---

        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, February 20, 2006, Vol. 7, Issue 36

                            Headlines


A R G E N T I N A

ACINDAR INDUSTRIA: Posts US$179 Million Profit in 2005
CATCHER S.R.L.: Claims to be Verified until May 8
CLINICA REGIONAL: Verification Phase Ends May 19
EMPRESA DE COMBUSTIBLES: Trustee Accepts Claims until April 3
TELECOM ARGENTINA: Considers Alternatives to Offer Shareholders

TELEFONICA ARGENTINA: Inks Letter of Understanding with UNIREN
TIFEC S.A.I.C. Y F.: Concludes Reorganization
TRANSPORTES AVELLANEDA: Trustee Sets End of Verification


B A H A M A S

GULF UNION: Liquidators Will Declare Third Dividend on March 10
ULTRAPETROL (BAHAMAS): S&P Assigns 'B' Corporate Credit Rating


B E R M U D A

FOSTER WHEELER: On Final Modification of Contract for Idaho
MLA INSURANCE: Appoints Michael W. Morrison as Liquidator


B O L I V I A

REPSOL YPF: Bolivia Investigating Environmental Damage Charge

B R A Z I L

BANCO BRADESCO: Moody's Changes C- Rating's Outlook to Positive
BANCO RURAL: Moody's Withdraws All Ratings
CSN: Arcelor and Mittal Eyeing Company for Possible Acquisition
TELEMAR: Issuing US$754 Million Non-Convertible Debt
TELEMAR: S&P Assigns BB Local and Foreign Currency Ratings

UNIBANCO: Posts Net Income of BRL1.838 Million in 2005


C A Y M A N   I S L A N D S

BAILEY COATES: Creditors Must Prove Claims by March 7
BRITCAY MANAGEMENT: Liquidator Ceases Verifying Claims on Mar. 7
ENERGY CATALYST: Claims Verification Phase Ends on March 7
MTU LTD: Verification of Claims to Stop on March 6
STATE REINSURANCE: Creditors Have 30 Days to Submit Claims

WOODALLEN AURIC: Wind Up Process to be Reported on February 27


D O M I N I C A N   R E P U B L I C

BANCO DOMINICANO: Possible Losses Cues Fitch's Downgrades
* DOMINICAN REPUBLIC: Needs Debt Restructuring Pact to Get Loan
* DOMINICAN REPUBLIC: IDB Lays Out Requirements for Loan


M E X I C O

CFE: Telephony, Data Services over PLC Available within Months
PEMEX: Study Shows Possible Decline in Cantarell Oil Field
SATMEX: Investing US$270M to Launch Satmex 6 Satellite on May 17


P U E R T O   R I C O

MUSICLAND HOLDING: Creditors Want Facts to Benefit Programs
WILLIAM CALO: Issues Case Summary, 17 Largest Unsec. Creditors


V E N E Z U E L A

CITGO: PDVSA Crude Shipments Increase Despite Diplomatic Spat
PETROBRAS ENERGIA: Net Income Reaches ARS109 Million in 2005
PDVSA: Crude Shipments Increase Despite Diplomatic Spat
* Venezuela Injecting US$50MM in Banco Industrial's Cuban Branch

     -  -  -  -  -  -  -  -

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


ACINDAR INDUSTRIA: Posts US$179 Million Profit in 2005
------------------------------------------------------
Business News Americas presents the 2005 financial results of
Acindar Industria Argentina de Aceros.

The Argentine long steel producer posted a 550 million-peso
(US$179 million) net profit in 2005, up 25.7% from the year
before.  The increase was due to the positive operating result
of 878 million pesos, net of the negative charge on income tax
of 294 million pesos.

Acindar's board has proposed allocating 5% of profits to the
legal reserve of 27.5 million pesos, distributing 225 million
pesos as cash dividends and keeping 297 million pesos as non-
allocated results.

Operating profit plus depreciation (Ebitda) for 2005 was 967
million pesos, compared to 972 million the year before.

In 2005, net sales rose 20% to 2.54 billion pesos, while exports
grew 1% to 506 million pesos.

Average production costs increased 37.6% due to higher labor
costs and the prices of raw materials, the latter of which saw
pellet and iron ore prices increase 91%.

Acindar, controlled by Brazilian steelmaker Belgo-Mineira,
produces non-flat steel products such as steel pipe, cable, hot-
rolled and cold-drawn steels for concrete, forged bars and
blocks for distributors of steel products, other steel
companies, manufacturers of original equipment for several
industrial sectors including the automotive and the oil and gas
industries and end users, mainly in the construction and
agricultural sectors of the economy.  Its principal market is
Argentina, although it exports its products to Brazil, Chile and
the United States, Bolivia and Uruguay through its sales office.

                        *    *    *

As previously reported on Dec. 23, 2005, Fitch Argentina
Calificadora de Riesgo S.A. maintained the 'D(arg)' rating given
to a total of US$100 million of corporate bonds issued by long
steelmaker Acindar Industria Argentina de Aceros.

Comision Nacional Valores, the country's securities regulator,
relates that the rating action was based on the Company's
finances as of Sep. 30, 2004.

The bonds, which matured in February 16 last year, are described
as "Obligaciones Negociables simples, no 5.8.96."


CATCHER S.R.L.: Claims to be Verified until May 8
-------------------------------------------------
Claims against Catcher S.R.L. will be verified until May 8,
2006, reports Argentine daily La Nacion.

Catcher S.R.L. was declared bankrupt by Buenos Aires' Court No.
22, with the assistance of Clerk No. 44, after the company
failed to pay $80,462.71 to Mr. Luis Gonzalez Romero -- the
company's creditor.  The court appointed Ms. Maria Cristina
Rodriguez as trustee.

Catcher S.R.L. can be reached at:

         Riobamba 72
         Buenos Aires

Ms. Maria Cristina Rodriguez, the trustee, can be reached at:

         Montevideo 581
         Buenos Aires


CLINICA REGIONAL: Verification Phase Ends May 19
------------------------------------------------
The verification phase of claims of creditors against Clinica
Regional del Centro Privado S.A. has started.  The phase will
end on May 19, 2006, reports Infobae.

Verified claims will be submitted in court as individual reports
on July 7, 2006.

Clinica Regional del Centro Privado S.A. can be reached at:

         Acuna 577
         Rio Tercero (Cordoba)


EMPRESA DE COMBUSTIBLES: Trustee Accepts Claims until April 3
-------------------------------------------------------------
Court-appointed trustee Abraham Yalovetzky is accepting
creditors' claims against Empresa de Combustibles y Energia S.A.
until April 3, 2006, reports Infobae.  Creditors whose claims
are not validated after the said date will not receive any
distribution that the company will make.

Validated claims will be presented in court as individual
reports on May 18, 2006.

Mr. Yalovetzky will also submit a general report on the case on
July 3, 2006.

Empresa de Combustibles y Energia S.A. started liquidating
assets after a Buenos Aires court declared its bankruptcy.

Mr. Abraham Yalovetzky, the trustee, can be reached at:

         Lavalle 1567
         Buenos Aires


TELECOM ARGENTINA: Considers Alternatives to Offer Shareholders
---------------------------------------------------------------
Telecom Argentina S.A. is considering alternatives to propose to
holders of series A notes due 2014 and series B notes due 2011
an amendment to two sections of the indenture under which the
notes were issued, in order to eliminate that portion of the
covenants that limit the ability of its subsidiary Telecom
Personal S.A. to make capital expenditures and certain
commitments related to the reinvestment of distribution payments
received from such subsidiary.

For this purpose, Telecom Argentina will analyze the applicable
legal procedures and will explore the market possibilities to
obtain the consent of the holders to the amendments of the
indenture contract.

Headquartered in Buenos Aires, Telecom Argentina S.A. --
http://www.telecom.com.ar/index-flash.html-- is the fixed-line
operator for local and long-distance services in northern and
southern Argentina.  It also provides cellular and PCS phone
services in Argentina, as well as in Paraguay through a 68%
stake in Nocleo.  France Telecom formerly controlled the company
through its Nortel Inversora venture with Telecom Italia.
France Telecom sold most of its stake in 2003 to the Werthein
Group, an Argentine agricultural concern owned in part by vice
chairman Gerardo Werthein. Nortel continues to be Telecom
Argentina's largest shareholder with a 55% stake.  Nortel is
owned by Sofora, a consortium owned by Telecom Italia (50%), the
Werthein Group (48%), and France Telecom (2%).

                        *    *    *

Telecom Argentina's $64,128,000 and $54,124,000 notes due Oct.
15, 2014, carry Standard & Poor's and Fitch's B- ratings.


TELEFONICA ARGENTINA: Inks Letter of Understanding with UNIREN
--------------------------------------------------------------
Telefonica de Argentina S.A. signed a letter of understanding
with Federal Administration, through the Unidad de Renegociacion
y Analisis de Contratos de Servicios Publicos aka UNIREN --
utility contract renegotiation and analysis unit.

The letter of understanding shall be the basis for the agreement
on transfer contract renegotiation approved by Decree 2332/90
under the provisions of Section 9, Law 25,561.

The letter of understanding states:

Investments

   -- Telefonica shall continue making investments for
      developing and updating its network technology;

   -- Telefonica shall undertake to foster:

         -- research and development relating to new services;

         -- actions towards reducing the digital divide and
            developing the information society, and

         -- update and technology transfer programs, as well as
            the development of domestic companies.

Service Goals and Long Term Goals

Telefonica undertakes to continue to provide service in
accordance with all the quality obligations arising from
applicable rules and regulations.  As of Dec. 31, 2010,
Telefonica shall have attained the goals set as Long Term Goals
in Decree No. 62/90, and in the General Regulations on Basic
Telephony Service Quality.  Starting in 2006 and until the date,
Telefonica shall have attained certain Service Goals.

Contractual Situation

Telefonica has reasonably complied with the obligations set
forth in the Transfer Contract and the applicable regulatory
framework.  There has been certain non-compliance, which was
subject to penalties, and certain operation-related issues are
pending, which shall be resolved by June 30, 2006.

Regulatory Framework

The parties undertake to comply with and keep the legal terms
set in the transfer contract and the applicable rules and
regulations.  The national executive branch undertakes to set a
stable legal framework in the future to regulate this business
sector.  To that end, it shall submit a bill to the legislative
branch.

Suspension of Actions

For a period of 210 business days beginning thirty days after
the completion of the public hearing to be called by the UNIREN
in order to discuss the letter of understanding, Telefonica and
its shareholders will have to suspend all dealings relating to
any claims, recourses and complaints filed or in progress,
either in administrative, arbitration or judicial venue, in our
country or abroad, grounded or related to the facts or actions
arising from the emergency situation set forth by Law No. 24,561
regarding the transfer contract and the company's license.

Abandonment of Right and Actions

Within thirty days after the ratification of the agreement by
the national executive branch, Telefonica and its shareholders
representing at least 98% of the capital stock shall fully and
expressly abandon any rights that may be eventually invoked, as
well as any such actions filed or in progress, grounded or
related to the facts or actions arising from the emergency
situation set forth by Law No. 25,561 regarding the transfer
contract and the company's license.  The foreseen abandonment
shall not be construed as abandonment by the company of such
rights that may be applicable under different future
circumstances.  Failure to perform such abandonment shall imply
a rejection of the agreement by the company, and could lead to
the revocation or expiration of the company's license.

Incoming International Calls in Local Area

In order to adjust to international standards the termination
fee of incoming international calls and to improve the foreign
exchange balance of our country resulting from the use of
international telecommunication services, the application of a
correction factor is approved such that the termination fee is
increased by a multiple of three.

Time Band Unification

Reduced rate time bands will be unified for local, domestic long
distance and international long distance calls resulting in the
joint application of minor discounts.

Equal Treatment

Within the contract renegotiation process scope, the Federal
Administration undertakes to provide the company treatment equal
to that granted to other telecommunication companies involved in
the mentioned process.

Renegotiation Agreement

The letter of understanding shall be submitted to a public
hearing proceeding in order to promote the involvement of users
and the community at large to build the consensus needed to make
progress towards the execution of the renegotiation agreement.
Likewise, the letter of understanding shall be submitted for
other approvals required by applicable rules and regulations.

Headquartered in Buenos Aires, Argentina, Telefonica de
Argentina S.A. -- http://www.telefonica.com.ar/-- provides
telecommunication services which include telephony business both
in Spain and Latin America, mobile communications businesses,
directories and guides businesses, Internet, data and corporate
services, audiovisual production and broadcasting, broadband and
Business-to-Business e-commerce activities.

                        *    *    *

Telefonica's $148,200,000 and $134,644,000 notes due Aug. 1,
2011, carry Standard & Poor's B- rating and Fitch's B rating.


TIFEC S.A.I.C. Y F.: Concludes Reorganization
---------------------------------------------
The reorganization of Buenos Aires-based TIFEC S.A.I.C. Y F. has
ended.  Data revealed by Infobae on its Web site indicated that
the process was concluded after Buenos Aires court homologated
the debt agreement signed between the company and its creditors.

Tifec S.A.I.C. y F., can be reached at:

         Avda. Bernardo O Higgins 3850
         Ciudad de Cordoba (Cordoba)


TRANSPORTES AVELLANEDA: Trustee Sets End of Verification
--------------------------------------------------------
Mr. Roberto Eugenio Bogliotti, the trustee appointed by Buenos
Aires' Court No. 22 for the bankruptcy of Transportes Avellaneda
S.A., will stop claims verification on May 5, 2006.

La Nacion relates that the court, with the assistance of Clerk
No. 44, declared the company bankrupt in favor of Obra Social de
los Empleados de Comercio y Actividades Afines, the company's
creditor.  Obra Social has claims reaching $12,908.07 against
the company.

Transportes Avellaneda S.A. can be reached at:

         San Antonio 494
         Buenos Aires

Mr. Roberto Eugenio Bogliotti, the trustee, can be reached at:

         Junin 59
         Buenos Aires



=============
B A H A M A S
=============


GULF UNION: Liquidators Will Declare Third Dividend on March 10
---------------------------------------------------------------
Raymond L. Winder and Graham C. Garner, the official joint
liquidators of Gulf Union Bank (Bahamas) Limited intend to
declare a third dividend on March 10, 2006.

Gulf Union's liquidation proceeding is under the Commonwealth of
the Bahamas 1997 in the Supreme Court No. 1237.


ULTRAPETROL (BAHAMAS): S&P Assigns 'B' Corporate Credit Rating
--------------------------------------------------------------
Standard and Poor's Ratings Services has assigned a B/Negative/
-- corporate credit rating to Ultrapetrol (Bahamas) Ltd.  It
also affirmed local currency 'B' rating on the company's senior
secured debt.

Strengths:

    -- Leading player in the Parana river barge business;
    -- Long-term profile of its debt maturity schedule; and
    -- Some business diversification reflected in the company's
       fleet profile

Weaknesses:

    -- Heavy debt burden and leverage;
    -- Increasing exposure to regional economic patterns;
    -- Uncertainties about its ability to consistently increase
       cash flows;
    -- Sizable capital expenditures programmed for the next
       couple of years; and
    -- Concentrated customer base

Rationale

The ratings on Bahamas-based shipping company Ultrapetrol
(Bahamas) Ltd. aka Ultrapetrol reflect its aggressive financial
profile, characterized by substantial debt leverage, an
increasing exposure to regional economic patterns -- with barge
and oil products transportation services in the South American
region -- uncertainties about its ability to consistently
increase cash flows with recently acquired vessels, sizable
capital expenditures programmed for the next couple of years
that may result in further debt leverage, and a concentrated
customer base.

These negatives are partly offset by a favorable market position
in the barge business at the Parana River's Hidrovia, close
relationships with the main oil companies in South America, the
long-term profile of its debt maturity schedule -- with the 2014
bond accounting for the bulk of its debt -- and some business
diversification reflected in the company's fleet profile.

Ultrapetrol is a small diversified shipping company incorporated
in the Bahamas with offices in Buenos Aires, Argentina.
Revenues, EBITDA, and total debt in the past 12 months ended
Sept. 30, 2005, amounted to $123.5 million, $42 million, and
$217 million, respectively. The company has chosen to diversify
its business portfolio in the past couple of years, reducing its
oceangoing fleet -- by selling off all single-hull vessels --
and growing its stake in river barges as well as entering into
passenger vessels.

While full-year 2005 passenger results point toward very
satisfactory performance, the company is still expected to
perform significant refurbishment on cruise vessels and continue
investing in new vessels in the next couple of quarters, which
tends to compress free operating cash flows aka FOCF.  Revenue
sources have been increasingly diversified with the full
consolidation of the barge operation aka UABL, but the
importance of oceangoing revenues remains high, accounting for
the bulk of EBITDA in the nine months ended September 2005 --
especially considering higher tariffs for the largest vessels in
the first half of 2005, although declining somewhat in the third
quarter.

S&P's projections take account of the risks of Ultrapetrol's
growth strategy in the context of relatively thin cash flows,
which might result in incremental leverage going forward.
Additional debt necessary to finance the expansion of the
company's fleet, especially more expensive oceangoing vessels,
and a less speedy ramp-up in cash generation in 2006 and 2007
may well result in credit ratios stabilizing or even
deteriorating from current levels of total debt to EBITDA at
5.1x, funds from operations to total debt at 9.4%, and EBITDA
interest coverage of 2.3x -- S&P's EBITDA calculation factors in
cash drydock expenses.  On the other hand, Ultrapetrol benefits
from the long-term profile of the bulk of its debt -- 81% of the
total amount matures only in 2014.

Liquidity

Ultrapetrol's liquidity is currently higher than historical
levels, at $24.2 million in September 2005 -- partly earmarked
for the acquisition of vessels -- net of $3.6 million restricted
cash, compared with short-term debt maturities of $8.2 million
in 2006.  Debt maturities should not be a source of pressure in
the medium term, with debt amortizations of less than $6.0
million within the next couple of years; interest burden,
however, tends to be a significant outlay, as S&P estimates
about $20 million in annual payments assuming the current debt
amortization schedule and some new loans already programmed to
be raised -- the company added $30.5 million in new debt in the
past 12 months ended Sep. 30, 2005.

In addition, the sale of some of its existing vessels to finance
the acquisition of others has been a practice for the company in
the past two to three years.  In fact, the company raised about
$20 million in 2003-2004 with the sale of its old single-hull
vessels, an amount further increased with the $39.9 million
obtained with the sale of Cape Pampas in 2005.  From now on S&P
expects UP Offshore -- the company's developing platform supply
vessel joint venture -- to be funded by the project finance debt
already accorded, which is nonrecourse to Ultrapetrol.  The
company distributed $13.4 million in dividends based on the
profits of the sale of Cape Pampas in 2005; however, S&P expects
Ultrapetrol to sustain a conservative dividend policy in the
future that is compatible with its fleet growth strategy.

Outlook

The negative outlook on Ultrapetrol's ratings reflects the
vulnerability of the company to volatile market conditions in
the context of its fleet growth strategy in the near future,
despite its currently improved cash flows and cash reserves.
The outlook may be revised to stable if Ultrapetrol is able to
obtain larger cash flows from its reformatted fleet in the next
couple of quarters and to add new profitable vessels under the
limits of its liquidity and internal cash constraints throughout
2006.  The ratings may be lowered if additional debt has to be
raised to fund new vessel acquisitions, especially if
incremental cash flows coming from recently acquired vessels
turn out to be below expectations.


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


FOSTER WHEELER: On Final Modification of Contract for Idaho
-----------------------------------------------------------
Foster Wheeler Ltd. announced that its subsidiary, Foster
Wheeler Environmental Corporation aka FWENC, has agreed to a
final modification to its contract with the U.S. Department of
Energy aka DOE to design and construct a spent nuclear fuel
storage facility at the DOE's Idaho National Laboratory.

Under the agreed final modification, the contract will be
terminated on a no-fault basis once FWENC has transferred to the
DOE certain licenses, permits, contracts, drawings, and other
documents related to the project.  At that time, the DOE and
FWENC will also exchange broad releases of claims related to the
project.  Neither party is required to pay the other any money
pursuant to the final modification.

FWENC is in the process of arranging the necessary transfers,
which are not yet complete.  The target date for completion of
the transfer and the related exchange of releases is March 6,
2006.

"We are very pleased to have been able to cooperate with the DOE
in arranging this mutually beneficial resolution to the various
issues posed by the existing contract.  We fully intend to work
with the DOE to complete the necessary transfers as soon as
possible," said Bernard H. Cherry, chief executive officer of
FWENC.

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.

                        *    *    *

On Feb. 7, 2006, Standard & Poor's Ratings Services revised its
outlook on Foster Wheeler Ltd. to stable from negative.  At the
same time, Standard & Poor's affirmed its 'B-' corporate credit
rating and 'CCC+' senior secured debt rating on the Clinton, New
Jersey-based engineering and construction company.  Standard &
Poor's estimates that as of 2005 year-end, Foster Wheeler had
approximately $315 million of total debt outstanding.


MLA INSURANCE: Appoints Michael W. Morrison as Liquidator
---------------------------------------------------------
Mr. Michael W. Morrison was appointed as liquidator of MLA
Insurance Company Limited -- company in liquidation -- on Feb.
9, 2006.  He will serve with a committee of inspection.

As reported by Troubled Company Reporter on Jan. 13, 2006, the
first meetings of contributories and creditors in the company's
liquidation was scheduled on Jan. 17, 2006, at the offices of
KPMG Financial Advisory Services Limited, Crown House, 4 Par-la-
Ville Road, Hamilton, Bermuda.  For the contributories, the
meeting was set at 9:00 a.m. while the creditors' meeting was at
10:00 a.m.  The purpose of the meetings was to consider the
appointment of the permanent liquidator and whether a committee
of inspection should be appointed in respect of the Company.

Mr. Michael Morrison, the provisional liquidator, can be reached
at:

         KPMG Financial Advisory Services Limited
         Crown House, 4 Par-la-Ville Road, Hamilton, Bermuda


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


REPSOL YPF: Bolivia Investigating Environmental Damage Charge
-------------------------------------------------------------
The Bolivian government has created a special committee that
will investigate alleged environmental damage committed by
Spanish-Argentinian oil company Repsol YPF at a natural gas
field in the country's Chaco region, according to a report from
the Spain Herald.

The panel will be composed of Jorge Alvarado, the president of
Bolivian Fiscal Petroleum Reserves, vice minister of Land, and
Juan Carlos Iporre, vice minister of Natural Resources and
Environment.

The Guarani People's Assembly complained to president Evo
Morales that "there is soil erosion, the forests are affected,
and hunting is impossible," the Herald relates.

Andres Segundo, GPA's president, said that in the area of the
Margarita gas field, shared by Repsol and British Gas, the
natural environment has been seriously damaged.  The Chaco
contains the country's largest natural gas reserves, estimated
at 13.4 trillion cubic feet, of which Repsol exports 0.62
million cubic feet a day to Brazil, the Herald relates.

The result of the panel's inquiry won't affect Repsol's license
to operate in Bolivia, vice minister of Coordination with Social
Movements and Civil Society Alfredo Rada told the Herald.

Last week, Repsol committed to a $150 million joint venture with
Yacimientos Petroliferos Fiscales Boliviano, Bolivia's state oil
company, despite the government's oil smuggling accusations.

                        *    *    *

On June 20, 2005, Moody's Investors Service upgraded the ratings
of Spanish-Argentine 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.


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


BANCO BRADESCO: Moody's Changes C- Rating's Outlook to Positive
---------------------------------------------------------------
Moody's Investors Service changed to positive, from stable, the
outlook on the 'C-' bank financial strength rating assigned to
Banco Bradesco S.A. aka Bradesco.  The rating action reflects
the improved core profitability and the positive trend of
Bradesco's performance metrics overall, which have substantially
converged to those of higher rated banks in Latin America.
Moody's affirmed all other ratings and their outlooks.

The rating agency noted that Bradesco's franchise has been
strengthened following successive acquisitions of banking and
non-bank businesses over a number of years.  While such strategy
has enhanced the scale of the bank's operations and further
diversified its customer and product base, it has also limited
the bank's focus on earnings quality and operating efficiency,
thus delaying the maximization of its financial potential.  The
integration process is now largely completed, said Moody's, and
this should ensure that earnings and efficiency gains can now be
realized.

Moody's observed that Bradesco's performance in the first three
quarters of 2005 attested to it, as both core earnings and
margins were up sharply from previous quarters.  Those improved
indicators were boosted by the favorable combination of high
interest rates, continued strong credit demand, and adjustments
to the cost base.

Moody's had previously indicated that the sustainability of
Bradesco's new profitability targets would be key to a potential
upgrade of the bank's financial strength rating.  In that
regard, management has demonstrated the ability to extract value
out of Bradesco's broad franchise, which Moody's views as
offering many opportunities to bolster core earnings generation.

The rating agency added that Bradesco's management is challenged
to manage the depth and size of Bradesco's diversified business
platform efficiently, and, without losing focus on its need to
maximize the value of its franchise.  The bank's growth dynamics
have resulted in a formidably diversified conglomerate, whose
asset size went up considerably over the past seven years, to
reach BRL202 billion in September 2005, with a customer base of
more than 16.5 million account holders.


BANCO RURAL: Moody's Withdraws All Ratings
------------------------------------------
Moody's Investors Service has withdrawn all of its ratings for
Banco Rural S.A. for business reasons.

The bank has no rated foreign currency debt outstanding.

This action does not reflect a change in Banco Rural's
creditworthiness.

Banco Rural had total assets of US$1.9 billion as of June 2005.

The ratings withdrawn are:

    -- Bank financial strength rating, E+, negative outlook;

    -- Long and short term foreign currency deposit ratings: B2/
       not prime, negative outlook;

    -- Long and short term local currency deposit ratings:
       B2/Not prime, negative outlook; and

    -- Long and short term national scale deposit ratings:
       Ba1.br/ BR-4.


CSN: Arcelor and Mittal Eyeing Company for Possible Acquisition
---------------------------------------------------------------
According to reports, Arcelor SA and Mittal Steel could be
considering the acquisition of CSN aka Cia Siderurgica Nacional.

Brazil's Gazeta Mercantil said that neither Arcelor nor Mittal
have publicly expressed interest in acquiring the Brazilian
steelmaker.

CSN told Gazeta Mercantil that it is in talks with the two
steelmakers, though it has not received an offer from either
one.

Business News Americas says that Mittal's interest in CSN would
be to increase its market share, especially in Brazil, Latin
America's largest steel producer. Mittal's other interest in the
country includes the available cheaper labor and high
concentration of raw materials, especially iron ore.

Arcelor, on the other hand, late last year consolidated its
three subsidiaries in the South American country -- Belgo-
Mineira, CST and Vega do Sul -- into Arcelor Brasil.  Arcelor
may be keen on CSN because the acquisition could stop Mittal's
growth in the Brazilian steel market, Business News relates.

Mittal Steel launched on January 27 an 18.6 billion euro
(US$22.6 billion) bid to acquire Arcelor.  Arcelor's board of
directors unanimously rejected the takeover bid.

                       About Arcelor SA

Headquartered in Luxembourg, Arcelor was formed by the
combination of steel giants Usinor (France), ARBED (Luxembourg),
and Aceralia (Spain).  Until 2004, Arcelor was considered the
world's leading steelmaker, but the formation of Mittal Steel
has pushed it into the #2 spot. Arcelor produces carbon steel
(coated steel sheet, cold coils, and hot coils), long carbon
steel (beams, merchant steel, sheet piling, and rails for public
transport), and stainless steel for the appliance, automotive,
construction, and packaging industries. Arcelor manufactures
about 50 million metric tons of crude steel per year.

                       About Mittal Steel

Headquartered in Rotterdam, The Netherlands, Mittal was forged
late in 2004 when publicly traded Ispat International (of which
the Mittal family owned 70%) purchased Antilles-based LNM
Holdings (wholly owned by the Mittals) for roughly $13.3
billion. When the dust settled, the combined entity stood as the
largest steel company in the world, with annual steel production
of more than 50 million metric tons. The company manufactures
flat rolled and long steel products utilizing direct-reduced
iron, which is cheaper than using iron ore or scrap iron. Top
customers include Ford Motor, General Motors, Maytag, and
Whirlpool.

                           About CSN

Companhia Siderurgica Nacional SA manufactures and distributes
hot rolled, cold rolled and galvanized steel products and tin
mill products.  CSN distributes primarily to customers in the
automobile, auto-parts, civil construction, tubes and pipes and
electrical equipment industries.  The Company markets its
products mainly in Latin America, North America, Europe and
Asia.

                        *    *    *

On Jan. 26, 2006, Standard and Poors' Rating Services assigned 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.


TELEMAR: Issuing US$754 Million Non-Convertible Debt
----------------------------------------------------
Telemar aka Tele Norte Leste Participacoes SA plans to issue 1.6
billion reais (US$754 million) of non-covertible debt in two
tranches, Business News Americas reports.  The first five-year
tranche will be for 1.2 billion reais and the second seven-year
tranche will be for 400 million reais.

BB Banco de Investimento is the lead coordinator, along with
local banks Bradesco, Itau BBA and Pactual as well as Dutch bank
ABN Amro and U.S. financial giant Citibank, Business News
relates.

Tele Norte Leste is one of three regional fixed-line phone
companies created in the 1998 breakup of former monopoly
Telebr s.  In 2001, the holding company combined its 16 wireline
operating subsidiaries into one unit, which was renamed Telemar
Norte Leste and now provides local access, intraregional and
international long-distance, and data transmission over 15
million lines in eastern and northern Brazil, from Rio de
Janeiro to the Amazon.  It also offers wireless phone service to
about 8 million subscribers through the "Oi" brand (Portuguese
for "hello").  Holding company Telemar Participacoes, made up of
regional investment groups, controls 54% of TNL.

                        *    *    *

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.


TELEMAR: S&P Assigns BB Local and Foreign Currency Ratings
----------------------------------------------------------
Standard and Poor's Ratings Services has assigned 'BB' local and
foreign currency ratings to Tele Norte Leste Participacoes S.A.
aka TNL and Telemar Norte Leste S.A. aka Telemar NL.

Rationale

The ratings on Tele Norte and Telemar Norte -- jointly referred
here as Telemar -- reflect the companies' exposure to the
volatile economic and operating environment of Brazil; the
challenges of a competitive and continuously changing
environment for telecom companies; and the regulatory
uncertainties, particularly those related to the new
requirements and rulings effective since January 2006.  These
risks are partially offset by Telemar's dominant market position
in fixed-line and broadband services, and strong position in
wireless that provide it with a fairly diversified revenue mix;
strong credit metrics supported by consistent generation of free
operating cash flows; and a strong liquidity position supported
by a strong cash position and wide access to financing sources.

Despite its strong market position, Telemar is ultimately
exposed to Brazil's country risks, including the fluctuations in
economic growth and income levels, volatility of the local
currency and interest rates, and potential reduction in credit
availability to Brazilian entities in the local and
international capital markets.

As a regulated entity, the company remains exposed to a
relatively new and evolving regulatory environment.
Nevertheless, while the requirements imposed by the new
concession contracts effective since January 2006 will require
additional investments in infrastructure to meet new quality
standards, a new tariff model, and other improvements, it is
anticipated that the level of capital expenditures related to
these investments will be much lower than that required at the
time of the privatization of the Brazilian telecom system in
1998.

While Telemar does not face meaningful competition in the
wireline segment, the competitive environment for mobile
operators is very aggressive.  After the initial efforts to
establish its mobile footprint in the first two years of
operations, Telemar was able to deliver positive mobile EBITDA
margins in 2005 -- 18% in the first nine months of 2005.
Nevertheless, the profitability levels of Telemar's mobile
business are well below the company's performance in fixed-line
services. As growth opportunities are generally more
concentrated in segments where competition is more intense, it
is unlikely that Telemar will be able to maintain its
consolidated EBITDA margins consistently above 40%.
Nevertheless, a major drop in margins is not anticipated as the
company's fixed-line and broadband services continue to generate
strong cash flows.

The assignment of a foreign currency rating on TNL and Telemar
NL that is above that of the Federative Republic of Brazil
reflects Standard & Poor's Ratings Services' review of the
transfer and convertibility aka T&C risk affecting entities in
Brazil and other countries announced on Nov. 3, 2005.  The
reassessment of T&C risk affecting Telemar has considered the
company's strong business position, moderate consolidated levels
of debt, and strong ability to generate free cash flows in a
consistent manner, even under certain stress scenarios.

Telemar is Brazil's largest telecommunications company in the
wireline segment with approximately 15 million lines in service.
The company's mobile business surpassed 10 million subscribers
at the end of 2005, which places the company as the market
leader within its licensed areas -- about 26% market share --
despite its late kick-off in 2002.  In line with the market's
trend, Telemar has been posting very strong growth of broadband
aka ADSL connections in past quarters, with 731,000 clients at
September 2005 -- compared to 497,000 at the end of 2004.

Liquidity

Telemar's liquidity position is strong.  The company has access
to uncommitted bank facilities from several banks in Brazil, and
is also significantly supported by credit financing from the
Brazilian National Development Bank aka BNDES.  Additional
sources of financing include other international development
banks such as the Japan Bank for International Cooperation and
Kreditanstalt fr Wiederaufbau.

As of September 2005, Telemar's short-term debt amounted to
BRL4.3 billion -- about 40% of its total debt -- compared to
cash holdings of BRL3.8 billion.  The concentration of short-
term maturities is partially explained by TNL's BRL1.3 billion
debentures maturing in June 2006.  The company has just
announced it intends to issue new local debentures in the total
amount of BRL1.6 billion, whose proceedings would be largely
used for the repayment of this upcoming maturity.

Outlook

The stable outlook reflects our expectation that Telemar should
continue to benefit from its strong competitive position,
financial flexibility, and generation of free operating cash
flows, partly mitigating the volatility related to Brazil's
economic environment, the potential regulatory risks, and the
fierce competitive environment.

A positive review of the ratings or outlook would depend on the
company's ability to maintain its solid profitability levels
accompanied by a reduction of debt levels that improved its
cash-flow protection measures.  This will be particularly
challenging under the current environment for telecom companies
in Brazil, which face decreasing traffic volumes, growing
contribution from more competitive and lower-margin businesses,
and regulatory risks.

A persistently negative economic scenario stemming from country
risk, which would result in inflationary pressures and higher
interest rates, reduced purchasing power, and regulatory
intervention, could trigger a negative review of the ratings or
outlook.  In addition, the ratings could suffer downward
pressure if Telemar failed to replicate its successful fixed-
line business strategy in other growing telecom services.


UNIBANCO: Posts Net Income of BRL1.838 Million in 2005
------------------------------------------------------
Unibanco posted a net income of BRL1.838 million in 2005, up
43.3% from the previous year.  Operating income was BRL2.921
million, 49.0% higher than 2004.  The 4Q05 net income -- at
BRL509 million -- grew 35.7% over 4Q04, resulting in an
annualized return on average equity of 24.2% in the quarter.

The efficiency ratio decreased 1030 basis points from 4Q04 to
4Q05, reaching 49.2%.  It was the best efficiency ratio ever
registered by Unibanco, mostly as a result of an intensification
of credit activity and growth of fees from services rendered,
further supported by strict budgetary discipline, which
translated into an increase of 0.7% in personnel and
administrative expenses in 2005.

Stockholders' equity reached BRL9,324 million at the end of the
year, up 15.0% from the year before.

Consolidated total assets amounted to BRL91,831 million, up
15.7% from Dec. 31, 2004.

In 2005, the credit portfolio increased to BRL39,875 million, a
25.4% growth over 2004 and 8.1% for the quarter.  The highlight
was the retail loan portfolio, which grew 30.9% during the year,
driven by credit cards -- up 43.2% -- consumer finance and small
and medium enterprise aka SME transactions.  The wholesale
portfolio increased 19.0%.

At year-end 2005, total deposits reached BRL35,499 million.
Core deposits went up 15.2% from December 2004, enhanced by an
87.3% growth of SuperPoupe.

Unibanco units were Ibovespa's best performing stock during the
second half of year 2005, gaining 72%.  In the same period,
Ibovespa went up 34%.

Unibanco remains satisfied and confident with the ongoing
results and the continuous improvement of its performance.

Headquartered in Sao Paulo, Brazil, Uniao de Bancos Brasileiros
S.A. aka Unibanco -- http://www.ir.unibanco.com-- is a
subsidiary of Unibanco Holdings S.A.  It provides financial
products and services to individual and corporate customers in
Brazil.  It operates in four segments: retail banking, wholesale
banking, insurance and pension plans, and wealth management.  As
of Sep. 13, 2005, the company operated 908 branches and 392
corporate site branches.  Unibanco's strategic partners include
Magazine Luiza, Ponto Frio, Sonae Distribuicao Brasil S.A., and
Fiat do Brasil S.A.

                          *     *     *

As reported by Troubled Company Reporter on Feb. 3, 2006,
Moody's Investors Service upgraded the bank financial strength
rating of Uniao de Bancos Brasileiros S.A. aka Unibanco to 'C-'
from 'D+', with a stable outlook.  Moody's affirmed all other
ratings and outlooks assigned to Unibanco S.A.  This action
concluded the review for possible upgrade that was initiated on
Nov. 3, 2005.


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


BAILEY COATES: Creditors Must Prove Claims by March 7
-----------------------------------------------------
Bailey Coates (Cayman) II Limited's creditors are required to
prove their debts or claims on or before March 7, 2006, and
establish any title they may have under the Companies Law (2004
Revision).  Creditors whose claims are not verified after the
said date will be excluded from receiving payment from the
company.

Bailey Coates (Cayman) II Limited started liquidating assets
voluntarily on Jan. 17, 2006, and appointed Messrs. Gordon I.
MacRae and G. James Cleaver as liquidators.

Mr. Gordon I. Macrae, the joint voluntary liquidator, can be
reached at:

         Kroll (Cayman) Limited
         4th Floor, Bermuda House
         Dr. Roy's Drive, Grand Cayman
         Cayman Islands

         Korie Drummond
         Telephone: 1 (345) 946-0081
         Fax: 1 (345) 946-0082


BRITCAY MANAGEMENT: Liquidator Ceases Verifying Claims on Mar. 7
----------------------------------------------------------------
Creditors' claims against Britcay Management Ltd. -- company in
voluntary liquidation -- will not be entertained after March 7,
2006.  Creditors must prove their claims on or before the said
date and establish any title they may have under the Companies
Law (2004 Revision).  Failure to do so would mean
disqualification from any distribution or payment that the
company would make.

Britcay Management Ltd. was liquidated on Dec. 14, 2005.  Mr.
Geoffrey W. Moore was appointed as liquidator.

Mr. Geoffrey W. Moore, the voluntary liquidator, can be reached
at:

         P.O. Box 2510 GT, Grand Cayman
         Cayman Islands

         Stuarts Walker Hersant
         Telephone: (345) 949 3344
         Facsimile: (345) 949 2888


ENERGY CATALYST: Claims Verification Phase Ends on March 7
----------------------------------------------------------
The end of verification phase for the claims of Energy Catalyst
Fund Ltd.'s creditors will end on March 7, 2006.  Creditors must
therefore prove their debts or claims by the said date and
establish any title they may have under the Companies Law (2004
Revision).  Failure to do so would disqualify the creditor from
receiving any distribution that the company would make.

The company entered voluntary liquidation on Jan. 4, 2006, and
appointed Messrs. Russell Burt and Chris Humphries as
liquidators.

Messrs. Russell Burt and Chris Humphries, the joint voluntary
liquidators, can be reached at:

         Stuarts Walker Hersant Attorneys-at-Law
         Dr. Roy's drive, P.O. Box 2510 GT
         Grand Cayman, Cayman Islands

         Stuarts Walker Hersant
         Telephone: (345) 949 3344
         Facsimile: (345) 949 2888


MTU LTD: Verification of Claims to Stop on March 6
--------------------------------------------------
The verification of claims of MTU Ltd's creditors will end on
March 6, 2006.  The deadline was set by Messrs. Ian Wight and
Stuart Sybersma, the liquidators appointed by the Grand Court of
the Cayman Islands.

All creditors and shareholders who have not yet contacted the
joint official liquidators are hereby requested to do so in
writing, setting out the basis for their claim and providing
contact details.

Mr. Stuart Sybersma, the joint official liquidator, can be
reached at:

         Deloitte & Touche
         P.O. Box 1787 GT, Grand Cayman
         Cayman Islands

         Mr. Chris Rowland
         Telephone: (345) 949 7500
         Facsimile: (345) 949 8258


STATE REINSURANCE: Creditors Have 30 Days to Submit Claims
----------------------------------------------------------
Creditors of State Reinsurance Co. Ltd. -- company in voluntary
liquidation -- are given 30 days, starting from Feb. 6, 2006, to
submit their claims to the voluntary liquidator.

Creditors must send in their names, addresses, the particulars
of their debts and claims, as well as the names and addresses of
their attorneys-at-law (if any) to the liquidator.  Failure to
do so would mean exclusion from receiving any distribution or
payment that the company would make.

State Reinsurance Co. Ltd. started winding up operations on Dec.
15, 2005.  Global Captive Management Ltd. was appointed as
liquidator.

Global Captive Management Ltd., the voluntary liquidator, can be
reached at:

         Genesis Building, P.O. Box 1363GT
         Grand Cayman, Cayman Islands

         Peter Mackay
         Telephone: (345) 949 7966


WOODALLEN AURIC: Wind Up Process to be Reported on February 27
--------------------------------------------------------------
The wind up process of Woodallen Auric Fund, Ltd., will be
reported during the final meeting on Feb. 27, 2006, at 10:00
a.m., at the registered office of the company.  During the
meeting the liquidators of the company will be authorized to
retain the records of the company for a period of six years from
the dissolution of the company.

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

As reported by Troubled Company Reporter on Jan. 31, 2006,
Woodallen Auric Fund, Ltd., entered voluntary liquidation on
Jan. 3, 2006, and appointed Messrs. David A. K. Walker and
Lawrence Edwards as joint liquidators.

Creditors were given until Feb. 15, 2006, to submit and prove
debts of claims against the company.

Mr. Lawrence Edwards, the joint voluntary liquidator, can be
reached at:

         P.O. Box 219GT, Grand Cayman
         Cayman Islands

         Aysha Jackson
         Telephone: (345) 914 8695
         Facsimile: (345) 949 4590


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


BANCO DOMINICANO: Possible Losses Cues Fitch's Downgrades
---------------------------------------------------------
Fitch Ratings has taken the following actions on Banco
Dominicano del Progreso:

     -- Individual rating downgraded to 'E' from 'D/E';

     -- Long-term foreign currency downgraded to 'CCC' from 'B-'
        and rating placed on Rating Watch Negative;

     -- Short-term foreign currency downgraded to 'C' from 'B';

     -- Support rating affirmed at '5';

     -- National long-term rating downgraded to 'BB(dom)' from
        'BBB+(dom)';

     -- Short-term rating downgraded to 'B(dom)' from 'F2(dom)'.

These rating actions follow the announcement on Feb. 9, 2006,
that BDP's principal shareholders injected around US$100 million
in fresh capital to cover possible losses that will result from
the effects of alleged fraud by the bank's former CEO, which
also affected its holding company, Grupo Progreso.  The
shareholders' announcement added that they had also injected
approximately US$300 million into the holding company to support
the payment of its financial obligations.  In the announcement,
shareholders and the bank's current management stated they were
undertaking a full independent audit to determine the extent of
what may be significant restatement of prior years' earnings; it
is the shareholders' stated intention to inject the capital
necessary to remain in compliance with local minimum regulatory
requirements. While deposits in BDP have suffered some outflow
in recent months, the bank reports it has met these outflows
with its own resources, and has not made use of the contingent
liquidity assistance that may be available from the local
authorities.

The Rating Watch Negative reflects continued uncertainty over
the extent of potential capital and/or liquidity injections the
bank may require as it addresses the issues noted above, and the
actions on the Individual and Long and Short-term ratings mirror
these uncertainties.  Fitch will continue to monitor
developments, and the resolution of the Rating Watch will depend
on the success of shareholders' and management's efforts to
identify the extent of the problems and to inject the resources
necessary to allow the return of confidence in the bank in local
markets.


* DOMINICAN REPUBLIC: Needs Debt Restructuring Pact to Get Loan
---------------------------------------------------------------
The Dominican Republic's government must reach a debt
restructuring agreement with electricity generators before it
could receive the first US$50 million tranche of the US$150
million it loaned from World Bank, Business News Americas
reports.  This was the main requirement World Bank set for the
government.

Lucio Monari -- World Bank lead energy economist and task
manager for the loan agreement between the bank and the
Dominican Republic -- told Business News Americas that in March
2005 the government signed a US$150 million loan agreement with
World Bank.  He also informed that the country's government
could sign an agreement with the companies in the next few days.

According to Business News, Monari stated that the government
must also be able to remain current on energy payments and agree
to pay the interest on consolidated debt.  He added that World
Bank should be able to disburse the first tranche of the loan
several days after the government reaches an agreement with the
generators.

The World Bank also requires that electricity tariffs fluctuate
in line with changes in oil prices and that the adjustment be
transferred to end-users rather than absorbed by government
subsidies as it is currently, states Business News.

Monari revealed to Business News that the government owed
generators some US$400 million at the end of 2004.  In 2005, it
acquired another US$100 million debt from power purchases by
distributors.

Monari believed that the Dominican Republic's government could
sign an agreement with electricity generators in the next few
days.

The government and power generators have reached an agreement to
freeze debt payments for a year, Monari said to Business News.

The government, added Monari, has already fulfilled the other
provisions for the first tranche of the structural loan.  The
second and third tranches require additional conditions related
to electricity bill payment collection.

According to Business News, Dominican Republic's electricity
sector has been in a crisis caused by high fuel prices for
thermoelectric generation which generators have been unable to
pass on to end consumers.  This led to shutting down of many
thermo plants that were unable to afford fuel, resulting in
frequent blackouts.

The electricity sector is currently losing US$500 million to
US800 million a year, IDB representative Moises Pineda told
Business News.

                        *    *    *

As reported by Troubled Company Reporter on Aug. 1, 2005, Fitch
Ratings upgraded on July 26, 2005, Dominican Republic's
sovereign external bonds that were eligible for April's debt
exchange but were not fully extinguished to 'CCC+' from 'DDD'.
This rating action reflects the government's commitment to
service this debt as demonstrated by the recent coupon payment
on 2013 bond.  This rating applies to the 9.50% bonds due 2006
(US$) and the 9.04% bonds due 2013.


* DOMINICAN REPUBLIC: IDB Lays Out Requirements for Loan
--------------------------------------------------------
The Inter-American Bank aka IDB has set requirements to begin
discussions for the disbursement of a possible loan to Dominican
Republic's electricity sector, reports Business News Americas.

Moises Pineda, IDB representative, told Business News that the
Costa Rican government must review the sector structure --
including subsidies, how losses are built into the tariffs and
investment in bill collection methods.  This is for the
government to come up with incentives for clients to pay their
energy bills.

The country's electricity bill collection index must also be
increased to about 70% from its current 50% level.  This could
be accomplished within two years, Mr. Pineda said to Business
News.

Mr. Pineda, according to Business News, said that an investment
of about US$200 million for new technology -- such as metal
plating for transmission lines and new electricity meters --
could help the country improve its bill collection rate and
reduce power theft.

Mr. Pineda revealed to Business News that only when the
requirements are met would the IDB start negotiating with the
Dominican Republic.  But giving the amount of a loan now would
be purely speculative, he added.

The country's electricity sector has been in a crisis caused by
high fuel prices for thermoelectric generation which generators
have been unable to pass on to end consumers, reports Business
News.  This caused many thermo plants to shut down, resulting in
frequent blackouts.

The electricity sector is losing US$500 million to US800 million
per year, he told Business News.


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


CFE: Telephony, Data Services over PLC Available within Months
--------------------------------------------------------------
CFE aka Comision Federal de Electricidad, Mexico's state power
company, expects to get permission in a few months from telecom
regulator Cofetel to offer telephony and data services over its
transmission network using power line communication, company
director of the modernization and structural change department,
Jose Antonio Lopez told Business News Americas.

"We are convinced that we are going to achieve something this
year. Cofetel has been working closely with us. There are
operators that are now requesting the interconnection
regulations so they can interconnect their equipment and we are
holding talks with others. I am very hopeful we will achieve
something," Mr. Lopez told Business News.

CFE's director Alfredo Elias Ayub had previously said he
expected regulations to be published before the end of 2005 and
the first concession auction to be launched at the beginning of
2006.

With PLC, concessionaires could offer telephone, video and data
services.  The technology is seen worldwide as an important
means of spreading internet access to areas where regular
telecommunications infrastructure does not reach, Business News
relates.

Mr. Lopez said PLC offered a tremendous opportunity for Mexico.
He added that it was not clear yet for which states the first
concessions would be launched, Business News states.

                        *    *    *

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.

PEMEX: Study Shows Possible Decline in Cantarell Oil Field
----------------------------------------------------------
An internal study made by Pemex aka Petroleos Mexicanos points
to a possible decline in its biggest oil field in Cantarell,
Mexico.  Water and gas are encroaching more quickly than
expected, the study states.

The Cantarell oil field produces two million barrels of oil a
day, making it the world's second-biggest-producing field after
Ghawar in Saudi Arabia.  According to the study, the worst
scenario that could happen to the Cantarell field is a drastic
decline in output to 875,000 barrels per day to 520,000 a day by
2008.

Industry analysts believes that a decline in Mexican output will
put further pressure on global oil prices.  The shortfall would
also be bad for the United States' aim to reduce its oil
importation from the Middle East.

The latest study, the Wall Street Journal states, takes the most
comprehensive look at the Cantarell field.  It says that the
difference between the layer of gas that sits atop the oil and
the water that is creeping into the rocks below is now just 825
feet and is diminishing at a rate of between 248 and 363 feet a
year.

"I am confident in Pemex's portfolio of assets. Other fields
will be able to substitute [Cantarell's output] and increase
production," Juan Jose Suarez Coppel, the company's chief
financial officer, said in an interview with the Journal.  Pemex
predicts Mexico's output will actually grow this year to 3.42
million barrels a day from 3.33 million barrels last year.

Locally, a decline in Cantarell's output will raise the issue of
whether the country needs to open its oil market to foreign
investors.


SATMEX: Investing US$270M to Launch Satmex 6 Satellite on May 17
----------------------------------------------------------------
Satmex aka Satelites Mexicanos will be investing US$270 million
to launch its new satellite, Satmex 6, on May 17, chief
executive officer Sergio Autrey was quoted as saying by
newspaper Reforma.

Satmex 6 will be launched in the French Guiana region and will
provide cable TV service to the United States and Latin America.
Satmex has signed an agreement with Arianespace for the
launching of the satellite.

"The launching is independent from the [debt] restructuring
process, since the company has enough money to pay Arianespace
and [the satellite] insurance to launch it. We do not need to
finish the restructuring process to do it,"  Autrey said in a
press conference.

Satmex and its senior noteholders reached a deal last week to
restructure the company's debts of over US$800 million, of which
US$523 million is in default.

Headquartered in Mexico, Satelites Mexicanos, S.A. de C.V.
-- http://www.satmex.com/-- is the leading provider of fixed
satellite services in Mexico and is expanding its services to
become a leading provider of fixed satellite services throughout
Latin America.  Satmex provides transponder capacity to
customers for distribution of network and cable television
programming and on-site transmission of live news reports,
sporting events and other video feeds.  Satmex also provides
satellite transmission capacity to telecommunications service
providers for public telephone networks in Mexico and elsewhere
and to corporate customers for their private business networks
with data, voice and video applications, as well as satellite
internet services.  The Debtor is an affiliate of Loral Space &
Communications Ltd., which filed for chapter 11 protection on
July 15, 2003 (Bankr. S.D.N.Y. Case No. 03-41710).  Some holders
of prepetition debt securities filed an involuntary chapter 11
petition against the Debtor on May 25, 2005 (Bankr. S.D.N.Y.
Case No. 05-13862).  The Debtor, through Sergio Autrey Maza, the
Foreign Representative, Chief Executive Officer and Chairman of
the Board of Directors of Satmex filed an ancillary proceeding
on Aug. 4, 2005 (S.D.N.Y. Case No. 05-16103).  Matthew Scott
Barr, Esq., Luc A. Despins, Esq., Paul D. Malek, Esq., and
Jeffrey K. Milton, Esq., at Milbank, Tweed, Hadley & McCloy LLP
represent the Debtor.  When the Debtor filed an ancillary
proceeding, it listed $900,000,000 in assets and $688,000,000 in
debts.


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


MUSICLAND HOLDING: Creditors Want Facts to Benefit Programs
-----------------------------------------------------------
As reported in the Troubled Company Reporter on Jan. 27, 2006,
Musicland Holding Corp. and its debtor-affiliates sought the
U.S. Bankruptcy Court for the Southern District of New York's
authority to:

    (a) continue to honor various prepetition claims for wages,
        salaries, commissions, overtime pay and other unpaid
        compensation;

    (b) continue to honor severance programs, field and
        corporate management incentive programs, and offer a
        modified incentive plan for corporate management;

    (c) continue to provide all employee health benefits and all
        other employee benefits; and

    (d) pay related costs and expenses.

                     Creditors Committee Objects

Mark T. Power, Esq., at Hahn & Hessen LLP, in New York City,
tells the Court that the Official Committee of Unsecured
Creditors has asked the Debtors and their financial advisors to
provide information, including the Benefit Programs, necessary
for it to review the merits of the Debtors' request.  However,
as of
Jan. 25, 2006, the Committee has not received any sufficient
information.

The Committee needs a clear understanding of the basic
provisions of the Benefit Program as to eligibility and terms of
payment, Mr. Power asserts.

The Committee does not consent to a further implementation of
the Benefits Program under the guise of an interim request.

                       *     *     *

Judge Bernstein authorizes, but does not direct, the Debtors to
pay the Relocation Expenses on a final basis.

Judge Bernstein allows the Debtors to pay all processing fees
associated with the payment of the Employee Wages and Benefits
and the Reimbursable Expenses.

All objections, except that of the Official Committee of
Unsecured Creditors, not otherwise withdrawn, waived or settled
are overruled on the merits.

Judge Bernstein will consider, at a later date, final approval
of the Debtors' request as to:

    * the Shrink Plan,
    * the Severance Program,
    * the Field MIIP,
    * the Corporate MIIP, and
    * the Modified Corporate MIIP

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


WILLIAM CALO: Issues Case Summary, 17 Largest Unsec. Creditors
--------------------------------------------------------------
Debtor: William Calo & Associates Inc.
        Road 849, Km. 2.2
        Bo. Santo Domingo
        San Juan, Puerto Rico 00924

Bankruptcy Case No.: 06-00409

Chapter 11 Petition Date: February 16, 2006

Court: District of Puerto Rico (Old San Juan)

Debtor's Counsel: Antonio I. Hernandez Rodriguez, Esq.
                  Antonio I. Hernandez Law Office
                  P.O. Box 8509
                  San Juan, Puerto Rico 00910-0509
                  Tel: (787) 250-0575

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $1 Million to $10 Million

Debtor's 17 Largest Unsecured Creditors:

   Entity                        Nature of Claim   Claim Amount
   ------                        ---------------   ------------
Margarita Borrero                Torts Judicial      $2,750,000
Comunidad Las Dolores            Action
Calle Brasil #73
Rio Grande, PR 00745

Doral Bank                       Commercial Loan       $649,937
P.O. Box 308
Cata¤o, PR 00963

G.E. Capital                     Equipment Loan        $500,000
P.O. Box 70256
San Juan, PR 00936

Citi Capital De P.R.             Bank Loan             $177,000

Internal Revenue Services        Debt to               $170,000
                                 Government

Popular Auto                     Motor Vehicles        $160,000

Energy Contractors               Merchandise            $86,035
                                 Purchase

R&F Asphalt                      Merchandise            $68,225
                                 Purchase

Mocoroa Y Castellanos            Merchandise            $59,374
                                 Purchase

Municipio De Coamo               Debt to                $25,180
                                 Government

Ford Motor Credit                Motor Vehicle          $21,280

Prime Control                    Merchandise            $17,000
                                 Purchase

Ing. Fabio Suero Diseno          Professional           $12,000
Racho Pocho                      Services

Kash Petroleum                   Merchandise            $11,870
                                 Purchase

West India                       Merchandise            $11,000
                                 Purchase

Ready Mix                        Merchandise            $10,032
                                 Purchase

Vasailo                          Bank Loan               $8,168


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


CITGO: PDVSA Crude Shipments Increase Despite Diplomatic Spat
-------------------------------------------------------------
PDVA or Petroleos de Venezuela SA's deliveries of crude to its
refining and distribution arm Citgo Petroleum Corp. have not
been interrupted as a result of diplomatic tensions between the
United States and Venezuela.

Deputy President for Trade and Supply Asdrubal Chavez told
Business News Americas that the company's shipments could even
increase by 100,000 barrels a day in March.

This development is contrary to what industry analysts believe
would happen after one diplomat from each side was expelled.

Mr. Chavez told Business News that of the 1.5 million barrels a
day of crude and oil products PDVSA sends to the U.S. every day,
about 1Mb/d is still processed at Citgo refineries or refineries
affiliated to PDVSA such as Hovensa (a partnership with Amerada
Hess based in the Virgin Islands) and Chalmette (a similar deal
with ExxonMobil in Louisiana).

Mr. Chavez also disclosed to Business News that Venezuela could
significantly increase its liquid fuels exports by 2008 thanks
to a plan for increased natural gas usage in thermal generation
and other industries.

According to government figures, increased use of natural gas
could free up some 100,000b/d of liquid fuels.  By 2008-2009
Venezuela plans to produce some 11 billion cubic feet a day of
natural gas, up from some 7Bf3/d at present, according to
national gas regulator Enagas.

Besides eight refining facilities, Citgo also banners about
14,000 gas stations in the continental U.S. and Puerto Rico.

Citgo is owned by PDV America, an indirect, wholly owned
subsidiary of Petroleos de Venezuela S.A., the state-owned oil
company of Venezuela.

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.

                        *    *    *

As reported on Feb. 16, 2006, Standard and Poor's Ratings
Services assigned a 'BB' rating on CITGO Petroleum Corp.

The ratings on CITGO Petroleum Corp. reflect a satisfactory
business risk profile and an aggressive financial risk profile,
limited by the ratings of the company's parent, Petroleos de
Venezuela S.A. aka PDVSA.

CITGO's credit strength as a stand-alone entity is based on the
scale and complexity of its refining operations, which have net
crude processing capacity of 970,000 barrels per day through
three wholly owned fuel refineries, two asphalt refineries, and
-- in a nonoperating position -- a 41% interest in the Lyondell-
CITGO Refining L.P. joint venture.

The company's throughput places it among the largest refiners in
the U.S.  CITGO gains substantial competitive advantage from its
ability to process large volumes of heavy, sour crude oils --
which trade at sharp discounts to better-quality crude oil --
into high-margin products, and large average unit sizes that
translate into economies of scale.

The refiner's profitability is limited by the concentration of
its operations in the highly competitive Gulf Coast market,
which usually has the lowest margins in the US Geographic
concentration also exposes the company to the risk of regional
disruption, as demonstrated by recent hurricanes.  The credit
effect of interrupted operations at the Lake Charles refinery
was offset somewhat by strong refining margins realized at
CITGO's other facilities.

Standard & Poor's 'BB' rating on CITGO is higher than the 'B+'
corporate credit rating on PDVSA, because of the relative
strength of the refiner's financial profile and the asset
protection afforded to CITGO creditors, if CITGO defaults for
PDVSA-specific reasons -- for example, a Venezuela sovereign
default.  Nevertheless, CITGO could be challenged by events
surrounding PDVSA.

                        *    *    *

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.


PETROBRAS ENERGIA: Net Income Reaches ARS109 Million in 2005
------------------------------------------------------------
Petrobras Energia Participaciones S.A. announced Thursday the
results for the fourth quarter ended December 31, 2005.

Net income for 2005 quarter was ARS109 million compared to
ARS522 million in 2004 quarter.  The twelve-month periods ended
Dec. 31, 2005, and 2004 reflected ARS613 million and ARS678
million gains, respectively.

Net sales for 2005 quarter increased 21.1% to ARS2,938 million,
boosted mainly by the significant rise in the price of WTI.

Gross profit for 2005 quarter was ARS981 million, 17.6% higher
compared to 2004 quarter.

Operating income for 2005 quarter totaled ARS620 million,
accounting for a 44.2% increase compared to 2004 quarter.

In 2005 fiscal year the Company's shareholders' equity increased
11.1% to ARS6,124 million as of Dec. 31, 2005.

The 2005 quarter reflects a ARS424 million allowance to adjust
the book value of assets in Venezuela to their recoverable
value.  The company has undertaken a migration process as to its
operations in Venezuela implying conversion of operating
agreements in force into partially state-owned companies that
will be majority-owned by the Venezuelan government, through
Petroleos de Venezuela S.A.

As of the date of these financial statements, there is no
accurate data available on the definitive terms and conditions
relating to conversion of operating agreements.  That
notwithstanding, based on the framework of operating agreements
and the present state of negotiations with PDVSA, the company
estimates that migration process will imply a deterioration in
the value of its assets in such country and a reduction in
reserve volumes.  Accordingly, as of Dec. 31, 2005, the
allowance provided by the company is reflected in the lines:
other (expense) income, net, ARS288 million; income tax, ARS110
million and equity in earnings of affiliates, ARS26 million.

The 2005 quarter reflects a ARS242 million gain attributable to
the partial reversal of the allowance provided for tax gains
derived from tax loss carry forwards and for payments made for
the minimum presumed income tax, considering profitability
expectations in connection with the company's businesses as of
Dec. 31, 2005. The recovery of tax gains is shown in the income
tax line.

For comparative purposes, information for 2004 quarter includes
the results of EG3 S.A., Petrobras Argentina S.A. and Petrolera
Santa Fe SRL, as if the merger had been effected on Jan. 1,
2004.  Considering that the effective date of the merger is Jan.
1, 2005, net income for the previous year shown on a comparative
basis does not change as a result of the merger.  For such
reason, the balancing item of the net effect of added results is
recorded under minority interest in subsidiaries.

Equity in earnings of affiliates reflects these changes:

   -- TGS/CIESA

      In 2005 quarter, equity in earnings of CIESA/TGS accounted
      for a ARS23 million loss compared to a ARS22 million gain
      in 2004 quarter, mainly attributable to the negative
      impact of the peso devaluation in 2005 quarter and a gain
      from TGS's debt restructuring in 2004 quarter.

      Sales revenues rose 5.8% in 2005 quarter.  Sales revenues
      for the gas transportation segment increased 11% to ARS12
      million in 2005 quarter.  This improvement mainly results
      from execution of new firm transportation agreements for
      the expansion of the Gral.  San Martin Gas Pipeline
      completed in August 2005.  Revenues from the NGL
      production and marketing segments moved up 43.4% to ARS175
      million in 2005 quarter, basically due to higher NGL
      export volumes at improved international reference prices.

   -- Citelec/Transener

      Equity in earnings of Citelec accounted for a ARS6 million
      gain in 2005 quarter compared to a ARS12 million loss in
      2004 quarter.  As from Sep. 30, 2005, upon submittal of
      the plan for Citelec divestment, equity interest in
      Citelec was valued at the recoverable value determined on
      the basis of the probable net realization value.

   -- Petrobras Bolivia Refinacion aka PBR

      Equity in earnings of PBR accounted for a ARS15 million
      gain in 2005 quarter and a ARS10 million loss in 2004
      quarter.  This improvement in 2005 quarter is attributable
      to an increased margin from unregulated market operations,
      positively affected by the rise in international reference
      prices and lower discounts in crude oil and gasoline
      exports; and, in addition, to the positive effects of the
      regulatory changes implemented as from 2005 second
      quarter.

   -- Petrolera Entre Lomas S.A. aka PELSA

      Equity in earnings of PELSA accounted for ARS8 million and
      ARS4 million gains in 2005 and 2004 quarters,
      respectively.  This increase derives from the combined
      effect of an improvement in sales prices in line with
      international reference prices and a 9% rise in sales
      volumes.

   -- Coroil and Inversora Mata Impairment

      Petrobras Energia Venezuela's equity in earnings of Coroil
      and Inversora Mata accounted for a ARS26 million loss in
      2005 quarter, as a result of an impairment charge to
      adjust the book value of operating assets to their
      recoverable value, on the basis of the provisional
      agreements whereby the parties undertake to negotiate the
      terms and conditions for the conversion of operating
      agreements into partially state-owned companies that will
      be majority-owned by the Venezuelan government.

Financial income (expense) and holding gains (losses)

   -- Without proportional consolidation, financial income
      (expense) and holding gains (losses) increased ARS10
      million to ARS80 million in 2005 quarter, mainly as a
      result of:

       -- A ARS29 million loss derived from exchange differences
          in 2005 quarter, as a result of the effect of the 4.1%
          depreciation of the peso against the US dollar on the
          net borrowing position, mostly denominated in US
          dollars.  In 2004 quarter, the exchange rate remained
          unchanged.

       -- A reduction in gains attributable to the valuation at
          market value of derivative instruments, which do not
          qualify for hedge accounting, which totaled ARS25
          million in 2005 quarter compared to ARS46 million in
          2004 quarter.  The future curve of crude oil prices
          dropped 10% in 2005 quarter compared to 5% in 2004
          quarter.  However, in 2004 quarter hedged volumes
          totaled 50,000 barrels per day compared to 20,000
          barrels per day in 2005 quarter.

Other Income (Expense), net

Without proportional consolidation, other income (expense), net
accounted for ARS320 million and ARS11 million losses in 2005
and 2004 quarters, respectively.

Income (expense) for 2005 quarter mainly reflect:

   -- A ARS255 million impairment charge for assets in
      Venezuela.

   -- ARS63 million allowance on the book value of the loans
      granted to joint venture partners in Venezuela.

   -- ARS54 million assessment by SENIAT - Venezuela.

   -- ARS44 million gain from recovery of the impairment charge
      for fixed assets in the  Rio Neuquen area in Argentina.

Income Tax

The income tax charge for 2005 quarter accounted for a ARS4
million loss compared to a ARS172 million gain in 2004 quarter.
The 2005 quarter reflects ARS6 million and ARS9 million losses
attributable to our share in the income tax of CIESA and
Distrilec, respectively.  The 2004 quarter reflects a ARS3
million loss attributable to our share in the income tax of
Distrilec.

Without proportional consolidation, income tax accounted for a
ARS11 million gain in 2005 quarter compared to a ARS175 gain in
2004 quarter.

Income tax charge for 2005 and 2004 quarters reflects tax gains
from reversal of allowances provided for tax credits resulting
from tax loss carry forwards in the amount of ARS197 million in
2005 and ARS299 million in 2004, including ARS31 million
attributable to Petrobras Energia Peru S.A.

In addition, a ARS45 million tax gain was recognized from
reversal of the allowance for payments made for the minimum
presumed income tax for 1998 to 2002 fiscal years.

As a result of the recoverability analysis of the book value of
assets in Venezuela, tax gains resulting from tax loss carry
forwards in the amount of ARS110 million were charged to income
in 2005 quarter.

Excluding the effects mentioned, income tax charge totaled
ARS121 million in 2005 quarter and ARS124 million in 2004
quarter.

Oil and Gas Exploration and Production

Net sales for 2005 quarter increased 31.9% to ARS1,256 million
mainly due to the 41.6% rise in the average sales price per
barrel of oil equivalent, reflecting a 24.2% positive variation
in the WTI price, partially offset by a 5.8% reduction in sales
volumes of oil equivalent.   The average sales price per barrel
of crude oil, net of the effect of taxes on exports, increased
37% to ARS106.6 in 2005 quarter from ARS77.6 in 2004 quarter.

Combined oil and gas daily sales volumes decreased to 163
thousand barrels of oil equivalent from 173 thousand barrels per
day in 2004 quarter.  Crude oil sales volumes decreased 3% to
117 thousand barrels per day in 2005 quarter, while gas sales
volumes decreased 11.2% to 277 million cubic feet.

In Argentina, sales rose 10% to ARS567 million in 2005 quarter,
boosted by a 25% increase in the average sales price of oil
equivalent.

Combined oil and gas daily sales volumes declined 12% to 85.7
thousand barrels of oil equivalent in 2005 quarter.  This
reduction was mainly attributable to the Argentine oilfield
natural decline and to the effects of the strike held by the
Private Oil Workers' Union aka Sindicato de Petroleros Privados
in October 2005, which had an impact on the production at the
Austral and San Jorge Basins.

Regarding the oilfields' decline, which is considerable since
they are mature fields under production through secondary
recovery, the significant investments made during the fiscal
year, mainly in projects to improve the oilfields' basic
production curve, allowed to mitigate such curve.

Crude oil sales increased 8% to ARS504 million in 2005 quarter.
This increase was attributable to the 20% rise in the average
sales price to ARS107.7 per barrel.  The favorable international
price scenario in both quarters was severely impacted by the
export tax scheme in force.  This scheme was a conditioning
reference for the fixing of domestic sales prices to the
downstream segment in line with the Argentine government's
intention to establish a price stability framework in the
domestic market.

Daily crude oil sales volumes declined 9% to 51 thousand barrels
in 2005 quarter.

Total gas sales increased 26.5% to ARS63 million in 2005
quarter, mainly due to a 48% improvement in sales prices to
ARS3.28 per million cubic feet.  This rise is mainly
attributable to the implementation of a path of prices provided
for by the Secretary of Energy as from May 2004 and increased
export prices and prices for industrial clients.

Conversely, due to restrictions imposed by the Argentine
government within the context of the energy emergency, gas
export volumes fell and were sold in the domestic market at
lower prices.  Daily sales volumes dropped 14.7% to 208.8
million cubic feet in 2005 quarter from 244.7 million cubic feet
in 2004 quarter.

Combined oil and gas sales outside of Argentina increased 61% to
ARS684 million in 2005 quarter.  Total daily oil and gas sales
volumes increased 1.8% to 77.4 thousand barrels of oil
equivalent in 2005 quarter.  The average sales price per barrel
of oil equivalent increased 58.6% to ARS96.1 in 2005 quarter.

In Venezuela, oil and gas sales grew 56% to ARS345 million in
2005 quarter.  This increase was mainly attributable to the 55%
rise in the sales price per barrel of oil equivalent basically
attributable to the WTI behavior mentioned above and the accrual
of the additional compensation provided for in the operating
agreement of the Oritupano Leona area.  Accumulated production
at the Oritupano Leona oilfield during 2005 first quarter
exceeded 155 million barrels.  As from this milestone, an
additional incentive started to be applied to any incremental
production.  This additional compensation was subsequently
limited by the application of the 66.67% limit provided for in
the provisional agreements relating to migration to the
partially-state owned company modality.  With such limit, this
compensation accounted for additional sales in the amount of
ARS78 million in 2005 quarter.

Considering the behavior of WTI prices, in addition to the net
effect of accrual of the above mentioned additional compensation
and the impact of the limit imposed under the provisional
agreements, the average price per barrel of oil equivalent grew
70.5% to ARS86.13 in 2005 quarter.

Daily sales volumes of oil equivalent dropped to 46.2 thousand
barrels or 9.2% in 2005 quarter mainly as a consequence of the
significant cuts in the investment plan for the Oritupano-Leona
area established by Petroleos de Venezuela at the time of
approval of 2005 fiscal year budgets and the poor results
obtained from drilling works during 2005 at La Concepcion area.

In Ecuador, oil sales for 2005 quarter increased 133% to ARS107
million, mainly boosted by a 98% rise in sales volumes and a 18%
increase in sales prices to ARS128.5 per barrel.

Daily sales volumes increased to 9 thousand barrels in 2005
quarter, mainly boosted by investments in development works made
in Block 18 during 2005.

In Peru, combined oil and gas sales increased 44% to ARS190
million in 2005 quarter.

The crude oil price rose 33% to ARS154.7 per barrel in 2005
quarter.  Daily sales volumes of oil equivalent increased 11.94%
to 15 thousand barrels in 2005 quarter, mainly as a result of
the successful investments made in development works.

In Bolivia, oil and gas sales in 2005 quarter increased 65.4% to
ARS43 million, boosted by an increase in gas prices.  Combined
daily oil and gas sales volumes dropped 2.1% to 7 thousand
barrels per day as a consequence of a reduction in gas
deliveries to Brazil.

Average gas sales prices rose 71% to ARS9.4 per million cubic
feet in 2005 quarter as a consequence of the increase in fuel
oil international prices used as the basis for calculation of
the price for exports to Brazil.

Gross profit for 2005 quarter rose ARS231 million or 47.8% to
ARS714 million.  The margin on sales increased to 56.76% in 2005
quarter from 50.74% in 2004 quarter.

Administrative and selling expenses in 2005 quarter increased
17% to ARS77 million.  This rise mainly results from increased
oil volumes transported in Ecuador and, to a lesser extent, to
higher labor costs.

Other operating income (expense) accounted for ARS68 million and
ARS101 million losses in 2005 and 2004 quarters, respectively,
mainly attributable to charges under the ship or pay
transportation contract in Ecuador and environmental remediation
expenses.

Liquid Hydrocarbon and Natural Gas Reserves

As of Dec. 31, 2005, liquid hydrocarbon and natural gas proved
reserves, audited by Gaffney, Cline & Associates, totaled
approximately 760 MMboe -- 538 million barrels of oil and 1,331
billion cubic feet of gas.  This accounts for a 4% increase
compared to reserves certified as of Dec. 31, 2004 -- 2.5% for
liquid hydrocarbons and 23.6% for natural gas.

During 2005 fiscal year, a net addition of reserves of
approximately 28 MMboe was recorded.

About 95 MMboe were added as a result of the merger of Petrolera
Santa Fe S.A and Petrobras Argentina S.A.

Through extensions in connection with known accumulations mostly
from drillings in Argentina and Venezuela, which allowed for the
extension of the proved area, 19 MMboe were added.

Technical reviews resulted in a 14 MMboe reduction mainly
attributable to adjustments in gas projects, which derived in a
drop in reserves at the Austral Basin in Argentina.  This was
offset by additions resulting from the good results obtained
from drilling projects in Peru.

A 9 MMboe drop was recorded as a result of adjustments in
secondary recovery projects in the Neuquen Basin in Argentina.

Production totaled 62.6 MMboe.

Liquid hydrocarbons and natural gas account for 71% and 29%,
respectively, of total proved reserves.  Sixty percent of total
proved reserves are located outside of Argentina.  This reduced
percentage compared to previous year is attributable to the
acquisition of Petrolera Santa Fe S.R.L.'s and Petrobras
Argentina S.A.'s reserves.

As of Dec. 31, 2005, we had total oil and gas proved reserves
equal to 12.1 years of production at 2005 oil and gas production
levels.

As of Dec. 31, 2005, estimated proved reserves attributable to
operations in Venezuela are calculated on the basis of the
contractual structure in force.

As a result of the new legislation governing hydrocarbon
exploitation in Venezuela, the subsidiary Petrobras Energia
Venezuela S.A. executed in September 2005 provisional agreements
with Petroleos de Venezuela S.A. aka PDVSA.  With the agreement,
the subsidiary undertook to negotiate the terms and conditions
for the conversion of the operating agreements governing the
Oritupano Leona, La Concepcion, Acema and Mata areas into
partially state-owned companies that will be majority-owned by
the Venezuelan government through PDVSA.  As of the date of
certification of reserves and of these financial statements,
there is not enough information available to quantify, if any,
any impact on reserves.

As of Dec. 31, 2005, estimated proved reserves attributable to
operations in Bolivia were certified under the agreements and
the regulatory framework in force as of Dec. 31, 2005.  However,
as stated by the new government that took over in Jan. 2006, the
regulatory framework governing operations in Bolivia may be
subject to changes that may adversely affect the company's
reserves.

Operations in Venezuela

In April 2005, the Venezuelan Ministry of Energy and Petroleum
aka MEP instructed PDVSA to review the 32 operating agreements
entered into by the latter's affiliates with oil companies in
the 1992-1997 period, including, among others, the agreements
executed by the Company governing development of the Oritupano
Leona, La Concepcion, Acema and Mata areas.  In the MEP's
opinion, these operating agreements include clauses that are not
consistent with the Hydrocarbons Organic Law currently in force
and enacted in 2001.

PDVSA was also instructed by the MEP to take all necessary
steps, within a six-month term, to convert the operating
agreements in force into partially state-owned companies that
will be majority-owned by the Venezuelan government, through
PDVSA.  In connection with these agreements, the MEP instructed
PDVSA that the total amount of payments to contractors accrued
over the remaining term of operating agreements should not
exceed 66.67% of the total value in US dollars of the crude oil
delivered under the operating agreements in force.

During 2005, through several initiatives, PDVSA has taken
several strong actions relating to the operating agreements in
force so as to foster migration, including, among others:

   -- PDVSA approved a reduced investment amount for the
      development of the Oritupano Leona area.

   -- PDVSA faced difficulties in the reception of oil
      production.

   -- Partial payment in bolivares.  In this respect, in June
      2005, PDVSA informed Petrobras Energia Venezuela S.A. that
      it will pay in bolivares the compensations provided under
      the operating agreements in force corresponding to the
      national component of the materials and services supplied.
      This modified the provision contemplated in the operating
      agreements mentioned, whereby PDVSA payments should be
      made in US dollars.

      In the meantime, and until an audit were conducted by
      PDVSA to determine the portion corresponding to the
      national component, PDVSA decided to pay in US dollars 50%
      of the amounts contemplated in the mentioned agreements
      and the remaining 50% in bolivares.  Subsequently, and as
      from payments for 2005 third quarter production, the
      portion of the payment in bolivares was reduced to 25%.

   -- the National Integrated Service of Tax Administracion --
      Servicio Nacional Integrado de Administracion Tributaria
      aka SENIAT -- looked into the taxes paid by companies
      operating the 32 oil operating agreements, and as a result
      it made objections as to the tax returns timely filed.  In
      such respect, as of Dec. 31, 2005 the company recorded a
      ARS54 million loss.

   -- An increase in the income tax rate from 34% to 50%.

As a prior step to adjust the operating agreements in force to
the new business scheme, on Sep. 29, 2005, Petrobras Energia
Venezuela, S.A. executed Provisional Agreements with PDVSA,
whereby PDVSA committed to negotiate the terms and conditions
relating to conversion of the operating agreements of the
Oritupano Leona, La Concepcion, Acema and Mata areas and, in
addition, it acknowledged application of the 66.67% limit on the
amounts paid to contractors.  The provisional agreement for the
Oritupano Leona Area was executed subject to prior approval by
Petrobras Energia S.A.'s Regular Shareholders' Meeting and by a
Petrobras Energia Participaciones S.A.'s Special Shareholders'
Meeting, which meetings adopted favorable resolutions in such
respect.

As of Dec. 31, 2005, estimated proved reserves attributable to
operations in Venezuela amount to 269 MMboe, accounting for
35.4% of the company's total reserves of oil equivalent.

The company's total reserves in Venezuela are calculated on the
basis of the contractual structure in force as of Dec. 31, 2005.

As of the date of these financial statements, there is no
accurate data available on the definitive terms and conditions
relating to conversion of operating agreements.  That
notwithstanding, based on the framework of provisional
agreements and the current state of negotiations with PDVSA, the
company estimates that the conversion process will imply a
deterioration in the value of its assets in Venezuela and a
reduction in reserve volumes.

Accordingly, as of Dec. 31, 2005, the company recorded a ARS424
million allowance to adjust the book value of assets in
Venezuela to their recoverable value, of which ARS255 million,
ARS110 million and ARS59 million are attributable to fixed
assets, deferred tax assets and noncurrent investments,
respectively.

For the purpose of determining the recoverable value, the
company's management made cash flow projections considering
continuation of agreements in force during the negotiation and
different estimates relating to the partially state-owned
company modality, in accordance with the information currently
available on account of the present state of negotiations with
PDVSA.

Such projections are highly sensitive to changes in the
estimates made and consequently, the final result of the
conversion process mentioned above might significantly differ
from the estimated amount.

Based on the company's estimated interest in the partially
state-owned companies and on the corporate structure established
to materialize migration of operating agreements, and once such
migration has been completed, the company's reserves in
Venezuela will be shown in the oil and gas supplementary
disclosure required by SFAS 69 on the unconsolidated companies
line.

Refining

Operating income for 2005 quarter reflected a ARS65 million loss
compared to a ARS36 million gain in 2004 quarter.  The
impossibility to pass through the 21.2% increase in crude oil
costs to domestic prices had a significant impact on the
downstream business performance during 2005.

Gross profit for 2005 quarter significantly declined to ARS9
million from ARS110 million in 2004 quarter.  Gross margin was
adversely affected by the increase in crude oil prices to ARS119
per barrel in 2005 quarter and by the impossibility to pass
through such increase to sales prices in the gasoline and diesel
oil retail market which accounts for approximately 60% of sales.
Gross margin dropped to 1% in 2005 quarter from 12% in 2004
quarter.

Net sales for refinery products increased to ARS1,025 million or
11.4% in 2005 quarter, mainly boosted by the 33.2% improvement
in prices of products not belonging to the gasoline and diesel
oil retail market and, to a lesser extent, by a 3.4% rise in
sales volumes both in the domestic and export markets.

In line with the significant 24% rise in the price of WTI,
average sales prices of products not belonging to the gasoline
and diesel oil retail market increased 33.2%, with a 33%, 40.4%,
48.7%, 65.3%, 22% and 58.2% improvement for gasoline, diesel
oil, fuel oil, blends, VGO and asphalts, respectively.
Conversely, petrochemical raw material prices decreased 8.3% as
a consequence of the 26% drop in benzene, offset by the 13.5%,
16%, 25%, 19% and 19% rise in hexane, varieties of paraffins,
solvents, xylene and high flash, respectively.

In 2005 quarter crude oil volumes processed at the refineries
totaled 66.7 thousand barrels per day in line with 2004 quarter.

Total gasoline sales volumes increased 35.4% to 214 thousand
cubic meters in 2005 quarter mainly due to a 195% increase in
exports on account of high prices in the international market
and, to a lesser extent, the 11.6% increase in local sales in
line with the 12.5% rise in the gasoline market.

Total diesel oil sales volumes decreased 3.2% to 433 thousand
cubic meters in 2005 quarter, mainly due to the decision to
limit diesel oil imports, the higher costs of which cannot be
passed through to final prices.  Within this scenario, the
market share dropped to 13.5% in 2005 quarter from 14.3% in 2004
quarter.

Asphalt sales volumes grew 5.6% in 2005 quarter, mainly as a
result of increased sales in the domestic market, taking the
lead in the market with a market share of 39.2%.

As regards heavy distillates, in 2005 quarter sales volumes
declined 4.4%, mainly due to lower VGO exports and reduced fuel
oil sales volumes both in the domestic and international
markets.

Regarding the other products, sales volumes of reformer plant
byproducts increased 18.9% in 2005 quarter basically due to
increased LPG and hexane sales in the domestic market.

Petrochemicals

Net sales for the Petrochemicals business segment increased 5.8%
to ARS641 million mainly due to higher sales volumes in all
products.

In Argentina, styrenics sales increased to ARS231 million or
2.7% in 2005 quarter, mainly due to the 9% increase in sales
volumes, partially offset by a 5% drop in average sales prices.

Styrene sales volumes rose approximately 24% in 2005 quarter.
The start-up of the ethylene plant in October 2004 allowed to
increase ethylbenzene production and to export 11.5 thousand
tons to Innova.  In addition, and due to interruptions in
production at the polystyrene plant, a styrene surplus was
recorded which was used for export markets.

Polystyrene and bops sales volumes were 6% higher in 2005
quarter with a 9% increase in domestic sales and a 2% rise in
exports.

Rubber sales volumes decreased 12% in 2005 quarter with a higher
impact on exports - 20% reduction -- mainly due to a higher
supply at international level and a drop in the regional market
activity.

In 2005 quarter, styrene and polystyrene prices decreased
approximately 14%, in line with the drop in international
reference prices.  Conversely, a 23% increase in the rubber
prices was recorded due to higher butadiene international prices
and the improvement in the sales mix, prioritizing regions with
higher profitability, basically non-traditional Middle East
markets such as Israel and Turkey.

In Brazil, Innova's sales decreased 2.4% to ARS247 million in
2005 quarter.

Styrene sales volumes increased 14% in 2005 quarter due to a
higher availability of ethylbenzene in addition to increased
exports to Argentina.  Conversely, polystyrene sales volumes
decreased 9% mainly due to a reduced demand in the domestic
market derived from consumption of customers' stocks, partially
offset by an increase in exports to Argentina.

In 2005 quarter, styrene and polystyrene prices recorded 11% and
20% decreases, respectively, as a consequence of lower sales
prices in the domestic market.

Fertilizers sales in 2005 quarter increased 34.6% to ARS214
million due to the combined effect of a strong increase in sales
volumes and a slight improvement in sales prices.  Sales volumes
rose 31.5% as a consequence of an increase in the demand from
the agricultural sector on account of fertilization delays
derived from adverse weather conditions during the third quarter
of 2005.

Gross profit for 2005 quarter increased 5.1% to ARS123 million
mainly due to the fertilizers business which allowed to absorb
reduced profits from styrenics, both in Argentina and Brazil.
Gross margin on sales remained at similar levels in both
quarters, with values slightly exceeding 19%.

As regards styrenics in Argentina, gross profit dropped 6.7% to
ARS42 million in 2005 quarter as a consequence of reduced sales
prices and higher fixed production costs.  Gross margin on sales
decreased to 18.2% in 2005 quarter from 20% in 2004 quarter.

Regarding styrenics in Brazil, gross profit dropped 15.4% to
ARS33 million in 2005 quarter.  Gross margin on sales moved down
to 13.4% in 2005 quarter from 15.3% in 2004 quarter as a result
of market limitations to pass through higher costs of raw
materials -- mainly benzene -- to prices.

Regarding fertilizers, gross profit increased 45.5% to ARS48
million in 2005 quarter, mainly due to higher sales volumes.
Gross margin on sales increased to 22.4% in 2005 quarter from
20.8% in 2004 quarter.

Hydrocarbon Marketing and Transportation

Sales revenues increased 20.3% to ARS154 million in 2005 quarter
mainly due to higher prices of both gas and liquids.  The
increase in the price of gas resulted from the application of
the price recovery path fixed by the secretary of energy as from
May 2004 and the rise in international reference prices
applicable to certain export contracts and contracts with
industrial customers.  The increase in liquids prices derived
from a rise in their international references.  Sales revenues
from gas and liquids produced by the company and imported gas
and liquids totaled ARS80 million and ARS74 million in 2005
quarter and ARS56 million and ARS71 million in 2004 quarter,
respectively.  Sales volumes in Argentina for imported gas and
gas produced by the company fell to 229.4 million cubic feet per
day in 2005 quarter from 263.2 million cubic feet per day in
2004 quarter, mainly as a consequence of the union strike held
at the Austral Basin during the last quarter of 2005 and, to a
lesser extent, a drop in the company's own production due to the
decline of fields located in Argentina.  Liquids sales volumes
dropped to 65 thousand tons in 2005 quarter from 75.4 thousand
tons in 2004 quarter as a consequence of reduced gas volumes
processed as indicated and lower yields obtained from processing
gas with lower richness and heavier crude oils.

No sales revenues from gas and LPG brokerage services were
recorded in 2005 quarter compared to ARS1 million in 2004
quarter.

Electricity

Net sales of electricity generation increased to ARS94 million
or 46.9% in 2005 quarter, mainly boosted by a 36.4% rise in
energy sales and a 9.3% improvement in generation prices.

The increase in average energy prices was primarily attributable
to a higher demand for energy and gas supply restrictions, which
resulted in energy deliveries by less efficient machines, and to
the passing through of increased gas costs to sales prices as a
result of the path of prices implemented during 2004.

Net sales attributable to Genelba power plant increased to ARS75
million or 50% in 2005 quarter as a result of the combined
effect of improved prices and increased sales volumes.  Average
energy sales prices rose to ARS56.1 or 8.5% per MWh in 2005
quarter as a consequence of the market reasons mentioned.
Energy sales increased to 1,329 GWh or 37.2% in 2005 quarter
mainly due to the plant shutdown occurred in November 2004.
Accordingly, both Genelba plant factor and availability factor
increased to 90% and 95%, respectively in 2005 quarter from 70%
and 74% in 2004 quarter, respectively.

Net sales attributable to Pichi Picun Leufu Hydroelectric
Complex rose to ARS19 million or 46.2% in 2005 quarter due to
the combined effect of higher generation volumes and improved
sales prices.  During 2005 quarter energy delivered rose to 373
GWh or 33.7%.  Sales prices increased to ARS51.2 per MWh or 9.6%
in 2005 quarter.  The plant factor increased to 58% in 2005
quarter from 44% in 2004 quarter and the availability factor was
approximately 100% in both quarters.

Gross profit for the generation business increased ARS19 million
to ARS46 million in 2005 quarter due to the combined effect of
improved sales prices and increased generation volumes.  Gross
margin on sales was 48.9% in 2005 quarter and 42.2% in 2004
quarter.

                       *    *    *

As reported by Troubled Company Reporter on Dec. 30, 2005, Fitch
Ratings affirmed the following ratings of Petrobras Energia:

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

All ratings had a Stable Outlook.


PDVSA: Crude Shipments Increase Despite Diplomatic Spat
-------------------------------------------------------
PDVSA aka Petroleos de Venezuela SA's deliveries of crude to its
refining and distribution arm Citgo Petroleum Corp. have not
been interrupted as a result of diplomatic tensions between the
United States and Venezuela.

Deputy President for Trade and Supply Asdrubal Chavez told
Business News Americas that the company's shipments could even
increase by 100,000 barrels a day in March.

This development is contrary to what industry analysts believe
would happen after one diplomat from each side was expelled.

Mr. Chavez told Business News that of the 1.5 million barrels a
day of crude and oil products PDVSA sends to the U.S. every day,
about 1Mb/d is still processed at Citgo refineries or refineries
affiliated to PDVSA such as Hovensa (a partnership with Amerada
Hess based in the Virgin Islands) and Chalmette (a similar deal
with ExxonMobil in Louisiana).

Mr. Chavez also disclosed to Business News that Venezuela could
significantly increase its liquid fuels exports by 2008 thanks
to a plan for increased natural gas usage in thermal generation
and other industries.

According to government figures, increased use of natural gas
could free up some 100,000b/d of liquid fuels.  By 2008-2009
Venezuela plans to produce some 11 billion cubic feet a day of
natural gas, up from some 7Bf3/d at present, according to
national gas regulator Enagas.

Besides eight refining facilities, Citgo also banners about
14,000 gas stations in the continental U.S. and Puerto Rico.

Citgo is owned by PDV America, an indirect, wholly owned
subsidiary of Petroleos de Venezuela S.A., the state-owned oil
company of Venezuela.

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.

                        *    *    *

As reported on Feb. 16, 2006, Standard and Poor's Ratings
Services assigned a 'BB' rating on CITGO Petroleum Corp.

The ratings on CITGO Petroleum Corp. reflect a satisfactory
business risk profile and an aggressive financial risk profile,
limited by the ratings of the company's parent, Petroleos de
Venezuela S.A. aka PDVSA.

CITGO's credit strength as a stand-alone entity is based on the
scale and complexity of its refining operations, which have net
crude processing capacity of 970,000 barrels per day through
three wholly owned fuel refineries, two asphalt refineries, and
-- in a nonoperating position -- a 41% interest in the Lyondell-
CITGO Refining L.P. joint venture.

The company's throughput places it among the largest refiners in
the US CITGO gains substantial competitive advantage from its
ability to process large volumes of heavy, sour crude oils --
which trade at sharp discounts to better-quality crude oil --
into high-margin products, and large average unit sizes that
translate into economies of scale.

The refiner's profitability is limited by the concentration of
its operations in the highly competitive Gulf Coast market,
which usually has the lowest margins in the US Geographic
concentration also exposes the company to the risk of regional
disruption, as demonstrated by recent hurricanes.  The credit
effect of interrupted operations at the Lake Charles refinery
was offset somewhat by strong refining margins realized at
CITGO's other facilities.

Standard & Poor's 'BB' rating on CITGO is higher than the 'B+'
corporate credit rating on PDVSA, because of the relative
strength of the refiner's financial profile and the asset
protection afforded to CITGO creditors, if CITGO defaults for
PDVSA-specific reasons -- for example, a Venezuela sovereign
default.  Nevertheless, CITGO could be challenged by events
surrounding PDVSA.

                        *    *    *

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.


* Venezuela Injecting US$50MM in Banco Industrial's Cuban Branch
----------------------------------------------------------------
The Venezuelan government is contributing US$50 million to the
state's Banco Industrial de Venezuela's branch in Cuba, El
Universal reports.

The money will be used to fund Venezuelan or Cuban joint
companies in an effort to strenghten bilateral trade, Banco
Industrial's President, Luis Quiaro, was quoted as saying by El
Universal.

Additionally, the board of directors of Banco Industrial de
Venezuela is waiting for economic and legal surveys to be
completed in order to open branches in Bolivia and Argentina, El
Universal states.

                        *    *    *

Venezuela's foreign currency long-term debt is rated B2 by
Moody's, B+ by Standard & Poor's, and BB- by Fitch.


                            ***********


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
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without
prior written permission of the publishers.

Information contained herein is obtained from sources believed
to be reliable, but is not guaranteed.

The TCR Latin America subscription rate is $575 per half-year,
delivered via e-mail.  Additional e-mail subscriptions for
members of the same firm for the term of the initial
subscription or balance thereof are $25 each.  For subscription
information, contact Christopher Beard at 240/629-3300.


* * * End of Transmission * * *