. after the Company
defaulted on its obligations. The city's Clerk No. 42 assists
the court on this case, which will end with the sale of the
Company's assets.

CONTACT: Maria Alejandra Barbieri
         Bartolome Mitre 1131
         Buenos Aires

         Ms. Maria Alejandra Barbieri, Trustee
         Avda Cabildo 2040
         Buenos Aires


METROGAS: Ceases Debt Payments, Credit Ratings Suffer
-----------------------------------------------------
Rationale

The 'D' rating on Metrogas S.A. reflects the company's decision
to suspend interest and principal payments on all of its
outstanding debt following the negative impact on its financial
profile of government intervention in the concessions pricing
mechanism (with the pesification and freeze of the tariffs) and
a severe devaluation of the Argentine peso in early 2002,
followed by high inflation levels. This situation has created a
significant mismatch between Metrogas' peso-denominated cash
flow and its mostly U.S. dollar- and euro-denominated debt, and
led to the suspension of payments in March 2002. Furthermore,
there are still uncertainties about the company's cash-flow
generation potential, given that the renegotiation of the
concession contracts in Argentina, mandated by the government
after the pesification of the tariffs, is still pending.

On Nov. 7, 2003, Metrogas launched a proposal to restructure all
its financial debt under an out-of-court agreement (Acuerdo
Preventivo Extrajudicial-APE). As of June 30, 2005, Metrogas had
$537 million of debt (including $360 million in bonds, $75
million in bank loans, and accrued interest expenses). The
company offered two options for restructuring, as follows:

    - A cash tender offer for up to $100 million (at a price of
      $0.50 per $1 of principal amount); and

    - A modified option, under which the principal amount is
      increased by capitalizing interest expenses at 2.5% since
      the last payment. The final maturity date is extended by
      nine years. In addition, a cash sweep for 50% of excess
      funds generation is included.

After many extensions, the current expiration date of the APE
solicitation is now Oct. 19, 2005. As of Aug. 18, 2005,
favorable votes reached about $75 million of the total debt.
Standard & Poor's Ratings Services will closely monitor further
developments under the restructuring process and, once it is
completed, evaluate Metrogas' resulting repayment capacity to
determine the appropriate rating.

During 2004, the natural gas regulatory framework in Argentina
was exposed to significant changes, which we expect to continue
in the medium term. The final effect of those changes on the
company's cash-generation ability is still uncertain. On Feb.
13, 2004, the Argentine government issued Decrees 180/2004 and
181/2004, introducing changes in the existing regulation.
Distributors could be negatively affected, as large industrial
and commercial consumers will have to buy natural gas directly
from producers or brokers, thus bypassing the distributors.
Although this does not affect the value added of distribution
charges collected by the distributors, it affects their ability
to use contracted capacity efficiently and may affect margins.

During fiscal 2004 and the first six months of 2005, demand
continued to grow, with 21.5% and 4% increases in Metrogas'
total volumes delivered, when compared to 2003 and the first six
months of 2004, respectively. Since the pesification and
freezing of natural gas tariffs, the relative price of natural
gas decreased and energy demand started to replace the more
expensive crude-related products with natural gas. The growth of
demand, in a relatively moderate-inflation and stable U.S.
dollar exchange rate, resulted in increased cash generation and
better operating results for Metrogas: EBITDA margin reached
19.9% for the last 12 months ended June 30, 2005, from 17.8% in
fiscal 2004 and 17.1% in 2003. Nevertheless, Metrogas' future
performance will remain conditioned by the outcome of the
renegotiation of its concession contract and by the debt profile
resulting from its debt restructuring.

Metrogas is Argentina's largest natural gas distributor, serving
about 1.9 million customers through a 35-year exclusive
concession to distribute natural gas in the Buenos Aires
metropolitan region, Argentina's most densely populated area.

Liquidity

Although Metrogas had about $148 million in cash and short-term
investments as of June 30, 2005, its financial flexibility and
liquidity position are severely restricted given its current
default situation, and will remain constrained while the company
negotiates with creditors to adapt its interest burden and
maturity schedule to its current cash-flow generation. We expect
the company to use most of this cash in its restructuring
process.

Primary Credit Analyst: Luciano Gremone, Buenos Aires (54) 11-
4891-2143; luciano_gremone@standardandpoors.com

Secondary Credit Analyst: Pablo Lutereau, Buenos Aires (54) 114-
891-2125; pablo_lutereau@standardandpoors.com


PAMET S.A.: Set to Announce Settlement Plan to Creditors
---------------------------------------------------------  
Pamet S.A. will propose a settlement plan to its creditors in an
informative assembly tomorrow, Sep. 9, 2005. The Company began
reorganization following the approval of its petition by Court
No. 1 of Buenos Aires' civil and commercial tribunal.

Ms. Renee Alba Montuega was appointed trustee by the court. The
verification of creditors claims closed on November 26 last
year.

The trustee submitted a general report on the Company's
accounting and business records as well as the summary of
important events pertaining to the reorganization. The report
was presented in court on March 22, 2005.
  
CONTACT: Pamet S.A.
         Domecq Garcia 555
         Puerto Madryn (Chubut)

         Ms. Renee Alba Montuega, Trustee
         Marcos A Zar 885
         Puerto Madryn (Chubut)


PETROBRAS ENERGIA: Denies Plans to Hike Fuel Prices
---------------------------------------------------
Petrobras Energia, the local unit of Brazil's state run Petroleo
Brasileiro SA, has ruled out plans to raise gasoline or diesel
pump prices in the short term, Dow Jones Newswires indicates.

According to Petrobras Energia Director Oscar Vicente, his
company is not going to raise prices for now. "I don't think
anybody is going to raise them," Mr. Vicente was quoted as
saying.

Mr. Vicente's comments go against calls for fuel price increases
from Antonio Brufau - Chairman of Spanish-Argentine oil company
Repsol YPF, and Tomas Hess - an official from the Argentine unit
of ExxonMobile Corp.

Mr. Brufau, who visited the country last week, said: "prices in
Argentina, little by little, will have to adjust to reality,
accompanying the growth of the economy."

But Planning Minister Julio De Vido told reporters Friday that
the state "will not support any fuel price increases."

Officially, there are no norms or price controls holding back
retailers from raising pump prices in Argentina. Instead, the
pressure is political.

In March, President Nestor Kirchner called on citizens to
boycott the local unit of Royal Dutch Shell PLC for raising pump
prices, a move that Esso followed. Mr. Kirchner's boycott,
backed up by protester marches on gas stations, cut into the
companies' profits and forced them to quickly rescind their
price hikes.

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


SANCOR: Local Moody's Assigns Ba3 Rating on Bonds
-------------------------------------------------
Moody's Latin America Calificadora de Riesgo S.A. assigned a Ba3
rating on bonds issued by dairy cooperative SanCor Cooperativas
Unidas Limitada, securities regulator, the CNV, revealed on its
Web site.

The rating affects the following:

  -- US$19 million worth of bonds that matured on Jan. 27, 2004.
     The bonds are classified under Series and/or Class and
     carry the description "Serie 2, bajo el Programa de Ons.
     por U$S 300 millones;"

  -- US$75.8 million worth of bonds that matured on Jan. 27,
     2004. These bonds are classified under Series and/or Class
     and carry the description "Serie 3, bajo el Programa de
     Ons. por U$S 300 millones."

The rating action is based on Sancor Coop.'s financial status as
of March 31, 2005. Obligations rated Ba3 are judged to have
speculative elements and are subject to substantial credit risk.


TALLERES LEZAMA: Court Declares Company Bankrupt
------------------------------------------------
Court No. 11 of Buenos Aires' civil and commercial tribunal
declared local company Talleres Lezama S.A. "Quiebra", relates
La Nacion. The court approved the bankruptcy petition filed by
Mr. Guillermo Santarelli, to whom the Company has debts
amounting to ARS15,000.

The Company will undergo the bankruptcy process with Eva Gorsd
as trustee. Creditors are required to present proof of their
claims to Ms. Gorsd for verification before Nov. 15, 2005.
Creditors who fail to submit the required documents by the said
date will not qualify for any post-liquidation distributions.

Clerk No. 21 assists the court on the case.

CONTACT: Talleres Lezama S.A.
         Valentin Gomez 3555
         Buenos Aires

         Ms. Eva Gorsd, Trustee
         Paraguay 1225
         Buenos Aires


TELECOM ARGENTINA: Fitch Ups Rating to 'B-' from 'DD'
-----------------------------------------------------
Fitch Ratings has upgraded the international scale foreign and
local currency rating of Telecom Argentina S.A. (Telecom) to 'B-
' from 'DD' and the national scale rating to 'BBB-(arg)' from
'D(arg)'. Fitch has also assigned an international foreign
currency rating of 'B-' to two newly issued notes as part of
debt restructuring process consisting of approximately US$885
million 5.5% Series A step-up notes due 2014 denominated in
Euros, Yenes, Argentine Pesos, and U.S. dollars, and US$999
million 9.0% Series B step-up notes due 2011. Fitch has also
withdrawn the old notes following the completion of the debt
restructuring. Approximately US$3 billion of debt is affected.
The Rating Outlook is Stable.

The rating actions reflect Telecom's improved capital structure
and debt maturity profile following the successful completion of
its debt restructuring on Aug. 31, 2005. The debt restructuring
process has extended the company's debt maturities, lowered
interest costs, and reduced overall levels of debt. On Aug. 31,
2005, Telecom exchanged approximately US$1.9 billion of new
notes for approximately US$3 billion of debt. In addition, as
part of the terms of the bankruptcy proceeding for Acuerdo
Preventivo Extrajudicial (APE), Telecom prepaid approximately
US$535 million of the new notes with balance sheet cash
including principal payments due up to and including Oct. 15,
2007. The outstanding balance of the new notes are series 'A'
notes are equivalent to US$750 million, and the series 'B'
US$599.5 million.

Telecom's financial profile has clearly improved after the
aforementioned debt restructuring and the company should be able
to successfully meet its debt service obligations going forward.
On a pro forma basis, credit ratios are strong for the rating
category; total debt to EBITDA is expected to be lower than 3.0
times (x), and EBITDA to interest expense should strengthen to
approximately 4.0x from 2.8x at the end of 2004. Total debt
declined to approximately US$1.8 billion from US$3.4 billion at
the end of June 2005. Refinancing risk is expected to remain low
over the medium term as the company uses cash flow from
operations to pay debt over the next few years on an improved
maturity profile.

Telecom's ratings are constrained by significant regulatory and
sovereign related risks. Regulated tariffs have been and
continue to remain frozen since the crisis began in 2002, which
limits revenue flexibility and adds exposure to devaluation and
inflationary risks. Telecom's revenues are peso-denominated,
while its debt is largely foreign currency-denominated.

Over the medium to long term, improvements in Telecom's credit
quality will hinge upon a sustained recovery of the Argentine
economy and telecommunications services demand, in addition to
tariff relief as part of a sustainable regulatory framework for
the fixed-line business. During the first half of 2005, the
company benefited from a partial recovery in demand for
telecommunications services, particularly in the wireless
segment. Consequently, the company increased revenues by 25%
during this period, but EBITDA declined by 1.1% mainly due to a
challenging competitive environment in the wireless business
that resulted in increased advertising, handset subsidies, and
sales commission costs.

Telecom is one of the largest telecommunications providers in
Argentina, with 3.85 million fixed lines in service (47%
estimated market share), 4.2 million wireless subscribers in
Argentina, and 252,000 Internet subscribers. Telecom is 55%
owned by Nortel Inversora, which in turn is jointly controlled
by Telecom Italia and Grupo Werthein; 5% owned by employees; and
the remainder is publicly traded.

CONTACT: Sergio Rodriguez, CFA +5281 8335-7179, Monterrey
         Dolores Teran +5411 5235-8120, Buenos Aires

MEDIA RELATIONS: Brian Bertsch +1-212-908-0549, New York


TELEFONICA HOLDING: Regulatory Challenges Affect Ratings
--------------------------------------------------------
Major Rating Factors

Strengths:

    - Strategic ownership by Spain's Telefonica S.A.

    - Good market position and efficient operations of
      Telefonica de Argentina S.A. (TASA), Telefonica Holding de
      Argentina S.A.'s (THA) most important asset

    - Very low exposure to debt with third parties. THA's
      shareholder expects to capitalize most of its credits with
      the company, which should help to alleviate financial
      figures.

Weaknesses:

    - Dependence on management fees from TASA and dividend
      streams from COINTEL

    - Significant regulatory risks

    - Exposure to currency mismatch after the Argentine currency
      (ArP) devaluation, as financial debt is in foreign
      currency and the company's cash flow generation is in ArP

    - Dependence on the volatile Argentine economy

Rationale

The rating (B-/Stable/--) on Argentine holding company
Telefonica Holding de Argentina S.A. (THA) are based on its
indirect stake in Telefonica de Argentina S.A. (TASA; of 32.4%),
an Argentine-based integrated telecom incumbent provider that
has about a 58% fixed-line share throughout the country.

The rating on TASA reflects the financial and regulatory
challenges of operating in the Argentine environment after the
crisis in 2002, which have weakened TASA's debt-servicing
ability (due to the fact that most of its debt is foreign
currency-denominated). Regulatory uncertainty is still high
regarding the contract and tariff renegotiation, which was
mandated by the government in early 2002 but is still pending.
Potential tariff adjustments resulting from the renegotiation
are not expected to compensate for the effects of the
devaluation of the peso and pesification and freeze of tariffs.
The company's good market position, efficient operations, and
improved financial performance partially mitigate the negative
factors.

In February 2005, Telefonica Internacional S.A. (TISA; a
subsidiary of Spain's Telefonica S.A.) expressed its intention
to capitalize almost all its intercompany loans with THA for up
to $620 million, equivalent to about 97% of the company's
financial debt as of June 2005. Although this transaction will
not represent a cash inflow for THA, it will significantly
improve THA's financial statements and ratios, as net worth
would become positive and financial debt would decline to about
$21 million (including $7 million outstanding notes with third
parties that mature in 2007).

THA's overall financial profile is highly dependent on the
performance of its subsidiaries, as THA is a holding company
whose only significant asset is its stake in COINTEL, through
which it participates in TASA, its main source of funds through
management fees (equivalent to 4% of TASA's gross margin) and
dividends (received through COINTEL). After the financial debt
capitalization, and despite the fact that COINTEL has not
distributed dividends since 2001, THA's revenue stream is
expected to be sufficient to cover selling, general, and
administrative expenses, and interest.

Liquidity

THA's liquidity and financial flexibility depend on its parent,
while cash flow ultimately depends on flows from TASA. THA's
liquidity position is expected to significantly alleviate after
the capitalization of its financial debt with companies of the
group. As of June 2005, the company's total financial debt
amounted to about $641 million, of which about 99% corresponded
to intercompany loans.

Outlook

The stable outlook on THA reflects the close link with TASA's
credit quality. The stable outlook on TASA reflects expectations
that the company's good competitive position and a relatively
stable economic scenario would allow TASA to continue reducing
debt and to consolidate its financial improvements. The rating
upside would be limited given the current business environment
in Argentina, especially as regards regulatory risk, but the
ratings could be pressured if tariff inflexibility persists
under a higher-than-expected inflationary and exchange rate
scenario, government intervention increases, or financial
flexibility deteriorates significantly.

Primary Credit Analyst: Ivana Recalde, Buenos Aires (54) 114-
891-2127; ivana_recalde@standardandpoors.com

Secondary Credit Analyst: Pablo Lutereau, Buenos Aires (54) 114-
891-2125; pablo_lutereau@standardandpoors.com



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

GERDAU: Fitch Assigns 'BB-' Rating to Perpetual Bond Issuance
-------------------------------------------------------------
Fitch Ratings has assigned a 'BB-' foreign currency rating to
the proposed US$300 million senior unsecured perpetual bond
issuance by Gerdau S.A. (Gerdau). Fitch has also assigned to
Gerdau a 'BB-' foreign currency rating. Gerdau's foreign
currency rating is constrained at the current level due to the
'BB-' foreign currency rating of Brazil. The Rating Outlook is
Stable.

Gerdau's rating reflects the group's consolidated financial
profile characterized by low leverage and strong liquidity, as
well as the favorable business positions and strong financial
profiles of its main steel production subsidiaries, Gerdau
Acominas S.A. (Acominas), Gerdau Acos Longos S.A. (Acos Longos)
and Gerdau Ameristeel Corporation (Ameristeel).

The perpetual bonds have no fixed maturity date but will become
callable in whole on a quarterly basis after five years. The
bonds are unconditionally and irrevocably, jointly and severally
guaranteed by Gerdau's four majority-owned Brazilian operating
subsidiaries: Gerdau Acominas S.A., Gerdau Acos Longos S.A.,
Gerdau Acos Especiais S.A. and Gerdau Comercial de Acos S.A.,
collectively the Guarantors. Proceeds of the offering are
expected to be used for general corporate purposes including
primarily the funding of acquisitions outside of North America
and the repayment of short-term debt.

Acos Longos is the dominant player in the long steel products
market in Brazil with a market share of about 50%, while
Acominas is a leading exporter of billets, bloom and slabs. Both
companies benefit from a relatively competitive cost structure
as a result of vertical integration and access to low-cost raw
materials and labor. The rating also considers the concentrated
nature of the Brazilian steel industry, which limits competition
based solely upon price. Barriers to entry include the
logistical challenges of transporting steel to Brazil and within
the country, as foreign steel producers have limited access to
efficient distribution networks. Gerdau's ratings factor in the
stand-alone credit strength of both these key Brazilian
operating subsidiaries, which were created on July 29, 2005 when
the former Gerdau Acominas S.A. was split up into the four
Guarantors mentioned above

Ameristeel, Gerdau's North American operations, also has a low
leveraged financial profile. The company has made many strategic
acquisitions such that it now holds the second leading position
in the North American long products market. Ameristeel has been
a key participant in the consolidation of the North American
steel industry which has recently restructured itself to become
a less fragmented and more competitive. Although Gerdau's
perpetual bond does not have a guarantee by Ameristeel, Gerdau
stands to benefit from potential future dividends to be received
from Ameristeel.

In 2004, Gerdau enjoyed its strongest performance ever,
generating consolidated net revenues of US$7.0 billion and
operating EBITDA of US$1.9 billion. Compared with the prior
year, revenues and operating EBITDA increased 53% and 116%,
respectively, mainly due to the increase in the spread between
steel prices and scrap prices and the recovery of demand both in
Brazil and worldwide. With total consolidated debt of about
US$2.5 billion and cash of US$1.1 billion at June 30, 2005,
Gerdau's leverage, as measured by net debt to operating EBITDA,
decreased to 0.7 times (x) from 2.2x in 2003, and the ratio of
total debt to operating EBITDA decreased to 1.2x from 2.5x.
About 64% of the company's consolidated debt was held at
companies in Brazil and about 22% was at Ameristeel.

Although Gerdau is a geographically well diversified, with 54%
of its total production capacity outside Brazil, approximately
67% of consolidated operating EBITDA was generated by the
company's Brazilian operations in 2004. This exposure, as well
as the overall risk of the cyclical steel industry, is factored
into Gerdau's ratings and the credit assessment of its operating
subsidiaries.

Headquartered in Porto Alegre, Brazil, Gerdau is a holding
company for the group's steel production facilities in North and
South America. The Gerdau companies operate mini-mill and
integrated-steel facilities in Brazil, Argentina, Canada, Chile,
the United States and Uruguay and have a crude steel production
capacity of 16.4 million tons. Gerdau owns 89.3% of its
Brazilian operating companies, which consist primarily of the
Acominas and Acos Longos and have a combined production capacity
of about 7.6 million tons of crude steel. In North America,
Gerdau owns 66.5% of Ameristeel which ranks as the second-
largest producer of long-steel products with an annual
production capacity of 8.3 million tons.

CONTACT: Anita Saha, CFA +1-312-368-3179, Chicago
         Joe Bormann, CFA +1-312-368-3349, Chicago
         Ricardo Carvalho +55-21-4503-2627, Rio de Janeiro

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


GERDAU: Judges Lift Injunction on Antitrust Case
------------------------------------------------
The antitrust case against steelmakers Gerdau, Belgo-Mineira and
Barra Mansa can now proceed before the Justice Ministry
Antitrust Division (CADE) after a panel of judges lifted the
injunction that had stalled the hearing.

Dow Jones Newswires recalls that CADE was scheduled to hear
allegations of price fixing against the three steelmakers on
Aug. 31. But on that same day, Gerdau obtained an injunction and
faxed it to CADE about 30 minutes into the scheduled hearing,
which was then suspended.

On Tuesday, the panel of judges voted 2-1 to overturn the
injunction, allowing the case against the three steelmakers to
proceed before CADE.

The case dates back to 1999, when two construction trade
associations complained to the Justice Ministry Consumer Affairs
Division (SDE) that Gerdau, Belgo-Mineira and Barra Mansa fixed
prices for steel bars used in construction.

SDE submitted a report to CADE in September 2003, saying that
their investigation showed the companies had held meetings to
divide the Brazilian market and set prices for steel bars.

CADE originally placed the case on its docket in May 2004.
However, a series of injunctions, lawsuits and countersuits had
delayed a hearing before CADE until Aug. 31. A new hearing has
not yet been scheduled.


UNIBANCO: Board Authorizes Securities Trading Policy
----------------------------------------------------
The Board of Directors of Uniao de Bancos Brasileiros S.A.
(Unibanco) approved in a meeting held on August 25, 2005 the
adoption of the trading policy of securities issued by the
Company and Unibanco Holdings called Institutional Trading
Policy by Unibanco - Uniao de Bancos Brasileiros S.A. and by
Unibanco Holdings S.A. ("Policy").

SUMMARY MINUTES OF THE MEETING OF THE BOARD OF DIRECTORS OF
UNIBANCO - UNIAO DE BANCOS BRASILEIROS S.A., HELD ON AUGUST 25,
2005.

VENUE AND TIME: Av. Eusebio Matoso n. 891, 22 floor, in the city
of Sao Paulo, State of Sao Paulo, at 2:30 p.m.

CHAIRMAN: Pedro Sampaio Malan

QUORUM: More than a half of the elected members

RESOLUTION TAKEN UNANIMOUSLY BY THOSE PRESENT

Considering that:

i) as known by all, the management of the Company is constantly
concerned about the creation of efficient mechanisms to regulate
the trading of securities issued by the Company and Unibanco
Holdings S.A. (Unibanco Holdings) by the direct or indirect
controller shareholders, officers, directors, members of the
Fiscal Board and any technical or consultative bodies, created
by by-laws dispositions.

ii) one of the mechanisms used to reach the objectives described
in the previous item is the high level of compliance with legal
and regulatory provisions applicable to publicly-held companies
which have securities negotiated in Brazil and abroad;

iii) CVM Instruction N. 358, of January 3, 2002, authorized the
companies to create trading policies, with detailed mechanisms
to regulate the trading of these securities;

iv) the purpose of the trading policy is to define high levels
of behavior to be observed by the trading of securities issued
by the Company and Unibanco Holdings by the people subjected to
them, guaranteeing an equitable and fare treatment for all the
investor and market agents;

v) approving the trading policy is on the Board of Directors'
incumbency;

vi) in view of the capital structure of the Company and Unibanco
Holdings and the fact that the UNITS, Certificates of Deposit of
Shares representative of a preferred share of Unibanco and of
one preferred share of its controlled Unibanco Holdings, is a
highly liquidity security, it is convenient that the Trading
Policy be made jointly by the Company and the Unibanco Holdings,
since the trading of ones securities, usually, involves the
trading of the other.

The Board of Directors approves:

i) the adoption of the trading policy of securities issued by
the Company and Unibanco Holdings called Institutional Trading
Policy by Unibanco - Uniao de Bancos Brasileiros S.A. and by
Unibanco Holdings S.A. ("Policy"), contemplating the procedures
relating to the trading of securities of the Company and
Unibanco Holdings issuance by the people defined in item 3.1
from the Policy, as per Exhibit I to this Minute; and

ii) the appointment of Mr. Cai Alejandro Von Igel as the officer
responsible by the Company for execution and follow-up of the
Policy, in compliance with article 17, paragraph 3, of CVM
Instruction N. 358.

It is noted that on this same date there will be a meeting of
the Board of Directors of Unibanco Holdings for the approval of
the Policy.

INTERNAL REGULATIONS ON THE NEGOTIATION OF SECURITIES ISSUED BY
UNIBANCO - UNIAO DE BANCOS BRASILEIROS S.A. AND BY UNIBANCO
HOLDINGS S.A.

1. PURPOSES

1.1 The Internal Regulations on the Negotiation of Securities
Issued by Unibanco-Uniao de Bancos Brasileiros S.A. and by
Unibanco Holdings S.A. (hereinafter referred to as the "POLICY")
has the purpose of establishing the procedures to be complied in
negotiations with securities issued by Unibanco - Uniao de
Bancos Brasileiros S.A. (UNIBANCO) and by Unibanco Holdings S.A.
(UNIBANCO HOLDINGS), in accordance with the provisions set forth
in the CVM Instruction No. 358, of January 3, 2002 (Instruction
358).

1.2 The POLICY defines high-level standards of procedures, which
must be observed in the negotiation of securities issued by
UNIBANCO and UNIBANCO HOLDINGS, by persons submitted to this
POLICY. Such procedures assure an equal and fair treatment to
all investors and market agents.

2. MATERIAL EVENT

2.1 A material event (Material Event), for the purposes of this
POLICY, shall be deemed: (i) any decision of the direct or
indirect controller shareholders of UNIBANCO and UNIBANCO
HOLDINGS (Controlling Shareholders); (ii) any resolution of the
shareholders general meetings or of the management bodies of
UNIBANCO and of UNIBANCO HOLDINGS, as well as (iii) any other
act or fact of political-administrative, technical, business or
economic-financial character occurred or related to the
businesses of UNIBANCO or of UNIBANCO HOLDINGS, provided that
the acts listed above may reasonably affect:

a) the value of the securities issued by UNIBANCO or by UNIBANCO
HOLDINGS or attached thereto; or

b) the decision of the investors to purchase, sell or maintain
such securities; or

c) the decision of the investors to exercise any rights related
to their capacity of holder of the securities issued by UNIBANCO
or by UNIBANCO HOLDINGS or attached thereto.

2.1.1 Article 2, sole paragraph, of Instruction 358 lists
examples of acts and facts that, among others, may be construed
as a "Material Event". In any case, the determination of whether
or not a certain event shall be construed as a Material Event
shall be based on the analysis of the impact thereof in the
context of the ordinary activities of UNIBANCO or of UNIBANCO
HOLDINGS, as well as on the level of knowledge already held by
the market, to avoid that the procedure of disclosure of
Relevant Acts or Facts be trivialized.

3. PERSONS SUBJECT TO THE POLICY

3.1 The following persons are subject to this POLICY:

3.1.1 UNIBANCO and UNIBANCO HOLDINGS;

3.1.2 The direct or indirect Controlling Shareholders of
UNIBANCO and UNIBANCO HOLDINGS;

3.1.3 The officers, the members of the Board of Directors, the
members of the Audit Committees, the members of the Fiscal
Counsel (when applicable) and the members of any bodies with
technical or advisory functions, created under the By-laws of
UNIBANCO or of UNIBANCO HOLDINGS or their controlled companies;

3.1.4 The officers and members of the Board of Directors of
UNIBANCO or of UNIBANCO HOLDINGS, or of their controlled
companies, who resign from their position:

i) and who have no knowledge or have not participated in
decision making -process related to potential Relevant Acts or
Facts, are not subject to this POLICY;

ii) and who have knowledge or have participated, during their
term of office in decision making -process related to potential
Relevant Acts or Facts, are preventing from negotiating with
securities issued by UNIBANCO or UNIBANCO HOLDINGS in the
imminence of their public disclosure, during a 6 (six) months
period or until the disclosure of the Material Event, which
occurs first.

3.1.5 The spouse or legal companion, the descendant and any
other dependent included in the annual income tax affidavit of
persons prevented from negotiating indicated in items 3.1.2,
3.1.3, 3.1.4, as applicable;

3.1.6 The following persons shall be comparable to the persons
prevented from negotiating:

a) the managers of portfolios and the investment funds,
companies or any other institutions or entities in which the
persons prevented from negotiating are the only shareholders or
in which, by force of agreement, they may materially influence
the decision making of negotiations;

b) any legal entity controlled directly or indirectly by the
persons prevented from negotiating;

c) any person who has knowledge of information related to
Material Event knowing that this information has not been
disclosed to the marked, specially through any of the persons
prevented from negotiating, as well as a consequence of a
commercial, professional or trust relationship with UNIBANCO or
with UNIBANCO HOLDINGS.

4. POLICY ADMINISTRATION

4.1 It is incumbent upon the Corporate Compliance Department
(Corporate Compliance) the general management of the POLICY.

4.2. It is incumbent upon the negotiation committee (Negotiation
Committee), subject to the approval of the Board of Directors of
UNIBANCO and UNIBANCO HOLDINGS, the analysis of the necessity,
discussion and implementation of any and all modification of
this POLICY.

4.2.1 The Negotiation Committee shall be composed of 4 (four)
members, with the following composition:

a) Investor Relations Officer of UNIBANCO, or any other officer
of the same department;

b) Investor Relations Officer of UNIBANCO HOLDINGS, or any other
person indicated by him/her;

c) Legal Department Officer of UNIBANCO, or any other person
indicated by him/her;

d) Corporate Compliance Officer, or any other person indicated
by him/her;

4.2.1.1 Always when deemed necessary, the Negotiation Committee
may invite other persons to assist its deliberations, such as,
but not limited to, officers responsible for the risks
management area and human resources area of UNIBANCO, or any
other person indicated by them.

5. PROHIBITIONS TO THE NEGOTIATION

5.1 The persons mentioned in item 3.1 may not negotiate with
securities issued by UNIBANCO or by UNIBANCO HOLDINGS, as the
case may be:

a) during the period that proceeds the disclosure of a Material
Event of which such persons are aware of;

b) in case such persons are aware of the intention of performing
any corporate incorporation, partial or total spin-off,
amalgamation, transformation or reorganization involving
UNIBANCO or UNIBANCO HOLDINGS;

c) in case transactions involving the sale or purchase of
securities issued by UNIBANCO are being implemented by UNIBANCO
itself, its controlled companies, affiliated companies or by
other company under common control, or in case a mandate or
option was granted for the same purpose, exclusively in the
dates in which any of the entities mentioned in this paragraph
acquires or sells securities issued by UNIBANCO, except for the
situations set forth in items 5.1.3 and 5.5. below; and,

d) in case transactions involving the sale or purchase of
securities issued by UNIBANCO HOLDINGS are being implemented by
UNIBANCO

HOLDINGS itself, its controlled companies, affiliated companies
or by other company under common control, or in case a mandate
or option was granted for the same purpose, exclusively in the
dates in which any of the entities mentioned in this paragraph
acquires or sells securities issued by UNIBANCO HOLDINGS, except
for the situations set forth in items 5.1.3 and 5.5. below.

5.1.1 The prohibition to negotiate foreseen in item 5.1 above
shall not be effective as soon as UNIBANCO or UNIBANCO HOLDINGS,
as the case may be, discloses the Material Event.

5.1.2 The Negotiation Committee may extend the prohibition set
forth in item 5.1 above for a period subsequent to the
disclosure of the Material Event whenever, at its discretion,
the negotiation of the referred to securities may jeopardize
UNIBANCO, or UNIBANCO HOLDINGS, or their respective
shareholders.

5.1.3 The prohibition foreseen in item 5.1 above does not apply:

a) to the acquisition of treasury stock through a private
negotiation resulting from the exercise of a purchase option
under the Stock Option Plan of UNIBANCO - Performance;

b) to the sell of the shares acquired in accordance with item
5.1.3 (a), provided that such selling occurs immediately after
their acquisition;

c) to the exercise by UNIBANCO of its pre-emptive right under
the terms of the Stock Option Plan of UNIBANCO - Performance;

d) to the private negotiation carried out among persons listed
in item 3.1, being such private negotiation those performed out
of the stock market and of over-the-counter market.

5.2 The persons listed in items 3.1.1, 3.1.2, 3.1.3 shall also
not negotiate with securities issued by UNIBANCO or UNIBANCO
HOLDINGS, as the case may be:

a) during a 15 (fifteen)- days period preceding the quarterly
(ITR) and annual (DFP and IAN, as published within 30 days after
the Ordinary General Shareholders Meeting) disclosure of
UNIBANCO and UNIBANCO HOLDINGS; and

b) during the period between the decision, taken by the
competent corporate body, to increase the share capital, to
distribute dividends, bonus in shares or its derivatives, or to
approve splitting, and the publication of the respective public
biddings or advertisement.

5.3 In the event of (i) any agreement or contract has been
celebrated with the purpose of transferring the control of
UNIBANCO or of UNIBANCO HOLDINGS, (ii) a mandate or option have
been granted for the same purpose, or (iii) there exists the
willingness of performing corporate transactions involving the
incorporation, partial or total spin-off, amalgamation,
transformation or reorganization involving UNIBANCO or UNIBANCO
HOLDINGS, and until such transactions are not disclosed through
the publication of a Material Event, the respective Board of
Directors of UNIBANCO and UNIBANCO HOLDINGS may not deliberate
the acquisition or sale of securities issued by such companies.

5.4 Always in the course of transactions negotiated by UNIBANCO
or by UNIBANCO HOLDINGS, involving sale and purchase options
attached to shares issued by such companies, for the purposes of
canceling, maintaining in treasury or selling such shares,
UNIBANCO and UNIBANCO HOLDINGS may not be a counterparty in
transactions involving securities issued by them and carried out
by persons listed in items 3.1.2 and 3.1.3.

5.5 Provided that the terms and conditions of this POLICY are
observed, and that UNIBANCO and UNIBANCO HOLDINGS are not a
counterparty, the Controlling Shareholder and the persons
mentioned in items 3.1.3, 3.1.4, 3.1.5 and 3.1.6 above may:

a) purchase securities issued by UNIBANCO or by UNIBANCO
HOLDINGS, or attached thereto, in the same day in which the
referred to companies, their controlled companies, affiliates or
another company under the common control, sell treasury stock,
or a mandate or option is granted for the same purpose;

b) sell securities issued by UNIBANCO or by UNIBANCO HOLDINGS,
or attached thereto, in the same day in which the referred to
companies, their controlled companies, affiliates or another
company under the common control, purchase treasury stock, or a
mandate or option is granted for the same purpose;

5.6 The Negotiation Committee may, independently of
justification or of the existence of Material Event not
disclosed, establish other periods ("black- out periods") during
which the negotiation of securities will be forbidden, always
when deemed necessary to the defense of the interests of
UNIBANCO or UNIBANCO Holdings. The persons who were prevented
from negotiating shall maintain confidentiality with respect to
such periods.

5.6.1 The Negotiation Committee may extend the restrictions of
the blackout periods to negotiations foreseen in individual
investment program ("Individual Investment Program"), set forth
in item 6 of this POLICY.

5.7 Provided that the terms and conditions set forth in this
POLICY are observed, the persons listed in items 3.1.1, 3.1.2,
3.1.3, 3.1.4 and 3.1.5 may negotiate with securities issued by
UNIBANCO or by UNIBANCO HOLDINGS, exclusively through Unibanco
Investshop Corretora de Valores Mobiliarios e Cambio S.A. or
Unibanco Securities Inc., as the case may be, for the
negotiation of securities regulated in this POLICY.

5.7.1. Eventual open positions, involving securities issued by
UNIBANCO or by UNIBANCO HOLDINGS, pertaining to persons
mentioned in items 3.1.1, 3.1.2, 3.1.3, 3.1.4 and 3.1.5 held by
other brokerage firms, shall be transferred to the brokerage
firms listed in item 5.7. , within a maximum term of 60 days
from the publication of this POLICY or from the date they
assumed their position.

6. INDIVIDUAL INVESTMENT PROGRAM

6.1 Provided that the terms and conditions of this POLICY are
observed, the persons mentioned in items 3.1.2 and 3.1.3 may
elaborate Individual Investment Program, in which it will be
indicated, in a detailed way, their individual policy with
respect to the negotiation with securities issued by UNIBANCO or
by UNIBANCO HOLDINGS, as the case may be.

6.1.1 The person interested in having its own Individual
Investment Program shall indicate the approximate amount of
funds to be invested, or the sum of securities issued by
UNIBANCO or by UNIBANCO

HOLDINGS, as the case may be, to be negotiated, for the term of
its duration, always respecting the prohibition established in
item 5.2 (a).

6.1.2 The Corporate Compliance shall be notified, through a 15
days prior and written notice, about any amendments to the
Individual Investment Program or in the forecasting of its
performance. In the occurrence of unexpected events, in which
the prior notice will not be possible, the Corporate Compliance
shall be informed about the reasons of the amendments or not-
compliance with the Individual Investment Program as soon as
possible.

6.2 The Individual Investment Program will last at least 6 (six)
months and shall be submitted to the approval of Corporate
Compliance 15 (fifteen) days prior to the first negotiation set
forth therein.

6.2.1 The Corporate Compliance may refuse the filing of the
Individual Investment Program, which is in disagreement with
this POLICY or with the regulation in force.

6.2.2 The Individual Investment Program shall not be filed
neither modified in the imminence of the disclosure of a
Material Event to the market.

6.2.3 Once the Individual Investment Program is approved, the
Investor Relations Officer shall make it available, whenever
demanded, to the Sao Paulo Stock Exchange (BOVESPA), to the
Brazilian Security and Exchange Commission (CVM), to the United
States Securities and Exchange Commission (SEC) and to the New
York Stock Exchange (NYSE).

7. DISCLOSURE OF INFORMATION

7.1 The disclosure of information as a result of the negotiation
of securities issued by UNIBANCO or UNIBANCO HOLDINGS shall be
made in compliance with the Institutional Policy of Information
Disclosure by Unibanco - Uniao de Bancos Brasileiros S.A. and by
Unibanco Holdings S.A.

8. GENERAL PROVISIONS

8.1 The prohibitions established in this POLICY shall apply, as
the case may be:

a) to the negotiations carried out through the stock exchange
and to those carried out without the intermediation of an
institution which makes part of the distribution system, except
for the provisions set forth in item 5.1.3 (d);

b) to the negotiations carried out directly or indirectly by the
persons mentioned in item 3.1, whether such negotiations take
place through a company controlled by UNIBANCO or by UNIBANCO
HOLDINGS, or through third parties with which a trust or
portfolio administration agreement is entered into.

8.1.1 The negotiations carried out through investment funds on
which the persons mentioned in item 3.1 are quotaholders shall
not be considered indirect negotiations, provided that such
funds are not exclusive and the decisions of negotiation by its
administrator may not be affected by the quotaholders.

8.2 This POLICY, upon approval by the Boards of Directors of
UNIBANCO and of UNIBANCO HOLDINGS, shall be informed to all
persons who hold in the present moment or in the future the
positions mentioned in item 3.1, obtaining from them their
respective formal consent, in an instrument which shall be filed
at the headquarters of UNIBANCO or of UNIBANCO HOLDINGS, as the
case may be. The mentioned formal consent shall be made
effective through the execution of the Adhesion Term (Exhibit
I), which shall be controlled by the Corporate Compliance.

8.3. The persons subject to this POLICY in accordance with items
3.1.1, 3.1.2, 3.1.3, 3.1.4 and 3.1.5 shall communicate the
changing on their shareholding positions in UNIBANCO and/or
UNIBANCO HOLDINGS, if any, in accordance with Exhibit I, within
a maximum term of 5 days after the month in which the changing
occurs.

8.3.1 Any modification or review to this POLICY shall be subject
to the approval of the Boards of Directors of UNIBANCO and of
UNIBANCO HOLDINGS.

8.3.2 This POLICY shall not be approved or amended in the
imminence of the disclosure of a Material Event to the market.

8.4 The provisions of this POLICY do not exclude the
responsibility, by virtue of legal and regulatory provisions, of
third parties not directly related to UNIBANCO and/or to
UNIBANCO HOLDINGS, which have the knowledge of a Material Event
and which may negotiate with securities issued by UNIBANCO
and/or by UNIBANCO HOLDINGS.

8.5 The non-compliance with the provisions of this POLICY shall
subject the violator to disciplinary sanctions, without
prejudice of administrative, civil and criminal applicable
sanctions. In case of a severe infraction, the Corporate
Compliance will submit the issue to the Negotiation Committee
for the analysis of the measures to be taken in this respect.

CONTACT: Unibanco  
         Investor Relations Area  
         Av. Eusebio Matoso  
         891 ? 15th floor - Sao Paulo  
         SP 05423-901- Brazil  
         Phone: (55 11) 3097-1980  
         Fax: (55 11) 3813-6182  
         E-mail: investor.relations@unibanco.com  
         URL: www.ir.unibanco.com  
  

VARIG: Lessor Seeks Protective Ruling on Assets
-----------------------------------------------
International Lease Finance Corporation asks the Hon. Robert D.
Drain of the U.S. Bankruptcy Court for the Southern District of
New York to modify the Preliminary Injunction so that it may
take actions necessary to protect its interests with respect to
several aircrafts leased to Viacao Aerea Rio-Grandense, S.A.,
and its subsidiary, Rio-Sul Linhas Aereas, S.A.

ILFC currently leases 11 aircraft to the Foreign Debtors
pursuant to certain lease agreements:

   Aircraft MSN     Aircraft Type    Lessee    Lease Date
   ------------     -------------    ------    ----------
      24961            B737-300       VARIG    10/04/1991
      28055            B737-500      Rio-Sul   04/30/1998
      28201            B737-500      Rio-Sul   02/20/1998
      30635            B737-700      Rio-Sul   07/23/2002
      28224            B737-700      Rio-Sul   08/15/2002
      26247           B757-200ER      VARIG    08/31/2004
      26248           B757-200ER      VARIG    09/23/2004
      26249           B757-200ER      VARIG    11/16/2004
      26250           B757-200ER      VARIG    12/21/2004
      28689           B777-200ER      VARIG    11/02/2001
      28692           B777-200ER      VARIG    11/19/2001

Under the 11 leases, VARIG is obligated to pay ILFC, on a
monthly basis, rent and other payments for its use of the
Aircraft.  In addition, the Foreign Debtors are obligated to
maintain the
Aircraft.

Jon Yard Arnason, Esq., at Klestadt & Winters, LLP, in New York,
believes that continuing the Preliminary Injunction would be
appropriate only if VARIG made rental and maintenance reserve
payments, maintained its aircraft and otherwise complied with
the terms of the relevant leases for its aircraft.  VARIG's
failure to comply with the terms of the Leases, therefore,
justifies the vacation of the  Preliminary Injunction insofar as
it applies to ILFC so ILFC can take appropriate steps to protect
its property.

Prior to the institution of the Foreign Debtors' bankruptcy
proceedings in Brazil, the parties had agreed that VARIG would
return all 11 of the Aircraft to ILFC.  To that end, a
consultant hired by ILFC -- Jock A. Seals -- went to Brazil to
supervise the return of the Aircraft and ensure that they met
the detailed return conditions set forth in each of the relevant
Leases.  Mr. Seals' findings with respect to the Aircraft are
set forth in his Affirmation dated August 17, 2005.

              Foreign Debtors' Postpetition Defaults

Mr. Arnason informs Judge Drain that the Foreign Debtors have
failed to make Rental Payments with respect to four aircraft --
30635, 26247, 28055, and 28689.

Mr. Arnason says that the payment to the four aircraft became
due and owing since the entry of the Preliminary Injunction in
the Foreign Debtors' Section 304 Proceedings.  Moreover, the
Foreign Debtors remain in arrears to ILFC postpetition.

ILFC served separate Notices of Default on Rio Sul and VARIG
with respect to the leases pertaining to the four Aircraft.

Each of the Notices of Default provides for a period of five
business days for the Foreign Debtors to make payment on the
past due amounts before ILFC seeks relief from the U.S.
Bankruptcy Court or elsewhere.  Mr. Arnason notes that the cure
period has expired and the Foreign Debtors have failed to pay
the past due amounts.

                    Poor Aircraft Maintenance

According to Mr. Arnason, the Leases set forth very detailed
requirements for both the maintenance of the Aircraft and for
their return at the end of the relevant Lease term.

In connection with the contemplated return of the Aircraft, ILFC
learned that the Aircraft have been improperly maintained or
damaged by the Foreign Debtors.  Mr. Arnason points out that the
"improper maintenance" has continued since the Preliminary
Injunction was entered.  This is a violation of the terms of the
Leases and, more importantly, raises serious questions as to the
safety of the Foreign Debtors' ongoing operations.

As set forth in detail in the Seals Affirmation, the Foreign
Debtors are operating, and continue to operate several of the
Aircraft that have structural damage in excess of the allowable
limits, as required by the aircraft manufacturers' Structural
Repair and Maintenance Manuals.  The dents and repairs are
located on all of the ILFC 737s and both of the ILFC 777
aircraft.

In addition, the Seals Affirmation indicated that the Foreign
Debtors continue to remove components from other aircraft that
are in a non-operating, non-stored condition, and use those
components to keep the remainder of their fleet operational.  
The ILFC employees attest that they have witnessed individuals
associated with or employed by the Foreign Debtors "removing and
cannibalizing parts of ILFC's Aircraft."

ILFC also informs Judge Drain that one of its 737 aircraft was
placed on the ground for four weeks and was not protected from
Brazil's high humidity climate.  ILFC contends that VARIG
undertook no measures to protect the aircraft and its components
from damage due to prolonged exposure.  Furthermore, ILFC found
that at least 17 various components had been removed from the
737 Aircraft and distributed to other aircraft throughout the
VARIG fleet.

Along with other practices of poor aircraft maintenance, ILFC
has also learned that, to save costs, VARIG is not subscribing
to the Compass engine trend monitoring program on the eight
engines that power the 757s.  Mr. Arnason explains that "trend
monitoring" refers to the collection and analysis of engine data
to predict potential engine problems.  When utilized, trend
monitoring allows the engine operator to detect and correct
engine problems. Without trend monitoring, there is no ability
to plan for maintenance and avoid unexpected engine failures.  
As a result, engine problems that could have been rectified
inexpensively cause engine failures and much greater expenses.

                Foreign Representatives Respond

Vicente Cervo and Eduardo Zerwes, Foreign Representatives for
Viacao Aerea Rio-Grandense, S.A., and Rio Sul Linhas Aereas,
S.A., ask Judge Drain to deny International Lease Finance
Corporation's request to lift the preliminary injunction.

The Foreign Representatives do not deny that temporary liquidity
constraints have resulted in delayed lease payments.  However,
they argue that the Preliminary Injunction should continue for
an additional period to allow a pending financing transaction to
proceed.  That transaction is expected to cure all debts under
the leases and provide adequate assurance of current payments of
all leases and other operating expenses.

Harry E. Garner, Esq., at Pillsbury, Winthrop, Shaw, Pittman,
LLP, in New York, relates that, with a brief extension of the
Preliminary Injunction, the Foreign Debtors have a realistic
chance of successfully completing their bankruptcy proceedings
in Brazil in a reasonably short period of time.  If the
Preliminary Injunction is lifted, the Foreign Debtors risk
damage to their business to the detriment of all their
creditors, including ILFC, other lessors, trade creditors and
employees.

Mr. Garner tells the United States Bankruptcy Court that all of
the Foreign Debtors' lessors received current payments during
the first weeks immediately following the Petition Date in
Brazil. No lessor is currently in arrears exceeding 45 days.  
Therefore, briefly extending the Preliminary Injunction at this
time should be deemed consistent with U.S. policy and practice,
particularly where a transaction is not just in prospect but is
actually pending.

The Foreign Debtors deny ILFC's allegations and statements
regarding aircraft maintenance issues. VARIG and its affiliates
can demonstrate that they have consistently carried out proper
and sufficient maintenance with respect to ILFC's aircraft.

Mr. Matos Olivieri, states that the VARIG engineering team works
to maintain the structural integrity of all aircraft in the
VARIG fleet following manufacturer-specific structural repair
manuals and maintenance plans. The dents and repairs pointed out
by Jock A. Seals, the consultant hired by ILFC, are minor
according to the SRMs.

VARIG is inspecting and repairing its fleet according to the new
rules that are applicable during aircraft structural heavy
maintenance.  The aircraft currently in operation in VARIG's
fleet are kept in strict compliance with the recommendations of
their manufacturers and aviation authorities.

Mr. Matos Olivieri asserts that it is not true that the ILFC
Aircraft is being used as a spare parts bin.  VARIG has control
of parts removed from the aircraft and it is trying to obtain
replacement parts to be installed.  VARIG has enough spare parts
to complete its maintenance of the aircraft in a short time, or
at least as soon as the interim financing becomes effective,
which financing will give the company the ability to retrieve
parts back from vendors.

Mr. Olivieri assures the Court that all missing parts removed
from the Aircraft were transferred to other aircraft to comply
with ILFC's request for return, and at the same time to maximize
the number of aircraft in operation in VARIG's fleet.

Mr. Matos Olivieri further states that VARIG has never parked an
aircraft with the sole aim of storage.  Excessive down times are
usually maintenance related, as a result of unexpected events.
As part of VARIG's safety policy, any aircraft subjected to a
prolonged non-routine maintenance service is submitted to a
complete 4A check prior to its return to service, which includes
all maintenance activities that are scheduled to be performed
every 1,000 hours of operation.  Moreover, the removal of
components from one aircraft to install on other aircraft
operated by the same airline is a common FAA-approved procedure
in the aviation industry.

With regard to ILFC's allegation of aircraft neglection, Mr.
Matos Olivieri points out that the relevant plane was, in good
faith, removed from revenue service on June 15, 2005, as
requested by ILFC to be returned immediately.  When the Aircraft
was called to the hangar, it was complete and complied with all
maintenance requirements.  The engines and other components were
removed because they were not ILFC property.

Mr. Matos Olivieri notes that a majority of the maintenance
activities to preserve the Aircraft are being carried out.  
VARIG plans to place the Aircraft back into revenue service,
painted in new livery, next September.

The Foreign Representatives contend that the list of minor
issues raised by Mr. Seals does not represent the sort of
problems that would cost hundreds of thousands of dollars to
remedy.  Although Mr. Seals can argue that some protection
devices in use are not proper, all of them have equivalent
functionality.

With respect other allegations in the ILFC Request, on-wing
maintenance for engines on the Boeing 757 aircraft operated by
VARIG is permitted in a Boeing maintenance planning data
document, Mr. Garner explains.  Also, engine trend-monitoring is
neither a mandatory nor an optional requirement defined in that
document, and therefore, VARIG is not obliged to perform engine
trend monitoring on those engines.

Rolls-Royce, the engine manufacturer, does not impose engine
trend-monitoring programs.  Boeing 757 aircraft are also not
used on extended twin over-water operations.  The engine trend
program mentioned in the Seals Affirmation is software for the
analysis of gas turbine engines used by Rolls-Royce engine
operators. That software is an effective engine-monitoring tool
that may be used to improve operation and maintenance
scheduling, and it is an optional predictive maintenance tool.

According to the Foreign Representatives, VARIG does perform
engine trend analyses for other engine types.  The Boeing 757
model was first added to the VARIG fleet less than one year ago
and all engines have been overhauled recently.  For this reason,
VARIG is still in the process of obtaining the Compass software
for the trend analysis applicable to these specific engines and
will implement it very soon.

Mr. Garner insists that the Foreign Debtors' high standard and
reputation for quality maintenance is widely recognized in
Brazil, the United States and internationally, and the subject
of consistent inspection by the regulatory authorities.  The
Foreign Debtors' aircraft maintenance practices complies with
all regulatory and manufacturer maintenance requirements for
safety and airworthiness in Brazil and in every other country to
which they are subject.

Mr. Garner asserts that whether or not a particular aircraft in
the fleet meets the individual sensibilities of Mr. Seals or
ILFC's technical return conditions, is irrelevant to the
requirements of the Preliminary Injunction to maintain the
aircraft.

                       Seals and ILFC React

Mr. Seals tells the Court that, while statements regarding
VARIG's previous high standards and quality maintenance
reputation are rife throughout the Foreign Representative's
Objection and Mr. Matos Olivieri's Declaration, little is done
to address the more relevant and immediate concerns conveyed by
ILFC in its request, namely, the cost of returning the Aircraft
to levels of airworthiness as defined in the Leases.

ILFC disagrees with VARIG with respect to four issues:

   (a) Damage to the Aircraft

       Despite VARIG's claims to the contrary, the structural
       damage observed by Mr. Seals on the Aircraft exceeds the
       allowable limits as set forth in Boeing's Structural
       Repair and Maintenance Manuals and, accordingly, DAC and
       the FAA requirements to maintain the aircraft original
       type design.

   (b) Storage

       Contrary to Mr. Matos Olivieri's assertions, VARIG is not
       storing the Aircraft in compliance with the appropriate
       manufacturer regulatory guidelines.  The Aircraft has now
       been "waiting," Mr. Seals estimates, for 72 days with
       minimal storage procedures being applied.

   (c) Trend monitoring

       VARIG downplays the importance of the critical engine
       maintenance tool and fails to mention that it is required
       by VARIG's own on condition maintenance program.  VARIG
       asserts that it will implement the trend monitoring
       software, which is to say it has yet to do so.

   (d) Removal of Parts

       VARIG asserts that this activity is common and accepted
       in the airline industry, which again, wholly misses the
       point.  VARIG's removal of parts from the ILFC Aircraft
       is not permitted by Article 12 of the Leases and will
       cost ILFC tremendous amounts of money to return the
       Aircraft to an airworthy condition in the event that
       VARIG must terminate the Leases and return the Aircraft
       on short notice.  This is not an unlikely scenario given
       VARIG's financial situation.

Mr. Seals notes that VARIG consistently blames its failure to
maintain the Aircraft on its current financial problems yet
discusses its future plans to rectify any deficiencies in the
current maintenance program.  In the meantime, ILFC has been
relegated to standing on the sidelines and waiting for the
rectification to occur while the value of its Aircraft
diminishes further on a daily basis.

Mr. Seals estimates that the cost of maintenance for the ILFC
aircraft to be millions of dollars.  Thus, the potential damage
to ILFC -- even disregarding the monthly rental payments -- is
large.  VARIG has never addressed the ongoing expense and
diminution of value of ILFC's Aircraft.

           VARIG Agrees to Pay Postpetition Obligations

In a Court-approved stipulation, ILFC, the Foreign Debtors and
Wells Fargo Bank Northwest N.A., stipulate that, in
consideration of mutual promises, agreements, releases and
covenants, ILFC's request is withdrawn without prejudice.

In exchange for ILFC's withdrawal, the Foreign Debtors will pay
all amounts that fell due on or after June 18, 2005, and that
remain due and owing to ILFC as of September 20, 2005, including
all past due amounts, as well as default interest, and $150,000
in attorneys' fees.

The Foreign Debtors have failed to pay amounts that have fallen
due under the Leases since the date they filed for Judicial
Recuperation protection in the Brazilian Court.  The Foreign
Debtors were obligated to pay approximately $4.3 million as of
August 31, 2005.

All amounts will have been credited to ILFC's bank accounts as
defined in the Leases by the close of business on September 20,
2005.

The parties also agree that the Foreign Debtors will remain
current on all payments, including rent, maintenance reserves,
reserves, and additional rent that fall due on September 20,
2005, to ILFC in accordance with the terms of each lease for the
Aircraft, on a going forward basis pursuant to the terms of the
Preliminary Injunction.

The Foreign Debtors will further maintain and insure the
Aircraft on a current basis.  When it removes the Engines from
the airframes, VARIG will deliver them to ILFC for the purpose
of restoration.

The engines will be restored at qualified maintenance facilities
which may include those currently used by the Foreign Debtors
and which will be reasonably satisfactory to VARIG based upon
quality and economic factors.  ILFC will finance the cost for
the restorations.  The costs will be deemed postpetition
obligations in accordance with Article 67 of the NBRL, provided
VARIG and ILFC first agree on the scope for each engine
restoration, the terms for VARIG's repayment of all restoration
costs, and other relevant terms relating to financing.

In the event the Foreign Debtors fail to comply with the
Stipulation, they will:

   (i) remove all Aircraft from commercial services not later
       than the close of business on September 21, 2005;

  (ii) by October 4, 2005, return all Aircraft to ILFC and
       deregister the planes from the Brazilian Register of
       Civil Aviation and to procure final customs clearance for
       All Aircraft allowing them to be exported from Brazil
       With Export Certificates of Airworthiness for the United
       States and otherwise fully cooperate with ILFC in the
       process of deregistration of the Aircraft and with
       respect to all other actions necessary and appropriate to
       return the Aircraft to ILFC including ferry flights; and

(iii) on October 20, 2005, return to ILFC all aircraft records
       relating to the Aircraft.

In the event they fail to comply with any of the ILFC Lease
provisions, within five business days after receipt of a default
notice from ILFC, the Foreign Debtors will:

   (i) remove the Aircraft under the Defaulted Lease from
       commercial services within 24 hours after the five-day
       period;

  (ii) within 14 days after five-day period, return the Aircraft
       to ILFC and deregister the planes from the Brazilian
       Register of Civil Aviation and procure final customs
       clearance for the planes, allowing the Aircraft to be
       exported from Brazil with Export Certificates of
       Airworthiness and otherwise fully cooperate with ILFC in
       the process of deregistration of the Aircraft and with
       respect to all other actions necessary and appropriate to
       return the Aircraft to ILFC including ferry flights; and

(iii) return to ILFC all aircraft records relating to the
       Aircraft not later than 30 days after the five-day
       period.

On September 8, 2005, VARIG and ILFC will jointly apply to the
Brazilian Court for an order substantially identical to those
set forth in the Stipulation.(VARIG Bankruptcy News, Issue No.
7; Bankruptcy Creditors' Service, Inc., 215/945-7000)



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

AES GENER: Fitch Maintains 'BB' Ratings on $400M Senior Notes
-------------------------------------------------------------
Fitch Ratings has affirmed the international senior unsecured
local and foreign currency ratings of AES Gener S.A. (Gener) and
the US$400 million senior notes due 2014 at 'BB'. The Rating
Outlook for these ratings remains Stable.

The ratings reflect the successful financial strategy
implemented by the company and subsidiaries during 2004, which
resulted in an improved capital structure and increased
financial flexibility, consistent with Fitch's expectations. In
2005, Gener has continued to optimize its financial performance,
improving liquidity. The ratings of Gener are also supported by
its position as the largest thermal generator in Chile, its
operating strategy to optimize contract electricity sales,
diversify operations, a constructive regulatory environment, and
experienced management. The rating also considers the current
exposure to natural gas supply availability from Argentina,
variations in hydrology, commodity price risks, and currency
risks

During 2004, Gener focused on strengthening its financial
profile, reducing debt and improving liquidity. The company
refinanced US$700 million of debt under more favorable terms and
reduced total debt by US$300 million. In addition to its
recapitalization, Gener also renegotiated US$151 million of
consolidated debt associated with the TermoAndes and InterAndes
projects to extend maturities to 2010, improving the
amortization schedule and reducing debt by US$62 million.
Chivor, Gener's Colombian subsidiary also successfully
refinanced US$260 million debt extending debt maturities up to
2014.

During the first half of 2005, Gener handled the impact of the
natural gas curtailments - which affected gas-fueled
thermoelectric plants in Chile, including Gener's subsidiary
Electrica Santiago owner of the 370 MW natural gas and diesel
combined cycle in the Central Interconnected System (SIC), Nueva
Renca - by implementing natural gas swaps agreements with
Argentinean generators and natural gas transfer agreements with
other Chilean generators. In addition, Nueva Renca's dual-fuel
capability allowed the plant to continue operating even during
the most severe curtailments by switching from gas to diesel oil
without removing the plant from service. The effect of the gas
restrictions in the SIC was counteracted by an improvement in
the operating results in the two other systems in which it is
present, the Northern Interconnected System in Chile and
Colombia.

AES Gener reported EBITDA -to-interest of 3.2 times (x) for the
12 month period ended in June 2005, compared to 2.7x for the
same period ended June 2004. The ratios were constrained by
lower natural gas availability to the SIC, the SIC's drier
hydrology in the first half and the evolution of fuel prices
which resulted in high electricity spot prices, combined with
its current contractual position. In the second half, Fitch
expects the company to benefit from an increase in node prices
related to a recent approved electricity law, improved natural
gas availability and better hydrology as a result of the
rainfall in the SIC recorded between June and August of this
year. The company has lowered its contractual exposure thereby
limiting the financial impact of future natural gas
restrictions.

Gener is the second-largest electricity-generation group in
Chile in terms of operating revenue and generating capacity with
an installed capacity of 2,428 MW, composed of 2,157 MW of
thermal and 271 MW hydro generating capacity. The company
currently participates in electricity generation in Colombia
(1,000 MW), Argentina (642.8 MW)and the Dominican Republic (a
25% participation in a 586.5 MW thermo generation plant), as
well as natural gas transportation in Chile and Argentina. The
company is 98.79% owned by AES.

CONTACT:  Giovanny Grosso +011-562-499-3327, Santiago
          Carlos Diez +011-562-499-3315, Santiago

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


MADECO: Prepaying Rescheduled Credit Agreements
-----------------------------------------------
Madeco reported Monday to the Superintendencia de Valores y
Seguros that it proceeded to prepay all the Credit Rescheduling
Agreements subscribed by the Company with its creditor banks on
December 18, 2002, for amounts of approximately UF 2,700,000 and
approximately US$4,400,000 respectively with regard to which
ample information was provided earlier.

For the above, the Company subscribed a Short Term Credit
Contract with the BBVA Bank on this day, which may be
restructured in the long term or paid with part of the funds
originating from the capital increase.

With the prepayment of the Credit Rescheduling Agreement, the
financial expenses will be reduced and the Company will be free
from all the restrictions that these agreements imposed on it as
regards the carrying out of its operational management and
future investments.

Madeco, formerly Manufacturas de Cobre MADECO S.A., was
incorporated in 1944 as an open stock corporation under the laws
of the Republic of Chile and currently has operations in Chile,
Brazil, Peru and Argentina. Madeco is a leading Latin American
manufacturer of finished and semi-finished non-ferrous products
based on copper, copper alloys and aluminum. Madeco is also a
leading manufacturer of flexible packaging products for use in
the packaging of mass consumer products such as food, snacks and
cosmetics.

CONTACT: Madeco, S.A.
         Sergio Dussaillant Ch.
         Investor Relations
         Phone: (56 2) 520-1380
         Fax: (56 2) 520-1545
         E-mail: sdc@madeco.cl
         URL: www.madeco.cl



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

BANSUPERIOR: Larger Bank Buys 97.9% Stake for $197M
---------------------------------------------------
Banco Davivienda, the country's fourth-largest bank in terms of
assets, agreed to buy a 97.9% stake in its smaller rival
BanSuperior, for COP451.4 billion (US$196.6 million). A majority
of BanSuperior's shareholders agreed to sell the Company during
a public tender offer at the Colombian stock exchange Tuesday.
Davivienda bought a total of 1,397,225 ordinary and preferred
shares of the 1,427,438 outstanding shares at a maximum price of
COP323.09 per share.

BanSuperior shares closed at COP322.00 on July 22, the last time
they traded.

Davivienda plans to de-list BanSuperior's shares from the local
stock exchange in about a year, when the complete legal
integration takes place, Davivienda President Efrain Forero
said, adding, BanSuperior's brand will disappear.

According to BanSuperior President Hernando Alvarez, the
transaction will allow BanSuperior to pay off COP130 billion it
owes Fogafin, the government agency that oversees Colombia's
banking assets.

The country bailed out the bank in 1999, saving it from
bankruptcy.

BanSuperior has the Colombian franchise for Diners Club credit
cards.



===================
C O S T A   R I C A
===================

ICE: Considers Extending Unisys Contract
----------------------------------------
State telecoms and electricity monopoly ICE appears to be tired
of waiting for the state comptroller to approve a contract
extension with US software firm ArtinSoft. According to Business
News Americas, ICE is looking at the possibility of extending
its contract with US IT company Unisys (NYSE: UIS) to implement
a new telephony platform.

ICE's assistant manager for administration Mauricio Moreno said
the three-year contract extension would cost ICE US$11 million -
US$15 million.

"We are currently examining the cost benefits to determine what
is in the best interests of ICE," Mr. Moreno said.

ICE is also looking at purchasing solutions individually and
installing them.

Business News Americas recalls that in 2003, ICE awarded
ArtinSoft Zona Franca, the local unit of ArtinSoft, two
contracts to put ICE's customer service (SIMO) and billing
systems (GITEL) on an integrated telephony management platform,
at a cost of US$3.3 million for each service.

But in November 2004, the comptroller blocked the contract,
saying the capacity of the system proposed by ArtinSoft should
be above and beyond the basic requirements of the auction rather
than merely meeting the minimum requirements.

Last week, ArtinSoft made a case to the comptroller to
demonstrate its software meets the requirements, ArtinSoft Zona
Franca CEO Carlos Araya revealed, adding his company expects a
new ruling soon.

ICE is losing US$1 million a month due to the inefficiency of
its outdated systems. If ArtinSoft's contracts are held up any
longer, the Company will have to make unnecessary investments to
upgrade its equipment.



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

BANCO BHD: Fitch Upgrades LTFC Rating to 'B-'
---------------------------------------------
Fitch Ratings-New York-September 6, 2005: Fitch Ratings, the
international rating agency, upgraded Banco BHD's (BHD) long-
term foreign currency rating to 'B-' (Outlook Stable) from
'CCC+' and the short-term foreign currency rating to 'B' from
'C'. At the same time, the bank's individual 'D' and support '5'
ratings were affirmed. Long and short-term local currency
ratings of 'B' and 'B', respectively, were assigned for the
first time.

The bank's national long- and short-term ratings were upgraded
to 'A(dom)' from 'A-(dom)' and to 'F1(dom)' from 'F2(dom)'. The
upgrades reflect the recent sovereign rating upgrade and the
adequate performance of the bank following the severe
deterioration of the operating environment during 2003 and 2004.
BHD's ratings reflect its diversified retail deposit base,
significant market share, adequate liquidity, competent
management, and its robust shareholder structure. However, the
ratings also consider the bank's weakening asset quality and
profitability, as well as its thin capital levels within a
competitive operating environment.

BHD's strategy following the economic turmoil in the Dominican
Republic of the past few years has focused on enhancing its
financial profile rather than increasing market share. During
2003 and 2004, the bank undertook significant efforts to reduce
its foreign currency denominated loan portfolio while
implementing a proactive credit collections policy. Also, the
bank focused on improving treasury activities to manage its
ample liquidity position.

As of March 2005, BHD ranked third out of 12 commercial banks in
the Dominican Republic, with a 12% market share by total assets.
Grupo BHD, which controls 60% of Centro Financiero BHD, the
bank's holding company, is one of the largest economic groups in
the Dominican Republic. BHD enjoys close cooperation with Banco
Sabadell of Spain and Banco Popular de Puerto Rico (Popular PR),
which together control the remaining 40% of Centro Financiero
BHD.

CONTACT: Franklin Santarelli +5821 2286-3232, Caracas
         Carlos Fiorillo +5821 2286-3232, Caracas
         Gustavo Lopez +1-212-908-0853, New York

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


EDENORTE/EDESUR: Weighs Benefits of Early Debt Repayment
--------------------------------------------------------
The Dominican Republic is considering paying off about EUR300
million to Union Fenosa SA ahead of the previous deadline, La
Gaceta de los Negocios reports. The same news source reported
earlier that the new government of plans to convert the
outstanding debt it owes Fenosa into sovereign debt by issuing
EUR300 million of state borrowing.

The newspaper noted that the government plans to pay the debt
off early, rather than in installments, in order to lower the
interest paid on the borrowing to 9% from a previous 12%.

The debt comes from a 2003 agreement to transfer Union Fenosa's
50% stakes in Dominican electricity distributors Edenorte and
Edesur to the state.



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

ASARCO: Court Approves 2005 Environmental Clean-Up Budget
---------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas
authorized the amendment of the 2005 environmental clean-up
budget of ASARCO LLC. As previously reported on the Troubled
Company Reporter on Aug. 31, 2005, ASARCO has environmental
liabilities to the U.S. Government pursuant to certain consent
decrees, administrative orders, or environmental statutes.

On Aug. 9, 2002, the U.S. Government filed a complaint against
ASARCO and SPHC in the United States District Court for the
District of Arizona, wherein the Government alleged that the
proposed terms of the SPCC sale violated provisions of the
Federal Debt Collection Procedures Act of 1990 and the Federal
Priorities Act.  The Government sought preliminary and
injunctive relief enjoining the sale and transfer.

The parties to the lawsuit reached a settlement of their
dispute. On February 2, 2003, the Arizona Court approved a
consent decree that had been entered into among ASARCO and SPHC,
on the one hand, and the United States, on the other hand.

Pursuant to the settlement, ASARCO agreed to set up a
$100,000,000 environmental trust for pollution cleanup, in
return for permission to sell SPCC.  The consent decree
establishes an annual budgeting process pursuant to which ASARCO
and the U.S. Government discuss the allocation of funds from the
trust at various sites.

Once a budget has been established, both ASARCO and the U.S.
Government must agree to any amendment of the budget.

The amendment that the U.S. Government has agreed to would
allocate $150,000 of the trust money that is as yet unallocated
to pay for the continued remediation and testing.  In other
words, any potential health and safety issues could be minimized
with very little effect on ASARCO's estate.

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. 4; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


AXTEL: Stron Sales Prompt Rating Upgrade from Moody's
-----------------------------------------------------
Moody's Investors Service has upgraded Axtel, S.A. de C.V.'s
corporate family rating to B1 from B2 to reflect Axtel's
improved credit metrics as a result of solid sales and EBITDA
growth. The same change to B1 from B2 was made to the senior
unsecured rating for the Mexican corporate. The outlook on the
ratings is stable.

The following issue was affected by Moody's upgrade:

- US$250 million of 11% Senior Unsecured Notes due 2013

Axtel's ratings upgrade is supported by its strong and
consistent increase in sales over the past two years, as well as
2004 growth in EBITDA, which Moody's expects will be, by FYE
2005, equivalent to over 4 times cash interest expenses. Growth
in EBITDA has also strengthened the company's financial
position, as total debt dropped from 2.9 times EBITDA in 2003 to
1.6 times at FYE 2004.

The consistent earnings growth reflects Axtel's successful
strategy of i) assuring its access to high-profile subscribers
such as business customers and large residential developments
and ii) choosing the right technology (wireless local loop) to
compete against incumbent Telmex. This strategy, coupled with
sharp operating expense management, has generated the means for
funding the expansion of the company's network; the consequent
increase in telephone lines (530,000 as of June 2005) has more
than offset expected reductions in the average revenue per user
(ARPU). The ratings also benefited from Axtel's consistent
market share gains, from 9% in 2003 to the current 10.9% in the
business customers segment; this represents 38.9% of the
company's total lines and approximately 69% of revenues as of
June 2005. The company also has a sound maturity profile, as no
significant debt matures before 2013, and strong sponsorship
from large shareholders. Axtel has also reduced its foreign
exchange exposure, as it has entered into cross currency swaps
to hedge interest payments on the $250MM senior notes up to
2008.

The company's ratings are restrained, however, by low free cash
flow generation, declining prices in traditional telephone
services and by the uncertainties around any possible
acquisition of a related or non-related business, which could
impact the company's leverage and profitability. Despite the
recent sales growth performance, it is unlikely that the company
will be able to post similar rates of sales increase in the
years to come, due to competition from the dominant telephone
carrier and the effects of wireless substitution, which have
been forcing a reduction in tariffs. However, Moody's expects
that the company's strategy of targeting business customers, as
well as new residential developments, will generate double digit
sales growth for the coming years.

The rating outlook is stable as per Moody's belief that Axtel's
sales, EBITDA and cash generation will increase mostly as a
consequence of the development of the Mexican fixed line market
coupled with market share gains in existing or new cities.
Moody's rating also recognizes that the company is expanding its
network to support revenue growth in a cost-effective manner.
Moody's also regards Axtel as well positioned, from a cash and
technology perspective, to participate in the market for fixed
line telecommunication services, which will eventually offer
bandwidth for video at home and home networking, besides the
current Internet access.

Factors that could contribute to upward pressure on the B1
rating would be if the company posts free cash flow in amounts
that reduce its leverage exposure, as demonstrated by FCF to
total debt higher than 10% and if it increases interest
coverage, as per EBITDA over 6.5 times interest expense. Should
credit metrics be impacted by an acquisition that increases
leverage, should projected subscriber base growth slow sharply,
or should average revenue per user (ARPU) drop more than the
expected annual decline of 10% , it would place pressure on the
rating.

Axtel, with headquarters in the city of Monterrey, Mexico, is a
competitive local telephone company providing bundled products
including voice, data and Internet services.


BALLY TOTAL: Strikes Agreement with Coca-Cola North America
-----------------------------------------------------------
Bally Total Fitness (NYSE: BFT) announced an agreement with
Coca-Cola North America to offer select products at nearly 400
Bally locations across the nation, including all Bally Total
Fitness and Bally Sports Clubs. Beginning in October 2005, Bally
will offer a wide portfolio of Coca-Cola(R) beverage choices
including DASANI(R), Minute Maid(R) juices, and an assortment of
Coca-Cola's soft drinks and energy drinks. Bally's nearly 400
locations across 29 states provide a unique platform for
distribution of products and services targeted to active,
fitness-conscious adult consumers.

"Exercise and proper hydration go hand-in-hand. Providing
quality products and services to our members and continuing to
grow our strong partnership and sponsorship program are top
priorities as we continue to be the leader in the fitness
industry," said Paul Toback, chairman and CEO of Bally Total
Fitness. "Coca-Cola's leadership in world-class customer service
and marketing support allows us to meet this objective and
provide the refreshing choices our customers want."

Bally Total Fitness is the largest and only nationwide
commercial operator of fitness centers, with approximately four
million members and 440 facilities located in 29 states, Mexico,
Canada, Korea, China and the Caribbean under the Bally Total
Fitness(R), Crunch Fitness(SM), Gorilla Sports(SM), Pinnacle
Fitness(R), Bally Sports Clubs(R) and Sports Clubs of Canada(R)
brands. With an estimated 150 million annual visits to its
clubs, Bally offers a unique platform for distribution of a wide
range of products and services targeted to active, fitness-
conscious adult consumers.

The Coca-Cola Company (www.cocacola.com) is the world's largest
beverage company. Along with Coca-Cola, recognized as the
world's most valuable brand, the company markets four of the
world's top five soft drink brands, including Diet Coke, Fanta
and Sprite, and a wide range of other beverages, including diet
and light soft drinks, waters, juices and juice drinks, teas,
coffees and sports drinks. Through the world's largest beverage
distribution system, consumers in more than 200 countries enjoy
the company's beverages at a rate exceeding 1 billion servings
each day.

CONTACT: Bally Total Fitness, Chicago
         Matt Messinger
         Phone: 773-864-6850
         URL: www.ballyfitness.com
                    or
         Coca-Cola Enterprises
         Lauren Sayeski
         Phone: 770-200-3442
                    or
         MWW Group
         Public Relations
         Jessica Lascar
         Phone: 201-460-2846


BANSI: S&P Upgrades Rating to 'BB-/B'; Outlook Stable
-----------------------------------------------------
Standard & Poor's Ratings Services raised its long-term
counterparty credit and CD ratings on Bansi S.A. to 'BB-' from
'B+'. The outlook is stable.

"The upgrade is based on the bank's capacity to continue growing
within a very competitive market, the improvements in its credit
risk assessment and management, its growing internal capital
generation, and its stronger capital base. Large concentrations
in the loan portfolio and the deposit base are important factors
that constrain the ratings," said Standard & Poor's credit
analyst Angelica Bala.

Despite being a small niche bank operating mainly in the State
of Jalisco and in Mexico City, confronting strong competition
from large banks with stronger distribution capabilities and
financial flexibility, Bansi has been able to double its loan
portfolio in the past year and a half. In addition, stricter
underwriting policies combined with better collecting efforts
have driven the bank to improve asset quality. In this sense,
nonperforming loans (NPLs) have decline in absolute and relative
terms, while reserve coverage has improved. At June 2005, NPLs
represented 1.4% of total loans and were covered 4.8x with
reserves.

Although the bank has improved its risk management policies, and
loans have been structured in a way that securities decrease
credit risk, concentration in the loan portfolio and deposit
base are factors that constrain the ratings. In this sense,
Bansi's 10 largest loans concentrate more than 50% of the loan
portfolio and 2.5x capital, while the 10 largest depositors, of
which some are related to the loans, represent 33% of total core
deposits at June 2005. Our concerns with such concentration are
that the prepayment of any large loan has an immediate effect on
the size of the portfolio and that Bansi would have to originate
loans to compensate the decrease to maintain the growing pace;
that related deposits could also leave the bank; and that the
default of a large loan could have a detrimental effect on asset
quality.

The stable outlook reflects our opinion that management
capabilities would allow the bank to post good results in terms
of growth, asset quality, profitability, and capitalization.
Diversification of the loan portfolio and deposit base and the
maintenance of good performance are fundamental for a rating
upgrade. On the contrary, the deterioration of Bansi's key
metrics could trigger a downgrade.

Primary Credit Analyst: Angelica Bala, Mexico City (52) 55-5081-
4405; angelica_bala@standardandpoors.com

Secondary Credit Analyst: Claudia Sanchez, Mexico City (52) 55-
5081-4418; claudia_sanchez@standardandpoors.com


GRUPO MEXICO: Workers Approve New Contract Proposal
---------------------------------------------------
Grupo Mexico successfully convinced workers at its La Cananea
copper complex to approve a proposed contract revision, averting
a strike planned for Tuesday, reports Dow Jones Newswires.

Juan Rebolledo, Grupo Mexico's vice president for international
affairs, said the local union chapter voted late Monday in favor
of the agreement, which was drawn up last week in negotiations
between the Company and officials of the National Mining and
Metallurgical Workers Union.

Guadalupe Coronado, who heads the Cananea chapter of the union,
revealed the agreement included a 6% direct wage increase, and a
one-time annual payment equal to 2% of salaries.

"With a big effort by the union and by the company, we obtained
a very favorable contract revision," Mr. Coronado said.

He added that the negotiation gave workers greater health and
insurance benefits, and satisfactory accords on production
bonuses. The collective contract is revised every two years,
while wages are revised annually.

Cananea holds Mexico's biggest copper reserves and has the
second-largest operation of refined copper products after La
Caridad. Both Grupo Mexico units are in northern Sonora state.

Grupo Mexico is the world's third-largest copper producer, with
operations in Mexico, Peru and the U.S.

CONTACT:  GRUPO MEXICO S.A. DE C.V.
          Avenida Baja California 200,
          Colonia Roma Sur
          06760 Mexico, D.F., Mexico
          Phone: +52-55-5264-7775
          Fax: +52-55-5264-7769
          Web site: http://www.gmexico.com


MINERA AUTLAN: Proposes Public Share Offer
------------------------------------------
Minera Autlan (BMV: AUTLANB) plans to meet with shareholders to
seek authorization on a proposal to issue shares on the Mexico
City stock exchange (BMV), reports Business News Americas. The
manganese-ferroalloys producer did not provide any details on
the number of shares to be offered or how much it hopes to
raise.

Based in the northern Mexican city of Monterrey, Autlan reported
a five-fold increase in net profit in the second quarter 2005 to
MXN215 million (US$20.3mn) compared to same-period last year.



=======
P E R U
=======

LUMINA COPPER: Details Recent Drill Results at Galeno
-----------------------------------------------------
Northern Peru Copper Corp. announced that it has received
excellent drill results from the first five holes drilled in its
5,000 meter Phase 1 drilling program at the Galeno copper-gold-
molybdenum project in northern Peru. Results were highlighted by
hole GND-05-03 that returned 336 meters of 0.93% copper
equivalent, grading 0.68% copper, 0.20 g/t gold, and 0.022%
molybdenum, including 54 meters of 1.47% copper equivalent,
grading 1.25% copper, 0.18 g/t gold and 0.02% molybdenum.

Marshall Koval, President & CEO, said, "We are very encouraged
by the long intercepts of copper and gold mineralization. Of
particular interest is the presence of molybdenum that was not
previously recognized which will contribute significantly to the
project's economics. I look forward to on-going results from our
current drilling program on this major copper-gold-molybdenum
deposit."

The Galeno property contains significant known copper
mineralization. An independent 43-101 report prepared by AMEC
Peru S.A. in 2003 stated that the property contains a Historic
Inferred Mineral Resource of 486 Mt at 0.57% Cu and 0.14 g/t Au,
at a cutoff grade of 0.4% Cu. The focus of the current drill
program is to extend the known mineralization and upgrade it
from an inferred category to measured and indicated categories.

The property is located 600 km by road north of Lima, in the
Department of Cajamarca adjacent to the Yanacocha gold mine
operated by Newmont Mining Company. Copper mineralization was
first recognized at Galeno in 1993. Subsequently the property
has undergone a number of exploration campaigns by Newmont Peru
Ltd. and North Compania Mineria S.A. Twenty-one diamond
drillholes and thirty reverse circulation drillholes for a total
of 13,146 meters have been completed on the property.

Northern Peru holds an option to purchase the property from a
private Peruvian company for cash and/or share payments
totalling US $2.0 million over a four year period plus bonus
payments based on the advancement of the project to mine status.

Marshall Koval, P.Geo, is the Qualified Person as defined by
National Instrument 43-101 for the Galeno Project. Bruce Davis
of Norwest Corporation, a geostatistician with over 30 years of
experience is supervising the quality control and quality
assurance program. Logging and sampling are completed in
Northern Peru's secure facility located at the project. The
drill cores are mechanically split on site and samples are
transported to the Acme Analytical Laboratories facility in Lima
for sample preparation with analysis done at their facility in
Vancouver B.C. Northern Peru inserts standards, blanks and
duplicates selected on a random basis into the sample stream and
sends 5% of the sample pulps to check laboratories in Vancouver.

CONTACT: Northern Peru Copper Corp.
         David Strang
         VP Corporate Development
         E-mail: dstrang@northernperucopper.com
         Phone: 604 687 0407
         Fax: 604 687 7401



=====================
P U E R T O   R I C O
=====================

DORAL FINANCIAL: Moody's Lowers Senior Debt, Still On Review
------------------------------------------------------------
Moody's Investors Service downgraded the senior debt rating of
Doral Financial Corporation (Doral) to Ba1 from Baa3. The
ratings remain on review for further possible downgrade. The
rating action reflects concerns about the credit implications of
the ongoing delay in filing financial statements, the
uncertainty surrounding the board's recent investigation, as
well as concerns about corporate governance issues, litigation
exposure and regulatory scrutiny.

The rating agency expects to conclude the current rating review
by September 30, 2005, at which time the NASDAQ filing extension
will expire if Doral does not file its financial statements.
Moody's anticipates that this timeframe should allow for
clarification on the findings of the board's investigation as
well as the filing of first and second quarter 2005 results
along with any restatements of past financial reports. The
rating agency noted that if Doral fails to file its financial
statements by September 30, 2005, it risks having its shares
delisted by the NASDAQ. Moody's emphasized that if Doral fails
to meet this deadline, its ratings could be lowered further.

In its previous rating action of June 10, 2005, Moody's lowered
Doral's senior debt rating to Baa3 from Baa2, and the ratings
were kept on review for further possible downgrade.

Moody's said that liquidity is not an immediate concern given
currently available sources to support ongoing operating
activity. Credit lines appear to be ample, because of the
secured nature of Doral's borrowing facilities. Furthermore,
barring any acceleration of debt repayments, there appears to be
sufficient liquidity to meet cash needs until mid-year 2007.

Moody's noted that there had been a number of corporate
governance failures at Doral, notably in risk management,
accounting practices and board oversight. The decision to remove
some of the key management members, including the CEO, CFO and
Treasurer, raises some concerns about the extent of internal
control failures. Some family members were retained in key
leadership roles to encourage employee commitment. On the other
hand, this decision could be an indication of weak board
decision-making. The appointment of an independent chairman is a
positive step, but it is unclear if any new independent
directors will be appointed in the short term.

Moody's said that uncertainty remains regarding potential
changes in Doral's business model as well litigation risks and
regulatory responses to developments. According to Moody's,
there have been a number of improvements in the area of risk
management, notably in asset liability management, but there may
be the need for changes in other areas. Finally, a prolonged
delay in the filing of its financial reports could result in
liquidity pressures. Thus, the ratings remain under review for
possible further downgrade.

The following is a partial list of ratings that were downgraded
and at the same time are on review for possible downgrade:

Doral Financial Corporation -- Senior debt to Ba1 from Baa3 and
subordinated debt to Ba2 from Ba1.

Doral Financial, headquartered in San Juan, Puerto Rico, had
total assets of $15 billion at December 31, 2004.



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

NBC: Advent International Agrees to $167M Acquisition
-----------------------------------------------------
Advent International, the global private equity firm, announced
an agreement to acquire Nuevo Banco Comercial S.A. (NBC),
Uruguay's largest commercial bank, from the Uruguayan
government. The total value of the transaction is US$167
million. The acquisition is subject to regulatory approval and
is expected to close in December 2005. This will be the sixth
investment Advent has made in the financial services sector in
Latin America, a sector in which it has substantial experience.

Advent, as the lead investor, arranged and is managing a
syndicate of co-investors, including Morgan Stanley Alternative
Investment Partners and two of Europe's largest development
banks, the Netherlands Development Finance Company (FMO) and DEG
- Deutsche Investitions- und Entwicklungsgesellschaft mbH.

NBC was formed by the Uruguayan government in December 2002
through the acquisition of assets from three banks that had been
suspended during the country's 2001-2002 banking crisis: Banco
Comercial, Banco de Montevideo and Banco Caja Obrera. The
structure of the acquisition process enabled NBC to select the
best assets from each bank, including the highest-quality loan
portfolios, branches, staff and infrastructure.

Today, NBC has close to US$1 billion in assets and a net worth
of US$176 million. The company provides a complete range of
banking services, including corporate and personal loans, credit
cards, car loans, export and import finance, to over 200,000
retail and corporate customers. NBC is the largest among private
banks in performing loans and net worth and second in total
assets and liabilities. It is also the leading credit-card
issuer in Uruguay, with approximately 35% market share and some
108,000 active accounts.

"NBC is an excellent, well-managed institution, having been
formed by combining the best assets of three of Uruguay's
largest banks," said Ernest Bachrach, Chief Executive of
Advent's Latin American operations. "The bank has a solid
balance sheet and excellent prospects for growth. We look
forward to working with management to develop NBC's product
lines, improve profitability and continue driving loan portfolio
growth."

In addition to bringing major financial institutions to the
partnership with NBC, Advent has signed an advisory agreement
with Grupo de Servicios y Transacciones, a leading Argentine
bank, whose senior executives will serve on NBC's board and
executive committee. These executives will work closely with
Advent and NBC's management to oversee the bank's operations and
strategic development.

"NBC's partnership with international, long-term investors of
this caliber is great news for our customers," said Jose
Fuentes, General Manager of NBC. "The investors' world-class
reputation and strong commitment to the region provides us with
an exceptional platform from which we can grow. In addition,
Advent's international experience and expertise will help us
enhance the services and products to our customers in Uruguay
and abroad."

Since the restructuring of Uruguay's banking sector in 2002,
there has been significant consolidation. The sector currently
comprises two state-owned banks, Banco de la Republica Oriental
del Uruguay (BROU) and Banco Hipotecario Uruguay (BHU), 13
private banks, including NBC, and a number of credit
cooperatives. NBC has the most extensive branch network among
private banks and is the only one with a truly national reach.
In many cities, it is the sole bank alongside BROU.

The Uruguayan economy has recovered strongly after a long
recession, with GDP growing 2.5% in 2003 and over 12% in 2004.
Historically, the financial services sector, particularly
banking, has grown 1.5 times faster than the economy. Assuming
average GDP growth of 3% a year until 2009, the demand for
financial and banking services in the next four years is
expected to be substantial. The surge in demand combined with
reduced competition should provide significant growth
opportunities for NBC.

Advent International is one of the most experienced and
successful private equity investors in Latin America. Active in
the region for nearly a decade, the firm has invested in 25
Latin American companies and operates out of wholly owned
offices in Mexico, Brazil and Argentina.

Advent International has been investing in the financial
services sector for two decades and has completed over 20
investments worldwide. In addition to NBC, Latin American
investments include Consultoria Internacional, a Mexican
provider of currency exchange services; DolEx Dollar Express, an
electronic money transfer firm, acquired by Global Payments; CSU
CardSystem, Brazil's largest independent credit card
administrator; J. Malucelli Seguradora, the No. 1 surety bond
provider in Brazil; and Proservvi, Brazil's leading provider of
back-office processing services for financial institutions.

About Advent International

Advent International is one of the world's leading private
equity firms, with $10 billion in cumulative capital raised and
offices in 13 countries across Europe, North America, Latin
America and Asia Pacific. Since it's founding in 1984, Advent
has invested in over 500 companies and helped businesses raise
more than $10 billion through public equity and debt offerings.
These include over 130 IPOs on major stock exchanges worldwide.

About Morgan Stanley Alternative Investment Partners

Morgan Stanley Alternative Investment Partners LP (Morgan
Stanley AIP) is recognized as one of the leading multi-manager
alternative investment specialists. Since its inception in 2000,
Morgan Stanley AIP provides eligible investors with access to
two primary strategies, offering a range of innovative multi-
manager hedging products and multi-manager private equity
products developed to meet specific client objectives. Morgan
Stanley AIP's goal is to offer investment products and services
that provide investors with consistent risk-adjusted performance
in varying market conditions.

About the Netherlands Development Finance Company

The Netherlands Development Finance Company (FMO) is the
international development bank of the Netherlands. FMO invests
risk capital in companies and financial institutions in
developing countries. FMO's investment portfolio is 2 billion
euros, and FMO is one of the largest bilateral development banks
worldwide. Thanks in part to its relationship with the Dutch
government, FMO is able to take risks which commercial
financiers are not -- or not yet -- prepared to take. FMO's
mission: to create flourishing enterprises, which can serve as
engines of sustainable growth in their countries.

About DEG. Deutsche Investitions- und Entwicklungsgesellschaft
mbH

DEG. Deutsche Investitions- und Entwicklungsgesellschaft mbH,
member of KfW Bankengruppe, finances private-sector investments
in developing and emerging-market countries. As one of Europe's
largest development finance institutes it promotes the expansion
of private-sector structures with the aim of contributing to
sustainable economic growth and improved living conditions. DEG
invests in profitable, sustainable projects with a developmental
impact in all sectors of the economy. In 2004, DEG provided
finance to the total amount of 563 million euros.

CONTACT:  Amy Rosenberg
          Financial Dynamics
          Tel: (212) 850-5615
          E-mail: arosenberg@fd-us.com

          Paul Ferrari
          Advent International
          Tel: (617) 951-9786
          E-mail: pferrari@adventinternational.com



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

H.J. HEINZ: Raises Concerns Over State's Asset Seizure
------------------------------------------------------
Alimentos Heinz, a unit of H.J. Heinz Co., questioned the
legality of the government's decision to seize an inactive
tomato-processing plant late last week, according to Dow Jones
Newswires. Monagas governor Jose Gregorio Briceno last week
ordered the military to seize the tomato-processing plant to
protect the plant from looting.

But, according to Heinz, which makes Heinz ketchup, the state
failed to notify the Company of a possible takeover or of any
plans to expropriate the plant.

"We hope the reasons for these actions are clarified since the
company has received no notice from the authorities about the
intervention/expropriation," the Company said.

Officials from the Company are now seeking a meeting with Vice
President Jose Vicente Rangel and Agriculture Ministry officials
to discuss the problem.

The plant, in the state of Maturin, wasn't operating because low
market demand and low prices didn't make it feasible to keep it
running, the Company explained.

President Hugo Chavez earlier warned that idle land and company
assets could be declared as "public interest" and expropriated.


PDVSA: National Assembly Hears Out Sacked Workers' Complaints
-------------------------------------------------------------
Venezuelan National Assembly deputy Ricardo Gutierrez met with
workers fired by oil firm Petroleos de Venezuela Gas (PDVSA-Gas)
in Anaco (Anzoategui) last year, Vheadline.com reports. The
meeting was attended by a delegation of workers representing 588
employees, some of them have joined in the protest held outside
the Capitolio.

During the meeting, Gutierrez announced that a parliamentary
committee will be formed to study the problem. Movimiento Quinta
Republica deputy and former trade union member Jose Khan was
appointed to preside the committee. Khan has already approached
PDVSA-Gas to request a dialogue with the workers.

Both Gutierrez and Khan have promised to hear out the complaints
against the respective Ministries and the PDVSA.

The worker's lawyer Pedro Camargo claims that the labor court
has favored the sacked employees but the Company has refused to
recognize decision.

No information has been given as to PDVSA's version of events
leading to the dismissal of the workers. Meanwhile, the workers
in question continue the strike at the National Assembly.



                            ***********


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
co-published by Bankruptcy Creditors' Service, Inc., Fairless
Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick,
Maryland USA. John D. Resnick, Edem Psamathe P. Alfeche and
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Copyright 2005.  All rights reserved.  ISSN 1529-2746.

This material is copyrighted and any commercial use, resale or
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Information contained herein is obtained from sources believed
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