TCRLA_Public/060130.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, January 30, 2006, Vol. 7, Issue 21

                            Headlines

A R G E N T I N A

BANCO HIPOTECARIO: Completes 9-3/4% US$100 Million Bond Issuance
BANCO HIPOTECARIO: Investing US$1.4 Million for IT Revamp
BANCO NACION: Issues US$47.7 Million in Loans
METROGAS: Has Until March 15 to Solicit Creditors' Vote on APE
MOLINOS RIO: Freezes Prices of Food Products to Fight Inflation

TELMEX: No Ruling on TAR and TEO's Appeal on Contract Award
VINTAGE PETROLEUM: Stockholders Okay Occidental Petroleum Merger


B E R M U D A

INTELSAT: IA-5 Contract with GlobeCast WorldTV Renewed
NEW WORLD: Issues Chapter 15 Petition Summary


B R A Z I L

ALCOA ALUMINIO: Increasing Itapissuma Production by 30%
AOL LATIN: Gets Court Approval for Client Transfer to Terra
CAMARGO CORREA: Exploring Tapajos' Power Generation Potential
CVRD: Court Heeds Privatization Complaints
REPSOL: Wrapping Up Gas Field Development Talks with Petrobas

SANTOS SEGURADORA: Susep Orders Company's Liquidation
TELEMAR: Investing US$442 Million to Obtain Distribution Rights


C A Y M A N   I S L A N D S

GULFSTREAM INT'L: Creditors Must File Proofs of Claim by Feb. 28
PORVENIR GLOBAL: Verification of Claims Ends on February 28
REFCO ADVANTAGE: Enters Voluntary Wind Up
REFCO COMMODITY: Liquidating Assets Voluntarily


C H I L E

AES CORP: Investing $37MM Constructing Chilean Power Plant


M E X I C O

AHMSA: Pulls Subsidiary Out of Suspension Payment Status
AXTEL: Buying Back Bonds Maturing 2013 to Cut Debt by US$87.5MM
BALLY TOTAL: Holders Deliver Mandate for Change
BALLY TOTAL: Pardus Nominees Likely to Get Director Position
CFE: Inks US$63 Million Transmission Contract with Iberdrola

TELMEX: Supreme Court Declares Share Buyback Tax Constitutional


P A N A M A

AES CORP: Building Hydroelectric Plant in Panama


P U E R T O   R I C O

G+G RETAIL: Issues Case Summary, 20 Largest Unsecured Creditors
G+G RETAIL: U.S. Trustee Meeting Creditors on February 2
MUSICLAND HOLDING: Honors Prepetition Debts on Interim Basis
MUSICLAND HOLDING: Paying Prepetition Critical Vendor Claims


V E N E Z U E L A

EDC: To Work with Vargas State Against Electricity Theft
PDVSA: Awaits Approval on Joint Venture with Private Oil Firms
PDVSA: Inks Agreement for Geological Studies with Enarsa

     -  -  -  -  -  -  -  -

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A R G E N T I N A
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BANCO HIPOTECARIO: Completes 9-3/4% US$100 Million Bond Issuance
----------------------------------------------------------------
Business News Americas relates that Banco Hipotecario S.A. has
issued US$100 million worth of bonds on Argentina's local stock
exchange on Thursday, the bank told securities regulator
Comision National de Valores.  The bond will mature in 2010 and
yields 9.75% annually.  The bonds are part of a larger US1.2
billion program.

The bonds were priced at 100.5% of its nominal value.  Deutsche
Bank (NYSE: DB) and Citigroup Global Markets are handling the
new issue, Business News relates.

In November 2005, Banco Hipotecario raised US$150 million in the
first bond issued by an Argentine firm since the federal
government restructured most of its sovereign debt in mid-2004.

Banco Hipotecario, a government-owned bank, offers home
mortgages in Argentina.  The Bank underwrites mortgage insurance
and services its own and third parties' mortgage portfolios.
Banco Hipotecario distributes its products through its own
branch network and through commercial banks.

                        *    *    *

On Jan. 25, 2006, Standard & Poor's Ratings Services assigned
'B-' foreign currency senior unsecured debt rating to Banco
Hipotecario S.A.'s $100 million issuance.  The issuance
constituted 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.  S&P said the outlook
is stable.


BANCO HIPOTECARIO: Investing US$1.4 Million for IT Revamp
---------------------------------------------------------
Banco Hipotecario S.A. in Uruguay will invest US$1.4 million
this year for the revamp of its technology processes and the
integration of its platforms, Business News Americas reports.

Banco Hipotecario's President Miguel Piperno revealed that
Chilean systems integrator Sonda will begin implementing a
software solution in February to upgrade the bank's 25-year old
IT system.  The whole process, according to him, will take eight
months, Business News relates.

The upgrade is part of an overall restructuring plan designed to
allow BHU to resume the loan operations that were suspended in
2002, due to a financial crisis caused by spillover effects from
Argentina's economic meltdown that year.

Mr. Piperno told Business News that the bank has asked economy
and housing ministries to form a commission to polish up BHU's
restructuring plan that includes creating a new unit to manage
the bank's past-due loans as well as revamping technology.

Uruguay's powerful banking union AEBU, however, forcefully
defied the plan, fearing that the cost-cutting program would
result to employee layoffs.

Banco Hipotecario, a government-owned bank, offers home
mortgages in Argentina.  The Bank underwrites mortgage insurance
and services its own and third parties' mortgage portfolios.
Banco Hipotecario distributes its products through its own
branch network and through commercial banks.

                        *    *    *

On Jan. 25, 2006, Standard & Poor's Ratings Services assigned
its 'B-' foreign currency senior unsecured debt rating to Banco
Hipotecario S.A.'s $100 million issuance.  The issuance
constituted 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.  S&P said the outlook
is stable.


BANCO NACION: Issues US$47.7 Million in Loans
---------------------------------------------
Banco Nacion has already loaned 145 million pesos (US$47.7
million) in the first two weeks of its 4.5 billion-peso lending
program.  The project is aimed to help local and foreign firms
to finance their purchase of new or used capital goods, local
daily La Nacion reports.

Banco Nacion has already granted 141 loans and expects to make
500-600 loans per month to lend all the 4.5 billion pesos by
October, said La Nacion, quoting Chief Executive Officer Juan
Carlos Fabrega.

Banco Nacion is Argentina's largest bank with assets and
deposits of 46 billion pesos and 31.1 billion pesos respectively
at November 30, 2005.

                        *    *    *

On Jan. 11, 2006, Fitch Ratings affirmed its long-term deposit
rating of BB+ with a stable outlook and short-term deposit
rating of N-3 on the Chilean unit of Argentine bank Banco
Nacion.

Fitch attributed the ratings to the unit's historical
performance, the reduced size of its operations, adequate
liquidity and debt levels as well as low asset risks.

The unit's assets totaled CLP18.4 billion (US$35 million) at
end-November and deposits amounted to CLP2.34 billion.

                        *    *    *

On Jan. 23, 2006, Credit ratings agency, Humphreys, withdrew its
ratings on the Chilean unit of Argentina's largest bank Banco
Nacion at its request.

Humphreys had rated Banco Nacion's short and long-term deposits
at level 4 and BB respectively with a stable outlook.

The Chilean unit's assets totaled 18.4 billion pesos (US$35
million) at end-November and deposits amounted to 2.34 billion
pesos.

Humphreys is an affiliate of international ratings agency
Moody's.


METROGAS: Has Until March 15 to Solicit Creditors' Vote on APE
--------------------------------------------------------------
MetroGAS SA extended, until March 15, the deadline for its
creditors to suscribe to an out-of-court debt-restructuring
proposal, known by its Spanish acronym APE.  Under the APE, a
two-thirds creditor agreement allows a company to submit its
offer for legal approval, which then makes the repayment terms
binding on all creditors.

The company aims to restructure an outstanding US$437 million
debt.  As of January 25, MetroGAS already has a 90.6%
subscription to the proposal.  The company originally aimed for
a 95% approval but lowered it to 92%.

The new deadline gives MetroGAS more time to solicit
restructuring acceptances from its Italian creditors.

According to Business News Americas, MetroGAS representatives
went to Italy to present the proposal to its creditors.
MetroGAS has not previously been allowed to propose the plan in
that country.

Headquartered in Buenos Aires, Argentina, MetroGAS S.A. --
http://www.metrogas.com.ar/-- distributes gas to Buenos Aires
and southern and eastern greater metropolitan Buenos Aires.  The
Company has a 35-year concession that began in 1992 to provide
natural gas in this area.  The concession is renewable for an
additional 10 years.  MetroGAS supplies some 2 million customers
in Buenos Aires through 15,840 km of pipelines, representing
about 26% of all gas retailed in Argentina.


MOLINOS RIO: Freezes Prices of Food Products to Fight Inflation
---------------------------------------------------------------
Molinos Rio de la Plata has agreed to freeze the prices of nine
popular food products for up to a year to help Argentina's
government fight rising inflation, according to Dow Jones
Newswires.

The company will keep prices of Vienna-style sausages, sunseed
oil, mixed vegetable oil, two types of white rice, wheat flower,
soup noodles, long noodles and breadcrumbs at the levels they
were sold in November 2005, Dow Jones states.

The accord was reached at a meeting among Molinos' Vice
President Juan Forn, Argentina's Economy Minister and the
country's President Nestor Kirchner, Dow Jones reports.

The government has been pushing the private sector to lower or
freeze prices at a time when inflation is lowering consumers'
purchasing power and threatening to disrupt three years of
economic growth.

Molinos Rio de la Plata S.A. produces, markets, and exports
foods including oil, margarine, flour, pasta, rice, meats, and
cake mixes.  The Company operates industrial facilities and
distribution centers in Argentina, and exports its products to
more than 20 countries.

                        *    *    *

Fitch Ratings rates the long-term foreign and local currency
ratings of Molinos Rio de la Plata S.A. at 'B' with stable
outlook.


TELMEX: No Ruling on TAR and TEO's Appeal on Contract Award
-----------------------------------------------------------
No resolution has been made regarding the appeal filed on the
Argentina's decision to give the US$18 million contract to fixed
line giant Telefonos de Mexico aka Telmex, Business News
Americas reports.

Mendoza's federal judge declared his court not competent to
decide on the complaint raised by fixed line operators Telecom
Argentina and Telefonica de Argentina.  The court also postponed
its decision on grounds that Telefonica's lawyers did not
provide all the documentation needed.

As reported in the Troubled Company Reporter on Jan. 25, 2006,
the government chose Telmex to implement a communications system
for the national police force -- a decision that Telecom
Argentina and Telefonica de Argentina have questioned.  The two
telecoms do not believe in Telmex's ability to provide the
service.

Telmex is close to signing the contract with the central
government.  Two of the company's proposals are being analyzed
by technicians at the security ministry in order to determine
the best project.

The government plans to start operating the new system in the
province of Gran Mendoza this year.

Telmex -- http://www.telmex.com.mx-- is Mexico's incumbent
telco with control of about 95% of the country's fixed line
infrastructure.  The company and its subsidiaries offer a wide
range of advanced telecommunications, data and video services,
internet access as well as integrated telecom solutions for
corporate customers.

                          *    *    *

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.


VINTAGE PETROLEUM: Stockholders Okay Occidental Petroleum Merger
----------------------------------------------------------------
Vintage Petroleum, Inc., announced that its stockholders
approved on Jan. 26, the merger agreement between Vintage and
Occidental Petroleum Corporation.

The proposed transaction was overwhelmingly approved with
approximately 55.0 million shares, or 99.9% of the shares
represented at the meeting, voting in favor of the merger.
Vintage had approximately 67.2 million shares outstanding as of
the Nov. 30, 2005, record date.  Vintage and Occidental expect
to complete the merger on January 30, 2006.

Following completion of the merger, Vintage stockholders of
record will receive instructions from Mellon Investor Services
LLC pertaining to the exchange of Vintage shares for the merger
consideration.

Under the terms of the merger, Vintage will be merged into a
subsidiary of Occidental and Vintage stockholders will gain the
right to receive 0.42 shares of Occidental Petroleum Corporation
common stock plus $20 in cash for each share of Vintage common
stock they hold.

Occidental Petroleum Corporation -- http://www.oxy.com/-- is an
oil and natural gas exploration and production and chemical
manufacturer.  The company's Latin American operations include
producing assets in Colombia and Ecuador.

Vintage Petroleum, Inc. -- http://www.vintagepetroleum.com
-- is an independent energy company engaged in the acquisition,
exploitation, exploration, and development of oil and gas
properties and the marketing of natural gas and crude oil.
Company headquarters are in Tulsa, Oklahoma, and its common
shares are traded on the New York Stock Exchange under the
symbol VPI.

                           *   *   *

As reported by Troubled Company Reporter on Oct. 18, 2005,
Standard & Poor's Ratings Services placed its 'BB-/B-2'
corporate credit rating on Vintage Petroleum Inc. on CreditWatch
with positive implications.


=============
B E R M U D A
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INTELSAT: IA-5 Contract with GlobeCast WorldTV Renewed
------------------------------------------------------
Intelsat announced Thursday that GlobeCast WorldTV has
recommitted to a long-term, multi-transponder contract for
Intelsat-Americas 5 aka IA-5 satellite capacity to support the
substantial growth of its international television distribution
platform over North America.  IA-5 hosts one of the largest
neighborhoods of international video programming in the US and
has been home to GlobeCast WorldTV since 1998.

GlobeCast WorldTV -- a subsidiary of GlobeCast -- is the leading
aggregator and distributor of premium international television
and radio channels in North America for delivery via direct-to-
home, cable, IPTV, hotels, multiple dwelling units and
commercial establishments.  More than 161 WorldTV television and
radio channels originate from Europe, the Middle East, Asia,
Africa and the Americas, and represent 41 countries in over 33
languages, offering a unique line-up of native homeland
programming as well as original in-language programming tailored
for US audiences.

"Through Intelsat and its IA-5 partners, a new channel entering
the US market can access a full range of services that allows
them to immediately start operation and access a significant and
increasing North American viewer base," Intelsat media services
president Jon Romm.  "Our relationship with GlobeCast has
remained strong because Intelsat allows them to directly access
hundreds of thousands of US homes, and gives them the
flexibility and room for continued growth as new channels are
added to the WorldTV platform."

GlobeCast WorldTV vice president Lisa Coelho stated, "GlobeCast
WorldTV's renewal on IA-5 confirms our long-term growth outlook
for international television distribution in America.  Intelsat
is extremely supportive of our development needs and the IA-5
satellite offers us the versatility we need to reach the broad
audience and diverse outlets for our programming."

About Intelsat, Ltd.

Intelsat, Ltd., offers telephony, corporate network, video and
Internet solutions around the globe via capacity on 25
geosynchronous satellites in prime orbital locations.  Customers
in approximately 200 countries rely on Intelsat's global
satellite, teleport and fiber network for high-quality
connections, global reach and reliability.

                        *    *    *

As reported in the Troubled Company Reporter on Nov. 16, 2005,
Intelsat, Ltd.'s announcement of its results for the third
quarter ended Sept. 30, 2005, does not affect the ratings of
Intelsat, wholly owned subsidiary Intelsat (Bermuda), Ltd., and
operating subsidiary Intelsat Subsidiary Holding Company Ltd.
The company remains on Rating Watch Negative.

                        *    *    *

As reported in the Troubled Company Reporter on Sept. 1, 2005,
Moody's Investors Service affirmed Intelsat, Ltd.'s ratings and
changed the outlook for all ratings to developing from negative
following the company's announcement that it was acquiring
PanAmSat for $3.2 billion plus the assumption of PanAmSat's debt
($3.2 billion).  The transaction, which Moody's expected to be
largely, if not entirely, financed with new debt, would
significantly increase Intelsat's pro forma leverage thereby
increasing credit risk for Intelsat debt holders and pressuring
the rating downwards.  Therefore, Moody's anticipated placing
all ratings on review for possible downgrade or lowering the
ratings once the timing and structure of the transaction and
resolution of regulatory review becomes more certain.

Moody's affirmed these ratings:

  Intelsat:

     * Corporate family rating -- B2
     * $400 Million 5.25% Global notes due in 2008 -- Caa1
     * $600 Million 7.625% Sr. Notes due in 2012 -- Caa1
     * $700 Million 6.5% Global Notes due in 2013 -- Caa1

  Intelsat Subsidiary Holding Company Ltd.:

     * $300 Million Sr. Secured Revolver due in 2011 -- B1
     * $350 Million Sr. Secured T/L B due in 2011 -- B1
     * $1 Billion Sr. Floating Rate Notes due in 2012 -- B2
     * $875 Million Sr. 8.25% Notes due in 2013 -- B2
     * $675 Million Sr. 8.625% Notes due in 2015 -- B2

  Intelsat (Bermuda) Ltd.:

     * $478.7 Mil. Sr. Unsecured Discount Notes due 2015 -- B3

Moody's changed the outlook to developing from negative.


NEW WORLD: Issues Chapter 15 Petition Summary
---------------------------------------------
New World Network International, Ltd. released the following
Chapter 15 petition information:


Petitioner: Mark W.R. Smith
            Provisional Liquidator

Debtor: New World Network International, Ltd.
        Clarendon House
        2 Church Street, Hamilton HM11
        Bermuda

Case No.: 06-10157

Type of Business: The Debtor is a holding company for the New
                  World Group of companies, an independent,
                  privately-held telecommunications group.
                  Through a number of its direct and indirect
                  subsidiaries, the New World Group owned
                  and operated an optical fiber submarine cable
                  system called the Americas Region Cable Ring
                  System or ARCOS, as well as some other assets.
                  ARCOS is an 8,600km high capacity undersea
                  digital broadband fiber optic network that
                  connects the United States with Puerto Rico
                  and other countries in Central America, South
                  America and the Caribbean.

Chapter 15 Petition Date: January 26, 2006

Court: Southern District of New York (Manhattan)

Petitioner's U.S. Counsel: Ingrid Bagby, Esq.
                           Cadwalader, Wickersham & Taft LLP
                           One World Financial Center
                           New York, New York 10281
                           Tel: (212) 504-6000
                           Fax: (212) 993-2747

Petitioner's Counsel
In Bermuda:                Robin J. Mayor, Esq.
                           Conyers, Dill & Pearman

Estimate Assets: Less than $50,000

Estimate Debts:  Less than $50,000


[The Chapter 15 Bankruptcy option is intended to create a way
for cooperation with foreign courts in the oversight of U.S.
assets of debtors in the process of overseas insolvency
proceedings.]



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B R A Z I L
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ALCOA ALUMINIO: Increasing Itapissuma Production by 30%
-------------------------------------------------------
Alcoa Aluminio S. A. decided to expand output at its rolling
complex in the city of Itapissuma in Brazil's Pernambuco state
due to the plant's efficiency and logistics, according to an
article from the AE Setorial.

Itapissuma exports 3,000t/y of aluminum.  The company wants a
boost in its rolling output at Itapissuma by 30% to 45,000 tons
by 2007.

"This facility has very good productivity compared to other
Alcoa units around the world," Alcoa Latin America rolling
director Michael Humpert told AE Setorial.  "We have plans to
increase exports at the facility by 50%, as the plant is near
the Suape port."

Alcoa's investment in Pernambuco is an additional investment to
its US$1.6 billion plan for bauxite, alumina and aluminum
operations.

Alcoa Aluminio S. A. manufactures fabricated aluminum.  The
Company mainly produces primary aluminum, alumina, extrusions,
foil, aluminum powder, automotive components, building products,
plastic closures, and flexible packaging materials.

                        *    *    *

On Oct. 17, 2005, Fitch Ratings revised the rating outlook of
the `BB+' long-term foreign currency rating Alcoa Aluminio S.A.
to positive from stable.  The action followed the recent change
in the rating outlook to positive from stable of the 'BB-'
foreign currency rating of the Federative Republic of Brazil.
The Brazilian corporate foreign currency ratings continue to be
linked to the 'BB-' foreign currency rating of the sovereign.


AOL LATIN: Gets Court Approval for Client Transfer to Terra
-----------------------------------------------------------
The U.S. Bankruptcy Court for the District of
Delaware authorized America Online Latin America Inc. aka AOL
Latin America Inc. to transfer its subscribers to ISP Terra,
Business News Americas reports.

AOL Latin sought bankruptcy protection in June 2005 and
submitted in December 2005 a request for the transfer of its
subscribers in Brazil to Terra, which is owned by Spain's
Telefonica S.A.

Terra is expected to pay AOL Latin up to US$2 million for the
transfer, but the amount depends on the number of clients
transferred to Terra's services, and on the number of active
clients at the time when the deal was made between the
companies, Business News relates.

Transferring the subscribers to Terra means that AOL Latin would
cease operations in Brazil.

AOL Latin America offers AOL-branded Internet service in
Argentina, Brazil, Mexico and Puerto Rico, as well as localized
content and online shopping over its proprietary network.  Main
shareholders in AOL Latin are US internet provider America
Online, Venezuela's Cisneros Group and Brazil's second largest
private bank, Banco Itau.

AOLA ended in late November 2005 its marketing alliance with
Banco Itau, with the bank agreeing to pay US$3.7 million to AOLA
and AOLA Brasil to escape potential liabilities under the
marketing agreements.

Headquartered in Fort Lauderdale, Florida, America Online Latin
America, Inc. -- http://www.aola.com/-- offers AOL-branded
Internet service in Argentina, Brazil, Mexico, and Puerto Rico,
as well as localized content and online shopping over its
proprietary network.  Principal shareholders in AOLA are
Cisneros Group, one of Latin America's largest media firms,
Brazil's Banco Itau, and Time Warner, through America Online.
The Company and its debtor-affiliates filed for Chapter 11
protection on June 24, 2005 (Bankr. D. Del. Case No. 05-11778).
Pauline K. Morgan, Esq., and Edmon L. Morton, Esq., at Young
Conaway Stargatt & Taylor, LLP and Douglas P. Bartner, Esq., at
Shearman & Sterling LLP represent the Debtors in their
restructuring efforts.  When the Debtors filed for protection
from their creditors, they listed total assets of $28,500,000
and total debts of $181,774,000.


CAMARGO CORREA: Exploring Tapajos' Power Generation Potential
-------------------------------------------------------------
Camargo Correa Cimentos S.A. together with engineering company
Eletronorte will invest 13 million reais (US$5.8 million) in
order to study the hydroelectric power generation potential of
the Tapajos river basin in the Amazon region of Brazil.

Eletronorte's preliminary studies identified up to 12,000 mega-
watt potential on the Tapajos river, according to a statement
issued by the company.  The first project that has been
identified is the 9,000 mega-watt Sao Luis do Tapajos
hydroelectric generation project.

The study is expected to be completed in two years.  Once
completed, the study will be handed over to the mines and energy
ministry and power regulator, Agencia Nacional de Energia
Eletrica, to prepare the projects to be tendered.

Camargo Correa's 7.5 million reais and Eletronorte's 5.5 million
reais investments will be paid back if they don't win the tender
to build and operate the projects.

About Camargo Correa

Camargo Correa Cimentos S.A. --
http://www.camargocorrea.com.br/eng/index.htm-- is a Brazilian
cement company that is directly owned by Camargo Correa S.A.,
one of the largest private sector conglomerates in Brazil with
annual net revenues of about BRL 6 bln originated mainly from
its engineering & construction, cement, textiles, footwear,
energy, and transportation businesses. The Camargo Correa group
regards cement as a core business, which represented
approximately 11% and 25% of the group's 2004 total sales and
EBITDA, respectively.

Camargo Correa's long-term corporate family rating is rated Ba3
by Moody's.  The company's long-term foreign and local issuer
credit is rated BB by Standard & Poor's.


CVRD: Court Heeds Privatization Complaints
------------------------------------------
Brazil's iron ore miner Companhia Vale do Rio Doce's 1997
privatization will be reviewed by a federal court in Brasilia,
Business News Americas reports.

According to the court ruling, the decision to revisit questions
over the iron ore miner was made in response to the 100 lawsuits
against decree no. 1.510 which included CVRD in the national
privatization program aka PND.

"The value at which CVRD was sold is ridiculous," company
representative Clair da Flora Martins told Business News, "who
have for years been calling for a review of the privatization
process alongside state advisor Hasiel Pereira."

The court decision could compel the government to reconsider the
sale of CVRD in 1997, when the miner was auctioned off for about
BRL3.3 billion (currently US$1.5 billion).  The decision could
also lead to the invalidation of the sale process.

The iron ore miner, however, believes there is no reason to
question its privatization, as stated by CEO Roger Agnelli.

Agnelli explained that since the privatization, CVRD's iron ore
production capacity has increased to an estimate of 270Mt from
82Mt.

"The benefits that came with the privatization are clear," said
Agnelli.  "We are calm and CVRD will keep on working."


                        *    *    *

On Jan. 5, 2006, Fitch Ratings assigned a long-term foreign
currency rating of 'BB' to Vale Overseas Limited's proposed
US$300 million issuance due 2016. Vale Overseas is a wholly
owned subsidiary of Companhia Vale do Rio Doce, a large
diversified mining company located in Brazil.  The notes are
unsecured obligations of Vale Overseas and are unconditionally
guaranteed by CVRD.  The obligation to guarantee the notes rank
pari passu with all of CVRD's other unsecured and unsubordinated
debt obligations.  Fitch expects the proceeds of this issuance
to be used for general corporate purposes and primarily to pay
down US$300 million of Vale Overseas' 9.0% guaranteed notes due
2013.

Fitch also maintains these ratings for CVRD and CVRD Finance
Ltd., a wholly owned subsidiary of CVRD:

  -- CVRD foreign currency rating: 'BB', Outlook Positive;
  -- CVRD local currency rating: 'BBB' Outlook Stable;
  -- CVRD national scale rating: 'AAA(bra)', Outlook Stable;
  -- CVRD Finance Ltd.: series 2000-1 and series 2000-3: 'BBB';
  -- CVRD Finance Ltd., series 2000-2 and series 2003-1: 'AAA'.


REPSOL: Wrapping Up Gas Field Development Talks with Petrobas
-------------------------------------------------------------
The Agencia Estado reports that Brazil's federal energy company
Petrobras (NYSE: PBR) will conclude talks with Spanish oil
company Repsol YPF (NYSE: REP) by early March for the
development of the offshore Mexilhao natural gas field in the
Santos basin.

Negotiations to develop the Mexilhao natural gas field between
the two companies started in 2005.

According to the Agencia Estado, the hiring of a fixed platform
to explore the field are close to conclusion.  Petrobras is
preparing a tender to build a natural gas processing plant in
the coastal town of Sao Sebastiao on the northern Sao Paulo
state coast 140km from Mexilhao.

Petrobras E&P Director Guilherme Estrella told the news agency
that the parties are now analyzing the latest results of
drilling in the field to estimate the reserves there and
potential for production.  Results of the initial estimates put
Mexilhao reserves at some 419 billion cubic meters and
production at up to 15 million cubic meters a day.

Petrobras has budgeted US$18 billion to explore and develop the
Santos basin through 2010 including Mexilhao's development as
one of the five existing projects in the basin, Agencia Estado
relates.

                        *    *    *

On June 20, 2005, Moody's Investors Service upgraded the ratings
of Spanish oil company Repsol YPF's local subsidiary YPF S.A.
Moody's upgraded YPF's senior unsecured rating to Ba3 from B1
and the unit's domestic currency issuer rating to Baa2 from
Baa3.

YPF's foreign currency issuer rating of Caa1 remained unchanged,
as it is constrained by the sovereign ceiling of Argentina.
YPF's Corporate Family Rating (formerly known as the senior
implied rating) is aligned with the foreign currency issuer
rating at Caa1.


SANTOS SEGURADORA: Susep Orders Company's Liquidation
-----------------------------------------------------
Insurance regulator Superintendłncia de Seguros Privados --
Susep -- has issued an order for Brazilian insurer Santos
Seguradora SA to be liquidated.

Santos Seguradora is controlled by bankrupt company, Banco
Santos SA, which was declared bankrupt in September 2005
following a year of intervention due to financial difficulties
and alleged irregularities.

Interests shown by some companies to purchase Banco Santos were
called off by Susep because the offers lacked guarantees.  Susep
decreed the liquidation of Banco Santos' savings bond unit Valor
Capitalizacao on January 6, Business News relates.

According to Business News Americas, Santos Seguradora suffered
liquidity problems as a result of Banco Santos' bankruptcy.

Valder Viana de Carvalho has been appointed to head the
liquidation process.


TELEMAR: Investing US$442 Million to Obtain Distribution Rights
---------------------------------------------------------------
Valor Economico relates that Brazil's largest phone operator
Telemar aka Tele Norte Leste Participacoes SA plans to invest
almost 1 billion reais (US$442 million) this year to enable
distribution of audiovisual content.

Telemar wants a distribution rights in order to meet its clients
downloading of films or videos.  The company has a total budget
of 2.4 billion reais this year, Business News Americas relates.

The company will test classes A and B in Rio de Janeiro, Belo
Horizonte, Vitoria and Salvador.

                        *    *    *

On Nov. 8, 2005, Standard & Poor's Ratings Services assigned
its 'BB' local and foreign currency ratings to Telemar Norte
Leste S.A.  A 'BB' rating was also assigned to Telemar NL's
upcoming $150 million equivalent in Brazilian Real five-year
bonds.

Telemar NL is controlled by Tele Norte Leste Participacoes
(TNL; BB/Stable) and is the sole cash contributor of the
so-called Telemar Group, comprising all Telemar's telecom
operations (fixed-line, wireless, and data services). Proceeds
from the new issue are expected to be used in the refinancing
of existing debts of the group and other corporate purposes.


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

GULFSTREAM INT'L: Creditors Must File Proofs of Claim by Feb. 28
----------------------------------------------------------------
Gulfstream International filed for voluntary liquidation on Dec.
29, 2005, at the Grand Court of the Cayman Islands.

Bessemer Trust Company (Cayman) Limited, serves as the
liquidator of Gulfstream's assets.

All creditors must file proofs of claim by Feb. 28, 2006, to
establish any title they may have under the Companies Law (2004
Revision).  If a creditor is unable to file its proof of claim
by the Feb. 24 deadline, it will be excluded from receiving any
distribution from the estate or objecting to any distribution to
other creditors.

The Bessemer Trust Company (Cayman) Limited can be reached at:

          P.O. Box 694GT, Dr. Roy's Drive
          Grand Cayman, Cayman Islands
          Telephone: (345) 949-6674
          Facsimile: (345) 945-2722


PORVENIR GLOBAL: Verification of Claims Ends on February 28
-----------------------------------------------------------
The Bessemer Trust Company (Cayman) Limited has been appointed
as liquidator of Porvenir Global which filed for voluntary
liquidation on Dec. 29, 2005, at the Grand Court of the Cayman
Islands.

All creditors must file proofs of claim by Feb. 28, 2006, to
establish any title they may have under the Companies Law (2004
Revision).  If a creditor is unable to file its proof of claim
by the Feb. 28 deadline, it will be excluded from receiving any
distribution from the estate or objecting to any distribution to
other creditors.

The Bessemer Trust Company (Cayman) Limited can be reached at:

          P.O. Box 694GT, Dr. Roy's Drive
          Grand Cayman, Cayman Islands
          Telephone: (345) 949-6674
          Facsimile: (345) 945-2722


REFCO ADVANTAGE: Enters Voluntary Wind Up
-----------------------------------------
Refco Advantage Multi-Manager Fund Futures Series I filed for
voluntary liquidation on Dec. 29, 2005, at the Grand Court of
the Cayman Islands.

All creditors must file proofs of claim by Feb. 24, 2006, to
establish any title they may have under the Companies Law (2004
Revision).  If a creditor is unable to file its proof of claim
by the Feb. 28 deadline, it will be excluded from receiving any
distribution from the estate or objecting to any distribution to
other creditors.

The following written resolutions were passed by the sole voting
shareholder of Refco Advantage on Dec. 20 2005:

   1. That the company be placed in voluntary winding up with
      immediate effect.

   2. That Messrs. G. James Cleaver and Gordon MacRae of Kroll
      (Cayman) Limited be appointed liquidators for the purposes
      thereof and that they have the power to act jointly and
      severally.

   3. That the liquidators may divide amongst the company's
      members in specie or kind the whole or any part of the
      assets of the company, that they may for such purpose set
      such value as they deem fair upon any property to be so
      divided, that they may determine how such division shall
      be carried out as between the members or different classes
      of members, and that they may vest the whole or any part
      of such assets in trustees upon such trusts as they shall
      think fit.

Gordon I. Macrae and G. James Cleaver, the joint liquidators,
can be reached at:

          Hadley Chilton
          Kroll (Cayman) Limited, 4th Floor
          Bermuda House, Dr. Roy's Drive
          Grand Cayman
          Telephone: 1 (345) 946-0081
          Fax: 1 (345) 946-0082


REFCO COMMODITY: Liquidating Assets Voluntarily
-----------------------------------------------
Refco Commodity Futures Fund Ltd. filed for voluntary
liquidation on Dec. 1, 2005, at the Grand Court of the Cayman
Islands.

All creditors must file proofs of claim by Feb. 24, 2006, to
establish any title they may have under the Companies Law (2004
Revision).  If a creditor is unable to file its proof of claim
by the Feb. 24 deadline, it will be excluded from receiving any
distribution from the estate or objecting to any distribution to
other creditors.

The following written resolutions were passed by the sole voting
shareholder of Refco Commodity Futures Fund Ltd. on Dec. 1,
2005:

   1. That the company be placed in voluntary winding up with
      immediate effect.

   2. That Messrs G. James Cleaver and Gordon Mac: Rae of Kroll
      (Cayman) Limited be appointed liquidators for the purposes
      thereof and that they have the power to act jointly and
      severally.

   3. That the liquidators may divide amongst the company's
      members in specie or kind the whole or any part of the
      assets of the company, that they may for such purpose set
      such value as they deem fair upon any property to be so
      divided, that they may determine how such division shall
      be carried out as between the members or different classes
      of members, and that they may vest the whole or any part
      of such assets in trustees upon such trusts as they shall
      think fit.

Gordon I. Macrae and G. James Cleaver, the joint liquidators,
can be reached at:

          Hadley Chilton
          Kroll (Cayman) Limited, 4th Floor
          Bermuda House, Dr. Roy's Drive
          Grand Cayman
          Telephone: 1 (345) 946-0081
          Fax: 1 (345) 946-0082


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


AES CORP: Investing $37MM Constructing Chilean Power Plant
----------------------------------------------------------
AES Corp., through its subsidiary, AES Gener S.A., is
constructing a new thermal generation plant in Llay Llay, Chile.
The $37 million investment will increase AES Gener's power
generation capacity to 2,557 MW, or 21% of the country's total
anticipated generation capacity in 2006.  AES Gener is currently
the second largest electricity generator in the country.  AES
has been in Chile since 2000 and is one of the largest foreign
investors in the Chilean electricity sector.

The 120 MW facility San Pedro will provide an additional source
of power to help meet Chile's growing energy needs.  The plant
will be able to burn either diesel or natural gas as fuel, which
will help diversify and stabilize the country's power sector.
The plant will begin supplying electricity to Chile's central
grid in May 2006.

                     Bulgarian Plant

Also, AES signed in December agreements to secure $965 million
of non-recourse debt financing for the construction of a $1.4
billion power plant in Bulgaria.  Through this investment, AES
will become the single largest foreign investor in Bulgaria.
The project will be the largest foreign greenfield investment in
southeast Europe and the first large scale power plant to be
built in Bulgaria in more than 20 years.

AES Corporation -- http://www.aes.com/-- is a leading global
power company, with 2004 revenues of $9.5 billion.  The Company
operates in South America, Europe, Africa, Asia and the
Caribbean countries.  AES generating 44,000 megawatts of
electricity through 124 power facilities and delivers
electricity through 15 distribution companies.  AES Corp.'s
30,000 people are committed to operational excellence and
meeting the world's growing power needs.

                        *    *    *

As reported in the Troubled Company Reporter on Jan. 11, 2006,
Moody's affirmed the ratings of The AES Corporation, including
its Ba3 Corporate Family Rating and the B1 rating on its senior
unsecured debt.  The rating outlook remains stable.

                        *    *    *

As reported in the Troubled Company Reporter on June 23, 2005,
Fitch Ratings upgraded and removed the ratings of AES
Corporation from Rating Watch Positive, where it was initially
placed on Jan. 18, 2005, pending review of the company's yearend
financial results.  Fitch said the Rating Outlook is Stable.


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


AHMSA: Pulls Subsidiary Out of Suspension Payment Status
--------------------------------------------------------
Cerro de Mercado aka Cemesa -- subsidiary of Mexican steelmaker
Ahmsa -- has been pulled out of the suspension payment status,
Business News Americas reports.

Ahmsa revealed that it had reached an agreement with 25
creditors to pay off the debts of Cemesa, which fell into
suspension in 1999.  It was in the same year when Ahmsa received
legal protection and permission to continue operating after
failing to pay US$1.8 billion of debt, Business News relates.

Cemesa, which has 400 employees and produces some 40,000t a
month of iron concentrates that supply Ahmsa's blast furnaces in
Monclava, is the first Ahmsa subsidiary to resolve its payment
suspension -- a sort of bankruptcy protection.

Ahmsa also expects subsidiary Minera Carbonifera Rio Escondido
-- Micare -- to be cleared of its suspension of payment status
in a Feb. 14 court ruling.

"Thanks to an upturn in the international steel and mining
industry, a series of creditor agreements have been signed as
part of a process aimed at normalizing the group's finances,"
Ahmsa's legal representative Jaime Guerra told Business News.


AXTEL: Buying Back Bonds Maturing 2013 to Cut Debt by US$87.5MM
---------------------------------------------------------------
Axtel, S.A. de C.V., is calling back 35% of the bonds it issued
in 2003 and 2005 in order to reduce its debt by US$87.5 million.
The company has an outstanding US$250 million debts, Business
News Americas reports.  The bonds will mature in 2013.

In December last year, the company began trading on the Bolsa
Mexicana de Valores, Mexico's securities exchange, and the US-
based Over The Counter Bulletin Pink Sheet (OTCPK) in a bid to
drum up resources to fund an expansion drive.  Chief executive
Tomas Milmo told investors that the company is interested in
acquiring one of its competitors, Avantel or Alestra, Business
News states.

Axtel, S.A. de C.V. provides local and long distance
telecommunications services, data transmission and internet
services in Mexico, to both residential and business customers.
Axtel posted net profits of 306 million pesos (US$29 million)
for 2005 compared to a loss of 79.6 million pesos in 2004.

Axtel's 11% $249,870,000 note due Dec. 15, 2013, is rated B1 by
Moody's and B+ by Standard & Poor's.


BALLY TOTAL: Holders Deliver Mandate for Change
-----------------------------------------------
Liberation Investments welcomes the anticipated results of
voting at Thursday's annual shareholder meeting of Bally Total
Fitness Holding Corporation.

According to proxy voting service ADP and other sources,
Liberation initially estimates that its proposals to give
shareholders a greater voice in corporate governance at Bally
received at least 70% of the votes cast at the meeting,
representing approximately 55% of the shares outstanding.

Although Liberation's proposals required a 75% super-majority of
all outstanding Bally shares to pass, the investment fund was
pleased with the outcome of the voting.  Liberation said that
Bally's shareholders have delivered Bally's new Board a powerful
message to meaningfully address shareholder concerns.

Liberation also believes that Bally's shareholders approved by a
wide margin the election of Charles J. Burdick, Barry R. Elson
and Don R. Kornstein -- each of whom was nominated by dissident
shareholder Pardus Capital Management -- as directors, rejecting
Bally's own candidate.  Liberation called on Bally's board to
heed the recommendation of other large shareholders and
immediately appoint Mr. Kornstein chairman of the special
committee formed to guide Bally's consideration of strategic
alternatives.

Liberation believes that the shareholders also rejected the
company's new proposed equity compensation plan, which would
have made another 1.75 million shares of Bally stock available
for award to Bally employees in addition to the substantial
equity grants made in recent months to senior Bally executives.

Liberation Investment Group LLC president Gregg Frankel
commented, "For the first time since July of 2004, when Bally's
last shareholder meeting was held, the voice of shareholders has
been heard.  This vote was a referendum on the responsiveness of
Bally's board to shareholder concerns.  The message to the board
is loud and clear: Reform is needed now.  We look forward to
working together with the Board to achieve this important goal."

Liberation Investments, L.P. and Liberation Investments Ltd. are
private investment funds managed by Liberation Investment Group
LLC.  Emanuel R. Pearlman is the majority member and general
manager of Liberation Investment Group LLC, and as such may be
deemed to be the beneficial owner of the shares of Bally owned
by the Liberation Funds.

Bally Total Fitness is the largest and only nationwide
commercial operator of fitness centers in the U.S., with nearly
410 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: Pardus Nominees Likely to Get Director Position
------------------------------------------------------------
Bally Total Fitness disclosed that based on preliminary results
in its contested election, it appears that Messrs. Burdick,
Elson and Kornstein have received sufficient votes to be elected
to Bally's Board of Directors.

The Company also reported that Liberation Investments'
shareholder proposal seeking the removal of Bally's Chairman and
CEO Paul Toback failed to receive the required vote for passage.

Bally's board lead Director John W. Rogers, Jr., said, "While a
number of forces and agendas appear to have been at work, it is
clear from today's [Thursday] vote that Bally's investors
intended to send a strong message about the importance of board
leadership at the Company.  We hear that message, and welcome
our three new independent directors to constructively work with
Bally's independent Board and management in helping lead the
Company's operational turnaround and strategic alternative
process to deliver enhanced value for shareholders."

Mr. Rogers continued, "We continue to maintain unanimous support
for and confidence in Paul Toback and his management team.  Paul
has been instrumental in transforming Bally's business model,
while driving an operational and cultural turnaround that is
achieving results.  This management team has worked tirelessly
to correct the mistakes of the past and rebuild confidence in
the Company's financials, and has participated actively, along
with the Board and outside financial advisors, in evaluating
strategic alternatives to address the Company's long-term
capital structure.  We believe it is in the best interest of all
shareholders to move forward under Bally's current leadership.
The Board will carefully assess progress on each of these
important initiatives over the next few months and continue
holding management accountable for their ultimate success in
enhancing value for all shareholders."

Final results will be announced following completion in the next
two weeks of the vote tabulation by IVS Associates, Inc., the
independent inspectors of election.

Bally Total Fitness is the largest and only nationwide
commercial operator of fitness centers in the U.S., with nearly
410 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.


CFE: Inks US$63 Million Transmission Contract with Iberdrola
------------------------------------------------------------
CFE aka Comision Federal de Electricidad, Mexico's state
electric company signed a 668 million pesos (US$63 million)
contract with Spanish firm Iberdrola.

Under the agreement, which started January 18, Iberdrola is
building and installing:

     * eight transmission lines totaling 86 km;
     * seven substations; and
     * 18 feeder stations in Tamaulipas and Coahuila states in
       northern Mexico.

The project is expected to end in May 2007.

According to Business News Americas, the construction and
installation of new lines will meet rising demand in Valles,
Tampico, Matamoros and Nuevo Laredo municipalities.

CFE is a state-owned integrated power company that dominates
generation, transmission and distribution in Mexico.  It has
20.6 million clients, 39,182km of transmission infrastructure,
156,647MVA transformation capacity and 163 generation plants
that at end-March 2003 had 40,350MW combined capacity.  Seventy
five per cent of sales are direct to the client, 24.5% are to
Mexico City distributor Luz y Fuerza del Centro and the
remaining 0.5% are exports.  The industrial sector accounts for
61% of direct sales, followed by residential (23%), commercial
(7%), agriculture (5%) and services (4%).

The company suffered increasing losses for 2003 and 2004.  CFE
incurred MXN6.2 billion loss in 2003, and MXN119 billion loss in
2004.


TELMEX: Supreme Court Declares Share Buyback Tax Constitutional
---------------------------------------------------------------
Telefonos de Mexico S.A., aka Telmex, has lost a petition filed
with Mexico's Supreme Court to have income tax on share buybacks
declared unconstitutional.

Telmex has been buying back its own shares since 1994.  Telmex
repurchased shares worth approximately 31.6 billion pesos
between 2002 and 2004.  After the government started taxing the
transactions in 2002, the company took the matter into court.
Telmex contended that the share buybacks shouldn't be taxed
because the company has already made corresponding deductions.

The Supreme Court's ruling saved the government from having to
pay back about 9 billion pesos (US$860 million) in taxes.

According to a statement released by the Court, the taxation of
the share buybacks was deemed constitutional because the
transactions were recorded as part of the company's accumulated
profits.

                        *    *    *

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.



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


AES CORP: Building Hydroelectric Plant in Panama
------------------------------------------------
AES Corporation announced plans to construct a $320 million
hydroelectric power plant in Panama.  The company disclosed that
information during a meeting held Thursday with country's
President Martin Torrijos.

When completed, the 150 MW plant will increase AES's total
generation capacity in Panama to 620 MW, making AES the largest
producer of electricity in the country.

The plant Changuinola 75 will be located in the Changuinola
River Basin, about 220 miles northwest of Panama City in the
Province of Bocas del Toro.  The project includes a 10-year
power purchase agreement with Panama's largest utility Union
Fenosa SA.  AES has begun the engineering and geo-technical work
and plans to begin construction in 2007.  The plant is scheduled
to be operational by mid-2010.

"This plant will provide a new, clean and low cost source of
electricity for Panama at a time when the country is
experiencing extremely high energy costs and high demand
growth," said AES Latin America president Andres Gluski.  "It
will integrate the Province of Bocas del Toro into the national
electric system of Panama, providing its people with a more
reliable and affordable source of electricity.  It will also
reduce the nation's traditional dependence on imported oil."

AES has been doing business in Panama since 1999.  The company
currently manages and operates four hydroelectric power plants
in Panama.

AES Corporation -- http://www.aes.com/-- is a leading global
power company, with 2004 revenues of $9.5 billion.  The Company
operates in South America, Europe, Africa, Asia and the
Caribbean countries.  AES generating 44,000 megawatts of
electricity through 124 power facilities and delivers
electricity through 15 distribution companies.  AES Corp.'s
30,000 people are committed to operational excellence and
meeting the world's growing power needs.

                        *    *    *

As reported in the Troubled Company Reporter on Jan. 11, 2006,
Moody's affirmed the ratings of The AES Corporation, including
its Ba3 Corporate Family Rating and the B1 rating on its senior
unsecured debt.  The rating outlook remains stable.

                        *    *    *

As reported in the Troubled Company Reporter on June 23, 2005,
Fitch Ratings upgraded and removed the ratings of AES
Corporation from Rating Watch Positive, where it was initially
placed on Jan. 18, 2005, pending review of the company's yearend
financial results.  Fitch said the Rating Outlook is Stable.


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


G+G RETAIL: Issues Case Summary, 20 Largest Unsecured Creditors
---------------------------------------------------------------
G+G Retail released this case summary and unsecured creditors
list:

Debtor: G+G Retail, Inc.
        aka G&G Retail Holdings, Inc. (former parent company,
            merged into G+G Retail, Inc. 3/12/04)
        aka G+G Retail, Inc.
        aka G+G
        aka G+G Retail of Puerto Rico (Inactive Corporation)
        aka G+G Retail of Virgin Islands (Inactive Corporation)
        aka Rave
        aka Rave Girl
        aka Authentika
        520 Eighth Avenue
        New York, New York 10018

Bankruptcy Case No.: 06-10152

Type of Business: The Debtor sells ladies wear and operates 566
                  stores in the United States and Puerto Rico
                  under the names Rave, Rave Girl and G+G.
                  See http://gorave.com/and
                  http://www.goravegirl.com/

Chapter 11 Petition Date: January 25, 2006

Court: Southern District of New York (Manhattan)

Judge: Robert D. Drain

Debtor's Counsel: William P. Weintraub, Esq.
                  Laura Davis Jones, Esq.
                  David M. Bertenthal, Esq.
                  Curtis A. Hehn, Esq.
                  Pachulski, Stang, Ziehl, Young & Jones P.C.
                  780 Third Avenue, 36th Floor
                  New York, New York 10017
                  Tel: (212) 561-7700
                  Fax: (212) 561-7777

Debtor's Special
Corporate
Counsel:          Davis & Gilbert LLP
                  1740 Broadway
                  New York, NY 10019

Debtor's Crisis
Managers and
Financial
Advisors:         Corporate Revitalization Partners
                  13355 Noel Road, Suite 1825
                  Dallas, Texas

Debtor's
Investment
Banker:           Financo, Inc.

DIP Agent:        The CIT Group/Business Credit, Inc.

Estimated Assets: More than $100 Million

Estimated Debts:  $10 Million to $50 Million

Debtor's 20 Largest Unsecured Creditors:

   Entity                        Nature of Claim   Claim Amount
   ------                        ---------------   ------------
The CIT Group/                   Claim for           $8,326,157
Business Credit, Inc.            Inventory
P.O. Box 1036
Charlotte, NC 28201
Attn: David Kotler
Tel: (212) 382-7204
Fax: (212) 382-7120

Rosenthal and Rosenthal          Claim for           $2,049,298
P.O. Box 88926                   Inventory
Chicago, IL 60695
Attn: John Fallahee
Tel: (212) 356-1435
Fax: (212) 356-0971

GMAC                             Claim for           $1,725,700
P.O. Box 403058                  Inventory
Atlanta, GA 30384
Attn: Steven Pamm
Tel: (212) 884-7366
Fax: (212) 884-7314

Estrada Clothing Inc.            Claim for           $1,230,773
1111 South San Julian Street     Inventory
Los Angeles, CA 90015
Tel: (213) 748-4391
Fax: (213) 748-0030

Capital Factors                  Claim for           $1,064,614
P.O. Box 79                      Inventory
Memphis, TN 38101
Attn: Joseph Zayas

First Capital                    Claim for             $913,630
P.O. Box 643382                  Inventory
Cincinnati, OH 45264

Milberg Factors                  Claim for             $874,279
99 Park Avenue                   Inventory
New York, NY 10016

DHL Express (USA) Inc.           Claim for             $779,074
P.O. Box 4723                    Services
Houston, TX 77210

Wells Fargo Century              Claim for             $767,629
P.O. Box 360286                  Inventory
Pittsburgh, PA 15250

Newport Apparel Corp.            Claim for             $522,977
1215 Walnut Street               Inventory
Compton, CA 90224

Jade Apparel Inc.                Claim for             $426,725
4551 Loma Vista Avenue           Inventory
Vernon, CA 90058

Ganis Bros./Artistic Creation    Claim for             $316,557
P.O. Box 37985                   Inventory
Charlotte, NC 28237

Hana Financial                   Claim for             $301,491
P.O. Box 92943                   Inventory
Los Angeles, CA 90009

General Business Credit          Claim for             $280,661
P.O. Box 92024                   Inventory
Los Angeles, CA 90009

Olivia Miller Inc.               Claim for             $272,124
16 Industrial Avenue             Inventory
Little Ferry, NJ 07643

J.C.S. Apparel Group Inc.        Claim for             $250,436
1407 Broadway                    Inventory
New York, NY 10018

FC Meyer Packaging, LLC                                $249,028

Pretty Good                      Claim for             $247,250
                                 Inventory

Worldcom                         Claim for Services    $170,397

Vandale Industries               Claim for             $167,309
                                 Inventory


G+G RETAIL: U.S. Trustee Meeting Creditors on February 2
--------------------------------------------------------
The United States Trustee for Region 1 will convene a meeting of
G+G Retail Inc.'s creditors at 10 a.m., on Feb. 2, 2006, at the
7th Floor, Marriott Marquis Hotel, Times Square in New York.
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 New York, G+G Retail, Inc., aka G+G Retail of
Puerto Rico -- http://gorave.com/and http://www.goravegirl.com
-- sells ladies wear and operates 566 stores in the United
States and Puerto Rico under the names Rave, Rave Girl and G+G.
The Company filed for chapter 11 protection on Jan. 25, 2006
(Bankr. S.D.N.Y. Case No. 06-10152).  When the company filed for
protection from its creditors, it estimated more than $100
million in assets and estimated $10 million to $50 million in
debts.


MUSICLAND HOLDING: Honors Prepetition Debts on Interim Basis
------------------------------------------------------------
Musicland Holding Corp. and its debtor-affiliates maintain
certain customer programs to market their products and services,
enhance customer loyalty, and develop and sustain a positive
reputation in the marketplace for their goods.  The Debtors'
Customer Programs have generated valuable goodwill, repeat
business and have contributed to the Debtors' overall revenue.

In this regard, the Debtors seek the U.S. Bankruptcy Court for
the Southern District of New York's authority to pay prepetition
obligations to their customers, continue certain customer
programs, and honor other prepetition obligations necessary to
maintain the existence of customer programs.

                         Replay Program

James H.M. Sprayregen, Esq., at Kirkland & Ellis LLP, in New
York, relates that prior to the Petition Date, the Debtors
offered customers the opportunity to join Replay, the Debtors'
loyalty program.  Replay has 3,000,000 members and is considered
one of the most successful loyalty programs offered by an
entertainment retailer.

At a member's request, the Debtors refund the Replay membership
fee.  During the month prior to the bankruptcy filing, due to
the closing of the Media Play stores, less than $60,000 was
refunded.

According to Mr. Sprayregen, many of the refunds were in the
form of checks and may not have been cashed prior to the
Petition Date.  The Debtors want to honor the prepetition refund
checks to Replay members.

The Debtors estimate that the amount of the Debtors' liability
for Replay Reward Points outstanding as of the Petition Date is
$2,371,000.  Furthermore, the approximate amount of the Debtors'
liability for Replay Reward Certificates as of the Petition Date
is $11,726,000.

Mr. Sprayregen says that Replay members are among the Debtors'
most valuable customers.  During December 2005 alone, Replay
members accounted for almost 40% of the Debtors' sales.

               Replay Extreme Rewards Credit Card

Prior to the Petition Date, the Debtors launched a co-branded
credit card with Providian National Bank -- the Replay Extreme
Rewards Credit Card.

The Debtors earn a fee for every new activated Replay Extreme
Rewards Credit Card, annual renewal fees for each activated
Replay Extreme Rewards Credit Card that renews annually, and
fees based on a percentage of eligible charges to Replay Extreme
Rewards Credit Card accounts in good standing.  As of the
Petition Date, 3,000 customers have been approved for a Replay
Extreme Rewards Credit Card.

During the month prior to the Petition Date, the approximate
amount of outstanding obligations with respect to Replay Extreme
Reward Points was $5,185.

                            Gift Cards

The Debtors sold pre-paid and reloadable gift cards for use in
the Debtors' stores and Web sites prior to the Petition Date.
The Debtors utilize CardFact, Ltd., to issue and sell the gift
cards and pay CardFact a fee for their services.  The gift cards
have no expiration date.

Mr. Sprayregen notes that as of December 31, 2005, the Debtors
carry a liability on their balance sheet of $46,000,000,
representing the unredeemed gift cards.

The Debtors have sold gift cards totaling approximately
$30,900,000 during the 12 months ended December 31, 2005.  Of
the gift cards sold during 12-month period ended December 31,
2005, a total of approximately $19,200,000, or 62%, have been
redeemed.  Historically, the Debtors have experienced a
redemption rate of 85%, with the remaining cards never redeemed.
The entire amount of unredeemed gift cards sold in the past 12
months is approximately $11,700,000.  If the Debtors experience
similar redemption rates for gift cards sold during the past 12
months, approximately $7,100,000 will be redeemed postpetition.

Prior to the Petition Date, at a customer's request, the Debtors
have refunded the gift cards for cash.  However, the Debtors now
seek the Court's authority to refuse to refund the gift cards
for cash or credit.  Holders of gift cards may redeem the gift
cards for product at the Debtors' stores or Web sites.

              Graze Music Gift Cards and Graze Points

The Debtors launched the Graze retail outlet as a store-within-
a- store at certain Sam Goody stores and the GrazeMusic.com Web
site prior to the Petition Date.  GrazeMusic.com allows
customers to download digital music by single track or album.

                         Other Programs

Prior to the Petition Date, the Debtors:

    -- operated a refund and exchange policy;

    -- permitted customers to purchase merchandise on layaway;

    -- sold warranties on small appliances to Customers on
       behalf of a third-party warranty provider, AIG/NEW;

    -- pre-sold or took deposits on goods that were new releases
       or had not yet been released;

    -- issued and honored unexpired coupons and discounts
       presented by customers when they purchased goods from the
       Debtors; and

    -- ran certain promotions including sweepstakes and
       giveaways as part of their advertising and promotional
       efforts.

According to Mr. Sprayregen, the Debtors' business operations
and the success of the Chapter 11 Cases depend on the
maintenance of customer loyalty.

In addition, the continuation of the Customer Programs is
essential to attract new customers.

                           *     *     *

Judge Bernstein grants the Debtors' request on an interim basis.

Judge Bernstein allows the Debtors to:

    * honor and perform certain prepetition obligations to
      customers;

    * continue, renew, replace, implement, modify or terminate
      some of their Customer Programs; and

    * honor certain other prepetition obligations necessary to
      maintain the existence of customer programs.

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


MUSICLAND HOLDING: Paying Prepetition Critical Vendor Claims
------------------------------------------------------------
Pursuant to Sections 105(a) and 363(b) of the Bankruptcy Code,
Musicland Holding Corp. and its debtor-affiliates seek the U.S.
Bankruptcy Court for the Southern District of New York's
permission to pay prepetition claims of certain vendors that are
essential to the continuance of the Debtors' operations.

According to James H.M. Sprayregen, Esq., at Kirkland & Ellis
LLP, in New York, the Critical Vendors primarily consist of:

(1) Product Vendors

     Much of the products sold in the Debtors' stores are
     available from a small number of vendors who would be
     difficult and expensive to replace.

(2) Information Technology Vendors

     Disruption in the information technology vendors' services
     could result in complete shutdown, degraded or lost
     functionality or lack of support of the Debtors' mainframe
     services and non-mainframe based corporate and store facing
     systems.  It could also result in the Debtors' inability to
     process credit card or gift card transactions and to place
     orders with and receive invoices from the Debtors'
     suppliers.

(3) Key Marketing Vendors

     Certain marketing vendors provide marketing services, which
     are essential to the concepts that lay at the core of the
     Debtors' go-forward business model.  It would be difficult,
     costly and time-consuming for the Debtors to obtain new
     marketing vendors.  In certain instances, the Debtors owe
     prepetition claims to alternative suppliers.

(4) Loss Prevention Vendors

     Certain loss prevention vendors provide security, alarm and
     inventory counting services which are essential to the
     Debtors' operations.  The services provided are from a
     small number of vendors and would be difficult, costly and
     time-consuming to replace.

Mr. Sprayregen says that the payment of the claims of Critical
Vendors is vital to the Debtors' reorganization efforts because
the Critical Vendors are often the only source for particular
goods or services needed for their business.  Failure to pay the
Critical Vendor Claims would result in the Critical Vendor
refusing to provide its goods and services to the Debtors, he
adds.

Furthermore, the Critical Vendors would themselves be
irreparably damaged by the Debtors' failure to pay their
prepetition claims.
That would result in the Debtors being forced to obtain goods
and services elsewhere that would either be at a higher price or
of the wrong quantity required.

Thus, the Debtors seek the Court's authority to pay up to
$4,000,000 in Critical Vendor Claims.

The Debtors reserve the right to seek Court authority at a later
date to increase the Critical Vendor Cap.

Mr. Sprayregen tells the Court that the Debtors have determined
that up to 22 out of 1,165 vendors with prepetition amounts
owing were considered to be Critical Vendors.

The Debtors propose to condition the payment of Critical Vendor
Claims on the agreement of the individual Critical Vendors to
continue supplying goods and services to the Debtors on terms
consistent with the historical trade terms between the parties.

Mr. Sprayregen discloses that to ensure that the Critical
Vendors deal on Customary Trade Terms, the Debtors propose that
a letter be sent to the Critical Vendors along with a copy of
the order granting the Motion.  The letter, once accepted, will
be the agreement between the parties that governs their trade
relationship.

However, if a Critical Vendor refuses to supply goods and
services to the Debtors on Customary Trade Terms after the
receipt of payment of its Claim or fails to comply with the
Trade Agreement, the Debtors seek the Court's authority to
terminate the Trade Agreement between the Debtors and that
Critical Vendor and declare that the provisional payments made
to Critical Vendors be in payment of then-outstanding
postpetition claims.

A Trade Agreement that is terminated as a result of a Critical
Vendor's refusal to comply can be reinstated if, among others,
the Debtors reach a favorable alternative agreement with the
Critical Vendor.

Mr. Sprayregen notes that the continued availability of trade
credit in amounts and on terms consistent with those the Debtors
enjoyed prepetition is vital because it allows the Debtors to
maintain liquidity for operations and to maintain inventory
levels consistent with operating profitability.

Preserving working capital through the retention or
reinstatement of traditional trade credit terms will enable the
Debtors to maintain their competitiveness and to maximize the
value of their businesses, Mr. Sprayregen says.

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


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


EDC: To Work with Vargas State Against Electricity Theft
--------------------------------------------------------
Electricidad de Caracas aka EDC, a subsidiary of AES Corp., will
work with the Vargas state government for the reduction of
electricity theft, Business News Americas reports.

The Venezuelan private electricity firm's President Julian
Nebreda was able to talk about electricity theft with Vargas
governor Antonio Rodriguez San Juan when they met Tuesday to
discuss the impact of recent landslides and heavy rains in the
state on electricity generation and distribution.

Rodriguez had assured that his office would go after those that
profit from the theft of wires and other materials used in the
transmission and distribution of electricity and prosecute those
who purchase the wires and other materials.

EDC said this year that it would replace 12,000 unlawful
connections with legal ones in the state as part of a nationwide
strategy to reduce theft.

"Last year we did so with some 9,000 clients, so the idea this
year is to increase that 30%," Nebreda said.

The company has over 1 million clients nationwide and 80,000 of
those in Vargas state, representing 9% of total EDC power sales.

Nebreda revealed that the total electricity losses for EDC in
Vargas are 20% -- much higher than the national average -- while
records of Caveinel, the chamber that groups electricity
companies in Venezuela, show that typical losses due to theft
are 10% in the Caracas metropolitan area.

Vargas, a state that is semi-isolated from the rest of the
country after a bridge on the main highway linking Caracas to
the seaport of La Guaira crumbled in late December, is home to
EDC's 1,786MW Zuloaga thermal plant, where 65% of all the power
the company generates comes from.


                           *   *   *

As reported by Troubled Company Reporter on Nov. 21, 2005, Fitch
Ratings upgraded the senior unsecured foreign currency rating of
C.A. La Electricidad de Caracas aka EDC to 'BB-' from 'B+'.


PDVSA: Awaits Approval on Joint Venture with Private Oil Firms
--------------------------------------------------------------
Private oil companies operating in Venezuela expect state oil
firm PDVSA aka Petroleos de Venezuela SA to continue its
payments for the firms' investments and expenses under their old
operating agreements until the new joint venture contract
model is approved by the national assembly, Caracas daily El
Universal reports.

Private oil companies signed preliminary agreements last year to
migrate all 32 existing operating agreements in the country to
new joint ventures controlled by PDVSA, which will have an
average 60% stake in all new joint venture contracts, Business
News Americas relates.  The 32 fields previously under operating
agreements are now under a transition scheme controlled by
special "transitional technical committees" to guarantee their
normal operations and transition to the new contract model.

The new contract is designed to substitute the old operating
agreements that cost PDVSA US$4 billion last year. The contracts
now under PDVSA control represent combined production of some
532,000 barrels a day.

PDVSA hopes to save US$3 billion in operating costs in 2006
through the new contracts.  Those savings though will be reduced
depending on how long it takes the national assembly to approve
the new contract model.

PDVSA is Venezuela's state oil company in charge of the
development of the petroleum, petrochemical and coal industry,
as well as planning, coordinating, supervising and controlling
the operational activities of its divisions, both in Venezuela
and abroad.

                        *    *    *

On Jan. 23, 2005, Fitch Ratings 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, was
also 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: Inks Agreement for Geological Studies with Enarsa
--------------------------------------------------------
State oil firm Petroleos de Venezuela aka PDVSA has entered into
an agreement with Argentina's own state oil company Enarsa to
conduct geological studies in certain areas in Venezuela and
Argentina, Business News Americas reports.

A letter of intent was signed between companies during a meeting
between Venezuela's President Hugo Chavez, Brazil's President
Luiz Inacio Lula Da Silva and Argentina's President Nestor
Kirchner in Brazil's capital Brasilia last week.

According to PDVSA, the study will touch on the potential,
reserves and possibility of carrying out joint exploration in a
block in Venezuela's Junin field in the Orinoco belt and in the
offshore area in Argentina's San Jorge basin.

It is probable that Petrobras, the Brazilian federal energy
company, will take part in any exploration projects resulting
from the studies.

PDVSA is Venezuela's state oil company in charge of the
development of the petroleum, petrochemical and coal industry,
as well as planning, coordinating, supervising and controlling
the operational activities of its divisions, both in Venezuela
and abroad.

                        *    *    *

On Jan. 23, 2005, Fitch Ratings 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, was also 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.


                            ***********


S U B S C R I P T I O N   I N F O R M A T I O N

Troubled Company Reporter - Latin America is a daily newsletter
co-published by Bankruptcy Creditors' Service, Inc., Fairless
Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick,
Maryland USA. John D. Resnick, Marjorie C. Sabijon and Sheryl
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Copyright 2006.  All rights reserved.  ISSN 1529-2746.

This material is copyrighted and any commercial use, resale or
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