TCRLA_Public/060131.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

          Tuesday, January 31, 2006, Vol. 7, Issue 22

                          Headlines



A R G E N T I N A

ARCANGEL GABRIEL: Individual Reports Due February 1
AUTOMACION APLICADA: Claims Verification Ends February 1
CAPACITACION: Submitting Bankruptcy Report on Feb. 1
CONSTRUCCIONES PYP: Verification Phase Ends on February 1
DANTE ZUNINO: Individual Reports to be Submitted on February 1

HISTA S.A.: Trustee to Stop Accepting Claims on February 1
KINGS COLLEGE: Deadline for General Report Approaches
PROCTER & GAMBLE: Freezes Prices of 31 Products in Argentina
YPF: S&P Revises Outlook on BB+ Currency Rating to Negative

     
B E R M U D A

1 CYBERNETWORK: Proofs of Claim Due February 20
BEAUFOY LTD: Validation of Creditors' Claims Stops on Feb. 17
FOSTER WHEELER: Concludes Common Stock Purchase Warrant Offers


B R A Z I L

BANCO CRUZEIRO: Moody's Assigns B3 Global Local Currency Rating
BANCO SCHAHIN: S&P Rates $20 Million Notes at B
BANCO SAFRA: S&P Assigns Low B Ratings on Currencies
CSN: Restating 2004 Financials to Comply with U.S. GAAP
CVRD: Board Approves US$4.63 Billion Budget for 2006

ENERSIS SA: Denies Interest in Acquiring Light Servicos Stake
TELEMAR: Launching VoIP in Rio de Janeiro, Minas Gerais


C A Y M A N   I S L A N D S

BRANDES OFFSHORE: Proof of Claims Submission Ends Feb. 24
CLIPPER CAPITAL: Deadline for Claims Verification Set Feb. 24
LSA INVESTMENTS: Creditors Have Until Feb. 24 to Verify Claims
WOODALLEN AURIC: Creditors to Prove Claims Until February 15


H O N D U R A S

MILLICOM: Tigo Allocates US$30 Million to Expand Network


M E X I C O

BALLY TOTAL: Pardus Director Nominees Win Board Slot
CFE: Completes Auction of 10-Year Bonds Worth US$190 Million


P E R U

INTERBANK: Projects 20% Increase in Profits This Year
VOLCAN COMPANIA: Strike at Yauli Unit Ends


P U E R T O   R I C O

DORAL FINANCIAL: Proposed Fixed Rate Notes' Amendments Approved
G+G RETAIL: Taps Pachulski Stang as Bankruptcy Counsel
MUSICLAND HOLDING: Look for Bankruptcy Schedules on March 28


U R U G U A Y

* URUGUAY: Primary Budget Surplus Exceeds IMF Target


V E N E Z U E L A

CANTV: President Called to Explain Irregularity Issues
PDVSA: Reimbursing Foreign Companies for Operating Expense

     -  -  -  -  -  -  -  -

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A R G E N T I N A
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ARCANGEL GABRIEL: Individual Reports Due February 1
---------------------------------------------------
The individual reports on the authenticated claims of creditors
of Arcangel Gabriel Vezzano S.A. will be submitted to the Buenos
Aires' civil and commercial court on Feb. 1, 2006.  The
authentication of the claims stopped on Nov. 18, 2005.

Mr. Luis Pedro Pereyra, the court-appointed trustee, will
prepare general reports containing the company's audited
accounting and business records as well as the summary of
important events pertaining to the reorganization.  The report
will be presented in court on March 15, 2006.

An Informative Assembly, the final stage of reorganization
where the settlement proposal is presented to the company's
creditors for approval, is scheduled on Aug. 29, 2006.

Arcangel Gabriel began reorganization after the court approved
its petition.  Reorganization allows the Company to negotiate
settlement with its creditors in order to avoid a straight
liquidation.

Mr. Luis Pedro Pereyra, the Trustee, can be reached at:

         Roque Saenz Pena 651
         Buenos Aires


AUTOMACION APLICADA: Claims Verification Ends February 1
--------------------------------------------------------
Mr. Cesar Paiz, the trustee selected by Court No. 2 of Buenos
Aires' civil and commercial tribunal for the bankruptcy of
Automacion Aplicada S.A., will stop accepting and verifying
claims on Feb. 1, 2006.  Validated claims will be presented in
court as individual reports.

The court, with the assistance of Clerk No. 3, declared
Automacion Aplicada bankrupt, favoring the petition filed by
creditor Cesar Paiz, whom the company has debt amounting to
$89,129.70.

Automacion Aplicada S.A. can be reached at:

         Peru 1042
         Buenos Aires

Mr. Eduardo Pronsky, the Trustee, can be reached at:

         Parana 480
         Buenos Aires


CAPACITACION: Submitting Bankruptcy Report on Feb. 1
----------------------------------------------------
Court-appointed trustee Raul Alberto Sena will present on Feb. 1
a general report on the bankruptcy case of Buenos Aires-based
Capacitacion Informatica Superior S.R.L.

The company began liquidating assets following the pronouncement
of the city's civil and commercial Court No. 16 that the Company
is bankrupt.

Court-appointed trustee Raul Alberto Sena verified creditors'
proofs of claim until Sep. 28, 2005 and prepared individual
reports out of the validated claims.  The reports were presented
in court on Nov. 14, 2005.

The bankruptcy process will end with the disposal of the
company's assets in favor of its creditors.

Clerk No. 32 assists the court with the proceedings.

Mr. Raul Alberto Sena, the Trustee, can be reached at:

         Bartolome Mitre 734
         Buenos Aires


CONSTRUCCIONES PYP: Verification Phase Ends on February 1
---------------------------------------------------------
The verification of creditors' claims against bankrupt company
Construcciones PyP S.R.L. will end on Feb. 1, 2006.  Individual
reports will be prepared out of the authenticated claims.

Court No. 23 of Buenos Aires' civil and commercial tribunal
declared the company bankrupt, in favor of the petition filed by
the company's creditor, Mr. Juan Benitez.  The company owed Mr.
Benitez about $39,211.50.  

The court appointed Ms. Jessica Minci as trustee, tasked to
supervise the liquidation process.

Clerk No. 46 assists the court on the case, which will conclude
with the liquidation of the Company's assets.

Construcciones PyP is a construction company and real estate
agency formerly called Baucar y Compania S.R.L.

Construcciones PyP S.R.L. can be reached at:

         Saenz Pena 20
         Buenos Aires

Ms. Jessica Minci, the Trustee, can be reached at:

         Vuelta de Obligado 1715
         Buenos Aires


DANTE ZUNINO: Individual Reports to be Submitted on February 1
--------------------------------------------------------------
The submission of the individual reports on the verified claims
of creditors of Dante Zunino S.A. will be on Wednesday, Feb. 1,
2006.  Court-appointed trustee Beatriz del Carmen Muruaga had
verified the claims until Nov. 21 last year.

After the presentation of the claims, Ms. Muruaga will then
prepare a general report on the case on March 15, 2006.

Dante Zunino entered bankruptcy protection after the Buenos
Aires' civil and commercial court ordered the company's
liquidation.  

Ms. Beatriz del Carmen Muruaga, the Trustee, can be reached at:

         Aguero 1290
         Buenos Aires


HISTA S.A.: Trustee to Stop Accepting Claims on February 1
----------------------------------------------------------
Mr. Hector Presta, the court-appointed trustee for the Hista
S.A. bankruptcy, will stop accepting creditors' claims on Feb.
1, 2006.  Mr. Presta will examine and authenticate the claims,
determining the nature and amount of the company's debts.

Creditors who fail to have their claims authenticated on or
before Feb. 1, will not qualify for the payments that will be
made after the company's assets are liquidated.

According to a report made by Argentine daily La Nacion, the
company was declared bankrupt by Court No. 22 of Buenos Aires'
civil and commercial tribunal.  The ruling was in favor of a
petition filed by one of the company's creditor, Mr. Marcelo
Servinsky, for nonpayment of ARS17,365.75 in debt.

Clerk No. 44 assists the court on the case, which will conclude
with the liquidation of the company's assets.

Hista S.A. can be reached at:

         Maipu 464
         Buenos Aires

Mr. Hector Presta can be reached at:

         Parana 467
         Buenos Aires


KINGS COLLEGE: Deadline for General Report Approaches
-----------------------------------------------------
The submission for the general report on the bankruptcy case of
Kings College S.R.L. will be on Wednesday, Feb. 1, 2006.  The
report contains a summary of the company's financial status as
well as relevant events pertaining to the case.

Kings College began liquidating its assets after Court No. 11 of
Buenos Aires' civil and commercial tribunal declared the company
bankrupt.  The court appointed Mr. Ricardo Oscar Garcia as
trustee.

Mr. Garcia submitted individual reports on Nov. 18, 2005.  These
reports were based on the claims submitted by the company's
creditors.  The claims underwent verification phase, which ended
on Oct. 6, 2005.

Mr. Ricardo Oscar Garcia, the Trustee, can be reached at:

         Lavalle 1206
         Buenos Aires


PROCTER & GAMBLE: Freezes Prices of 31 Products in Argentina
------------------------------------------------------------
Procter & Gamble Co. agreed to freeze for a year the prices for
31 of its products to aid the Argentinian government in fighting
inflation, Bloomberg reports.

"We expect this agreement will also help us boost our sales
volume,'' Raul Lamos, P&G's finance director in Argentina, told
reporters at a conference.  "For this accord to be sustainable,
we need to work with the government in the event of our costs
rise, such as the U.S. dollar or raw materials."

Argentina's President, Nestor Kirchner, with economy ministry
officials are asking businessmen to stabilize prices after the
annual inflation rate jumped to 12.3% in December, Bloomber
relates.

The Procter & Gamble Co. manufactures and markets a range of
consumer products in various countries throughout the world.  
The company markets over 300 branded products in more than160
countries.  The company manages its business in five product
segments: Fabric and Home Care, Baby and Family Care, Beauty
Care, Health Care and Snacks and Beverages.

On Jan. 31, 2005, the company reported having $20,996,000,000 in
total current assets against $23,903,000,000 in total current
liabilities or a $2,907,000,000 working capital deficit.


YPF: S&P Revises Outlook on BB+ Currency Rating to Negative
-----------------------------------------------------------
Standard & Poor's Rating Services revised on Jan. 27, 2006, its
outlook on its 'BB+' local currency rating for Argentina-based
integrated oil and gas producer YPF S.A. to negative from
positive following the company's announcement of a 22% downward
revision of its 2004 year-end consolidated proven reserves.
     
At the same time, Standard & Poor's affirmed its 'BB+' local
currency corporate credit rating as well as the 'BB' foreign
currency rating.  The outlook on the foreign currency rating
remains stable.
      
"The outlook revision reflects the impact of the unexpected
downward revision of YPF's proven reserves by 509 million
barrels of oil equivalent on the business profile of the company
in a context of a poor reserve replacement performance over
recent years," said Standard & Poor's credit analyst Pablo
Lutereau.
     
The negative outlook incorporates Standard & Poor's pessimistic
view for the hydrocarbon sector in Argentina, most notably the
absence of regulation that would foster additional investment;
artificially low hydrocarbon prices that do not mirror regional
or international prices; and uncertainties regarding future
changes to the institutional environment -- including tax
regimes and concession award mechanisms -- that would further
affect both the business and financial profiles of the company.

The affirmation of both the local and foreign currency corporate
ratings follows:

-- The absence of accounting and short-term financial impacts of
   the downward revision;

-- The very conservative capital structure evidenced by a very  
   low use of financial debt -- YPF has had negative net debt
   for the last couple of years and is expected to be very
   modestly leveraged, if at all;

-- Strong cash flows despite lower than international
   realization prices;

-- Our expectation that the company will maintain its prudent
   financial policy; and

-- Our understanding that its strategic importance to its parent
   is not heavily impaired by the new reserve situation.
     
The stable outlook on the foreign currency ratings reflects
Standard & Poor's expectations that Repsol has sufficient
economic incentives to support YPF, thereby mitigating direct
sovereign risk particularly an increase in current transfer and
convertibility restrictions -- we currently see Argentine T&C
risk as 'B+' versus the sovereign foreign-currency rating of B-.

     
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B E R M U D A
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1 CYBERNETWORK: Proofs of Claim Due February 20
-----------------------------------------------
Creditors are given until Feb. 20, 2006, to prove their claims
against 1 Cybernetwork Ltd., a company in voluntary liquidation.

Creditors are required to submit to the liquidator, Mr. Robin J
Mayor, their full Christian names, addresses and descriptions,
full particulars of their debts or claims, and the names and
addresses of their lawyers (if any), and if so required by the
liquidator to come in and prove their debts or claims,
personally or by their lawyers, at such time and place as shall
be specified in such notice.  In default thereof will result to
their exclusion from the benefit of any distribution made before
such debts are proved.

A final general meeting will be held at the offices of Messrs.
Conyers Dill & Pearman, Clarendon House, Church Street,
Hamilton, Bermuda on March 13, 2006, at 9:30 a.m., or as soon as
possible thereafter, for the purposes of:

   1) receiving an account laid before them showing the manner
      in which the winding-up of the Company has been conducted
      and its property disposed of and of hearing any
      explanation that may be given by the Liquidator;

   2) by resolution determining the manner in which the books,
      accounts and documents of the Company and of the
      Liquidator shall be disposed of; and

   3) by resolution dissolving the Company.


The company entered voluntary wind up on Jan. 12, 2006.

Mr. Robin J Mayor can be reached at:

          Messrs. Conyers Dill & Pearman
          Clarendon House, Church Street
          Hamilton, HM DX, Bermuda


BEAUFOY LTD: Validation of Creditors' Claims Stops on Feb. 17
-------------------------------------------------------------
Mr. Robin J. Mayor, the appointed liquidator of Beaufoy Ltd,
will stop validating proofs of claim of the company's creditors
on Feb. 17, 2006.  Creditors are therefore required on or before
the said date to send to the liquidator their full Christian
names, addresses and descriptions, full particulars of their
debts or claims, and the names and addresses of their lawyers
(if any).  

If so required by the liquidator, creditors will prove their
debts or claims personally or by their lawyers at the time and
place specified by the liquidator.  In default thereof they will
be excluded from the benefit of any distribution made before
such debts are proved.

a final general meeting will be held at the offices of Messrs.
Conyers Dill & Pearman, Clarendon House, Church Street,
Hamilton, Bermuda on March 10, 2006, at 9:30 a.m., or as soon as
possible thereafter, for the purposes of:

   1) receiving an account laid before them showing the manner
      in which the winding-up of the Company has been conducted
      and its property disposed of and of hearing any
      explanation that may be given by the Liquidator;

   2) by resolution determining the manner in which the books,
      accounts and documents of the Company and of the
      Liquidator shall be disposed of; and

   3) by resolution dissolving the Company.

Beaufoy Ltd entered voluntary liquidation on Jan. 17, 2006.  

Mr. Robin J Mayor can be reached at:

          Messrs. Conyers Dill & Pearman
          Clarendon House, Church Street
          Hamilton, HM DX, Bermuda


FOSTER WHEELER: Concludes Common Stock Purchase Warrant Offers
--------------------------------------------------------------
Foster Wheeler Ltd. announced Friday that it has accepted all
Class A and Class B common stock purchase warrants exercised
pursuant to its offers to increase the number of common shares
to be delivered upon the exercise of its Class A and Class B
common stock purchase warrants.  

As of the expiration of the offers at 5:00 p.m., on Jan. 27,
2006, about 3,904,689, or 95% of the company's outstanding Class
A warrants and 20,106,678, or 57% of its outstanding Class B
warrants have been exercised in the offers.

Exercise of these warrants will result in cash proceeds to the
company of approximately $75.3 million and the issuance of 8.4
million common shares, bringing the total outstanding common
shares to 66.5 million.  The company plans, but is not
obligated, to use the proceeds resulting from the exercise of
warrants to reduce its outstanding indebtedness.

"I am very pleased with the results of the offers, which
represent another successful step in our ongoing program of debt
reduction," said Raymond J. Milchovich, chairman, president and
chief executive officer.  "Although we have not yet committed to
any specific transactions, the anticipated debt reduction will
be accretive to expected 2006 earnings per share."

Foster Wheeler Ltd. -- http://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.


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B R A Z I L
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BANCO CRUZEIRO: Moody's Assigns B3 Global Local Currency Rating
---------------------------------------------------------------
Moody's Investors Service assigned first-time ratings to Banco
Cruzeiro do Sul S.A. (BCSul), giving long- and short-term global
local-currency deposit ratings of Ba3 and Not Prime,
respectively.  

These ratings were assigned to Banco Cruzeiro do Sul S.A.:

Bank Financial Strength Rating: D-, with stable outlook.

Global Local-Currency Rating: Ba3 long-term local-currency
deposit rating and Not Prime short-term local-currency deposit
rating, with stable outlook.

Foreign Currency Deposit Rating: B1 long-term foreign-currency
deposit rating, and Not Prime short-term foreign-currency
deposit rating, with positive outlook.

Brazilian National Scale Deposit Ratings: Baa1.br long-term
deposit rating and BR-2 short-term deposit rating.

According to Moody's, BCSul's ratings are supported by a leading
position in a fast-growing consumer-lending business -- one
mainly targeted to civil servants and retirees.  BCSul's early
start in this market has allowed management to build expertise
in loan origination and distribution, as well as assemble the
operational and technological supports that provide an edge over
competitors.

Moody's also noted that ratings are positively affected by the
adequate asset quality of the bank's loan portfolio.  Moreover,
BCSul has a balanced source of funding, one comprising customer
time deposits, credit assignments, and funds from international
capital markets, which furnishes a cushion in periods of funding
volatility.

Moody's said that ratings for BCSul are constrained by its
modest size and by its below-average financial metrics relative
to peers', particularly its profitability and capital.  Such
limitations challenge the growth of the bank's franchise because
it constrains BCSul's ability to fund loan growth with its own
resources.  A higher-than-peers' cost base also challenges the
banks' performance.

BCSul's ability to further diversify deposits and overall
funding alternatives would be a positive factor for its ratings.  
Improving profitability ratios would indicate management's
ability to expand operations within the bank's defined niche
markets in a scenario of increasing competition and potentially
lower interest rates.  Conversely, negative pressure on BCSul's
ratings might derive from deteriorating asset quality and poor
profitability, which could in turn result from aggressive
lending practices or from tougher competition.

Moody's Ba3 global local-currency deposit rating reflects
BCSul's modest participation in the deposits market, which
translates, in Moody's view, into a low probability of
regulatory support.

BCSul is the sole business of the Indio da Costa family, and as
such, any capital and liquidity support would likely be
forthcoming from the family to provide for the bank's growth.

BCSul is headquartered in Sao Paulo, Brazil. As of September
2005, the bank had total assets of approximately BRL2.8 billion
(US$1.3 billion) and equity of BRL170 million (US$76 million).


BANCO SCHAHIN: S&P Rates $20 Million Notes at B
-----------------------------------------------  
Standard & Poor's Ratings Services assigned on Jan. 26, 2006,
its 'B' foreign-currency long-term senior unsecured debt rating
to Banco Schahin S.A.'s $20 million notes to be issued on Jan.
30, 2006, under the US$100 million short-term note program. The
issue matures in two years with semiannual payments.

"The counterparty credit rating on Banco Schahin S.A.
(B/Stable/B) reflects the intrinsic risks of a small bank facing
the challenge of growing its business while maintaining adequate
funding in the increasingly competitive banking market; the weak
credit quality of its remaining wholesale portfolio that,
despite improvement, is still worse than that of its major
peers; and like all the banks that operate in the same market,
the margin pressure related to retail lending," said Standard &
Poor's credit analyst Tamara Berenholc.

These risk factors are offset by the bank's coherent strategy to
generate more retail business while gradually reducing the
weight of loans to small and midsize companies; the improvement
in credit quality and profitability through the increase of its
retail operations; and the conservative approach of its
Treasury activity.
     
The stable outlook on both the local and foreign currency
ratings assigned to Schahin incorporates our expectation that
the bank will be able to maintain stability in its consumer
finance and payroll discount lending to support its growth
strategy while maintaining its profitability and asset quality
indicators. The stable outlook also incorporates the maintenance
of a BIS ratio higher than 13%.

The outlook may be changed to positive or the ratings may be
raised if the bank (consolidated figures) shows sustainable
growth and stronger returns, a significant improvement in asset
quality indicators (with the nonperforming loan ratio below 2%),
higher liquidity, and better capital ratios. On the other hand,
the outlook could be changed to negative or the ratings could be
lowered if there is a significant deterioration in Schahin's
asset quality ratios (vis-a-vis its current levels) or if the
bank is unable to sustain its operations, thus reducing its
profitability.
     

BANCO SAFRA: S&P Assigns Low B Ratings on Currencies
----------------------------------------------------
Standard & Poor's Ratings Services assigned on Jan. 27, 2006, a
BB- foreign currency rating to Banco Safra S.A., and a 'BB'
rating on its local currency.

Strengths

   -- Long track record in its primary market as an important
      player in Brazil;

   -- History of good asset quality indicators as a pioneer bank
      operating with receivables; and

   -- Strong brand name recognition from ownership by a
      traditional and well regarded family.

Weaknesses

   -- As a wholesale bank, Safra runs concentration risk;

   -- Lower profitability than expected for its target market
      with pressure in terms of margins; and

   -- Strong competitive environment has difficult business
      generation.

Rationale

The ratings on Banco Safra S.A. consider the bank's
differentiated position and strong track record in the middle-
market segment in Brazil; the historically good asset quality
indicators, which are explained by the benefits derived from its
position as a pioneer bank operating with receivables; and its
strong brand name and the reputation of the controlling
families.  The ratings also incorporate the lower-than-expected
profitability for its target markets; the strong competitive
environment, particularly in the middle-market segment, and the
consequent challenges of growing this business; and the bank's
exposure to the economic risk of the Brazilian financial system.

Banco Safra is the seventh-largest private banking organization
in the country with BRL35.8 billion of consolidated assets as of
June 2005 -- equivalent to USD15.2 billion at BRL2,35 to USD1,0
-- and market share in terms of assets and loans of 2.3% and
2.9%, respectively, in 2005.  Safra is among the largest players
in the niche segment of secured lending to midsize companies,
mainly having receivables as collateral-the middle-market credit
portfolio weighs 35% of the total portfolio.  In the retail
segment-retail accounts for 15% of the total credit portfolio-
Safra is a leading player in providing leasing operations to its
clients and consumer finance -- mainly vehicle financing.  
Safra's strong name and size have also allowed the bank to be a
player in the corporate segment by servicing most of the larger
industrial conglomerates in Brazil -- 50% of total credit
operations.

Safra is a traditional bank in the Brazilian market.  
Shareholders belong to the third generation of bankers in the
Safra family, which has been in the banking business for more
than 100 years and has controlled the bank since its founding in
1957.  Safra is wholly owned by a holding company which, in
turn, is owned by two brothers, Joseph Yacoub Safra and Moise
Yacoub Safra.  Although the bank's ratings incorporate the
benefits derived from the ownership structure and implicit
support from the shareholders, Standard & Poor's expects that
the succession plan will be defined in the near future, which
should add to the bank's financial flexibility.

In the past two years, lending activity grew at a lower rate
than the market: the annualized growth rate was 10% in the last
12 months ending June 2005 and 7% in 2004, while the market grew
about 20% in 2005 and 19% in 2004.  The strong competitive
environment and the fact that 50% of total lending is still
directed to large corporates-a segment that has reduced its
indebtedness and financed part of its needs in the Capital
Market--were the rationale for the lower lending progress.  The
major challenge is still the ability of the bank to translate
its commercial efforts into increasing share and position in the
lending phase of the Brazilian banking industry.

As a consequence of the bank's credit portfolio profile, asset
quality indicators are adequate to the bank's business profile.  
The ratio of nonperforming loans to total loans -- measured by
credits ranging from the 'E' to the 'H' category according to
the Brazilian Central Bank requirements -- has been relatively
stable at 3.4% at June 2005 -- 3.1% at December 2004 -- while
the final loss is much lower, net charge-offs to total loans
have been maintained at about 0.2% in the past four years, given
Safra's ability to strongly recover its guarantees and its good
collection process.

The wholesale profile of the bank has explained Safra's
relatively low profitability levels.  Profitability is in line
with that of its Brazilian commercial banking peers, but is
lower when compared to that of large retail peers due to
relatively lower interest margins and higher funding costs.  
Historically, the bank has shown ROA at about 1.5%, with a peak
in 2003 due to strong treasury gains.  Returns are mainly
generated from its ability to maintain interest results derived
from its commercial activities and its lean and adequate
structure.  Operating with a smaller and more efficient branch
network and staff, the bank has continued to make improvements
in efficiency year-by-year.  The bank's operating costs are
adequate with regard to its business base, with a cost-to-income
ratio of 56% in the first semester of 2005.  Nonetheless, core
revenue enhancement remains key for Safra to maintain
comparatively strong efficiency ratios.

Outlook

The stable outlook of the local currency rating balances the
expectation that the bank will be able to sustain its market
position while benefiting from the higher lending environment.  
The outlook also incorporates the generation of asset quality
indicators -- NPLs to total loans -- of less than 4%,
profitability ratios of about 1.5%, and the ability to fund its
growth pattern. In the event of a downgrade or negative change
for the local currency sovereign credit rating and/or outlook on
Brazil, the local currency credit rating and/or outlook on Banco
Safra would move in tandem.  If, on the other hand, the
sovereign local currency rating has positive changes, the bank
would not be automatically affected.  The rating could be
negatively affected if profitability levels are reduced as a
consequence of the difficult operating environment and
competition, if asset quality indicators are impaired as a
result of relaxed underwriting procedures, or if there is an
adverse change in the bank's business situation.

The positive outlook on the foreign currency rating mirrors the
outlook attributed to the Federative Republic of Brazil.  At
current levels, a change in the foreign currency sovereign
credit rating would lead to a similar action on the foreign
currency rating on Banco Safra.


CSN: Restating 2004 Financials to Comply with U.S. GAAP
-------------------------------------------------------
Brazilian steelmaker CSN (NYSE: SID) aka Companhia Siderurgica
Nacional will restate its 2004 financial results in order to
comply with U.S. generally accepted accounting principles, the
company told last week the Sao Paulo stock exchange.

The change has no impact on CSN's operating revenue, gross
profit, operating profit and net worth, the steelmaker said.  

                        *    *    *

On Jan. 26, 2006, Standard and Poors' Rating Services gave a
'BB' corporate credit rating on Brazilian flat carbon steelmaker
Companhia Siderurgica Nacional.

The 'BB' corporate credit rating on CSN reflects the company's
exposure to volatile demand and price cycles, increasing
competition in its home and predominant market of Brazil,
aggressive dividend policy and capital investment plan, and
sizable gross-debt position.  These risks are partly offset by
CSN's privileged cost position and sound operating profile,
favorable market position in Brazil, strong export capabilities
to offset occasional domestic demand sluggishness, and
increasing business diversification.

CSN is one of the lowest-cost steel producers in the world,
which is a result of its access to proprietary, high-quality
iron ore (at the Casa de Pedra mine); self-sufficiency in
energy; streamlined facilities; and logistics advantages.  This
is in addition to the group's strong market position in the
fairly concentrated steel industry in Brazil.


CVRD: Board Approves US$4.63 Billion Budget for 2006
----------------------------------------------------
CVRD aka Companhia Vale do Rio Doce's (NYSE: RIO) board of
directors has approved a capital expenditure budget of US$4.63
billion for 2006, according to a prepared statement from the
company.  Last year's budget was US$3.36 billion.

Organic growth investments this year will total US$3.56 billion
-- or 77% of the 2006 capex.  Of that total, US$3.07 billion
will go to greenfield projects and expansion of existing assets,
while US$491 million will fund research and development.  
Expenditure in the ferrous mineral business will total US$2.12
billion, or 46% of this year's capex.

"In 2006 CVRD begins the development of new projects in which it
will expand its production capacity in iron ore, pellets,
bauxite, alumina, copper and nickel," the company said.

                        *    *    *

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'.


ENERSIS SA: Denies Interest in Acquiring Light Servicos Stake
-------------------------------------------------------------
Chilean power company Enersis SA (NYSE: ENI) denied in a
statement that it held talks or negotiated the acquisition of a
stake in Brazilian power company Light Servicos de Electridade
SA.

Local press reports that Endesa Brasil's subsidiary, Ampla
Energia e Servicos is interested in acquiring Light Servicos.

Light's controller, EDF aka Electricite de France, has started a
process to sell up to a controlling stake in the company, which
distributes power in 31 towns Rio de Janeiro state including Rio
de Janeiro city, Business News Americas relates.

                        *    *    *

Oct. 18, 2005, Moody's Investors Service affirmed the ratings of
Enersis S.A., Empresa Nacional de Electricidad S.A. (Endesa
Chile), and Endesa Chile Overseas Co., all Ba1 senior unsecured,
and revised the rating outlook for all three issuers to positive
from stable.  Endesa Chile is a 60% subsidiary of Enersis.
Endesa Chile Overseas Co. is a subsidiary of Endesa Chile and
its ratings are based upon the guarantee of timely payment by
Endesa Chile.


TELEMAR: Launching VoIP in Rio de Janeiro, Minas Gerais
-------------------------------------------------------
Telemar aka Tele Norte Leste Participacoes SA plans to launch
VoIP services for its consumers this month, Agencia Estado
quoted the company's Chief Executive Officer Ronaldo Iabrudi.

The VoIP service will be launched as a pilot with a client base
of 20,000 in some areas of Rio de Janeiro and Minas Gerais
states, Business News Americas states.

A company representative told Business News that
telecommunication companies stand to lose 30% in voice revenues
by 2009 because of VoIP.

                        *    *    *

On Nov. 9, 2005, Fitch Ratings assigned a 'BB-', Positive
Outlook to Telemar Overseas proposed offering of US$150 million
notes to be issued in Brazilian Reais and paid in U.S. currency.
Telemar Norte Leste S.A will unconditionally and irrevocably
guarantee the proposed notes.

The 'BB-' rating of the proposed notes incorporates transfer
and convertibility risks associated with the settlement of the
notes, as they will be issued in Brazilian reais and paid in
U.S. dollars at market exchange rates; the new issuance will
not add foreign exchange risk to the company's financial risk
profile. The Positive Outlook reflects the recent change in the
Rating Outlook to Positive from Stable of several Brazilian
corporates, including Telemar Norte Leste S.A., as a
consequence of the revision of the Outlook to Positive to the
'BB-' foreign currency rating of the Federative Republic of
Brazil.


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

BRANDES OFFSHORE: Proof of Claims Submission Ends Feb. 24
---------------------------------------------------------
Submission of proofs of claim of Brandes Offshore Investment
Fund, Ltd. creditors will cease on Feb. 24, 2006.  Creditors who
fail to present and prove their debts or claims and establish
any title they may have under the Companies Law 2004 Revision
will be excluded from the benefit of any distribution made
before such debts are proved or from objecting to the
distribution.

Brandes Offshore voluntarily liquidated its assets on Dec. 22,
2005.  S.L.C. Whicker and K.D. Blake were appointed as joint
voluntary liquidators.

K.D. Blake, the Joint Voluntary Liquidator, can be reached at:

          P.O. Box 493 George Town
          Grand Cayman, Cayman Islands
          Telephone: 345-914-4378
          Facsimile: 345-949-7164


CLIPPER CAPITAL: Deadline for Claims Verification Set Feb. 24
-------------------------------------------------------------
The deadline for the verification of claims of Clipper Capital
Offshore Fund Limited's creditors is Feb. 24, 2006.  Creditors
who fail to prove their debts and claims on or before the said
date and establish any title they may have under the Companies
Law 2004 Revision will not be included in any distribution made
by the company after its assets are liquidated.

Clipper Capital entered voluntary wind up after its shareholders
passed a resolution allowing the liquidation and appointing
Trident Directors (Cayman) Ltd. as liquidator.

Trident Directors (Cayman) Ltd. can be reached at:

          P.O. Box 847
          Grand Cayman, Cayman Islands

          Donald Spence
          P.O. Box 847, George Town
          Grand Cayman, Cayman Islands
          Telephone: (345) 949 0880
          Facsimile: (345) 949 0881


LSA INVESTMENTS: Creditors Have Until Feb. 24 to Verify Claims
--------------------------------------------------------------
Creditors of LSA Investments Ltd, which is in voluntary
liquidation, must prove debts or claims on or before Feb. 24,
2006, and establish any title they may have under Companies Law
2004 Revision.  

Creditors who fail to have their claims verified will be
excluded from the benefit of any distribution made before the
debts are proved or from objecting to the distribution.

The shareholder of LSA Investments passed special resolutions on
Dec. 16, 2005, allowing the company's voluntary liquidation and
appointing Ian Wight and Stuart Sybersma as liquidators.

Mr. Stuart Sybersmacan be reached at:

          Joshua Taylor, Deloitte
          P.O. Box 1787 George Town
          Grand Cayman, Cayman Islands
          Telephone: (345) 949 7500
          Facsimile: (345) 949 8258


WOODALLEN AURIC: Creditors to Prove Claims Until February 15
------------------------------------------------------------
Creditors of Woodallen Auric Fund, Ltd. -- a company in
voluntary liquidation -- have until Feb. 15, 2006, to submit and
prove debts of claims against the company, and to establish any
title they may have under the 2004 Revision of the Companies
Law.  Failure to do so would result to creditors' exclusion from
the benefit of any distribution to be made.

Woodallen Auric entered voluntary liquidation on Jan. 3, 2006,
and appointed Messrs. David A. K. Walker and Lawrence Edwards as
joint liquidators.

Messrs. David A. K. Walker and Lawrence Edwards can be reached
at:

           PricewaterhouseCoopers, Strathvale House
           George Town, Grand Cayman, Cayman Islands
           
           Aysha Jackson
           Telephone: (345) 914 8695
           Facsimile: (345) 949 4590


===============
H O N D U R A S
===============

MILLICOM: Tigo Allocates US$30 Million to Expand Network
--------------------------------------------------------
Millicom International Cellular's Honduran mobile operator Tigo
has alloted about US$30 million for use in strengthening its
network and expanding to areas where the company lacks coverage,
Business News Americas reports.  

Tigo, which used to be called Celtel, plans to set up seven new
radio towers by the end of January.

CEO Jose Manuel Astigarraga told Business News Americas that
Tigo was able to add about 60,000 subscribers last year.  
Earlier this month, Tigo disclosed that it had halved
international calling rates to the US to US$0.38 from US$0.83.  

Tigo has coverage in 17 of the country's 18 departments,
according to Astigarraga.  The CEO claims that the company now
accounts for 70% of Honduras' mobile users with 850,000 clients
and is positive that Tigo will break the one million mark this
year.

Millicom International Cellular S.A. is a global
telecommunications investor with cellular operations in Asia,
Latin America and Africa.  It currently has cellular operations
and licenses in 16 countries.  The Group's cellular operations
have a combined population under license of approximately 391
million people.

Millicom has assets amounting to USD1,522,900,000 and
liabilities reaching USD1,608,200,000.

                        *    *    *

As reported by Troubled Company Reporter on Jan. 24, 2006,
Standard & Poor's Ratings Services placed its 'B+' long-term
corporate credit rating and 'B-' senior unsecured debt ratings
on telecommunications operator Millicom International Cellular
S.A. on CreditWatch with developing implications.  


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


BALLY TOTAL: Pardus Director Nominees Win Board Slot
----------------------------------------------------
Pardus Capital Management L.P.'s nominees for directors --
Charles J. Burdick, Barry R. Elson and Don R. Kornstein -- have
been elected by an overwhelming number of votes cast to the
board of Bally Total Fitness Holding Corporation.  

In addition, the Bally's proposed 2006 Omnibus Equity
Compensation Plan, which Pardus opposed, was defeated.  

While the report of the independent inspector of elections is
expected to be available within two weeks, Pardus believes
nearly 85% of the votes cast at the meeting -- and 60% of all
outstanding shares -- supported its directors and opposed the
Equity Plan.

Karim Samii, President of Pardus Capital Management L.P., said,
"We believe this vote represents a clear and unmistakable
mandate for corporate reform and a fair strategic sale process.  
We and the other shareholders want the company to move past the
recent conflict and focus on building shareholder value through
the sales process.  Bally's directors have said they hear us,
and we hope they will move forward constructively with the new
directors to create that value."

                     About Bally Total

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

                         *     *     *

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 remains 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 an agreement with
lenders to extend the 10-day period until Aug. 31, 2005.  Prior
to Aug. 31, the company received consent from its bondholders
extending its waiver of default to Nov. 30, 2005.


CFE: Completes Auction of 10-Year Bonds Worth US$190 Million
--------------------------------------------------------------
CFE aka Comision Federal de Electricidad, Mexico's state
electric company, informed the country's stock exchange -- Bolsa
Mexicana de Valores -- it auctioned 10-year bonds worth 2
billion pesos (US$190 million) on the local market.

Money raised from the issue will be invested in public financed
works projects, the statement said.

At the auction, CFE received 27 offers totaling 10.8 billion
pesos, far surpassing the 1.5 billion pesos minimum target,
Business News Americas relates.  A total of 11 offers were
accepted and 20 million bonds worth 2 billion pesos were issued
on Jan. 27.

The bonds, which have been rated by credit ratings agencies
Standand & Poor's (S&P) as mxAAA and Fitch as AAA(mex), will pay
annual interest equivalent to 91-day federal treasury
certificates plus a 0.429% rate, Business News states.

Dutch bank ABN AMRO acted as fiduciary and ING as the placing
agent.

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.


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

INTERBANK: Projects 20% Increase in Profits This Year
-----------------------------------------------------
Business News Americas reports that Peru's fourth biggest bank
-- Interbank -- aims to raise profits at least 20% this year on
the back of higher retail banking activity.

Executive Vice President Jorge Flores told Business News that
the bank saw its 2005 profits rise 72% to 113 million soles
(US$34.3 million) due to strong loan activity and commission
revenues.  The bank's ROE came in at 21.4% last year and the
target for 2006 is 25%.

The bank's revenues rose 17% to 606 million soles and net
service income was up 20% to 199 million soles, boosting the
operating profit 93% to 131 million soles.

Net lending grew 25% to 1.5 billion soles last year due to a 30%
increase in mortgage lending and 20% growth in the consumer loan
segment.  Consumer loans represent about 33% of the bank's loan
portfolio and mortgage lending 14%.

"Since the bank was privatized in 1994 we have focused on the
retail segment and knew there would come a time when this growth
would come," Mr. Flores told Business News.  He added that
although the bank foresees a fierce fight in the consumer
segment this year, it has no current plans of buying another
bank to increase its presence in the market.

Interbank is Peru's fourth largest bank in terms of assets and
deposits.  Assets rose 8.7% to 6.28 billion soles last year,
while deposits were up 4.5% to 4.61 billion soles.

                        *    *    *

On Dec. 5, 2005, Fitch Ratings affirmed Peru-based Interbank's
ratings at Long-term Foreign and Local Currency
'BB-', Short-term Foreign and Local currency 'B', Individual 'D'
and Support '3', and simultaneously withdrawn them.  Fitch will
no longer provide ratings or analytical coverage of this issuer.


VOLCAN COMPANIA: Strike at Yauli Unit Ends
------------------------------------------
The strike that started last week at the Yauli unit of Peru's
largest zinc mine Volcan Compania Minera has ended, Business
News Americas reports.  The company informed the country's
securities regulator, Conasev, that work at the unit has
resumed.

Business News relates that no details have been released
regarding the agreement between the union Federacion de
Trabajadores Minero Metalurgicos de Volcan Compani Minera and
the mining company. The union had been upset that Volcan was
allegedly not respecting the collective agreement, among other
complaints.

Federacion de Trabajadores had demanded that Volcan respect the
workers' positions and not replace them with subcontracted
workers, rejecting Volcan's reduction in personnel,
establishment of shifts longer than 12 hours and alleged
supervisors' hostility.

According to Volcan, the country's labor authority itself had
declared the work stoppage illegal. The workers planned to cease
picketing Jan. 18, but threatened to continue unless the union's
13 conditions in its petition were met.

As reported by Troubled Company Reporter on Jan. 27, 2006, zinc
production from Volcan was cut by 40% after six days of strike.  
Also, inventories in warehouses monitored by the London Metal
Exchange fell to their lowest levels since 2001.

Volcan Compania Minera S.A.'s principal activities are the
exploration and exploitation of mining reports by its own
account or its corresponding extraction, concentration,
treatment and distribution of polymetallic minerals.  


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

DORAL FINANCIAL: Proposed Fixed Rate Notes' Amendments Approved
---------------------------------------------------------------
Doral Financial Corporation announced Friday that holders of a
majority of the outstanding principal amount of its $30,000,000
7.00% senior notes due 2012, its $40,000,000 7.10% senior notes
due 2017 and its $30,000,000 7.15% senior notes due 2022, have
delivered consents to proposed amendments to the related
indenture and waivers of certain defaults in the company's
consent solicitations as to those notes.  

The company has waived the condition that the holders of each
series of these notes and its $100,000,000 7.65% senior notes
due 2016 consent to the proposed amendments and waiver.  As a
result, the company has accepted the consents received today and
the consent solicitation with respect to these three series of
notes has expired.

The company also announced the extension of the expiration date
for the consent solicitation as to the 2016 notes from 5:00 p.m.
on Jan. 27, 2006, to 5:00 p.m. on Feb. 2, 2006, unless further
extended.  This extension was requested by the holder of the
2016 Notes.  All other terms and conditions of the 2016 Notes
consent solicitation remain the same.

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

                        *    *    *

As reported by Troubled Company Reporter on Nov. 1, 2005,
Moody's Investors Service downgraded to Ba3 from Ba1 the senior
debt of Doral Financial Corporation.  The ratings had been
downgraded a number of times since Moody's initial review
process began in April 2005.  


G+G RETAIL: Taps Pachulski Stang as Bankruptcy Counsel
------------------------------------------------------
G+G Retail, Inc., asked the U.S. Bankruptcy Court for the
Southern District of New York for authority to employ Pachulski,
Stang, Ziehl, Young, Jones & Weintraub P.C. as its bankruptcy
counsel.

Pachulski Stang will:

   a) provide the Debtor legal advice with respect to its powers
      and duties as a debtor-in-possession in the continued
      operation of its business and management of its property;

   b) prepare and pursue confirmation of Debtor's plan and
      approval of a disclosure statement;

   c) prepare necessary applications, motions, answers, orders,
      reports and other legal papers on behalf of the Debtor;

   d) appear in Court to protect the interests of the Debtor;
      and

   e) perform all other legal services for the Debtor which may
      be necessary and proper in this proceeding.

Laura Davis Jones, Esq., discloses Pachulski Stang's
professionals' hourly billing rates:

      Professional                  Rate
      ------------                  ----
   Laura Davis Jones, Esq.          $675
   William P. Weintraub, Esq.       $675
   David M. Bertenthal, Esq.        $495
   Curtis A. Hehn, Esq.             $350
   Sandra G.M. Selzer               $295
   Kathe F. Finlayson               $165

To the best of the Debtor's knowledge, Pachulski Stang is a
"disinterested person" as that term is defined in Section
101(14) of the Bankruptcy Code.

Headquartered in New York, New York, G+G Retail Inc. retails
ladies wear and operates 566 stores in the United States and
Puerto Rico under the names Rave, Rave Girl and G+G.  The Debtor
filed for chapter 11 protection on Jan. 25, 2006 (Bankr.
S.D.N.Y. Case No. 06-10152).  When the Debtor filed for
protection from its creditors, it estimated assets of more than
$100 million and debts between $10 million to $50 million.


MUSICLAND HOLDING: Look for Bankruptcy Schedules on March 28
------------------------------------------------------------
Pursuant to Section 521 of the Bankruptcy Code and Rule 1007 of
the Federal Rules of Bankruptcy Procedure, a debtor is required,
within 15 days from the Petition Date, to file with the court a
schedule of assets and liabilities and a statement of financial
affairs.

Musicland Holding Corp. has 33,000 creditors.  Moreover, the
conduct and operation of the Debtors' business operations
require the Debtors to maintain voluminous books and records and
complex accounting systems.

According to James H.M. Sprayregen, Esq., at Kirkland & Ellis
LLP, in New York, because of the size and complexity of the
Debtors' business operations, the number of creditors, and the
fact that certain prepetition invoices have not yet been entered
into the Debtors' financial accounting systems, the Debtors have
not finished compiling their Schedules and Statements.

Thus, the Debtors ask the U.S. Bankruptcy Court for the Southern
District of New York for a 60-day extension to complete their
Schedules and Statements.

The Debtors further request that the extension be without
prejudice to their right to seek further extensions or a waiver
of the requirement for filing certain schedules.  In addition,
the Debtors will work with the Office of the United States
Trustee and any subsequently appointed creditors' committee to
make available sufficient financial data and creditor
information to permit at least an initial Section 341 meeting to
be timely held.

                        *    *    *

Judge Stuart M. Bernstein extended the deadline for the Debtors
to file their Schedules and Statements to March 28, 2006.

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)


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

* URUGUAY: Primary Budget Surplus Exceeds IMF Target
----------------------------------------------------
Reuters reports that Uruguay's primary budget surplus of 14.94
billion pesos in 2005 exceeded the target that it agreed with
the International Monetary Fund.  The target surplus was 14.65
billion pesos.

The surplus excludes interest payments on debt and is used a
gauge of the government's ability to repay creditors, Reuters
states.

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


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

CANTV: President Called to Explain Irregularity Issues
------------------------------------------------------
Gustavo Roosen, Compania Anonima Nacional Telefonos de
Venezuela, CANTV's president, has been called before the
country's national assembly to answer a series of questions
about his company's actions, Business News Americas reports.

The assembly wants to determine whether accusations made by
residents of Guarico, Venezuela, are true.  The assembly also
wants to know whether CANTV has complied with privatization
agreements and whether it is acting against the interests of its
customers and employees.  The assembly hearing will be made at
the first half of February, Business News relates.

CANTV's treatment of its retired employees are questioned by
Guarico's residents.  The retirees are currently in the eighth
year of a lawsuit against the company in an attempt to obtain
their pensions, and filed complaints with the assembly because
CANTV closed its regional customer service offices, Business
News relates.  CANTV is also accused of irregularities in the
handling of the minutes remaining on prepaid phone cards.

Compania Anonima Nacional Telefonos de Venezuela, CANTV, offers
telecommunications services.  The Company provides domestic and
international long distance telephone services throughout
Venezuela, wireless telephone services, and Internet access, and
publishes telephone directories.


PDVSA: Reimbursing Foreign Companies for Operating Expense
----------------------------------------------------------
As previously reported, PVSA aka Petroleos de Venezuela SA
signed preliminary agreements in 2005 with foreign oil companies
to migrate 32 existing operating agreements in the country to
new joint ventures.  PDVSA will have an average 60% stake in the
new contracts.  PDVSA hopes to save US$3 billion in operating
costs in 2006 through the new contracts.

The foreign companies asked PDVSA 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 Venezuela's national assembly.

Luis Xavier Grisanti, the Venezuelan Hydrocarbons Association's
head, disclosed that the state oil company has agreed to
continue reimbursing the firms for operating costs and overhaul.

Venezuela is a founding member of OPEC and the fourth-largest
supplier of crude oil to the U.S.

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
Joy P. Olano, Editors.

Copyright 2006.  All rights reserved.  ISSN 1529-2746.

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