TCRLA_Public/060125.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

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

          Wednesday, January 25, 2006, Vol. 7, Issue 18

                            Headlines

A R G E N T I N A

AGUAS ARGENTINAS: Suez Wants Sale Agreement Signed by Feb. 8
ALTO PALERMOS: Gets A+ Rating
BANCO HIPOTECARIO: S&P Rates Senior Debt Issue at 'B-'
CLAXSON INTERACTIVE: Inks Distribution Agreement with Lime(TM)
EDENOR: Offer to Restructure Gets 65% Preliminary Approval

IRSA: Gets BB+ Rating on Program of ONs for US$250 Million
TELMEX: Argentinian Telecom Companies Question Telmex Award


B E R M U D A

FOSTER WHEELER: Exchanging 9,893,037 Common Shares for Warrants
FOSTER WHEELER: Upgrading Second Unit at Endesa's As Pontes


B O L I V I A

* New President Renews Pledge to Nationalize Natural Gas


B R A Z I L

COSIPA: Moody's Upgrades US$172 Million Notes to Ba2 from B1
CSN: Building Cement Plant in Volta Redonda
CSN: Ratings Not Immediately Affected by Steel Mill Accident
PETROBRAS ENERGIA: Investing $261 Mil. in Hydrocarbon Production


C A Y M A N   I S L A N D S

ALTAIR REAL ESTATE: To Lay Accounts on Liquidation
EISBERG FINANCE: To Show Manner of Liquidation on February 9
NICOS ASSET: Sets Shareholders Final Meeting on February 13
SBC GLACIER: To Explain Wind Up Process on February 9
VEGA FINANCE: Liquidation Accounts to be Presented on Feb. 14


M E X I C O

BALLY TOTAL: Proxy Governance Balks at Omnibus Stock Plan
BALLY TOTAL: Leading Proxy Advisory Firm in Favor of Company
EMPRESAS ICA: Signs Airport Construction Pact with Aeropuertos
GRUPO IUSACELL: Reaches Debt Restructuring Deal With Creditors
INDUSTRIAS PENOLES: Finds 2,807g/t Silver at Juanicipio with MAG

INDUSTRIAS PENOLES: Naica Mine Workers Will Not Strike


P U E R T O   R I C O

MUSICLAND HOLDING: Asks Court Nod to Conduct Store Closing Sales


V E N E Z U E L A

PDVSA: 2004 Financial Results to be Released in February
PDVSA: Fitch Upgrades Currency Ratings to 'BB-' from B+

     -  -  -  -  -  -  -  -

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

AGUAS ARGENTINAS: Suez Wants Sale Agreement Signed by Feb. 8
------------------------------------------------------------
Dow Jones reports that Aguas Argentinas' operator and largest
shareholder -- French utility company, Suez -- set February 8 as
the deadline to ink a sale agreement with the Argentinian
government and two Latin American investment funds over the sale
of the waterworks.

Suez declared last September that it is withdrawing its stake in
Aguas Argentinas after contract negotiations with the government
failed, Dow Jones relates.  Suez will meet on Friday with the
company's other shareholders -- Aguas de Barcelona and Banco de
Galicia y Buenos Aires -- to discuss the concession's fate.

A Suez spokeswoman said in a statement that the two investment
funds interested in buying Aguas Argentina stock are based in
Argentina and the other in Mexico, Dow Jones says.

Aguas Argentinas currently has a $600 million debt that Suez was
unsuccessful in restructuring.  Banco de la Nacion rejected
Suez's lobbying to refinance the debt, Dow Jones relates.  Suez
and the other shareholders has a pending claim in the World
Bank's arbitration tribunal, the International Centre for the
Settlement of Investment Disputes, over Argenitina's 2002
decision to convert utility rates from dollars into devalued
pesos and freeze them.

President Nestor Kirchner's administration has made withdrawal
of ICSID lawsuits a key condition of negotiations with the
utility sector.  The President has expressed interest in having
the water company return to government control, as he was a
fierce critic of Suez's management of the utility, Dow Jones
relates.

President Kirchner contends that foreign investors in
Argentina's utility sector generated huge profits while failing
to invest and provide decent service.  Suez says that they have
racked up unmanageable debts and can't invest while the rate
freeze remains in place, Dow Jones relates.


ALTO PALERMOS: Gets A+ Rating
-----------------------------
The rate of A+ (arg) has been given to Alto Palermos S.A.  The
shares have been included in category 2.

The rate given shows the position of APSA as leader among the
shopping centers of Argentina, the capacity that it has got for
generating funds and its conservative structure of capital.  The
favorable competitive environment which shows the sector with
increasing sells in the commercial centers and on most of its
shops, allows the company to improve the conditions of new
contracts of rent, with an increase resulting on its incomes as
well as on its EBITDA level ($140mm on June 2005-12 months -
$43,3mm on the trimester concluded on Sept. 2005).  The
improvement on its funds and its conservative structure of
capital resulted on a cover of the interests with EBITDA of the
8x on Sept. 2005, and years of repayment of debt of 1,4x.

The operative cash of APSA after interests and taxes, will allow
to pay, in more than twice, the commitments with capital for
around $40mm in the next two exercises (supposing the conversion
of convertible ONs).  The company has got the capacity of
covering its level of debt.  The evolution on the level of debt
will depend on the level of investments to be done during the
next exercises.  The growing strategy of the company is based in
adding one or two commercial centers per year, through the
construction or buying of the ones already existing in high-
density cities; these being Neuquen, Cordoba and Buenos Aires.

Alto Palermo S.A. aka APSA is dedicated to the operation and
development of commercial centers in Argentina.  It has got six
commercial centers located in Capital Federal and Buenos Aires
suburbs, where it has got the 43% of participation on the market
and another three located in the cities of Salta, Mendoza and
Rosario.  It represents, in all, 1,118 shops.  The shareholders
of APSA are IRSA (61,5%) and Parque Arauco (29,6%), with the
rest of the shares in the stock market of Buenos Aires and New
York.


BANCO HIPOTECARIO: S&P Rates Senior Debt Issue at 'B-'
------------------------------------------------------
Standard & Poor's Ratings Services assigned on Monday its 'B-'
foreign currency senior unsecured debt rating to Banco
Hipotecario S.A.'s upcoming $100 million issuance.  The issuance
constitutes the second tranche of BH's Series IV notes due Nov.
16, 2010, issued under the $1.2 billion senior unsecured global
MTN program.  With this issuance, the series (whose first
tranche was rated 'B-' on Nov. 16, 2005) will total US$250
million.   At the same time, Standard & Poor's affirmed its
ratings on the Argentine bank's outstanding debt and its 'B-
/Stable/--' counterparty credit ratings.  The outlook is stable.

"Proceeds from the upcoming issuance will be used for liability
management and to increase lending activities to the private
sector," said Standard & Poor's credit analyst Federico Rey-
Marino.

The ratings on BH reflect its relatively high exposure to the
sovereign's creditworthiness-mostly originated by the government
bonds received as compensation for pesification-as is the case
with the rest of the financial system.  In addition, the ratings
incorporate the bank's high concentration in mortgage lending-
given its still-low potential in the Argentine post-crisis
scenario-and the disagreements on BH's future strategy between
the controlling group and the Argentine government, the bank's
other major shareholder.  These weaknesses are counterbalanced
by a still-improving operating environment for the Argentine
financial system since the completion of the sovereign debt
restructuring process and more benign macroeconomic conditions
that result in higher intermediation with the private sector. In
addition, BH shows a high capitalization level and a good
liquidity position.

With total assets of ARS8.4 billion (or $2.9 billion at ARSP2.91
to $1) as of September 2005, BH is Argentina's eighth-largest
bank in terms of assets, the leading private financial
institution in terms of mortgage lending, and the second-largest
bank in terms of equity.

BH is a public company controlled by several shareholders
including IRSA, a prominent Argentine real estate company, and
several international investment funds.  As a result of the
bank's privatization in 1999, the Argentine government remains a
shareholder of the institution.

The stable outlook reflects Standard & Poor's' expectation that
the increasing normalization of the local operating environment
will allow BH to consolidate the improvements achieved in terms
of financial strength and to increase lending to the private
sector.  Rating upside is limited by the close linkage between
the sovereign and financial system credit quality.


CLAXSON INTERACTIVE: Inks Distribution Agreement with Lime(TM)
--------------------------------------------------------------
Claxson Interactive Group and LIME(TM), Healthy Living With a
Twist, announced Monday the signing of an exclusive agreement to
represent LIME's library throughout Latin America and Iberia.

Under the terms of the agreement, Claxson will distribute LIME's
library in Latin America, Iberia and Portugal.

In addition, Infinito, one of Claxson's most successful
channels, reaching over 11 million subscribers in Latin America
and the US Hispanic market, will launch a LIME branded block of
programming in the near future, and will explore all
distribution outlets with the objective to establish a strong
presence in the wellness area.

LIME is the new lifestyle media brand from Revolution Living
focused on healthier, greener, and more balanced living.
Relaunched in the US this fall, LIME is a multimedia platform --
television, VOD, Sirius Satellite radio, home video, Internet
and wireless handsets -- for audiences interested in the people,
ideas, and products that empower personal growth and inform
their many choices about how to improve their lives.

Ralph Haiek, Pay TV COO of Claxson, said, "We are delighted with
this alliance and we see it as an initial step to further expand
the market dedicated to wellbeing content which we have already
explored successfully throughout our channel Infinito.  This
deal reflects confidence in Claxson's distribution and places us
in a leader market position as a provider of wellness content in
the Pay TV market."

Lee deBoer, Chairman of LIME, agreed, "We look forward to
expanding LIME's horizons in partnership with Claxson.
Ultimately a global brand, LIME will seek to work alongside
people who know the international marketplace and bring unique
experience in building brands across borders.  We know Claxson
can bring valuable insights and resources to the future of
LIME."

LIME(TM) -- http://www.lime.com-- is a multimedia lifestyle
brand with multiple platforms devoted to delivering entertaining
and insightful content to the growing worldwide community
focused on leading a healthier, greener, and more balanced
lifestyle.  LIME is currently available on Television, Sirius
Satellite Radio channel 114, on demand with cable providers
nationally, and at lime.com on your PC and mobile phone.  LIME
is owned by Revolution Living LLC and is headquartered in New
York City.

Claxson (XSONF.OB) is a multimedia company providing branded
entertainment content targeted to Spanish and Portuguese
speakers around the world.  Claxson has a portfolio of popular
entertainment brands that are distributed over multiple
platforms through its assets in pay television, radio and the
Internet.

                        *    *    *

As reported in the Troubled Company Reporter on Jan. 2, 2006,
Fitch Argentina Calificadora de Riesgo S.A. maintained its
'B(arg)-' rating on US$44.4 million worth of undated
"Obligaciones negociables" bonds issued by Claxson Interactive
Group Inc.

The action, according to Argentina's securities regulator
CNV was based on the Company's financial status as of Sep. 30,
2005.

Fitch said that a 'B(arg)' rating indicates significant credit
risk although a limited margin of safety remains. Capacity for
payment at this juncture is dependent on a sustained, favorable
business climate.


EDENOR: Offer to Restructure Gets 65% Preliminary Approval
----------------------------------------------------------
Argentina power distributor Edenor got a 65% preliminary
approval rating for its offer to restructure $537 million in
debt that the company defaulted on in 2002 amid the nation's
financial crisis, Dow Jones Newswires reports.

The Company said that the restructuring will allow the reduction
of Edenor's debt by $161 million, as well as reduction of the
annual interest payments that reached $36 million until last
year, to $12 million, on average, during the coming years.  The
deal also extends payment terms to 14 years, Edenor said.

The debt swap offered a fixed-rate 11-year bond, a variable rate
and Libor-based 14-year bond, or a combination option that
included an 85% cash buyback and a discount 9-year bond.

Edenor's board of directors launched the debt swap in late
September, a week after Edenor signed a new long-term contract
with the government, after deciding to halt debt interest
payments during the restructuring. The restructuring, as well as
the rate adjustment agreement signed with regulators in
September 2005, will allow the Company to carry out a ARS1.2
billion ($394 million) investment plan over five years.

                        *    *    *

As reported by Troubled Company Reporter on Jan. 2, 2006, the
Argentine arm of credit ratings agency Fitch Ratings maintained
its 'D' local scale rating on US$600 million of bonds issued by
power distributor Edenor.

Fitch attributed the rating to Edenor's inability to make its
credit payments, which are in US dollars, due to the devaluation
of the peso and the government having frozen rates.


IRSA: Gets BB+ Rating on Program of ONs for US$250 Million
------------------------------------------------------------
The rate of BB+ has been given to the Program of ONs for US$250
million (still missing US$33.6 million) of IRSA.  Additionally,
the shares were put in category 2.

The rate given has taken into account the leading position of
the company as well as the experience that the company has got
in the sale of houses' sector.  Also, it has considered the high
level of it in relation to stable funds, which come from the
rent of offices.  This, together with the rent and sell
activities, provide IRSA with direct funds.  At present,
favorable perspectives are estimated, something which would
benefit the company.  The company participates indirectly in the
business of shopping centers through Alto Palermo S.A. (rated
with A+), controlled by IRSA in a 75%, and which constitutes one
of the main sources of funds for IRSA through dividends.  The
latter have shown an increase in the last years -- around US$18
million charged on Dec. 2005 -- as well as on its the interests,
for US$3mm per year from the holding of ONs convertibles of
APSA.

IRSA has got a restructured debt in the long term, having to
cover annual interests for around US$8 million and in 2006
annual amortizations of capital for US$6 million.  Considering
the funds from the rent of offices, plus the funds of APSA, IRSA
would be able to cover its interests and the great part of
amortizations of capital from the present exercise.  Also, it
has got cash for around US$33mm. Nevertheless, its has to be
taken into account that the scheme of amortizations of
increasing capital and the debt for rebuying a new building of
offices, mean an increase on the amount of capital for the next
exercise in around US$18mm per year in 2007 and 2008.  In order
to face these commitments, IRSA has got the possibility of
getting further funds through the exercise of suscription of
shares by holders of convertible ONs.  Despite that this source
of fund is unpredictable and not stable, it gives the company
certain financial flexibility.  During the last annual exercise,
IRSA received for the exercise of these options a total of
US$36.7 million and on Dec. 2005 a total of US$5.7 million.

Created in 1943, Inversiones y Representaciones S.A. aka IRSA is
a leading company with activities in the business of offices,
commercial centers and hotels.  The total of the shares have got
price at the Buenos Aires stock market and the New York one.
Its main shareholder is Cresud S.A. with the 21.7% of
participation, which increases up to the 36.6% when considering
the conversion of the convertible ONs and the exercise of option
of suscription of shareholders.


TELMEX: Argentinian Telecom Companies Question Telmex Award
-----------------------------------------------------------
Telecom Argentina (NYSE: TEO) and Telefonica de Argentina (NYSE:
TAR) are questioning the Argentine government's decision to
award an US$18 million contract to Mexico's Telmex (NYSE: TMX)
aka Telefonos de Mexico SA, according to a report from the Los
Andes.

Under the contract, Telmex will implement a communications
system for the Argentinian police.  The government plans to
start operating the new system in the province of Gran Mendoza
during this year. Telecom and Telefonica don't believe Telmex
has the ability to provide telecom service to the local police.

"We are a company with more presence in the region than Telecom
and Telefonica," the Los Andes quoted Telmex Government Services
Commercial Manager Carlos Oro.  "We have more clients, and
[local presence through] CTI. We are not a company without
experience as they [apparently] intend to show, and if our
technical proposal was the only one that qualified, it is simply
because we have done things well."

                        *    *    *

As reported in Troubled Company Reporter on March 9, 2005, court
No. 4 of Buenos Aires' civil and commercial tribunal declared
Telmex bankrupt, appointing Ms. Maria Lilia Orazi as the
trustee.


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

FOSTER WHEELER: Exchanging 9,893,037 Common Shares for Warrants
---------------------------------------------------------------
Foster Wheeler Ltd. has released a prospectus on Monday,
announcing an offering of up to 9,893,037 common shares issuable
upon the exercise of 4,114,517 Class A warrants and 35,180,454
Class B warrants.

The offer will expire after 5:00 p.m., New York City time, on
Jan. 27, 2006.  Each warrant currently entitles its owner to
purchase, in the case of the Class A warrants, 1.6841 common
shares and, in the case of the Class B warrants, 0.0723 common
shares, at a price of $9.378 per common share issuable
thereunder.  The exercise price per warrant will not be
increased in the offers.  Consequently, as adjusted for the
offers the effective exercise price will be reduced in the case
of the Class A warrants, to $8.92 per common share.  For Class B
warrants, price will reduced to $9.15 per common share.

On January 19, 2006, the closing prices per common share, Class
A warrant and Class B warrant were $43.44, $61.40 and $2.50,
respectively.

Foster Wheeler Ltd. -- www.fwc.com -- is a global company
offering, through its subsidiaries, a broad range of
engineering, procurement, 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, petrochemical, chemicals, power,
pharmaceuticals, biotechnology and healthcare industries.  The
corporation is based in Hamilton, Bermuda, and its operational
headquarters are in Clinton, New Jersey, USA.

At Sept. 30, 2005, Foster Wheeler's balance sheet showed a
$375,004,000 equity deficit.


FOSTER WHEELER: Upgrading Second Unit at Endesa's As Pontes
------------------------------------------------------------
Foster Wheeler Ltd. announced Monday that Foster Wheeler
Energia, S.A., part of Foster Wheeler's Global Power Group, has
been authorized by Endesa, Spain's largest utility, to proceed
with an upgrade of the second of four steam generating units at
Endesa's As Pontes power plant at La Coruna, Spain.  The terms
of the award, which will be included in the company's fourth-
quarter bookings, were not disclosed.

The four boilers at the As Pontes plant, rated at 350 MWe each,
were originally supplied by Foster Wheeler.  They were designed
to fire local brown coal, and were commissioned between 1976 and
1979.  Foster Wheeler modified the units between 1993 and 1996
to fire up to 50% imported coal.

Under a contract signed with Endesa in 2003, FWESA and its
partner, Duro Felguera S.A., a Spanish manufacturing and
construction contractor, are carrying out a further phased
upgrade of all four boilers to burn 100 percent low-sulfur
imported coal.  Upgrade of the first unit began in 2005 and the
unit is now in commercial operation.  Authorization to proceed
has now been given by Endesa for the upgrade of the second unit.

"Endesa's election of the option for the second upgrade is an
important milestone for Foster Wheeler," said Eric Svendsen,
chief executive officer, Foster Wheeler Energia, S.A.  "It
demonstrates Endesa's confidence in the quality of our project
execution, following the start-up of the first unit in 2005.
Endesa is a strategic customer that is actively considering
investments in new large coal-fired supercritical units and we
look forward to strengthening further our relationship with this
client."

Foster Wheeler Ltd. -- www.fwc.com -- is a global company
offering, through its subsidiaries, a broad range of
engineering, procurement, 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, petrochemical, chemicals, power,
pharmaceuticals, biotechnology and healthcare industries.  The
corporation is based in Hamilton, Bermuda, and its operational
headquarters are in Clinton, New Jersey, USA.

At Sept. 30, 2005, Foster Wheeler's balance sheet showed a
$375,004,000 equity deficit.


=============
B O L I V I A
=============

* New President Renews Pledge to Nationalize Natural Gas
--------------------------------------------------------
The Associated Press reports that the newly-elected President of
Bolivia, Evo Morales said in his inaugural address that he
intends to nationalize the country's large natural gas reserves.
Mr. Morales also expressed willingness to consider a U.S.-
sponsored trade zone.

President Morales left out the details of how he will reverse
the privatization in 1990 that left the country's natural gas
industry in the hands of foreign oil companies.

"They told us 15 years ago the private sector was going to
resolve our problems of corruption and unemployment, but years
have passed and we have more unemployment and more corruption,"
the President said.

Analysts speculate that it will take months to know how
President Morales will govern and how he will treat foreign
investment.  In his inaugural speech, the President showed that
he does not want to be perceived as a socialist prepared to
seize control of sectors of Bolivia's economy, the AP reports.

The President also said he will study the benefits Bolivia might
get by joining a separate zone that would link the economies of
the U.S. with Colombia, Ecuador and Peru, or by becoming a
member the Mercosur trade zone made up of Argentina, Brazil,
Paraguay and Uruguay.

"Those words must have been welcome to anxious business groups,
who feared a fiercely confrontational tone," AP quoted Michael
Shifter, a Latin American expert at the Inter-American Dialogue
think tank in Washington.  "He hit some conciliatory notes."

Bolivia has the second-largest national natural gas reserves in
South America, second only to Venezuela.  Petroleum companies
have invested $3.5 billion in Bolivia since the mid-1990s, and
the biggest players include Brazil's Petroleo Brasileiro SA;
Britain's BG Group PLC; France's Total SA; and the Spanish-
Argentine Repsol YPF SA.

                        *    *    *

Bolivia's foreign currency long-term debt is rated:
B3 by Moody's, B- by S&P and D by Fitch.


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

COSIPA: Moody's Upgrades US$172 Million Notes to Ba2 from B1
------------------------------------------------------------
Moody's Investors Service has upgraded Monday the USD175 million
2009 notes issued by Companhia Siderurgica Paulista -- COSIPA
with the guarantee from Usinas Sider£rgicas de Minas Gerais S.A.
to Ba2 from B1.  The rating outlook is stable.  This rating
action concludes the review process initiated on July 7, 2005.

Ratings upgraded are:

   -- US$175 million 2009 notes issued by Cosipa, guaranteed by
      Usiminas: to Ba2 from B1;

   -- US$500 million Senior Unsecured Global MTN Program issued
      by Cosipa with the guarantee from Usiminas: to Ba2 from
      B1;

   -- US$500 million Senior Unsecured Global MTN Program issued
      by Usiminas without guarantee from Cosipa: to Ba3 from B2;

Outlook Stable

The upgrade reflects the group's improved capital structure
through continuous de-leverage, extended average tenor of
consolidated debt and strengthened liquidity position.  In
addition, the rating action incorporates Moody's belief that the
Usiminas group will maintain its position as a low-cost producer
in the foreseeable future, will manage future expansions
prudently to avoid a meaningful increase in leverage, and will
continue to report sound operating margins and generate
satisfactory cash flows even during downturn cycles.

The ratings continue to be supported by the group's position as
the largest flat steel producer in Latin America with a strong
market presence in Brazil, its risk-averse management and track
record of consistent near-full capacity utilization rates.  In
addition, Moody's regards the group's minority interest in the
newly created Ternium as a credit positive within the worldwide
ongoing consolidation process of the steel industry.  On the
other hand, the ratings are constrained by the lack of ownership
of key raw materials, the strong dependence of the group on the
domestic market, and by the event risk deriving from the
announced investments in capacity expansion.

For notes issued by Usiminas under the MTN Program without a
guarantee from Cosipa, the Ba3 rating is principally constrained
by structural subordination caused by the significant percentage
of total debt and cash flow located at Cosipa.  Moody's
generally expects that the operating subsidiary's creditors
would have to be satisfied before the parent company's senior
unsecured creditors could realize any value from subsidiary
assets.  Moody's believes that the significant guarantees
provided by Usiminas for nearly all of Cosipa's debt may also
significantly increase the loss severity for senior unsecured
creditors at the Usiminas level.

As a low-cost steel producer and benefiting from the improved
market conditions for steel over the past years following the
conclusion of the group's large investment program in 2001, the
group's management has focused on reducing the consolidated
indebtedness and strengthening the capital structure.  As a
result, the group's adjusted gross debt (including underfunded
pension liabilities and interest-bearing refinanced taxes)
dropped from BRL10,566 million at 2002 fiscal-year end to BRL
6,319 million at September 30, 2005 while total debt /
capitalization ratio improved from 82% to 45% in the same
period.

The increased cash position from excess cash flow combined with
the successful re-profiling of the indebtedness maturity through
the replacement of short-term debt with long-term obligations
resulted in substantial improvement of the group's liquidity
position, as evidenced by the Cash to Short-Term Debt ratio of
94% at September 30, 2005, compared with 18% at fiscal-year-end
2002.  Furthermore, in August-2005 the group secured a USD250
million 2-year stand-by export pre-payment facility that further
contributed to the improvement of its liquidity position.

Moody's believes that the competitive cost structure and
efficient utilization of capacity will continue to translate
into healthy operating margins and satisfactory cash flows over
the foreseeable future. Accordingly, we believe that despite the
recent decline in steel prices and increase in raw material
costs -- namely iron ore and coal -- EBITDA margins will stay
above 30% and cash flow from operations will remain robust.
Moody's expects the group will maintain prudent financial
management, based on a conservative hedging policy and moderate
leverage.

Regarding the supply of important raw materials used in the
production of steel, such as iron ore and coal, the Usiminas
group is fully dependent on third parties.  Iron ore is mostly
supplied locally by Companhia Vale do Rio Doce -- CVRD -- under
a long-term contract with annual price adjustments.  While coal
is imported under short-term contracts, the group has invested
to increase self-sufficiency in coke.  On the other hand,
Moody's recognizes that the Usiminas group benefits from
important cost-competitive advantages such as efficient
logistics, favorable location close to iron ore mines, own ports
and to the most developed Brazilian cities.

Historically Usiminas group has achieved some 70% to 75% of net
revenues from sales to the domestic market, making the group
susceptible to the volatility of the Brazilian economy.  Thanks
to its low production cost, the group has some flexibility to
increase exports in times of depressed domestic demand, albeit
with lower margins.

Recently the group announced a USD 1.55 billion 4-year
investment program to be concluded by 2009 year-end, aiming at
improving product quality and sales mix with a new hot strip
mill at Cosipa and the revamp of Usiminas' plate mill, in
addition to increasing the slab capacity of Cosipa by
approximately 500,000 tons per year.  Moody's expects the group
will continue to generate positive free cash flows during the
investment period, although we understand the investments pose
substantial event risk to the group.  Additional USD1.6 billion
investments in the period 2008 -- 2011 for the construction of a
new 5 million tones-per-year slab mill are in study and will be
subject to the identification of project partners.

In August 2005 Usiminas and Techint established a partnership to
consolidate their respective equity interests in Sidor
(Venezuela), Siderar (Argentina), and Hylsamex (Mexico).
Usiminas also contributed some USD 100 million in cash to the
joint venture and ended up with about 16% of the shares of the
newly created holding company Ternium, while Techint holds the
remaining 83.7% shares.  Moody's understands the joint venture
with Techint gives Usiminas important presence in some of the
main Latin American economies, particularly considering the
ongoing consolidation process of the steel industry worldwide.

Outlook Stable

The stable outlook reflects Moody's expectations that the group
will maintain its conservative financial management and will
continue to report satisfactory operating margins and positive
free cash flows even in a downturn scenario.

What Could Change The Ratings Up

The ratings could be under upward pressure if the group is able
to sustain free cash flow to total adjusted debt ratio higher
than 15% during the execution of the announced investment
program combined with the maintenance of a solid liquidity
position and further reduction of short-term debt to about 20%
of total adjusted debt.

What Could Change The Ratings Down

The ratings or outlook would be under downward pressure if the
group reports successive negative free cash flows with a
simultaneous deterioration of the total adjusted debt to EBITDA
ratio to above 2.0x or significant reduction of the group's
financial flexibility.

The Usiminas group is the largest fully integrated flat steel
manufacturer in Brazil and in Latin America.  In 2004, Usiminas
produced 9 million metric tons of crude steel using continuous
casting technology, making it the largest producer of crude
steel in Brazil.  The Usiminas group, comprising mainly Usiminas
and Cosipa, is one of the top twenty largest steel groups in the
world.


CSN: Building Cement Plant in Volta Redonda
-------------------------------------------
Business News Americas reports that Brazilian integrated
steelmaker CSN (NYSE: SID) has decided to build its US$43
million Rio de Janeiro state cement project in the city of Volta
Redonda.  The company has already recruited personnel for the
plant before the location was finalized.

"The construction of the 1.5Mt/y-capacity plant will begin in
the second half of this year, while operations are expected to
begin in the second half of 2007," a company spokesperson told
Business Americas, adding that an official announcement about
the plant will be made within 1-2 months.

CSN will be using cinder, an essential component for cement
manufacturing, from its iron ore processing operation in the new
plant.  CSN currently sells the cinder to cement companies,
Business News reports.


CSN: Ratings Not Immediately Affected by Steel Mill Accident
------------------------------------------------------------
Standard & Poor's Ratings Services said Monday that its ratings
on Companhia Siderurgica Nacional (CSN, local and foreign
currency: BB/Stable/--) are not immediately affected by the
accident that occurred Sunday at CSN's steel mill in Volta
Redonda.  The accident affected production of the mill's Blast
Furnace #3, which is accountable for about two-thirds of its pig
iron production. The extent and severity of the damages, as well
the extent of production interruption, have not yet been
determined.

While the company counts on intermediary slabs stocks that would
suffice if repair and remediation are concluded quickly, a
prolonged furnace production interruption would require CSN to
acquire slabs in the spot market to feed its stripping mills,
reducing profitability somewhat from its current very strong
levels.

Assuming that production is only temporarily interrupted, we do
not expect CSN's credit quality and fundamentals to change due
to the accident.

CSN's liquidity is strong with cash reserves of $2 billion
compared with short-term debt maturities of $844 million as of
Sept. 30, 2005, and should allow the company to comfortably
manage short-term debt maturities even if cash generation is
reduced due to lower profitability within the next several
months.  CSN counts on an insurance policy that covers all
equipment at its Volta Redonda steel mill as well as business
interruption.


PETROBRAS ENERGIA: Investing $261 Mil. in Hydrocarbon Production
----------------------------------------------------------------
Petrobras Energia SA (PECO.BA), the Argentine unit of Brazilian
state oil firm Petrobras SA, plans to invest $261 million in
hydrocarbon production in 2006, a 20% increase from last year.
However, the company's overall oil production is expected to
decline to 60,000 barrels per day (b/d), Petrobras Planning
Manager Gustavo Amaral told a reporter from the El Cronista
newspaper.

Petrobras Energia also plans to invest at least $18 million in
exploration this year, down from $35 million last year, Mr.
Amaral told the El Cronista.

Despite a bigger budget for production, oil output last year was
62,000 b/d and 68,000 b/d in 2004, Business News Americas
relates.  That decline mirrors Argentina's decreasing oil
output, which has suffered from a lack of investment in new
exploration due in large part to heavy oil export taxes and de-
facto fuel pump price controls set by the government.

"The majority of the areas in production are in mature fields
employing secondary recovery," Mr. Amaral was quoted as saying.
"The decrease was partially compensated for by an increase in
perforation activities and well conversion," he added. The
majority of the firm's production is generated in the Cuenca
Neuquina and the Cuenca Austral.

Last week, Petrobras Energia inked a pact with Enarsa, Repsol
YPF and Uruguay's state energy company Ancap, to explore
offshore oil and gas fields.  Repsol and Enarsa will each
control a 35% stake in the venture, while Petrobras will control
25%, and Ancap will control 5%.  Repsol will serve as the lead
technical operator for the project, which is to be funded by
Repsol and Petrobras. Investment in the project is expected to
run between $40 million and $100 million, although Repsol said
it could reach as high as $2 billion, depending on the results,
Business News reports.

                        *    *    *

On Dec. 30, 2005, Fitch Ratings affirmed these ratings of
Petrobras Energia:

    -- International local currency rating at 'B';
    -- Foreign currency rating at 'BB-';
    -- Argentine national scale rating at ' AA-(arg)'.

All ratings have a Stable Outlook.

Petrobras Energia is one of the most vertically integrated
energy conglomerates in Latin America, with operations
encompassing virtually all segments of the energy value chain.
Core business activities include oil and gas exploration and
production; refining and marketing; petrochemicals; and
electricity.  Petrobras Energia is controlled by Petrobras
Energia Participacoes S.L., a holding company that is in turn
controlled by Brazil's national oil company, Petrobras S.A.
(senior unsecured foreign currency rating of 'BB-' by Fitch).


===========================
C A Y M A N   I S L A N D S
===========================


ALTAIR REAL ESTATE: To Lay Accounts on Liquidation
--------------------------------------------------
            Altair Real Estate Investment Corporation
                   (In Voluntary Liquidation)
                The Companies Law (2004 Revision)

Pursuant to section 145 of the Companies Law (2004 Revision),
the extraordinary final meeting of the shareholder of Altair
Real Estate Investment Corporation will be held at the offices
of HSBC Financial Services (Cayman) Limited, P.O. Box 1109,
George Town, Grand Cayman, Cayman Islands, on Feb. 14, 2006.

Business:

1. To lay accounts before the meeting, showing how the winding
   up has been conducted and how the property has been disposed
   of, as at the final winding up on Feb. 14, 2006.

2. To authorize the liquidators to retain the records of the
   Company for a period of five years from the dissolution of
   the Company, after which they may be destroyed.

Proxies: Any person who is entitled to attend and vote at this
meeting may appoint a proxy to attend and vote in his stead.  A
proxy need not be a member or creditor.

CONTACT:  Ms. Kareen Watler and Mr. Jamal Young
          Joint Voluntary Liquidators
          Marguerite Britton
          P.O. Box 1109GT, Grand Cayman
          Cayman Islands
          Telephone: (345) 949-7755
          Facsimile: (345) 949-7634


EISBERG FINANCE: To Show Manner of Liquidation on February 9
------------------------------------------------------------
                       Eisberg Finance Ltd
                   (In Voluntary Liquidation)
                The Companies Law (2004 Revision)

Pursuant to section 145 of the Companies Law (2004 Revision),
the final meeting of the shareholders of Eisberg Finance Ltd
will be held at the registered office of the Company, on Feb. 9,
2006, at 9:30 a.m.

Business:

1. To lay accounts before the meeting showing how the winding up
   has been conducted and how the property has been disposed of,
   to the date of winding up on Feb. 9, 2006.

2. To authorize the liquidator to retain the records of the
   Company for a minimum of six years from the dissolution of
   the Company, after which they may be destroyed.

Proxies: Any person who is entitled to attend and vote I
entitled to appoint a proxy to attend and vote in his stead.  A
proxy need not be a member or a creditor.

CONTACT:  Mr. Sean Flynn, Voluntary Liquidator
          P.O. Box 852GT, Grand Cayman


NICOS ASSET: Sets Shareholders Final Meeting on February 13
-----------------------------------------------------------
                 Nicos Asset Holding Corporation
                    (In Voluntary Liquidation)
                The Companies Law (2004 Revision)

Pursuant to section 145 of the Companies Law (2004 Revision),
the extraordinary final meeting of the shareholder of Nicos
Asset Holding Corporation will be held at the offices of HSBC
Financial Services (Cayman) Limited, P.O. Box 1109, George Town,
Grand Cayman, Cayman Islands, on Feb. 13, 2006.

Business:

1. To lay accounts before the meeting, showing how the winding
   up has been conducted and how the property has been disposed
   of, as at the final winding up on Feb. 13, 2006.

2. To authorize the liquidators to retain the records of the
   Company for a period of five years from the dissolution of
   the Company, after which they may be destroyed.

Proxies: Any person who is entitled to attend and vote at this
meeting may appoint a proxy to attend and vote in his stead.  A
proxy need not be a member or creditor.

CONTACT:  Ms. Kareen Watler and Mr. Jamal Young
          Joint Voluntary Liquidators
          Marguerite Britton
          P.O. Box 1109GT, Grand Cayman
          Cayman Islands
          Telephone: (345) 949-7755
          Facsimile: (345) 949-7634


SBC GLACIER: To Explain Wind Up Process on February 9
-----------------------------------------------------
                     SBC Glacier Finance Ltd
                   (In Voluntary Liquidation)
                The Companies Law (2004 Revision)

Pursuant to section 145 of the Companies Law (2004 Revision),
the final meeting of the shareholders of SBC Glacier Finance Ltd
will be held at the registered office of the company, on Feb. 9,
2006, at 9:30 a.m.

Business:

1. To lay accounts before the meeting showing how the winding up
   has been conducted and how the property has been disposed of
   to the date of winding up on Feb. 9, 2006.

2. To authorize the liquidator to retain the records of the
   Company for a minimum of six years from the dissolution of
   the Company, after which they may be destroyed.

Proxies: Any person who is entitled to attend and vote I
entitled to appoint a proxy to attend and vote in his stead.  A
proxy need not be a member or a creditor.

CONTACT:  Mr. Sean Flynn, Voluntary Liquidator
          P.O. Box 852GT, Grand Cayman


VEGA FINANCE: Liquidation Accounts to be Presented on Feb. 14
-------------------------------------------------------------
                     Vega Finance Corporation
                    (In Voluntary Liquidation)
                 The Companies Law (2004 Revision)

Pursuant to section 145 of the Companies Law (2004 Revision),
the extraordinary final meeting of the shareholder of Vega
Finance Corporation will be held at the offices of HSBC
Financial Services (Cayman) Limited, P.O. Box 1109, George Town,
Grand Cayman, Cayman Islands, on Feb. 14, 2006.

Business:

1. To lay accounts before the meeting, showing how the winding
   up has been conducted and how the property has been disposed
   of, as at the final winding up on Feb. 14, 2006.

2. To authorize the liquidators to retain the records of the
   Company for a period of five years from the dissolution of
   the Company, after which they may be destroyed.

Proxies: Any person who is entitled to attend and vote at this
meeting may appoint a proxy to attend and vote in his stead.  A
proxy need not be a member or creditor.

CONTACT:  Ms. Kareen Watler and Mr. Jamal Young
          Joint Voluntary Liquidators
          Marguerite Britton
          P.O. Box 1109GT, Grand Cayman
          Cayman Islands
          Telephone: (345) 949-7755
          Facsimile: (345) 949-7634


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

BALLY TOTAL: Proxy Governance Balks at Omnibus Stock Plan
---------------------------------------------------------
Pardus European Special Opportunities Master Fund L.P. announced
that Proxy Governance, Inc., an independent proxy advisor,
recommends that shareholders of Bally Total Fitness Holding
Corporation support Pardus' slate of directors and recommends
that shareholders vote against the Company's compensation plan
in connection with the upcoming annual meeting of shareholders
scheduled to take place on January 26, 2006.

Proxy Governance notes in its report, "[w]e do believe that the
company's current board could benefit from outside viewpoints
represented by the Pardus slate... [and] [w]e believe the third
[Pardus nominee], Kornstein, has a background that could be
useful in helping the board oversee a sale or strategic
transaction at Bally.  Accordingly, we recommend that
shareholders support Pardus' full slate of directors at the
upcoming meeting...."

Proxy Governance also urged shareholders to vote against the
Company's proposed new Omnibus Stock Plan, noting that, "we have
serious reservations about the timing and manner in which the
plan may be implemented.  Specifically, we refer to management's
sizeable stock sales only a month ago.  We question whether they
will ultimately participate in the plan or not and why they
should be granted new awards under these circumstances... we do
not think it is appropriate or necessary that the company grant
equity awards prior to its possible sale (particularly since
only 75 out of 23,000 employees are eligible to participate)."

Pardus urges shareholders to vote FOR the Pardus nominees and
against the Company's proposed new Omnibus Stock Plan by
signing, dating and returning the GREEN proxy card.
Shareholders with questions or in need of assistance in voting
their shares should contact Pardus' proxy solicitor, D.F. King &
Co., Inc., toll-free at 888-644-6071 or collect at 212-269-5550.

Bally Total Fitness is the largest and only nationwide
commercial operator of fitness centers in the U.S., with nearly
440 facilities located in 29 states, Mexico, Canada, Korea,
China and the Caribbean under the Bally Total Fitness, Pinnacle
Fitness, Bally Sports Clubs and Sports Clubs of Canada brands.
Bally offers a unique platform for distribution of a wide range
of products and services targeted to active, fitness-conscious
adult consumers.

Bally Total Fitness is the largest and only nationwide
commercial operator of fitness centers in the U.S., with nearly
440 facilities located in 29 states, Mexico, Canada, Korea,
China and the Caribbean under the Bally Total Fitness, Pinnacle
Fitness, Bally Sports Clubs and Sports Clubs of Canada brands.
Bally offers a unique platform for distribution of a wide range
of products and services targeted to active, fitness-conscious
adult consumers.

                        *    *    *

As reported in the Troubled Company Reporter on Dec. 6, 2005,
Standard & Poor's Ratings Services revised its CreditWatch
implications on Bally Total Fitness Holding Corp. to developing
from negative.  The corporate credit rating remained at 'CCC'.

Bally's ratings were originally placed on CreditWatch on
Aug. 8, 2005, following the commencement of a 10-day period
after which an event of default would have occurred under the
company's $275 million secured credit agreement's cross-default
provision and the debt would have become immediately due and
payable.  Subsequently, Bally entered into a consent with
lenders to extend the 10-day period until Aug. 31, 2005.  Prior
to Aug. 31, the company received consents from its bondholders
extending its waiver of default to Nov. 30, 2005.

Bally Total has assets amounting to US$1,453,300,000 and
liabilities of US$1,611,500,000.


BALLY TOTAL: Leading Proxy Advisory Firm in Favor of Company
------------------------------------------------------------
Bally Total Fitness (NYSE: BFT), the nation's leader in health
and fitness, announced Monday that Glass Lewis & Co., LLC, a
leading proxy advisory firm, has recommended that Bally
shareholders vote in favor of the Company's key proxy proposals,
including its board nominees and proposed 2006 Omnibus Equity
Compensation Plan.  Bally's board slate includes two candidates
also nominated by Pardus Capital Management, a dissident hedge
fund, plus Eric Langshur, the current chairman of Bally's Audit
Committee.  Glass Lewis also recommended that Bally shareholders
reject all stockholder proposals put forth by Liberation
Investment Group, another dissident hedge fund led by a
disgruntled former employee consultant to the Company.

Says the report, "...in our opinion, the Dissident's arguments
fall short given their failure to advance an alternative plan
for Bally.  As such, investors must assume that the Dissidents
believe that management's new plan is the best growth
alternative for the Company at this time.  Considering the
Dissident's admission that they are 'investors, not operators'
of companies, it would seem clear that faced with the
uncertainty of not having a chief executive, the current
management team is the best choice for shareholders."

Regarding the director nominees, the report notes, "...on
balance, Mr. Langshur's knowledge with respect to Bally's
financial reporting travails will likely prove more beneficial
to shareholders than Mr. Kornstein's admittedly strong banking
expertise.  In particular, in light of the potential sale of the
Company, we believe Mr. Langshur's intimate knowledge of Bally's
financial statements would prove invaluable during due diligence
with a potential acquirer or strategic investor."

Commenting on the Glass Lewis recommendations, John W. Rogers,
Jr., Lead Director of Bally's Board, said, "We are very pleased
that Glass Lewis has asked shareholders to support Bally's
director slate which includes Eric Langshur.  Eric joined the
Bally Board in December 2004, and quickly took on a key
leadership role on the Audit Committee, which he has effectively
led for the last six months and now Chairs.  Eric has been
immensely helpful to the Company and its finance team, having
led them successfully through the arduous financial restatement
process and helped restore integrity to the financial reporting
process at Bally.  We are also pleased that all three major
proxy advisory firms have rejected Liberation's proposals in
recent days, including Glass Lewis, ISS and Proxy Governance,
Inc."

The recommendations by Glass Lewis followed Bally's
participation in a January 20 "Proxy Talk" presentation, in
which Paul Toback, Bally's Chairman and CEO, Marc Bassewitz,
General Counsel, and Adam Metz, one of Bally's outside
Directors, made the case for Bally's proposals.

Bally's presentation followed earlier comments from Emanuel
Pearlman and Nicole Jacoby of Liberation and one of Liberation's
attorneys.  During each presentation, Glass Lewis asked
questions they had prepared, as well as those submitted from
their institutional investor clients.

"We were pleased with the opportunity to juxtapose Bally's
presentation of substance and results with that of one of its
dissidents, who clearly has no plan for the Company.  We are
even more gratified at the subsequent recommendations made by
Glass Lewis, a truly independent third party whose unbiased
analysis carries significant weight with institutional
investors.  On behalf of all Bally shareholders, we thank them
for their efforts in providing an effective forum for investors
to sort through the rhetoric about Bally Total Fitness," said
Paul A. Toback, Chairman and CEO of Bally.

Bally urges shareholders to vote for the Bally nominees by
signing, dating and returning the WHITE proxy card.
Shareholders with questions or in need of assistance in voting
their shares should contact Bally's proxy solicitor, MacKenzie
Partners, toll-free at 800-322-2885 or collect at 212-929-5500.

Glass Lewis is a leading investment research and proxy advisory
firm focused on helping institutional investors make more
informed investment and proxy voting decisions by identifying
business, legal, fiduciary and financial statement risks at more
than 7,000 companies worldwide.

Bally Total Fitness is the largest and only nationwide
commercial operator of fitness centers in the U.S., with nearly
440 facilities located in 29 states, Mexico, Canada, Korea,
China and the Caribbean under the Bally Total Fitness, Pinnacle
Fitness, Bally Sports Clubs and Sports Clubs of Canada brands.
Bally offers a unique platform for distribution of a wide range
of products and services targeted to active, fitness-conscious
adult consumers.

                        *    *    *

As reported in the Troubled Company Reporter on Dec. 6, 2005,
Standard & Poor's Ratings Services revised its CreditWatch
implications on Bally Total Fitness Holding Corp. to developing
from negative.  The corporate credit rating remained at 'CCC'.

Bally's ratings were originally placed on CreditWatch on
Aug. 8, 2005, following the commencement of a 10-day period
after which an event of default would have occurred under the
company's $275 million secured credit agreement's cross-default
provision and the debt would have become immediately due and
payable.  Subsequently, Bally entered into a consent with
lenders to extend the 10-day period until Aug. 31, 2005.  Prior
to Aug. 31, the company received consents from its bondholders
extending its waiver of default to Nov. 30, 2005.

Bally Total has assets amounting to US$1,453,300,000 and
liabilities of US$1,611,500,000.


EMPRESAS ICA: Signs Airport Construction Pact with Aeropuertos
--------------------------------------------------------------
Empresas ICA, S.A. de C.V., the largest engineering,
construction, and procurement company in Mexico, announced
Monday the signing of a contract with Aeropuertos y Servicios
Auxiliares, which was awarded through public bidding process, to
complete the construction of the seven buildings that make up
Terminal II of the Mexico City International Airport for a total
of MXN1,939 million.  The contract will be executed over a
period of 208 days, beginning in January with scheduled
completion in August 2006.

The unit price, fixed-term contract includes the construction of
350,000 m 2 of interior space and 150,000 m 2 of exterior works.
The work includes reinforced concrete structures, masonry,
aluminum and glass, iron work, finishing, installations,
prefabricated facades, signage, equipment and furniture.

Empresas ICA -- http://www.ica.com.mx/-- the largest
engineering, construction, and procurement company in Mexico,
was founded in 1947.  ICA has completed construction and
engineering projects in 21 countries.  ICA's principal business
units include civil construction and industrial construction.
Through its subsidiaries, ICA also develops housing, manages
airports, and operates tunnels, highways, and municipal services
under government concession contracts and/or partial sale of
long-term contract rights.

                        *    *    *

As reported by Troubled Company Reporter on Nov. 14, 2005, the
ratings (B/Stable/) assigned to ICA took into consideration the
company's position as the largest engineering, construction, and
procurement concern in Mexico.


GRUPO IUSACELL: Reaches Debt Restructuring Deal With Creditors
--------------------------------------------------------------
Mexican mobile operator Grupo Iusacell S.A. de CV has reached a
deal with creditors to restructure its debt of more than US$800
million, Business News Americas reports.

The financially troubled Mexican mobile operator's parent
company Grupo Iusacell has arrived at an agreement with 51% of
creditors over the weekend through a bond swap at better
interest rates and extensions to maturities, effectively ending
a two-year saga that caused much speculation about the company's
future.

A US$350 million bond due 2006 with a coupon of 14.25% was
exchanged by the Company for a new bond worth US$175 million
with a 10% interest rate that matures in December 2013.

Iusacell renegotiated a US$150 million loan, which it defaulted
on in 2004, and a US$266 million secured syndicated loan.

The Company has essentially reduced its debt by over US$300
million to approximately US$550 million.

According to analysts, the new debt load was manageable compared
to other telecommunications companies around the globe.

James Harper, director of corporate research at US investment
firm BCP Securities, saw the debt restructuring deal as great
news.

"Even though creditors have taken a large haircut it was better
than expected ... it is better getting paid something than not
getting paid at all," Harper said.

Grupo Iusacell provides cellular services reaching about 90% of
Mexico's population, including Mexico City. It has 1.3 million
subscribers (75% are prepaid). It also offers local and long-
distance telephony, paging, and data transport services. Verizon
Communications and Vodafone Group together acquired 74% of the
Company in 2001 from the Peralta family, which founded Iusacell
in 1989. But following its default on debts, the two companies
in 2003 sold their stake to Ricardo Salinas Pliego's Movil@ccess
in a deal valued at $7.4 million. It agreed to sell more than
140 signal towers to US-based American Tower.

                        *    *    *

As reported by Troubled Company Reporter on May 5, 2005, Grupo
Iusacell received on April 29, 2005, a notice from The Bank of
New York, acting as trustee for the $350 million 14 1/4 % notes
due December 2006, reminding Grupo Iusacell of its non-payment
of interest since June 1, 2003, an unspecified percentage of
noteholders had requested the acceleration of principal and
accrued interest on the notes.


INDUSTRIAS PENOLES: Finds 2,807g/t Silver at Juanicipio with MAG
----------------------------------------------------------------
Industrias Penoles S.A. de C.V. and Vancouver-based MAG Silver
reported drilling a new high-grade vein 1 km north of the
Juanicipio silver-gold JV in Zacatecas, Mexico, Business News
reports.

Industrias Penoles holds a 56% stake in the project.

Assays returned 2.95m of 2,807g/t silver, 3.27g/t gold, 5.94%
lead and 9.14% zinc within a longer 6.35m intercept grading
1,798g/t silver, 2.91g/t gold, 3.43% lead and 5.51% zinc, MAG
said in a statement.  A second drill hole intersected 8.65m
grading 116g/t silver and 0.23g/t gold.

"This discovery combined with our earlier work confirms that
Juanicipio is a high grade, multiple vein field in early
discovery stage," said MAG President Dan MacInnis to Business
News.

Industrias Penoles, S.A. de C.V. is a mining group with
integrated operations in smelting and refining non-ferrous
metals, and producing chemicals.  The Company produces refined
silver, metallic bismuth, sodium sulfate, gold, lead, and zinc.


INDUSTRIAS PENOLES: Naica Mine Workers Will Not Strike
------------------------------------------------------
Laborers at mining and metals group Industrias Penoles' Naica
zinc-lead mine have decided to kill strike plans, Business News
Americas reports

Mining-metalworkers union STMMRM said that the Naica workers
have unanimously voted to accept pay hike that the Company
offered.

The Company had proposed a 6% pay rise, a 2% one-off payment and
life insurance benefits when the workers had threatened to
strike starting Jan. 21 and later extended the deadline to
January 27 before accepting the offer.


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


MUSICLAND HOLDING: Asks Court Nod to Conduct Store Closing Sales
----------------------------------------------------------------
Musicland Holding Corp. and its debtor-affiliates seek the
Honorable Stuart M. Bernstein's permission to conduct "Store
Closing Sales" in order to liquidate inventory, furniture,
equipment and trade fixtures, and other assets located at some
or all of the Debtors' store locations.

Bloomberg News reports that according to Musicland's attorney,
James Stempel, the Company wants to begin going out of business
sales at 284 stores.

The Debtors also seek the U.S. Bankruptcy Court for the Southern
District of New York's authority to schedule and conduct an
auction for the right to be the "Agent" in connection with the
Store Closing Sales.

James H.M. Sprayregen, Esq., at Kirkland & Ellis LLP, in New
York, relates that prior to the Petition Date, the Debtors
extensively reviewed the performance of their retail store
locations, including a review of the profitability of each store
on a stand-alone basis.  As a result of this review process, Mr.
Sprayregen says, the Debtors identified the Closing Stores as
underperforming and unprofitable stores that should be closed as
part of the Debtors' overall business strategy.

The Debtors further determined that conducting Store Closing
Sales and or GOB Sales at the Closing Locations prior to their
closing would provide the best opportunity for maximizing the
value of the inventory located within those stores.  The Debtors
believe that any attempt to restore the profitability of the
Closing Locations would not only prove to be futile, but perhaps
more significantly, would distract management from critical
efforts to restructure the Debtors' ongoing operations and
burden the estates with additional carry costs.

According to Mr. Sprayregen, each of the Closing Locations are
contributing to the Debtors' negative cash flow from operations
and has inventory and other items that must be sold to maximize
value.  "The realization of fair value for the Assets as
promptly as possible will inure to the benefit of all parties-
in-interest.  In addition, the Debtors' post-petition financing
documents require the Debtors to commence the Store Closing
Sales by February 1, 2006."

The Debtors believe that they can expedite the Store Closing
Sales and maximize the return from the Assets by conducting an
open Auction and soliciting offers from competing bidders who
wish to liquidate the Assets.  Mr. Sprayregen notes that
allowing a professional liquidator to liquidate the Assets will
enable the Debtors to maximize sale proceeds for the Assets
while minimizing distraction from the restructuring effort.
Moreover, Mr. Sprayregen continues, it is more cost effective
for the Debtors to allow a liquidation agent to conduct the
Store Closing Sales than to conduct those sales on their own.
Liquidation agents generally have extensive knowledge, expertise
and experience in conducting store closing sales.

Accordingly, the Court will convene a hearing on January 27,
2006, to consider approval of the Store Closing Sales.  An
auction will be held on January 26, 2006, at 11:00 a.m.

All competing bids must be submitted in writing and served on
counsel for the Debtors, counsel to Wachovia and counsel to the
Secured Trade Creditors no later than January 25, 2006, at 5:00
p.m.  A full-text copy of the Store Closing Sale Bidding
Procedures is available for free at:


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

The Sale Approval Order, when approved, will authorize the
Debtors to enter into an "Agency Agreement" with the highest or
best bidder at the Auction, and that highest or best bidder will
serve as the Debtors' Agent in conducting the Store Closing
Sales.

Specifically, but by way of example only, the Debtors want the
Agent to:

    (a) administer the Store Closing Sales without complying
        with:

           (i) any applicable state and local statutes, rules or
               ordinances governing liquidation or "going-out-
               of-business" sales,

          (ii) any court order or other decree of any federal,
               state or local governmental authority or
               regulatory body that would impair, or is required
               for the Debtors' consummation of the transactions
               contemplated, or

         (iii) any contract or other agreement to which the
               Debtors are a party or by which the Debtors are
               otherwise bound that would prevent or impair the
               consummation of the Store Closing Sales or the
               other transactions contemplated;

    (b) sell the Assets at the Store Closing Sales free and
        clear of all liens, claims and interests, pursuant to
        section 363(f) of the Bankruptcy Code, with liens to
        attach to the proceeds of sale in the same priority as
        those liens had against the property sold and with any
        good faith buyer to be afforded all of the protections
        afforded by section 363(m) of the Bankruptcy Code; and

    (c) sell the Assets free from any warranties, except that
        the Debtors will, to the extent legally permissible,
        pass on all manufacturer's warranties to customers.

The Liquidating Agent will have the right to use the Closing
Locations and the Debtors' related services, FF&E and other
assets located in the Closing Locations in conducting the Store
Closing Sales.  In addition, the Liquidating Agent will also
have a limited license to use the Debtors' trade names, logos
and customer lists related to and used in connection with the
operation of the Closing Locations, solely for the purpose of
advertising the Store Closing Sales.

The Debtors further seek to conduct the Store Closing Sales
notwithstanding any provisions in the Closing Location's leases
restricting the Debtors' ability to do so.

Headquartered in New York, New York, Musicland Holding Corp., is
a specialty retailer of music, movies and entertainment-related
products.  The Debtor and 14 of its affiliates filed for chapter
11 protection on Jan. 12, 2006 (Bankr. S.D.N.Y. Lead Case No.
06-10064).  James H.M. Sprayregen, Esq., at Kirkland & Ellis,
represents the Debtors in their restructuring efforts.  When the
Debtors filed for protection from their creditors, they
estimated more than $100 million in assets and debts.
(Musicland Bankruptcy News, Issue No. 2; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


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

PDVSA: 2004 Financial Results to be Released in February
--------------------------------------------------------
State oil firm Petroleos de Venezuela aka PDVSA's 2004 financial
results will be submitted to the US Securities and Exchange
Commission aka SEC in February, Business News Americas reports.

PDVSA CFO Eudomario Carruyo informed that the report will be
audited by accounting firm KPMG.

Carruyo revealed that the report should have been presented to
SEC in July. "But the SEC has been informed of the delay so
there isn't any problem or fine that could result," he said.

The form 20F will also be submitted together with the financial
statements and will contain additional financial as well as
operational information about the Company. According to Carruyo,
this document would include information such as export revenue
and refining, production and reserves figures.

                        *    *    *

As previously reported in the Troubled Company Reporter on Jan.
25, 2005, the Finance Minister Nelson Merentes said the
government of Venezuela failed to pay an estimated US$35 million
on oil indexed payment obligations due Oct. 15, 2004, blaming it
on PDVSA's administrative woes caused by an extended oil strike
in 2003.


PDVSA: Fitch Upgrades Currency Ratings to 'BB-' from B+
-------------------------------------------------------
Fitch Ratings has upgraded the local and foreign currency
ratings of Petroleos de Venezuela S.A. aka PDVSA to 'BB-' from
'B+'.  The rating of PDVSA's export receivable future flow
securitization, PDVSA Finance Ltd, has also been upgraded to
'BB+' from 'BB'.  In addition, Fitch has assigned PDVSA a
'AAA(ven)' national scale rating.  The Rating Outlook is Stable.
Both rating actions follow Fitch's November 2005 upgrade of
Venezuela's sovereign rating.

PDVSA's assigned corporate rating is constrained by Fitch's 'BB-
' foreign currency rating of the Bolivarian Republic of
Venezuela and is strongly linked with the sovereign's credit
profile.  The linkage is based on the company's nature as a
state-owned entity, the shareholder's ultimate ability to
restrict PDVSA's financial flexibility, and its increasing
utilization of PDVSA's financial resources for quasi-sovereign
and fiscal, rather than commercial, uses.  Currently, the oil
minister and the PDVSA president are one and the same further
illustrating the government's tight control over the strategy
and resources of PDVSA.  PDVSA's Rating Outlook is influenced by
three fundamental factors: political interference risk;
vulnerability to cash flow redirection to the sovereign; and the
company's ability to attract private investment, all of which
support the linking of PDVSA's rating to that of the sovereign.

PDVSA has not yet filed its 2004 20-F and only filed its 2003
20-F in October 2005, Illustrating in some degree the
administrative difficulties still affecting the company after
the PDVSA strike in 2002-2003.  Positively from a credit
prospective, PDVSA is estimated to have less than US$4 billion
of debt Monday compared with its 2003 equity balance of US$37
billion of equity and 2003 EBITDA of US$8 billion.  Results for
2004 and 2005 are estimated to be strong given the increase in
oil prices since 2003. Fitch estimates that despite generating
significant cash flow, PDVSA has underachieved its capital
expenditure plan and significant financial resources are being
directed toward government social spending.

In its 2003 20-F, PDVSA reported crude production totaled 2.5
MMbpd, down from 2.7 MMbpd in 2002 and 3.1 MMbpd in 2001,
illustrating the impact of the PDVSA strike in 2002-2003. PDVSA
management has stated that production has increased to 2.8 MMbpd
level.  However, estimates presented by various independent
analysts and agencies, including the US Energy Information
Administration and OPEC's Monthly Oil Market Report, suggest
PDVSA production levels of 2.5-2.6 MMbpd, which seems more
reasonable.  It is important to mention that about 0.4 MMbpd of
PDVSA's production come from fields managed by private companies
under operating agreements and the Venezuelan Heavy Oil
Strategic Associations located in the Orinoco Belt contributes
with about 0.6 MMbpd to the national oil production.

While upstream crude output has recovered since early 2003,
concerns regarding the sustainability of Venezuela's production
profile remains.  Fitch had previously estimated PDVSA must
invest approximately US$2-2.5 billion annually to offset pre-
crisis decline rates of 22%.  Fitch now estimates these rates
may be somewhat greater, requiring increased investment just to
maintain production.

In August 2005, PDVSA announced that it would increase national
oil production to 5.84 MMbpd and refining capacity to about 4
MMbpd by 2012 as part of its US$76 billion investment program,
of which US$20 billion is expected to be invested by third
parties. PDVSA is expected to invest approximately US$5-6
billion during 2006, primarily focused on improving production
and refineries; investment during 2005 appeared to be somewhat
lagging the budget.  Given the many uses of PDVSA cash and low
leverage of the company, it is possible that PDVSA may seek to
raise additional debt to finance its expenditures.

As noted, PDVSA's capital-investment program calls for
significant third-party investments over the ensuing seven
years.  The near-term appetite from potential sponsors and/or
investors for Venezuelan risk is uncertain in the current
environment.  The Venezuelan government modified in 2004 the
royalty rate initially given to the Venezuelan Heavy Oil
Strategic Associations.  In addition, the operating agreements
have been converted to joint ventures as of Jan. 1, 2006, with
PDVSA assuming majority ownership.  In exchange for its new
ownership in these projects, PDVSA could provide additional
development opportunities for the projects, limiting PDVSA
direct financial contributions.  However, many of the details
still need to be finalized over the next six months.  Despite
the many changes in the rules of the game in the Venezuelan
energy sector, given high prices, the scarcity of world oil
reserves and Venezuela's proximity to major markets, PDVSA is
ultimately expected to attract partners.

The upgrade to PDVSA's export receivable future flow
securitization, PDVSA Finance Ltd., is also primarily a result
of the recent sovereign upgrade.  Current outstanding debt on
the program is approximately $380 million.  Cash flow coverage
for the securitization remains very strong with an upwardly
trend up over the last year. Coverage levels over the last 12
months have averaged over 220 times debt service obligations.
Similar to the corporate rating, the rating of the structure is
also influenced, although not directly constrained, by linkage
to the sovereign.  Structural protections, including the legal
sale of future receivables and offshore payment mechanisms, help
to reduce the risks of sovereign or corporate interference and
therefore allow the structure a two-notch differentiation over
these ratings.

PDVSA, Venezuela's national oil company, is engaged in the
exploration and production of crude oil and natural gas; the
refining, marketing and transportation of crude and refined
products; and the production of petrochemicals, as well as
various other hydrocarbon-related activities in Venezuela and
abroad.  The Venezuelan government is the company's sole
shareholder.

                            ***********


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