TCRLA_Public/050926.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

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

          Monday, September 26, 2005, Vol. 6, Issue 190

                            Headlines


A R G E N T I N A

ACINDAR: Local Fitch Reiterates Default Rating on $100M Debt
BANCO BISEL: Moody's Default Rating Unchanged
BANCO PATAGONIA: Moody's Reaffirms `BB' Rating on $80M Bonds
BAMUR S.A.: Reogranization Proceeds with Trustee Appointment
EDENOR: Inks Revised Contract With Government

GAS ARGENTINO: $130M of Bonds Remain in Default
LOMA NEGRA: S&P Reaffirms 'raBB+' Rating on $39.78M of Bonds
MUTUAL DE LA FEDERACION: Claims Review Deadline Set
* BUENOS AIRES: Unveils $2.9B Debt Restructuring Plan


B E R M U D A

ALEA GROUP: A.M. Best Removes Ratings from Under Review
FOSTER WHEELER: Secures Indiana Construction Services Contract
PXRE GROUP: A.M. Best Issues "bbb-" Ratings
PXRE GROUP: Fitch Watch Negative Still In Effect


B O L I V I A

AGUAS DEL ILLIMANI: Govt. Seeks to Delay Arbitration Proceedings


B R A Z I L

ALCOA ALUMINIO: Fitch Upgrades Foreign Currency Rating
ELETROPAULO METROPOLITANA: CVM Green Lights Debt Issue
NET SERVICOS: Finalizes Total Redemption of Debentures
VARIG: Ansett Seeks to Repossess Leased Aircraft


C O L O M B I A

TELECOM: Telmex Deal Moves Closer Pending MOU Details


E C U A D O R

PETROECUADOR: LPG Bottling Plant Operations Resume


J A M A I C A

JPSCo: Fuel Price Hikes Induce More Illegal Connections


M E X I C O

ASARCO: Pursues $75MM DIP Financing Deal With CIT Group
AVIA DE MEXICO: Initial Creditor Meeting Set for Sep. 26


P U E R T O   R I C O

DORAL FINANCIAL: To File Restated Financial Statements November


V E N E Z U E L A

CANTV: Chavez Threatens Consequences for Ruling Non-Compliance


     - - - - - - - - -


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

ACINDAR: Local Fitch Reiterates Default Rating on $100M Debt
------------------------------------------------------------
The local arm of ratings agency Fitch Ratings reaffirmed its
D(arg) rating on US$100 million in debt issued by long
steelmaker Acindar, reports Business News Americas. In a report,
Fitch explained that the rating assigned to the debt obligations
reflects Acindar's debt restructuring, which is yet to be
completed.

The agency, however, believes the restructuring will usher in
important changes to Acindar's financial profile. In addition,
the Company is working at full capacity and has reported strong
growth trends over the last three years thanks to higher demand
from construction and high metal prices.

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


BANCO BISEL: Moody's Default Rating Unchanged
---------------------------------------------
The National Securities Commission of Argentina, the CNV,
reports that the local branch of Moody's Ratings Agency is
maintaining its 'D' rating on various corporate bonds issued by
local bank, Banco Bisel S.A.

The rating, which denotes the issuer has defaulted on payments,
affected the following bonds:

  - US$54 million worth of "Obligaciones Negociables
    Subordinadas" classified under "Series and/or Class." The
    bonds matured on July 20, 2000.

  - US$100 million worth of "Programa Global de Obligaciones
    Negociables" classified under "Program." These bonds also
    matured on July 20, 2000.

  - US$300 million worth of "Programa de Emision de Titulos de
    Deuda a Mediano Plazo" classified under "Program." These
    bonds matured on July 20, 2000.

  - US$200 million worth of "Programa Global de Emision de
    Obligaciones" classified under "Program." The maturity date
    of the bonds was not indicated.

The Company's financial status as of June 30, 2005 determined
the ratings given by Moody's.

CONTACT:  Banco Bisel S.A.
          Mitre 602 Rosario
          2000 Santa Fe
          Argentina
          Phone: 0341-4200300
          Web Site: http://www.bancobisel.com.ar/


BANCO PATAGONIA: Moody's Reaffirms `BB' Rating on $80M Bonds
------------------------------------------------------------
Moody's Latin America Calificadora de Riesgo S.A. reaffirmed the
`BB' rating on the US$80 million worth of bonds issued by Banco
Patagonia S.A. (f.k.a. Banco Patagonia Sudameris SA), the CNV
revealed in its Web site.

The undated bonds are described as "Serie 3 Oblig Negociables"
and are classified under "Series and/or Class."

The rating reflects the bank's financial status as of June 30,
2005. A "BB" rating indicates that the future of these bonds
cannot be well assured.


BAMUR S.A.: Reogranization Proceeds with Trustee Appointment
------------------------------------------------------------
Bamur S.A., a company operating in Buenos Aires, is ready to
start its reorganization after Court No. 15 of the city's civil
and commercial tribunal appointed Ms. Maria Estela Acuna to
supervise the proceedings as trustee. Clerk No. 29 assists the
court on this case.

An Infobae report states that Ms. Acuna will verify creditors
claims until Oct. 17, 2005. Afterwards, she will present these
claims as individual reports for final review by the court on
Nov. 29, 2005. The trustee will also provide the court with a
general report pertaining to the Company's reorganization on
Feb. 14, 2006. The court has scheduled the informative assembly
on Aug. 15, 2006.

CONTACT: Ms. Maria Estela Acuna, Trustee
         Combate de los Pozos 129
         Buenos Aires


EDENOR: Inks Revised Contract With Government
---------------------------------------------
Power distributor Edenor (DNOR.BA) has signed a new, long-term
contract with the government, reports Dow Jones Newswires. Under
the renegotiated contract, Edenor must invest a total of ARS1.2
billion over the next five years.

The Company said its major plans include the construction of a
new substation, expansions of two existing substations and
putting up 160 kilometers of new high-voltage lines. The Company
also said it will work to locate and terminate some 70,000
illegal connections.

Under the terms of the contract, Edenor will see a 15% rate hike
starting in November. Residential users are excluded from the
increases. ENRE, the national electricity regulator, will
determine a long-term plan for future rate hikes by May 31,
2006.

The Dolphin Fund Management recently assumed control of Edenor
after it bought a 65% stake from French state power company EdF
for US$100 million. The French utility is retaining a 25% stake
and lending technical assistance for five years.

Edenor serves 2.4 million clients in the northern part of Buenos
Aires. The Company's new investments will allow the addition of
250,000 new residential and small-business clients, as well as
6,800 more industrial users. These new customers represent a
10.6% expansion in the residential client base and a 19%
increase in large-scale users.

CONTACT:  EDENOR S.A.
          Azopardo Building
          Azopardo 1025 (1107) Capital Federal
          Phone: (54-11) 4346-5000
          Fax: (54-11) 4346-5300
          E-mail: to ofitel@edenor.com.ar
          Web Site: http://www.edenor.com.ar


GAS ARGENTINO: $130M of Bonds Remain in Default
-----------------------------------------------
Some US$130 million worth of bonds issued by Gas Argentino S.A.
maintain a `D' rating, the CNV reports on its Web site. The
rating assigned by Moody's Latin America Calificadora de Riesgo
S.A. is based on the Gas Argentino's financial status as of June
30, 2005.

The bonds, which expired on June 7, 2000, are described as
"Obligaciones negociables simples por U$S" and classified under
"Simple Issue."  

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


LOMA NEGRA: S&P Reaffirms 'raBB+' Rating on $39.78M of Bonds
------------------------------------------------------------
Standard & Poor's International Ratings, Ltd. Sucursal Argentina
reaffirmed its "raBB+" rating on US$39,778,828 of corporate
bonds issued by Loma Negra Cia. Industrial Argentina. The rating
was based on the Company's finances as of May 31, 2005.

The CNV described the affected bonds as "Obligaciones
Negociables Serie 6". The issue will mature on September 30,
2013.

An obligation rated "raBB" denotes somewhat weak protection
parameters relative to other Argentine obligations, according to
S&P. The obligor's capacity to meet its financial commitments
upon the obligation is somewhat weak because of major ongoing
uncertainties or exposure to adverse business, financial or
economic conditions.


MUTUAL DE LA FEDERACION: Claims Review Deadline Set
---------------------------------------------------
The verification of creditors' claims for the Mutual de la
Federacion de Comercio e Industria de San Nicolas insolvency
case is set to end on Nov. 25, 2005, states Infobae. Ms. Adriana
Bravo, the court-appointed trustee tasked with examining the
claims, will submit the validation results as individual reports
on Feb. 9, 2006. She will also present a general report in court
on March 27, 2006.

On Sep. 8 next year, the Company's creditors will vote on the
settlement proposal prepared by the Company. Infobae adds that
Court No. 2 of San Nicolas' civil and commercial tribunal
handles the Company's reorganization case. Clerk No. 4 assists
the court in the proceedings.

CONTACT: Mutual de la Federacion de Comercio e Industria
         de San Nicolas
         Bartolome Mitre 182
         San Nicolas

         Ms. Adriana Bravo, Trustee
         Avda. Central 2970 Bu Somisa
         San Nicolas


* BUENOS AIRES: Unveils $2.9B Debt Restructuring Plan
-----------------------------------------------------
Buenos Aires released late Wednesday the details of its US$2.9
billion debt-restructuring offering, reports Dow Jones
Newswires. The discount bond on offer to prospective
participants will carry a 60% reduction in face value.

According to the province's Ministry of Economy, holders of the
16 foreign currency bonds eligible for the exchange will have a
choice of three bonds in either dollars or euros.

In addition to the discount bond, there will be two "par" bonds,
which carry no reduction in principal: a long-term bond maturing
in 2035 and a medium-term bond maturing in 2020. The long-term
par bond will carry a step-up interest coupon starting at 2% and
ending at 4% and will have a grace period of 15 years before
amortizations of principal begin.

The medium-term par's interest payments will start at 1%, rising
also to a maximum of 4% over time, and will have a 12-year grace
period on principal payments.

Meanwhile, the discount bond will have a fixed coupon of 9.25%
for bonds denominated in dollars and 8.5% for euros. It will
begin amortizing in 2012. The final maturity date for the
discount bond was not provided.

There will be no cash payments offered to participating
bondholders. Rather, past-due interest accrued before and after
the province's January 2002 default will be capitalized into
bondholders' claims for new, restructured bonds.

Interest owed from the period before the default will be
recognized at its original rate. For the purposes of
capitalizing the post-default accrued interest, however, a
maximum rate of just 2% will be applied.

In addition, there will be issuance limits of US$500 million and
US$750 million, respectively, on the medium-term and discount
bonds.

And, similar to the national government's US$103 billion debt
exchange earlier this year, small bondholders with claims of
less than US$50,000 will be given preferential access to these
limited issue bonds as part of an early subscription period.

Buenos Aires reportedly presented late Wednesday the debt
offering to Italian regulators.



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B E R M U D A
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ALEA GROUP: A.M. Best Removes Ratings from Under Review
-------------------------------------------------------
A.M. Best Co. has downgraded the financial strength rating to
B++ (Very Good) from A- (Excellent) and the issuer credit rating
to "bbb" from "a-" of the insurance and reinsurance operating
subsidiaries of Alea Group Holdings (Bermuda) Ltd (collectively
referred to as Alea Group or Alea). This rating action removes
the under review status of the rating, which occurred in June
2005. The rating applies to Alea London Limited, Alea (Bermuda)
Limited, Alea Europe Limited, Alea North America Insurance
Company, Alea North America Specialty Insurance Company, Alea
Global Risk Limited and Alea Jersey Limited. The outlook for all
ratings is negative.

A.M. Best believes that compound annual growth in net premiums
written of 60% between 2001-2004 and significant reserve
shortfalls from prior underwriting years, which have greatly
weakened operating performance, have placed a strain on the
company's risk-adjusted capitalisation. A.M. Best remains
concerned about Alea's ability to significantly improve
performance to the level required to sustain capitalisation
going forward. Although premium levels are expected to decline
as a result of changes to Alea's business plan and its
diminished business profile, the company has insufficient
capital to maintain an A- (Excellent) financial strength rating,
taking into account the potential for further poor operating
performance. The company unlikely will be able to address this
issue by raising additional capital in 2005.

A.M. Best expects Alea's future performance to continue to
deteriorate as a result of expenses pressure due to declining
business volumes, catastrophe experience in the second half of
2005 and the possibility of further deterioration in prior year
reserves. Combined, these factors could lead to performance
considerably below the group's long-term target of a 12%-15%
post tax return on capital and surplus.

A.M. Best anticipates a decline in gross premiums written in
2005 of above 10%, reflecting restructuring of the company's
underwriting, management of exposure and withdrawal from certain
poorly performing classes. Further ahead, Alea's access to
certain business classes and territories will be detrimentally
affected by concerns relating to its recent performance.

For Best's Ratings, an overview of the rating process and rating
methodologies, please visit www.ambest.com/ratings.

A.M. Best Co., established in 1899, is the world's oldest and
most authoritative insurance rating and information source. For
more information, visit A.M. Best's Web site at www.ambest.com.

CONTACT: A.M. Best Co.
         Public Relations:
         Jim Peavy
         Tel: +(1) 908 439 2200, ext. 5644
         E-mail: james.peavy@ambest.com

         Rachelle Striegel
         Tel: +(1) 908 439 2200, ext. 5378
         E-mail: rachelle.striegel@ambest.com

         Analysts:
         Miles Trotter
         Tel: +(44) 20 7626 6264
         E-mail: miles.trotter@ambest.com

         John Laubach
         Tel: +(1) 908 439 2200, ext. 5144
         E-mail: john.laubach@ambest.com


FOSTER WHEELER: Secures Indiana Construction Services Contract
--------------------------------------------------------------
Foster Wheeler Ltd. (Nasdaq: FWLT) announced Thursday that a
subsidiary of its Global Power Group, Foster Wheeler Zack, Inc.,
has been awarded a contract for outage construction services at
American Electric Power Company, Inc.'s (AEP) Tanners Creek
Plant, located in Lawrenceburg, Indiana. The terms of the award
were not disclosed. The award will be included in the company's
third-quarter bookings.

"Foster Wheeler's Global Power Group continues to provide world-
class solutions for American Electric Power, the largest coal-
burning utility in the United States," said Bernard H. Cherry,
president and chief executive officer of Foster Wheeler Global
Power Group. "This important award demonstrates that providing
excellent service to our customers results in significant repeat
business for our company."

Foster Wheeler Ltd. is a global company offering, through its
subsidiaries, a broad range of design, engineering,
construction, manufacturing, project development and management,
research and plant operation services. Foster Wheeler serves the
refining, upstream oil and gas, LNG and gas-to-liquids,
petrochemicals, chemicals, power, pharmaceuticals, biotechnology
and healthcare industries. The corporation is based in Hamilton,
Bermuda, and its operational headquarters are in Clinton, New
Jersey, USA.

CONTACT: Foster Wheeler Ltd.
         Media
         Maureen Bingert
         Phone: 908-730-4444
                 or
         Investors
         John Doyle
         Phone: 908-730-4270
                 or
         Other Inquiries
         Phone: 908-730-4000

         URL: http://www.fwc.com

         Warrant Agent
         Mellon Investor Services LLC
         Phone: 800-777-3674


PXRE GROUP: A.M. Best Issues "bbb-" Ratings
-------------------------------------------
A.M. Best Co. has assigned indicative ratings of "bbb" to senior
debt, "bbb-" to subordinated debt and "bb+" to trust preferred
and preferred stock of the PXRE Group Ltd.'s (PXRE) [NYSE: PXT]
(Bermuda) $300 million mixed shelf offering that was recently
filed with the Securities and Exchange Commission.

The existing issuer credit, debt and financial strength ratings
of PXRE and its subsidiaries remain unchanged. The outlooks on
all ratings were placed under review with negative implications
following PXRE's recent announcement that its estimate of after
tax net losses from Hurricane Katrina is in the range of $235 to
$300 million, which is approximately 30% to 40% of the company's
reported June 2005 shareholders' equity. As a result of the
Katrina loss, there is significant pressure on PXRE's risk-
adjusted capital position, which the company will seek to
resolve through the issuance of securities listed in this
registration.

The ratings of PXRE and its operating subsidiaries, along with
all debt issues, will remain under review with negative
implications pending the company's capital raising initiative,
which is expected to take place in the short term. However,
further catastrophe losses in the short term may expedite A.M.
Best's review and potentially result in a rating downgrade. A.M.
Best will continue to hold discussions with PXRE's management in
order to assess the company's risk management capabilities and
to reevaluate the level of capital necessary to support PXRE's
risk profile.



PXRE GROUP: Fitch Watch Negative Still In Effect
------------------------------------------------
Fitch Ratings comments that ratings of PXRE Group Ltd., PXRE
Capital Trust I, PXRE Reinsurance Ltd., and PXRE Reinsurance
Company remain on Rating Watch Negative following PXRE's
announcement of a $300 million shelf registration filed on Sept.
15, 2005.

Fitch views the potential capital as a positive credit event.
Based on PXRE's current estimate of a net loss from Hurricane
Katrina of between $235 million and $300 million, the amount
raised could be enough to replenish the loss if industry losses
fall within PXRE's $30 billion-$40 billion assumption.  Fitch
also notes that in the past, major insurance losses have spurred
significant increases in insurance prices, which PXRE could be
in a position to capitalize on, depending on the capital raised
and ultimate net loss from Katrina.  The speed with which PXRE
will be able to successfully raise capital will be an indication
of the capital market's confidence in both PXRE's organization
and future reinsurance pricing.

As a predominantly property catastrophe writer, Fitch expects
PXRE will experience a certain amount of catastrophe losses from
time to time.  Nonetheless, Fitch notes that the present loss
estimates are significant, representing from 30%-40% of PXRE's
June 30, 2005, shareholders' equity.  This indicates to Fitch
that PXRE's book of business contained a much greater
concentration of risk than Fitch previously believed.  The
additional capital provided under the shelf registration will
replenish losses and replace capital lost to Hurricane Katrina;
however, it will not cure potential issues with PXRE's risk
management.

Fitch also notes that significant uncertainties remain.  Loss
estimates from Hurricane Katrina continue to develop, and Fitch
believes this event presents unprecedented risks to the
insurance industry.  Thus, Fitch believes it may take longer
than normal for these losses to fully develop. Fitch further
notes that PXRE's loss estimates are based on an industry loss
estimate of $30 billion to $40 billion.  With some estimates of
the industry loss now as high as $60 billion, it is possible
that PXRE's loss could grow above the high end of its estimated
range.

Fitch expects to be able to resolve the Rating Watch only after
PXRE successfully raises adequate capital, Fitch obtains a
better understanding of PXRE's risk exposure, and Fitch believes
there is a reasonably stable estimate of the industry's and
PXRE's ultimate loss from Hurricane Katrina.  Given the very
unusual nature of this loss, this could take an extended period
of time.  Resolution of the Rating Watch will depend upon PXRE's
capital base, net of storm losses and capital replenishment, and
Fitch's updated assessment of PXRE's risk concentration relative
to the capital base.

If PXRE is unable to raise capital as planned, the rating will
likely be downgraded, potentially by more than one notch.

Current ratings remain on Rating Watch Negative by Fitch:

   PXRE Group Ltd.

    -- Long-term rating 'BBB-'.

   PXRE Capital Trust I

    -- Trust preferred securities $100 million 8.85% due Feb. 1,
       2027 'BB+'.

   PXRE Reinsurance Company
   PXRE Reinsurance Ltd.

    -- Insurer financial strength 'A-'.
(Troubled Company Reporter, September 21, 2005, Vol. 9, No. 224)



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AGUAS DEL ILLIMANI: Govt. Seeks to Delay Arbitration Proceedings
----------------------------------------------------------------
The government has requested the International Center for
Settlement of Investment Disputes (ICSID) to extend to March
2006 the period before La Paz waterworks concessionaire Aguas
del Illimani (AISA) starts arbitration proceedings.

Business News Americas reports that the government wants more
time to prepare its case in negotiations with AISA over the fate
of the concession.

AISA has informed the Washington DC-based tribunal that it
wishes to remain available for a friendly accord with the
Bolivian government until December 27. If talks do not succeed
after this date, AISA said it would pursue arbitration
proceedings.

AISA, a subsidiary of French energy company Suez, was notified
by the government last year that its contract has been rescinded
after residents complained about lack of services in parts of
the city.



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ALCOA ALUMINIO: Fitch Upgrades Foreign Currency Rating
------------------------------------------------------
Fitch Ratings has upgraded the foreign currency rating of the
secured exports notes (SENs) issued by Alcoa Aluminio S.A.
(Aluminio) to 'BBB' from 'BBB-'. Fitch has also upgraded
Aluminio's foreign currency rating to 'BB+' from 'BB-' and the
company's national scale rating to 'AA+' (bra) from 'AA' (bra).
The Rating Outlook for all the ratings is Stable.

These upgrades reflect the improvement in the company's credit
profile and the increasing strategic importance of Aluminio to
its parent company Alcoa Inc. (Alcoa). In 2004, Aluminio
generated operating EBITDA of US$240 million, an increase of
about 40% from 2003 operating EBITDA of US$171 million. The
company's total debt as of June 2005 was US$407 million,
including about US$223 million of off balance sheet debt
pertaining to the Machadinho and Barra Grande hydroelectric
projects, for which Aluminio has provided a several guarantee.
Operating EBITDA is expected to be about US$280 million in 2005
while total debt should decline to about US$350 million. As a
result, Aluminio's total debt-to-operating EBITDA ratio should
be about 1.3 times (x) by year-end 2005, a marked improvement
from 2.4x during 2003.

Fitch's upgrade of Aluminio's foreign currency rating above the
'BB-' rating of the Brazilian government reflects the company's
strong liquidity. In 2004, Aluminio sent US$160 million of its
cash abroad to Alcoa. The related party receivable established
by this transaction amortizes through 2014. In the event of a
sovereign liquidity crisis in Brazil and/or government imposed
transfer or convertibility restrictions, this cash has the
potential to be accessed via Aluminio to be used for debt
service as it is clear of repatriation requirements in Brazil.
Considering the off-shore cash only, net debt (excluding the
contingent liabilities) is low at US$24 million. Cash in the
United States covers Aluminio's annual debt service by about
2.0x. In addition, to this receivable, the company has about
US$50 million of cash in Brazil.

Alcoa's commitment to its largest operating subsidiary in Latin
America is further demonstrated by Alcoa's holding of 65% of
Aluminio's outstanding SENs, totaling approximately US$185
million. In addition, Alcoa increased its equity stake in the
company to 100% from 60% during August 2003 via a transaction
with its Brazilian partner, Camargo Correa Group (Camargo), a
Brazilian industrial conglomerate. Fitch viewed this acquisition
positively, as it aligned Aluminio's operations with the
strategic focus of its industry-leading parent company and
facilitates the transfer of technology.

Any significant future long-term funding needed by Aluminio will
likely come in the form of an inter-company loan from Alcoa
(rated 'A' by Fitch). Fitch believes that Alcoa, with US$23
billion in annual revenues and US$3.3 billion in operating
EBITDA, would likely support Aluminio in the event of a
sovereign crisis due to the strategic importance of the region
to Alcoa's future growth. Recent and proposed investments in
Aluminio and the region totally approximately US$1.0 billion and
demonstrate Alcoa's commitment to developing its strongest
financially performing subsidiaries and providing operational
and technical expertise. Alcoa operates in more than 40
countries including Brazil, Chile, Peru, Argentina, Colombia in
the Latin American region. Aluminio, in Brazil, is the largest
of Alcoa's Latin American subsidiaries. The region represented
nearly 10% of Alcoa's consolidated after tax profits, about 90%
of which were generated from Brazil.

In the past, uncertainties regarding Brazil's energy policies
and supplies for Aluminio's main aluminum production facility,
Alumar, were constraining factors to the company's ratings. An
energy crisis in Brazil in 2001 caused Aluminio to reduce
production and export sales. Many risks have been mitigated due
to Aluminio's new energy supply agreement. Under a 20.5-year
contract, the company had agreed to buy up to 500 megawatts per
year of hydro-powered electricity from government-owned energy
producer Centrais Eletricas do Norte do Brasil S.A.
(Eletronorte). Having secured the power supply with reasonable
pricing terms, Aluminio is expanding its smelting operations at
Alumar by 30%, bringing its share of smelting capacity to
262,000 tons per year.

Exposure to Brazil will continue to constrain Aluminio's
ratings. Brazilian economic conditions and government policies
can significantly affect Aluminio's results since approximately
60% of the company's revenues are derived from the Brazilian
market.

Aluminio is the second-largest privately owned, integrated
aluminum producer in Latin America. The company produces
alumina, primary aluminum and related industrial chemicals;
fabricated aluminum products; and packaging products. In 2004,
Aluminio's total sales volume was 300,847 tons. The company
exported 101,525 tons of aluminum ingot, used 90,419 tons in
downstream applications and sold 108,903 tons in the domestic
market. Alcoa Inc, based in the United States and one the
world's leading producers of aluminum and alumina, holds 100% of
the voting stock of Aluminio.

CONTACT:  Anita Saha, CFA +1-312-368-3179, Chicago
          Joe Bormann, CFA +1-312-368-3349, Chicago
          Ricardo Carvalho, +55-21-4503-2600, Rio de Janeiro

MEDIA RELATIONS: Chris Kimble +1-212-908-0226, New York


ELETROPAULO METROPOLITANA: CVM Green Lights Debt Issue
------------------------------------------------------
The Brazilian Securities Exchange (CVM) has authorized electric
power utility Eletropaulo Metropolitana Eletricidade de Sao
Paulo SA to move ahead with the issuance of non-convertible
debentures worth BRL800 million ($1=BRL2.275).

Dow Jones Newswires reports that the debentures will mature in
August 2010 and will pay an annual interest rate of 2.9
percentage points over the local interbank rate.

Banco Itau BBA is coordinating the distribution.

The Troubled Company Reporter - Latin America detailed in a
previous report that Eletropaulo expects to use BRL720 million
of the issue to pay part of its existing BRL1.5 billion debt. It
will use the remaining balance for its investment program and to
strengthen its cash reserves.

Eletropaulo defaulted on over US$2 billion in debts in 2002 but
resumed payments in 2004 after extended negotiations with
creditors in Brazil and abroad. At the time, the Company said it
did not need to raise more money in financial markets but would
consider opportunities that led to lower financial costs.

Eletropaulo is controlled by US power company AES (NYSE: AES)
through a 50% stake in holding company Brasiliana, in which one
of the Company's largest creditors, national development bank
BNDES, has the other 50%.

CONTACT: Eletropaulo Metropolitana Eletricidade de Sao Paulo S/A
         Investor Relations Manager
         Ms. Clarice Silva Assis
         E-mail: clarice.assis@aes.com
         Phone:(55 11) 2195-2229
         Fax:(55 11) 2195-2503


NET SERVICOS: Finalizes Total Redemption of Debentures
------------------------------------------------------
Net Servicos de Comunicacao S.A. ("Net") carried out the total
redemption of the debentures through the SND/CETIP system,
pursuant to the Prepayment Notice submitted on September 14,
2005 in compliance with the provisions in the clauses 3.11 and
3.13 of the Deed of the Fourth Public Issuance of Debentures of
the Company, dated as of February 24, 2005 and amended on March
15, 2005 ("Deed").

Date of event: September 21, 2005
Asset: PLIM14 (1st tranche)
Number of Debentures: 255
Type of event: TOTAL REDEMPTION
Principal Unit Price: R$133,737.535322
Interest Unit Price: R$420.113063
Unit Price: R$134,157.648387

Date of event: September 21, 2005
Asset: PLIM24 (2nd tranche)
Number of Debentures: 17,884
Type of event: TOTAL REDEMPTION
Principal Unit Price: R$8,323.541311
Interest Unit Price: R$26.146948
Unit Price: R$8,349.688259

In compliance with the provision in the clause 3.12.1 of the
Deed, such amortization will be followed by the payment of the
Compensatory Interest due until September 21, 2005.

CONTACT: Banco Bradesco S.A.
         Stock and Custody Department
         Email: 4010.acoes@bradesco.com.br
         Phone: (55 11) 3684-9281


VARIG: Ansett Seeks to Repossess Leased Aircraft
------------------------------------------------
Ansett Worldwide Aviation, U.S.A., AWMS I, AWMS II, Ansett
Worldwide Aviation Limited and Ansett Worldwide Aviation Sales
Limited currently lease 14 aircraft to VARIG S.A. and its
debtor-affiliates under certain aircraft lease agreements.
Pursuant to the Leases, the Foreign Debtors are obligated to pay
the Ansett Lessors basic rent for their use of the aircraft on a
monthly basis.  The Foreign Debtors are also required to
maintain the Aircraft in the same condition as when delivered to
them under the Leases, ordinary wear and tear excepted, and in
good operating condition.

With respect to each Aircraft, Keith M. Murphy, Esq., at Kaye
Scholer, LLP, in New York, tells Judge Drain that the Foreign
Debtors failed to make Lease Payments to the Ansett Lessors that
have become due and owing during August and September 2005.  The
Foreign Debtors remain in arrears to the Ansett Lessors during
the postpetition period.

Mr. Murphy notes that VARIG's failure to make the Lease Payments
to the Ansett Lessors constitute events of default under the
Leases.

In addition to the Lease Payment Defaults, Mr. Murphy says that
VARIG has defaulted on certain other monetary obligations
related to the Aircraft. Specifically, the Foreign Debtors
failed to pay a post-June 17 payment obligation for aircraft
maintenance.  They also failed to honor a postpetition agreement
to reimburse the Ansett Lessors for legal expenses incurred in
documenting certain postpetition amendments to the Leases.

The Foreign Debtors are also obligated to pay the Ansett Lessors
late charges in connection with the unpaid Lease Payments, as
well as reimburse the Ansett Lessors for attorney's fees and
expenses incurred in connection with enforcing the Foreign
Debtors' obligations, Mr. Murphy adds.

On September 2, 2005, the Ansett Lessors provided the Foreign
Debtors with notice of defaults and requested that they cure
those defaults.  Mr. Murphy relates that the formal notices
followed numerous contacts in which the Ansett Lessors sought
performance under the Leases, all to no avail.  Despite receipt
of the Default Notices, the Foreign Debtors have failed to cure
any of the defaults, as required under the Preliminary
Injunction Order.

The Foreign Debtors remain in possession of and continue to use
and depreciate the Aircraft's value.

Mr. Murphy contends that the Leases require the Foreign Debtors
to maintain the Aircraft and their engines in good operating
condition.  However, eight of the engines on lease to the
Foreign Debtors have been removed from service between April 29,
2004, and August 23, 3005, because they have exceeded
operational limits and can no longer be operated.

"Engines are valuable and expensive assets, and the behavior of
the Foreign Debtors in simply removing and storing the engines
for lengthy periods of time is extremely unusual," Mr. Murphy
argues.

Mr. Murphy asserts that the Foreign Debtors' conduct is in
direct violation of the terms of the Preliminary Injunction
Order.

Moreover, Mr. Murphy recounts that Judge Drain has previously
approved a stipulation resolving International Lease Finance
Corporation's motion for relief from the Preliminary Injunction,
and further directed the Foreign Debtors to either:

   -- pay all amounts to ILFC that fell due with respect to an
      ILFC aircraft on or after June 28, 2005, and that remains
      unpaid as of September 20, 2005; or

   -- remove the aircraft from service and return it to ILFC by
      October 4, 2005.

Mr. Murphy points out that if the U.S. Court were to decline to
grant the Ansett Lessors the injunction relief while it permits
ILFC to proceed in accordance with the Stipulation, the Ansett
Lessors will be hugely disadvantaged.  That result would mean
that either ILFC would:

   (a) receive payments of its lease obligations -- a benefit
       that no other aircraft lessor would be receiving and may
       never receive; or

   (b) repossess its aircraft and would be in a position to
       remarket that aircraft, which would give ILFC a
       tremendous economic advantage over other aircraft lessors
       who would not be in a position to compete for those
       leasing opportunities.

Either result is patently unfair to the Ansett Lessors as well
as the other aircraft lessors to the Foreign Debtors, Mr. Murphy
insists.

Furthermore, Mr. Murphy maintains that the Foreign Debtors'
refusal to honor their obligations under the Leases and their
willingness to ignore their undertaking as an inducement to the
U.S. Bankruptcy Court to grant the Preliminary Injunction Order
is particularly "egregious" considering that they extensively
and vigorously negotiated the terms of the Preliminary
Injunction Order governing continued use of the Aircraft.  The
Ansett Lessors maintain that the Foreign Debtors cannot be
permitted to unilaterally rewrite the terms of the Preliminary
Injunction Order, while at the same time claiming the
protections it provides.

The Ansett Lessors have no assurance that they will be paid any
further amounts under the Leases despite the Foreign Debtors'
ongoing use and resultant diminution of the Aircraft's value,
Mr. Murphy avers.

Accordingly, the Ansett Lessors ask the U.S. Bankruptcy Court to
lift the Preliminary Injunction on an emergency basis so they
may:

   -- exercise their rights and remedies under the Leases to the
      fullest extent permissible under applicable law, including
      terminating the Leases and repossessing the Aircraft; and

   -- require the Foreign Debtors to reimburse the Ansett
      Lessors for the attorney's fees and expenses in connection
      with enforcing the Foreign Debtors' obligations under the
      Leases.

In the alternative, the Ansett Lessors propose that the
treatment of the Leases be no less favorable than the treatment
afforded to other similarly situated aircraft lessors.

Headquartered in Rio de Janeiro, Brazil, VARIG S.A. is Brazil's
largest air carrier and the largest air carrier in Latin
America.  VARIG's principal business is the transportation of
passengers and cargo by air on domestic routes within Brazil and
on international routes between Brazil and North and South
America, Europe and Asia.  VARIG carries approximately 13
million passengers annually and employs approximately 11,456
full-time employees, of which approximately 133 are employed in
the United States.

The Company, along with two affiliates, filed for a judicial
reorganization proceeding under the New Bankruptcy and
Restructuring Law of Brazil on June 17, 2005, due to a
competitive landscape, high fuel costs, cash flow deficit, and
high operating leverage.  The Debtors may be the first case
under the new law, which took effect on June 9, 2005.  Similar
to a chapter 11 debtor-in-possession under the U.S. Bankruptcy
Code, the Debtors remain in possession and control of their
estate pending the Judicial Reorganization.  Sergio Bermudes,
Esq., at Escritorio de Advocacia Sergio Bermudes, represents the
carrier in Brazil.

Each of the Debtors' Boards of Directors authorized Vicente
Cervo as foreign representative.  In this capacity, Mr. Cervo
filed a Sec. 304 petition on June 17, 2005 (Bankr. S.D.N.Y. Case
Nos. 05-14400 and 05-14402).  Rick B. Antonoff, Esq., at
Pillsbury Winthrop Shaw Pittman LLP represents Mr. Cervo in the
United States.  As of March 31, 2005, the Debtors reported
BRL2,979,309,000 in total assets and BRL9,474,930,000 in total
debts. (VARIG Bankruptcy News, Issue No. 8; Bankruptcy
Creditors' Service, Inc., 215/945-7000)



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

TELECOM: Telmex Deal Moves Closer Pending MOU Details
-----------------------------------------------------
State-run operator Colombia Telecomunicaciones (Telecom)
confirmed it has received the comptroller general's analysis on
the memorandum of understanding (MOU) under which Mexico's
Telmex (NYSE: TMX) would become Telecom's partner.

"We received it and are convinced that there are opinions that
are well accepted and very constructive. The [final version of
the] memorandum of understanding has not yet been signed and it
is open to discussions. We will look for the best scenario to
give an answer," said Telecom president Alfonso Gomez.

The comptroller said last week that the government should modify
the memorandum of understanding to grant more guarantees to
Colombia.

The current version of the memorandum allows parties to the deal
to drop out of the transaction without paying a penalty. The
comptroller wants this clause changed in order to increase
Telmex's commitment.

The comptroller is also asking Telecom to revise the memorandum
to include a detailed description of the rights the Company will
have once it is fused with Telmex.

The auditor's recommendation is non-binding.



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

PETROECUADOR: LPG Bottling Plant Operations Resume
--------------------------------------------------
State oil company Petroecuador resumed operations at its
liquefied petroleum gas (LPG) bottling plant at the Esmeraldas
refinery on September 22, Business News Americas reports. The
plant, which has a bottling capacity of 60 tonnes a day, was
shut down a few years ago due to market conditions and for
refurbishment. A Petroecuador spokesperson revealed LPG bottled
in the plant will supply the country's residential, commercial
and industrial sectors.



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

JPSCo: Fuel Price Hikes Induce More Illegal Connections
-------------------------------------------------------
The Jamaica Public Service Company (JPSCo) revealed that the
number of people making illegal connections to its power
distribution network has increased due to the rise in fuel
prices, the Jamaica Gleaner relates. The Company said customers
are paying an additional $12.5 million per month due to this
irregularity.

Tom Dorsey, senior vice-president of operations at JPS,
explained that for every percent loss, it is $25 million per
month and "right now (that cost) is split half with the customer
and half with the shareholders."

Dorsey said the Company had removed some 20,000 illegal
connections in 139 raids conducted since the start of the year.
He said the Company will be doubling the number of raids and
investigations to minimize the number of illegal connections to
the system.

JPSCo President and CEO Charles Matthews revealed the Company
spends $100 million annually on security to protect its
distribution network.

"Those dollars could be diverted to customer service. We have to
get to a point where we have to spend less on security and more
dollars on customer service, especially with what we've heard
from our customers over the last year," Matthews said.

Meanwhile, Matthews sought to bury concerns that the light and
power company might attempt to recover interest on the US$457.5
million awarded by the Office of Utilities Regulation (OUR) for
delaying the collection date, which was slated for October 1.



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

ASARCO: Pursues $75MM DIP Financing Deal With CIT Group
-------------------------------------------------------
ASARCO LLC seeks authority from the U.S. Bankruptcy Court for
the Southern District of Texas to enter into an agreement with
The CIT Group/Business Credit, Inc., for $75,000,000 in
postpetition financing.

James R. Prince, Esq., at Baker Botts L.L.P., relates that DIP
financing is the sole means for ASARCO to preserve and enhance
its going-concern value.  The availability of credit under the
DIP Financing Agreement is necessary to provide working capital
for the Debtor to continue to operate its business, which
capital is made even more necessary by the labor strike.

Moreover, Mr. Prince explains that the available credit will
give ASARCO's vendors and suppliers the necessary confidence to
continue ongoing relationships with the company, including the
extension of normal credit terms for the payment of goods and
services.  The Debtors' employees and customers will also view
the DIP Financing Agreement favorably, which will help promote a
successful reorganization.

Mr. Prince informs Judge Schmidt that ASARCO has previously
contacted other potential sources for DIP financing to obtain
the best terms.  None of the other sources were able to submit a
proposal on more favorable terms than The CIT Group.

The salient terms of the DIP Facility, as set forth in a
commitment letter, include:

   (a) DIP Facility

       The DIP Commitment Letter contemplates making a
       $75,000,000 revolving line of credit available to ASARCO.
       This amount includes $50,000,000 for letters of credit.
       The revolving line of credit may be increased to an
       amount not to exceed $150,000,000, subject to certain
       conditions.

   (b) Closing Date

       ASARCO anticipates that initial funding under the DIP
       Facility will occur as soon as the Court enters the Final
       Order on the DIP Motion and ASARCO is able to satisfy the
       closing conditions contained in the DIP Financing
       Agreement and the DIP Commitment Letter.

   (c) Availability

       The amount that ASARCO can borrow under the DIP Facility
       will depend on the inventory and accounts receivable that
       ASARCO has at any given point in time.  The amount that
       ASARCO can borrow will be determined by a formula
       specified in the DIP Commitment Letter.  Additional
       amounts may be available based on the value of ASARCO's
       equity interest in Silver Bell Mining, LLC, and other
       assets.

   (d) Interest Rate

       The interest rate for advances under the Revolving Line
       of Credit will be, at ASARCO's option, prime plus 1% or
       LIBOR plus 2.50%.  Determination of the prime and LIBOR
       rates is specified in the DIP Commitment Letter.

       Under certain conditions specified in the DIP Commitment
       Letter, if the revolving line of credit is increased
       above $75,000,000, the interest rate margins on the
       entire revolving line of credit may be adjusted upwards
       by not more than 75 basis points.

   (e) DIP Fees

       ASARCO is required to pay a variety of fees to CIT:

       1.  Loan Facility Fee

           On the closing date, The CIT Group will receive a
           loan facility fee of 1% of the revolving line of
           credit. Under certain conditions specified in the DIP
           Commitment Letter, the loan facility fee may be
           adjusted upwards by not more than 75 basis points on
           the entire revolving line of credit and will be
           payable on the date of the increase.

       2.  Underwriting Fee

           On the closing date and on the date of any increase
           in the size of the revolving line of credit, The CIT
           Group will receive an underwriting fee of 0.25% of
           the revolving line of credit.

       3.  Line of Credit Fee

           The Debtor will also pay a Line of Credit Fee equal
           to 0.375% per annum of the difference between the
           revolving line of credit and the sum of:

              (i) the average daily revolving line of credit
                  loan balance plus

             (ii) the average daily balance of outstanding
                  letters of credit.

       4.  Letter of Credit Fee

           ASARCO will also pay a Letter of Credit Fee equal to
           2.50% per annum of the face amount of each letter of
           credit payable monthly upon issuance, plus any
           administration costs imposed by the issuing bank.

   (f) Collateral

       To secure all obligations under the DIP Facility, ASARCO
       will grant The CIT Group a first priority lien on
       substantially all of ASARCO's assets, excluding insurance
       proceeds arising from or payable as a result of personal
       injury claims, and subject to agreed upon carve-outs for
       the United States Trustee and the Debtors' and Creditors
       Committee's professionals.  No costs or expenses of
       administration will be imposed against the collateral.

   (g) Out of Pocket Expenses

       ASARCO will reimburse The CIT Group and any other lenders
       who may be assigned a portion for all of their out-of-
       pocket costs and expenses incurred in connection with the
       DIP Facility.

   (h) Term

       All of The CIT Group's commitments under the DIP Facility
       will terminate at the earliest of:

          (i) date which is 24 months after the Petition Date;

         (ii) the entry of an Order pursuant to Section 363 of
              the Bankruptcy Code approving the sale of
              substantially all of ASARCO's assets;

        (iii) the effective date of any plan of reorganization;

         (iv) conversion of ASARCO's bankruptcy case to a case
              under Chapter 7 of the Bankruptcy Code;

          (v) dismissal of ASARCO's bankruptcy case; or

         (vi) a default under any term of the DIP Facility.

   (i) Good Faith Deposit

       ASARCO has paid The CIT Group $275,000 as a work fee and
       good-faith deposit.  Under certain conditions described
       in the DIP Commitment Letter, ASARCO may be required to
       pay additional deposits and The CIT Group may be required
       to return $200,000 of the deposit.

   (j) Covenants

       The DIP Financing Agreement will contain warranties,
       representations, affirmative and negative covenants,
       including financial and collateral reporting, and events
       of default as are customary for CIT in financing
       transactions of this type.  At this stage, the financial
       covenants will be limited to a minimum unused
       availability of $10,000,000 at all times, exclusive of
       any availability reserve.

A full-text copy of the DIP Commitment Letter is available for
free at http://ResearchArchives.com/t/s?1b5

ASARCO further seeks authority to grant the DIP Agent priority
in payment with respect to obligations over administrative
expenses of the kinds specified in Sections 503(b), 507(b), 1113
and 1114 of the Bankruptcy Code subject to agreed-upon carve-
outs.

Mr. Prince notes that ASARCO is unable to obtain credit without
providing a superpriority administrative expense and the secured
liens to The CIT Group.  The Debtor would not have been able to
obtain financing on any other basis.  In the Debtor's considered
business judgment, the DIP Financing is fair and reasonable and
is the best financing option available in the circumstances in
this case.

According to Mr. Prince, the parties to the DIP Facility are
preparing the credit agreement by which they will memorialize
the financing and are in the process of completing the Final
Order.  ASARCO says it will file copies of the DIP Financing
Agreement and the proposed Final Order before the final hearing
on the DIP Facility, and will present copies of the DIP
Financing Agreement and proposed Final Order as evidence at the
hearing.

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 through 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.  

Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304),
Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex.
Case No. 05-21346) also filed for chapter 11 protection, and
ASARCO has asked that the three subsidiary cases be jointly
administered with its chapter 11 case.  (ASARCO Bankruptcy News,
Issue No. 6; Bankruptcy Creditors' Service, Inc., 215/945-7000).


AVIA DE MEXICO: Initial Creditor Meeting Set for Sep. 26
--------------------------------------------------------
The U.S. Trustee for Region 7 will convene a meeting of Avia
Energy Development, LLC, and Avia de Mexico S. de R.l. de CV's
creditors at 2:00 p.m., on Sept. 26, 2005, at the Office of the
U.S. Trustee, Room 976, 1100 Commerce Street, Dallas, Texas
75242. This is the first meeting of creditors required under 11
U.S.C. Sec. 341(a) in all bankruptcy cases.

All creditors are invited, but not required, to attend.  This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.

Headquartered in Dallas, Texas, Avia Energy Development, LLC,
and Avia de Mexico S. de R.l. de CV filed for chapter 11
protection on August 18, 2005 (Bankr. N.D. Tex. Case No. 05-
39339).  Kimberly A. Elkjer, Esq., Scheef & Stone, LLP, and
Marvin R. Mohney, Esq., in Dallas, Texas, represent the Debtors.  
When the Debtors filed for protection from their creditors, they
listed $2,298,509 in consolidated assets and $11,768,065 in
consolidated debts. (Troubled Company Reporter, Sep. 22, 2005,
Vol. 9, No. 225)



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

DORAL FINANCIAL: To File Restated Financial Statements November
---------------------------------------------------------------
Doral Financial Corporation (NYSE: DRL) announced Thursday that
it expects to file its amended annual report on Form 10-K for
the year ended December 31, 2004, including its restated
financial statements, by November 10, 2005, and to file its
quarterly reports on Form 10-Q for the first three quarters of
2005 as soon as practicable thereafter. Doral Financial believes
that this schedule provides sufficient time for the Company to
complete the restatement and for PricewaterhouseCoopers LLP to
complete its audits for the periods involved.

Based on the results of its work to date, Doral Financial
estimates that its consolidated stockholders' equity at December
31, 2004, will be reduced, on a pre-tax basis, by approximately
$615 million related to corrections to the valuation of its
interest-only strips ("IOs"), which is in line with the
Company's previously disclosed estimates.

Also, as previously disclosed, the restatement process included
the review of other accounting matters. Doral now estimates that
these other matters will result in additional reductions to its
consolidated stockholders' equity of approximately $70 million
related to corrections to the valuation of its mortgage
servicing assets and $35 million related to the correction of
other accounting practices.

The estimate for the adjustments related to the mortgage
servicing assets is based on a market valuation of the Company's
servicing portfolio as of December 31, 2004. The estimate for
the adjustments to IOs and mortgage servicing assets also
reflect certain reclassifications between such asset categories.

All the estimates included above are unaudited and have been
calculated on a pre-tax basis because the Company is still
calculating the required adjustments for tax accruals.

The Company noted that the estimated adjustments to its
consolidated stockholders' equity and the proposed time schedule
could change because of the ongoing work on the restatement, as
well as the ongoing independent investigation being conducted by
Latham & Watkins LLP, outside counsel to the Company's
independent directors and the Audit Committee.

John A. Ward, III, Chairman of the Board and Chief Executive
Officer, stated that while he would have preferred that the
Company file its restated financial statements sooner, it was
important that the Company's review of all relevant accounting
issues and internal controls be detailed and comprehensive.

Ward noted that the Company was working diligently to address
these issues and to restore trust and confidence in its
financial reporting process.

Mr. Ward stated, " Although the involvement of new senior
management in the process has inevitably caused some delay, we
believe that a fresh perspective has improved the review
process. We are committed to finalizing the restatement by the
announced date."

Mr. Ward continued, "Doral is the premier mortgage franchise in
Puerto Rico."

He also noted that the Company had adequate capital and
liquidity to meet its current operational needs and that it
intended to continue to meet its financial obligations to
bondholders and other creditors.

Additionally, the Company and both of its banking subsidiaries
will continue to be well capitalized for bank regulatory
purposes after making the required adjustments to stockholders'
equity.

Doral is requesting an extension from the Nasdaq Listing
Qualifications Department of the current September 30, 2005
deadline for coming into full compliance with Nasdaq Marketplace
Rule 4310(c)(14).

As previously reported, Doral is currently not in compliance
with that rule because of its failure to timely file its
Quarterly Reports on Form 10-Q for the first two quarters of
2005. This could subject the Company's preferred stock to
delisting from Nasdaq. The Company's common stock trades on the
New York Stock Exchange while its preferred stock trades on
Nasdaq.

The Company, a financial holding company, is the largest
residential mortgage lender in Puerto Rico, and the parent
company of Doral Bank, a Puerto Rico based commercial bank,
Doral Securities, a Puerto Rico based investment banking and
institutional brokerage firm, Doral Insurance Agency, Inc. and
Doral Bank FSB, a federal savings bank based in New York City.

CONTACT: Doral Financial Corporation
         Investor Relations
         Richard F. Bonini or Lucienne Gigante
         Phone: 212-329-3733



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

CANTV: Chavez Threatens Consequences for Ruling Non-Compliance
--------------------------------------------------------------
Venezuelan President Hugo Chavez told telecommunications company
CA Nacional Telefonos de Venezuela (CANTV) to adjust worker
pensions or face the consequences.

"CANTV is obligated to recognize the debts with workers...and if
they fail to do it, no matter how powerful they consider
themselves, we will have to apply the acid and sword of the
law," Mr. Chavez said Wednesday during a televised speech as he
addressed former airport workers.

In late July, the Supreme Court ruled against CANTV on an old
dispute with workers seeking an adjustment of their pensions.
The high court said the Company would have to increase the
pensions to reflect a new minimum wage level and to include past
devaluations and inflation since 1999.

At the time, CANTV officials warned that such a move would
severely hurt the Company's finances, but it still isn't clear
what the final cost could add up to.

Chavez said CANTV owes US$279 million to workers in the form of
an adjustment of their pensions. The figure, however, only
covers the initial suit brought forward by the workers.

The final ruling also forces the Company to adjust all pensions
to a new minimum wage and that could bring up the cost even
more. CANTV has said it plans to fight the ruling and should
begin the appeal soon.



                            ***********


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