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        T R O U B L E D   C O M P A N Y   R E P O R T E R

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

          Wednesday, March 1, 2006, Vol. 7, Issue 43

                            Headlines

A R G E N T I N A

BANCO PATAGONIA: Trading Stock in Buenos Aires Stock Exchange
CABANA DON JOAQUIN: Seeks Reorganization Approval from Court
COLUMBIA S.A.: Claims Must be Submitted to Trustee by April 26
DAFIM S.R.L: Trustee Verifies Creditors' Claims Until April 7
EDENOR: Issuing US$238 Million Obligaciones Negociables

GRUPO SEGURCITY: Trustee Sets Apr. 19 as Last Day to File Claims
INDUSTRIAS J. MATAS: Claims Verification Deadline Is June 23
KAYDERS S.A.: Submission of Creditors Claims Ends on March 27
LA CASA: Verification of Creditors' Claims Ends on April 21
LATTE E FORMAGGIO: Claims Verification Begins, Ends April 25

MUNDO GRAFICO: Creditors Must Present Claims to Trustee by May 2
SERVI GUARD: Creditor Claims' Verification Begins, Ends May 2
TELECOM ARGENTINA: Noteholders to Meet on Indenture Amendments
TGS: DE Shaw Acquires 15% Stake Sold for US$115 Million
* Argentina Selling US$308 Million Due 2012 Bonds to Venezuela

* Chile's Energy Panel Warns of Argentina Gas Supply Cuts


B E R M U D A

PXRE GROUP: Releases 2005 Fourth Quarter Financial Highlights


B O L I V I A

REPSOL YPF: Bolivia Orders Arrest of Local Chief Executive


B R A Z I L

ARACRUZ CELULOSE: S&P Assigns BB- Foreign Currency Rating
PETROLEO BRASILEIRO: Starts Production in Peroa Field


C A Y M A N   I S L A N D S

CORALIE LIMITED: Shareholders Convene March 3 for Final Meeting
FORMULA OFFSHORE: Shareholders' Final Meeting Set on March 7
POWIS SQUARE LIMITED: Shareholders' Final Meeting Set on March 8
STATE REINSURANCE: Shareholders' Final Meeting Scheduled Mar. 8
WHITECHAPEL CORPORATION: Shareholders Final Meeting Is on Mar. 7


C H I L E

* Chile's Energy Panel Warns of Argentina Gas Supply Cuts


C O L O M B I A

* Colombia Inks Free Trade Deal with United States
* Colombia Intends to Buy Back US$4.3 Billion of Bonds


D O M I N I C A N   R E P U B L I C

* Dominican Republic Looks to Ethanol to Lower Petroleum Expense


E L   S A L V A D O R

* El Salvador Enters Free Trade Deal with United States


M E X I C O

CORPORACION DURANGO: Net Sales Up 1% at Quarter Ended Dec. 31
EMPRESAS ICA: Releases Fin'l Reports for FY Ended Dec. 31, 2005
GRUPO MEXICO: 65 Miners Trapped Inside Mine Believed to be Dead
VITRO: 4Q05 Consolidated Sales Up 9.3%


P A N A M A

* Panama Inks Free Trade Accord with Singapore Today


P A R A G U A Y

* PARAGUAY: S&P Affirms B- Foreign Currency Rating


P E R U

* PERU: Reaches Extrajudicial Agreement with Lan Airlines


P U E R T O   R I C O

MUSICLAND HOLDING: Gets Final Okay to Use Cash Collateral


V E N E Z U E L A

PDVSA: Acquires 46% Stake in Argentine Fuel Distributor
PDVSA: Says Dragon Deposit Doesn't Cross into Trinidad Waters
* Argentina Selling US$308 Million Bonds Due 2012 to Venezuela
* Venezuela Buying Back US$3.9 Billion of Brady Bonds
* Venezuela Delays Suspension of U.S. Flights Until March 30

     -  -  -  -  -  -  -  -

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


BANCO PATAGONIA: Trading Stock in Buenos Aires Stock Exchange
-------------------------------------------------------------
Due to its good expectations on the financial sector, Banco
Patagonia has announced its imminent opening of capital in the
Buenos Aires Stock Market.

The bank, lead by Mr. Jorge Stuart Milne, has indicated that the
opening would happen between the end of this year and 2007.

Banco Patagonia has 139 branches, after buying Sudameris and
LLoyd's Bank.  It occupies the position number 14 in borrows,
with 1.105 million in pesos and the position number 13, with
2.211 million.  It closed the 2005 exercise gaining 234.6
million, a 158% more than in 2004.

The bank would be interested in increasing its presence in the
north and center regions of Argentina; the opening of its
capital would be a
way of providing funding for this objective.

Banco Patagonia became Argentina's fifth largest locally owned
private bank through its purchase of Lloyds TSB Argentina in
late 2004.  The bank's equity totaled 789 million pesos and its
assets 4.22 billion pesos at November 30, 2005.

In 2004, the bank posted a 90.8 million-peso (US$30 million) net
profit compared to a 594 million-peso loss in 2003.  Patagonia's
profits amounted to 196 million pesos at November 30, 2005.

                        *    *    *

On Dec. 12, 2005, Moody's Latin America Calificadora de Riesgo
S.A. reaffirmed the 'BB' rating on US$80 million worth of bonds
issued by Banco Patagonia S.A. (f.k.a. Banco Patagonia Sudameris
SA), the CNV revealed in its Web site.

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

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


CABANA DON JOAQUIN: Seeks Reorganization Approval from Court
------------------------------------------------------------
Buenos Aires' Court No. 11 is currently reviewing the merits of
the reorganization petition filed by Cabana Don Joaquin S.A.
Argentine daily La Nacion reports that the company filed the
request after defaulting on its debt payments since November
2005.

The reorganization petition, if granted by the court, will allow
Cabana Don Joaquin to negotiate a settlement with its creditors
in order to avoid a straight liquidation.

Clerk No. 21 assists the court on this case.

Cabana Don Joaquin S.A. can be reached at:

         Inclan 3302
         Buenos Aires, Argentina


COLUMBIA S.A.: Claims Must be Submitted to Trustee by April 26
--------------------------------------------------------------
Accounting firm Mabel Iris Ferraro y/o Maria Cristina Ubbriaco
y/o Diana Novakovich y/o Horacio Jose S. -- the trustee
appointed by the Buenos Aires court for the Columbia S.A. de
Seguros bankruptcy case -- will stop validating claims from the
company's creditors on April 26, 2006.

Columbia S.A. will present the validated claims in court as
individual reports on June 9, 2006.  The trustee will also
submit a general report on the case on Aug. 7, 2006.

Columbia S.A. de Seguros can be reached at:

         Tte. Gral. Juan D. Peron 690
         Buenos Aires, Argentina

Mabel Iris Ferraro y/o Maria Cristina Ubbriaco y/o Diana
Novakovich y/o Horacio Jose S., the trustee, can be reached at:

         Bartolome Mitre 784
         Buenos Aires, Argentina


DAFIM S.R.L: Trustee Verifies Creditors' Claims Until April 7
-------------------------------------------------------------
Creditors' claims against Dafim S.R.L. will be verified until
April 7, 2006.  Court-appointed trustee Nelida Haydee Grunblatt
de Nobile is tasked with the verification.

Infobae relates that validated claims will be presented in court
as individual reports on May 10, 2006.

The submission of a general report will follow on June 8, 2006.

A Buenos Aires court handles the Dafim S.R.L.'s bankruptcy case.

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

         Sarmiento 747
         Buenos Aires, Argentina

Ms. Nelida Haydee Grunblatt de Nobile, the trustee, can be
reached at:

         Uruguay 618
         Buenos Aires, Argentina


EDENOR: Issuing US$238 Million Obligaciones Negociables
-------------------------------------------------------
The major electrical distributor, Edenor, announced that it
will be emitting "Obligaciones Negociables" for US$238 million.
The company will open an offer for the shares at the Buenos
Aires stock market.

The company has succesfully restructured its debt and is now
ready to place a new one.

Through the Bank, Macro Bansud, thee types of "Obligaciones
Negociables" will be offered:

   * serie par, fixed rate, to increased in 11 years;
   * serie par, variable rate to increase in 14 years time; and
   * with discount, fixed rate to increase in 9 years time.

Edenor provides electricity to 2.4 million clients.  It had a
debt for US$537 million dollars, which after the refinancing was
reduced to US$376 million.

                        *    *    *

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

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


GRUPO SEGURCITY: Trustee Sets Apr. 19 as Last Day to File Claims
----------------------------------------------------------------
Court-appointed trustee Isabel Ana Ramirez will stop verifying
claims from Grupo Segurcity S.A.'s creditors on April 19, 2006.
Infobae relates that verified claims will be used as basis in
creating individual reports, which will be due in court on June
2, 2006.

A general report is expected in court on Aug. 7, 2006.

Grupo Segurcity S.A. started reorganization after a Buenos Aires
court approved its petition to reorganize.

Grupo Segurcity S.A. can be reached at:

         Acoyte 1360
         Buenos Aires, Argentina

Ms. Isabel Ana Ramirez, the trustee, can be reached at:

         Tte. Gral. Juan D. Peron 2082
         Buenos Aires, Argentina


INDUSTRIAS J. MATAS: Claims Verification Deadline Is June 23
------------------------------------------------------------
The verification of creditors' claims for the Industrias J.
Matas S.C.A. insolvency case is set to end on June 23, 2006,
states Infobae.  Messrs. Roberto G. Palumbo and Juan F. Nieto,
the court-appointed trustees tasked with examining the claims,
will submit the validation results as individual reports on Nov.
27, 2006.  He will also present a general report in court on
June 27, 2007.

On Dec. 5, 2007, the company's creditors will vote on the
settlement proposal prepared by the company.  Infobae adds that
a Mendoza court handles the company's reorganization case.

Messrs. Roberto G. Palumbo and Juan F. Nieto, the trustees, can
be reached at:

         Rivadavia 76
         Ciudad de Mendoza, Argentina


KAYDERS S.A.: Submission of Creditors Claims Ends on March 27
-------------------------------------------------------------
Creditors with claims against Kayders S.A., a company under
reorganization, must present proof of the company's indebtedness
to Mr. Hugo Daniel Pantaleo, the court-appointed trustee, on or
before March 27, 2006.

Infobae relates that these claims will constitute the individual
reports to be submitted in court on May 11, 2006.  The court
also requires the trustee to present an audit of the company's
accounting and business records through a general report due on
June 26, 2006.

An informative assembly is scheduled on Oct. 6, 2006.  During
the assembly, creditors will vote on a settlement proposal
prepared by the company.

Buenos Aires-based Kayders S.A began reorganization proceedings
after the city's court granted its petition to reorganize.

Kayders S.A. can be reached at:

         Ibarrola 6955
         Buenos Aires, Argentina

Mr. Hugo Daniel Pantaleo, the trustee, can be reached at:

         Avenida Corrientes 1450
         Buenos Aires, Argentina


LA CASA: Verification of Creditors' Claims Ends on April 21
-----------------------------------------------------------
The verification phase for the claims submitted by creditors
against bankrupt company La Casa de los Uniformes S.R.L. has
started, Argentine daily La Nacion reports.  The verification
will end on April 21, 2006.

La Casa de los Uniformes S.R.L. was declared bankrupt by Buenos
Aires' Court No. 23 with the assistance of Clerk No. 45.  The
court made the ruling in favor of the company's creditor, Union
de Cortadores de la Industria, for nonpayment of $2,961.54.  Ms.
Jessica Minci was appointed as trustee.

La Casa de los Uniformes S.R.L. can be reached at:

         Cuenca 3361
         Buenos Aires, Argentina

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

         Vuelta de Obligado 1715
         Buenos Aires, Argentina

Ms. Beatriz Satachesky, the trustee, can be reached at:

         Avenida Cordoba 817
         Buenos Aires, Argentina


LATTE E FORMAGGIO: Claims Verification Begins, Ends April 25
------------------------------------------------------------
Mr. Alberto Samsolo, the court-appointed trustee, has started
verifying claims against Latte e Formaggio S.A., reports La
Nacion.  The verification phase will end on April 25, 2006.

Latte e Formaggio S.A. was declared bankrupt by Buenos Aires'
Court No. 11.

Clerk No. 22 assists the court in this case.

Latte e Formaggio S.A. can be reached at:

         Lavalle 652
         Buenos Aires, Argentina

Alberto Samsolo, the trustee, can be reached at:

         Paraguay 1225
         Buenos Aires, Argentina


MUNDO GRAFICO: Creditors Must Present Claims to Trustee by May 2
----------------------------------------------------------------
Mundo Grafico S.A.'s creditors are required to present their
claims against the company to Ms. Beatriz Satachesky, the
company's trustee, on May 2, 2006.

Argentine daily La Nacion relates that Buenos Aires' Court No.
3 declared the company's bankruptcy in favor of the company's
creditor Casa Hutton S.A. for nonpayment of about $7,738.71 in
debt.

Clerk No. 6 assists the court with the proceedings.

Mundo Grafico S.A. can be reached at:

         Avellaneda 4080
         Buenos Aires, Argentina

Ms. Beatriz Satachesky, the trustee, can be reached at:

         Avenida Cordoba 817
         Buenos Aires


SERVI GUARD: Creditor Claims' Verification Begins, Ends May 2
-------------------------------------------------------------
The verification phase for the claims submitted by Servi Guard
S.R.L.'s creditors has started, Argentine daily La Nacion
reports.  The verification will end on May 2, 2006.  Creditors
who are unable to submit claims after the said date will be
excluded from receiving any distribution or payment that the
company will make.

Servi Guard S.R.L. was declared bankrupt by Buenos Aires' Court
No. 11 with the assistance of Clerk No. 22.  The court made the
ruling in favor of the company's creditor, Liberty ART, for
nonpayment of $15,546.29.  The court selected Ms. Analia Calvo
as the company's trustee.

Servi Guard S.R.L. can be reached at:

         Avenida Juan B. Justo 365
         Buenos Aires, Argentina

Ms. Analia Calvo, the trustee, can be reached at:

         Rodriguez Pena 797
         Buenos Aires, Argentina


TELECOM ARGENTINA: Noteholders to Meet on Indenture Amendments
--------------------------------------------------------------
Telecom Argentina S.A. announced that it summoned the holders of
Series A Notes, due Oct. 15, 2014 and Series B Notes, due Oct.
15, 2011, to attend an extraordinary meeting of noteholders to
be held on March 27, 2006, in order to approve amendments to the
indenture dated Aug. 31, 2005, between Telecom Argentina and The
Bank of New York as Trustee, Registration Agent, Paying Agent
and Transfer Agent.

The proposed amendments include:

  -- Paragraphs (a) and (c) of Section 3.17. Limitation on
     Capital Expenditures:

     The proposed amendment modifies the limitation on the
     ability of the controlled company Telecom Personal S.A.
     aka Telecom Personal to make capital expenditures;

  -- Section 3.21. Reinvestment of Dividends Paid by Telecom
     Personal:

     The proposed amendment eliminates the obligation to
     reinvest in Telecom Personal any distribution payments --
     as defined in the indenture -- received by Telecom
     Argentina from Telecom Personal; and

  -- Removal of the definitions of Telecom Personal permitted
     capital expenditures and Telecom Personal distribution
     payment.

In accordance with the indenture, approval of the amendment
requires the affirmative vote of not less than a simple majority
of the U.S. dollar equivalent of the aggregate outstanding
principal amount of all series of notes, voting as a single
class, present or represented at the meeting in which quorum is
obtained.  A quorum means at least 60% in aggregate outstanding
principal amount of the notes to hold a meeting on first call
and at least 30% in aggregate outstanding principal amount of
the notes to hold a meeting on second call, if the meeting on
first call is reconvened due to a lack of quorum.

Telecom Argentina is soliciting authorizations from holders of
notes authorizing representatives to vote in favor of the
proposed amendment.  The solicitation of authorizations will
expire at 12:00 p.m., on March 17, 2006, unless extended.

Telecom Argentina announced that a consent fee equal to 0.50% of
the outstanding principal amount of notes will be paid to the
Holders who vote in favor of the amendment -- for further
distribution to beneficial owners if applicable -- but only if
the amendment is approved.

The company also informed that the record date of the meeting is
Feb. 24, 2006, 5:00 p.m.  Therefore, holders of notes as of the
record date are eligible to participate and vote at the meeting,
and shall keep those voting rights irrespective of any transfer
of notes made after the record date.

The Bank of New York will be acting as proxy agent and
tabulation agent.  Holders may participate and vote at the
meeting through the proxy agent and tabulation agent, or
directly in accordance with the procedures set forth in the
document captioned solicitation statement prepared for
information purposes and available on Telecom Argentina's
website for consultation.

Procedures that must be followed by holders of listed notes that
are traded through DTC, Euroclear, or Clearstream depend on in
which Clearinghouse such listed notes are held.  Persons who
hold notes through an intermediary, beneficial owners, are urged
to contact the bank, broker, custodian or other nominee that
holds the notes for them if they wish to instruct such party to
grant or cause the grant of an authorization, with respect to
such beneficial owner's notes, to vote in favor of the proposed
amendment.

The extraordinary meeting of noteholders will be held on March
27, 2006, at 10:00 a.m., at:

         Avenida Alicia Moreau de Justo 50, Ground Floor
         Buenos Aires, Republic of Argentina

If a quorum is not reached to hold the meeting on first call,
the company may publish notices to hold a meeting on second call
on a given date within the period specified in the indenture.

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.


TGS: DE Shaw Acquires 15% Stake Sold for US$115 Million
-------------------------------------------------------
About 15% of natural gas carrier Transportadora del Sur aka TGS
has been sold to Wall Street group DE Shaw Laminar Emerging
Markets, Latin Lawyer Online reports.

Latin Lawyer relates that Enron's Argentine subsidiaries, Enron
Pipeline Company Argentina, Enron Argentina Ciesa Holdings and
Enron de Inversiones de Energia, sold their shares in TGS to DE
Shaw Laminar for a reported US$115 million, transferring about
121 million class B shares.

The deal, according to Latin Lawyer, is the last stage of a plan
disclosed in April 2004, which allows the branches of Enron to
undo their shared 50% stake in Company de Inversiones de
Energia, TGS's holding company.  The stake was divided between
the Enron companies and Petrobras's Argentine unit, Petrobras
Energia S.A.

TGS, with a current firm contracted capacity of approximately
71.4 MMm3/d or 2.5 Bcf/d, is Argentina's leading transporter of
natural gas.  TGS's controlling shareholder is Compania de
Inversiones de Energia S.A., which holds approximately 55.3% of
the company's common stock.

                        *    *    *

As reported by Troubled Company Reporter on April 1, 2005,
Standard & Poor's Ratings Services changed its ratings on TGS
S.A.'s US$201.14 million and US$89.00 million Inter-American
Development Bank bonds to 'B-' from 'CCC+'.


* Argentina Selling US$308 Million Due 2012 Bonds to Venezuela
--------------------------------------------------------------
In an announcement published in the Official Bulletin, the
Argentinian government disclosed its intention to sell US$308.1
million Boden 2012 bonds to the Venezuelan government at market
prices.

Venezuela is Argentina's biggest buyer of debt since the
country's US$95 billion bond default in 2001.

The sale will raise Argentina's total bond sale to Venezuela to
US$2.4 billion.

Argentina opted to directly sale the bonds to Venezuela rather
than auctioning them because rates in international credit
markets are too high.


* Chile's Energy Panel Warns of Argentina Gas Supply Cuts
---------------------------------------------------------
Luis Sanchez Castellon, Chile's head of the Energy Committee
warned that the industrial sector must be prepared to pay higher
prices for fuel given the new set of cuts in natural gas supply
from Argentina, the Merco Press reports.

"We have to get used to the idea that energy costs are and will
be dearer," Mr. Castellon said.  "We will have to learn to
survive with these natural gas shortages for the next three
years at least, which is the time we estimate it will take Chile
to diversify its natural gas sources."

Last week, 235 small- and medium-sized industrial companies in
Santiago were forced to halt activities totally or partially
following greater cuts in the Argentine natural gas supply, the
Merco Press reports.

The 700 cubic metres supply cut was caused by a greater demand
particularly in Buenos Aires, Argentina, which underwent a heat
wave, the Merco Press relates.

Chile imports almost 90% of its natural gas, 22 million cubic
metres per day, from Argentina, according to Merco Press.

Chilean industrialists complain that the surprise cuts not only
cause havoc to the production line but increase considerably
costs when forced to use alternative fuels.

The energy cuts, according to the business sector, will cause
reduction in investment and cause job losses.

Last week Argentina also shut gas supply to Uruguay.

Since taking office, Argentine President Nestor Kirchner has
established that domestic consumption will be privileged over
surplus exports, in spite of standing long term contracts signed
in the nineties with Chile, the Merco Press relates.

                        *    *    *

Fitch Ratings assigns these ratings on Peru:

                     Rating     Rating Date
                     ------     -----------
   Country Ceiling     B       Jun.  3, 2005
   Long Term IDR       RD      Dec. 14, 2005
   Short Term IDR      B       Dec. 14, 2005
   Local Currency
   Long Term Issuer
   Default Rating      B-      Jun.  3, 2005


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


PXRE GROUP: Releases 2005 Fourth Quarter Financial Highlights
-------------------------------------------------------------
PXRE Group Ltd. (NYSE: PXT) reported a net loss before
convertible preferred share dividends of $446.5 million for the
quarter ended December 31, 2005, compared to net income before
convertible preferred share dividends of $32.8 million in
the fourth quarter of 2004.  The net loss in the fourth quarter
of 2005 principally reflects losses from Hurricane Wilma and
increased estimates of losses from Hurricanes Katrina and Rita.

On a fully diluted basis, book value per share decreased to
$6.01 at December 31, 2005 from $13.01 per share at September
30, 2005.  Fully diluted shares outstanding as of December 31,
2005, are approximately 77.4 million.  The Company's
shareholders' equity was $465.3 million as of December 31, 2005.

Jeffrey L. Radke, President & Chief Executive Officer of PXRE
Group, commented, "As we indicated last week, our fourth quarter
results reflect the severe losses associated with Hurricane
Wilma and significant development on Hurricanes Katrina and
Rita.  Although the fourth quarter loss and recent rating
actions are extremely disappointing, PXRE remains financially
sound and able to meet all of our obligations to clients.  We
also have sufficient liquidity to meet all currently foreseen
needs and have taken a number of steps to even further improve
our liquidity in order to meet contingencies that may arise."

Mr. Radke continued, "We have built a 23-year track record of
promptly paying claims and providing superior underwriting
services to our clients.  We are hopeful that our financial
soundness and strong service track record will allow us to
continue trading with our clients and brokers.  Nevertheless,
more than 75% of our current reinsurance clients, as measured by
the premium volume, have the right to cancel their reinsurance
contracts as a result of either the recent ratings downgrade or
reduction of our capital, which, if such rights were exercised,
could cause a substantial loss in premium volume.  We are
therefore continuing to explore a range of strategic
alternatives for the Company."

As of September 30, 2005, the Company had income tax
recoverables of $47.8 million.  The recent downgrade of the
Company's credit ratings below the "A-" level has created
uncertainty with regard to the ultimate realization of the
Company's income tax recoverables.  As a result, the Company has
recorded a valuation allowance against certain of these assets,
which reduced the income tax recoverable to $6.3 million as of
December 31, 2005.  Such amount represents expected tax refunds
related to prior periods that are expected to be received in
2006.  A result of the recording of this valuation allowance is
the reversal of approximately $30.9 million of tax benefits that
had previously reduced the net impact of Hurricanes Katrina and
Rita on the Company's results at September 30, 2005.

The $330.3 million increase in the estimated pre-tax net impact
for Hurricanes Katrina, Rita and Wilma reflected in the
foregoing table brings the estimated losses for these hurricanes
above the high end of the range announced by the Company on
February 16, 2006.  The new loss estimate results from the
Company's assessment of recent loss reports, as well as
notifications received by the Company subsequent to the recent
downgrades from two counterparties exercising their rights under
certain of the Company's reinsurance contracts to cancel and
commute retrocessional coverage based on ratings downgrades and
material changes to the Company.

As a result of the losses arising from Hurricanes Katrina, Rita
and Wilma during the second half of 2005, PXRE has an
accumulated deficit of $527.3 million at December 31, 2005.
Under Bermuda company law, even if a company is solvent and able
to pay its liabilities as they become due, it cannot declare or
pay dividends or make distributions if, after such payment, the
realizable value of its assets would thereby be less than the
sum of its liabilities, its issued share capital (par value) and
its share premium account, a defined term in Bermuda company
law.  Due to the size of the Company's share premium account
($550.0 million as of December 31, 2005), it is currently
prohibited under Bermuda company law from paying dividends or
making distributions from its contributed surplus to its
shareholders.  In order for PXRE to continue to have the
flexibility to pay dividends, the Board of Directors has
determined that it is in the best interests of PXRE to reduce
the share premium account to zero and allocate $550.0 million to
the Company's contributed surplus as permitted under Bermuda
company law.  This reduction of the share premium account and
reallocation to the Company's contributed surplus requires the
approval of PXRE's shareholders at a General Meeting.  If
shareholders approve the foregoing proposal, the Board of
Directors will evaluate whether to resume paying dividends and
the appropriate level of such dividends as part of its
evaluation of strategic alternatives.

                       Director Retires

Finally, the Company also announced today that Robert Fiondella
has retired from the Company's Board of Directors effective
immediately due to health reasons.

Gerald Radke, Chairman of PXRE Group, said, "We are sorry to be
losing Bob's wisdom and insight on the Board, but understand his
decision to retire.  Bob was instrumental in the formation of
the Company and has served on PXRE's board since the Company's
origination in 1982.  He made significant contributions to
PXRE's development over the past 23 years.  I know that I speak
for the entire organization in wishing Bob all the best."

PXRE Group-- with operations in Bermuda, Europe and the United
States -- provides reinsurance products and services to a
worldwide marketplace.  The Company's primary focus is providing
property catastrophe reinsurance and retrocessional coverage.
The Company also provides marine, aviation and aerospace
products and services.  The Company's shares trade on the New
York Stock Exchange under the symbol "PXT."

                        *    *    *

Standard & Poor's Ratings Services lowered its counterparty
credit and financial strength ratings on Bermuda-based PXRE
Reinsurance Ltd. and U.S.-based PXRE Reinsurance Co.
(collectively referred to as PXRE) to 'BBB-' from 'BBB+'.

Standard & Poor's also said that it lowered its counterparty
credit ratings on holding companies PXRE Group Ltd. (NYSE:PXT)
and PXRE Corp. to 'BB-' from 'BB+'.

All of these ratings remain on CreditWatch with negative
implications, where they were placed on Feb. 16, 2006.

"The downgrades reflect PXRE's announcement of a writedown of
its deferred tax asset, the adverse impact of two counterparties
canceling their reinsurance contracts, and an increase in the
group's estimated 2005 hurricane losses," explained Standard &
Poor's credit analyst Steven Ader.

Although PXRE's capital and liquidity are sufficient to meet
known obligations, its competitive position has materially
diminished, as demonstrated by its disclosure that a substantial
loss in premium volume could result from current reinsurance
clients Exercising their right to cancel their reinsurance
contracts.  This possibility also materially hampers PXRE's
financial flexibility, borne from its prospective business
opportunities, previously incorporated into the rating.
Financial flexibility is further hampered by the group's
disclosure that it is currently precluded under Bermuda holding
company law from declaring or paying dividends, subject to a
shareholder vote in April 2006.

The ratings remain on CreditWatch negative because of the fluid
nature of developing events relative to PXRE's:

   * competitive position,
   * financial flexibility,
   * capital adequacy, and
   * liquidity.

Standard & Poor's expects to resolve the CreditWatch status of
the ratings within the next 90 days.  The absence of further
material negative events will likely result in the ratings being
affirmed.  Alternatively, the ratings could be lowered again if
there is further material adverse reserve development or an
unanticipated capital and liquidity impact from ongoing
commutations.


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


REPSOL YPF: Bolivia Orders Arrest of Local Chief Executive
----------------------------------------------------------
Bolivia has issued a search and arrest warrant against Repsol
YPF's local chief executive, EFE News Service reports.

Spain's Foreign Ministry has approached Bolivian authorities to
express concern about the warrant.  According to EFE, diplomatic
sources said that the Spanish embassy in Bolivia said that the
warrant "will do nothing to improve relations" between the two
countries.

The warrant, EFE says, is apparently related to accusations of
fuel smuggling supposedly committed by the Spanish-Argentine
multinational.

As previously reported, Repsol and its subsidiary, Andina, are
being investigated for alleged smuggling of 230,399 barrels of
crude worth US$9.22 million.

Repsol and Andina representatives have since denied the
allegations, reiterating their willingness to cooperate with
Bolivia.

Repsol said earlier this month that it is disturbed by recent
criticism from the Bolivian government but will nevertheless
undertake some $150 million worth of joint ventures with the
Andean nation's state petroleum firm.

In early February Andina presented its formal response to
accusations by Bolivia's customs service that the firm used both
pipelines and tanker trucks to smuggle fuel to Chile and
Argentina during the 2004-2005 period.

Bolivian customs officials also charged Andina with falsifying
export documents.

                        *    *    *

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
===========


ARACRUZ CELULOSE: S&P Assigns BB- Foreign Currency Rating
---------------------------------------------------------
Standard and Poor's Ratings Services assigned a 'BB-' rating to
Aracruz Celulose S.A.'s foreign currency.

The ratings on Aracruz reflects the company's ability to remain
protected against the peculiarities of the Brazilian economy,
stemming from:

    -- The company's virtual total sales to the external market;

    -- Aracruz's ring-fenced attributes from infrastructure
       risks of electricity supply and pulp shipment, due to its
       electricity self-sufficiency and its private port
       Portocel;

    -- Its strong competitive position in the market pulp
       business as a low-cost producer -- average cash cost of
       $165/ton in 2005 -- bearing one of the lowest cash costs
       in the world; and

    -- Its free cash flow generation since 2004.

On the other hand, Standard & Poor's Ratings Services also
considers that a lingering economic crisis in Brazil could
potentially curtail the company's financial flexibility in the
medium term, as its ability to sustain cash generation at
current strong levels and to execute adequate investment
decisions to support its long-term growth could be impaired.

A protracted environment of extremely low eucalyptus pulp prices
coupled with abridged international liquidity and ultimately
strong local currency appreciation over the dollar could pose
risks in its ability to service debt.

In arriving at a foreign currency rating above the sovereign
foreign currency rating of Brazil, S&P assumes that Aracruz
would have the capacity and strong incentive to service foreign
debt despite a foreign currency default by the sovereign and
potentially tightened foreign exchange controls accompanying
such a scenario.  This, in turn, is derived from a strong
ongoing and forecasted export base relative to an absorbable
foreign debt repayment schedule, even under stressed conditions,
immaterial direct import needs, and strong foreign currency
liquidity, including the ability to generate and keep cash
reserves abroad.

S&P notes that Aracruz's willingness to serve its foreign debt,
despite a potential Brazilian sovereign stress event, stems from
its full integration into global trading (exports account for
98% of revenues), equity (34.5% of total capital is held by
foreign investors), and debt markets (60% of debt raised
abroad), giving the company strong incentives to honor foreign
debt obligations.

Veracel Celulose S.A., a 900,000-ton pulp project in association
with Sweden-based pulp and paper producer Stora Enso Oyj
(BBB/Stable/A-2), started production in late May 2005, three
months anticipated, and the learning curve was recently achieved
in early November 2005 when Veracel will be able to deliver
900,000 tons per year (tpy), evenly split by Aracruz and Stora
Enso.

For analytical purposes, S&P's projections proportionally
incorporate in Aracruz's US GAAP financial figures, 50% of the
Veracel debt, and 50% of its projected cash generation, as
Aracruz guarantees 50% of the debt and will benefit from 50% of
Veracel's pulp production.

Europe and North America continued to be Aracruz's main sale
destinations in 2005, together accounting for 78.4% of total
volume sold.

During 2005, pulp prices remained strong and should be sustained
in early 2006, but some capacities starting up in 2006 and 2007,
especially from Latin America, might pose some downward
pressure.  Within its total capital expenses in 2005, Aracruz
invested $26.7 million of the debottlenecking project in the
Guaiba unit, increasing its nominal capacity by another 30,000
tpy for 2006, and has announced another 200,000 tpy
debottlenecking project in the Barra do Riacho unit, at a cost
of $192 million, 40% to be invested in 2006 and 60% in 2007,
when this additional capacity should be starting to reach the
market.

Aracruz's fiscal year-end 2005 aka FYE2005 results show another
growth in volume sold, achieving 2.6 million tons, 6.3% higher
than the volume for FYE2004, mostly due to 180,000 tons of
Veracel's production.  Aracruz's higher volume sold and average
pulp prices, about 8.4% higher than the same period last year in
the global market, supported the 15% increase in net revenues
for FYE2005 compared with those in FYE2004.

Even though larger net sales have notably contributed to the
company's financial performance in the period, the lower wood
requirements purchased from third parties were also key to
keeping Aracruz's historically great profitability level and
improving its EBITDA margin to 49% -- nonadjusted -- stable
compared with the FYE2004 figure, even taking into account the
appreciation of Brazil's local currency affecting 63% of the
company's total cash costs and expenses.

As Aracruz uses the US dollar as the functional currency,
Brazil's local currency appreciations negatively affect the
company's costs and expenses, the average 16% appreciation of
the local currency experienced in 2005 was offset by minor
costly wood purchases from third parties, decreasing to 10% of
total needs from about 30% in the beginning of the year.  By
increasing the level of self-sufficiency in the period, Aracruz
was able to buffer about 50% of the cash effect of local
currency appreciation on cash costs.

As a result, Aracruz's EBITDA volume grew about 17% in the same
period, $659 million in FYE2005 and $564 million in FYE2004, a
significant increase even considering that 63% of Aracruz's cash
costs and expenses are denominated in local currency that is
Brazilian Reais.  Although during 2005 EBITDA to gross interest
coverage remained stable at 4.8x, funds from operations aka FFO
to total gross debt, including Veracel's 50% debt portion,
reached 34%, which is higher compared to 28% in the same period
last year.

Aracruz's superior FFO of $578 million in the period, $457
million in FYE2004, derives from the same grounds as the EBITDA
growth, coupled with higher interest income.  The company's
credit metrics for 2005 are in line with our previous
expectations.

Aracruz is the world's leading producer of bleached eucalyptus
Kraft pulp aka BEKP, accounting for some 30% of the global
supply, and the product is used to manufacture tissue (57%),
high value-added specialty papers (22%), and printing and
writing (21%).

Aracruz's nominal pulp production capacity, totaling some three
million tpy, is distributed among three pulp making units: Barra
do Riacho in Espirito Santo, Guaiba in Rio Grande do Sul, and
Veracel in Bahia.

Since the Fiberline C project began at the Barra do Riacho unit
in mid-2002, Aracruz is no longer self sufficient in its fiber
needs and has been supplied by Veracel.

In 2004, 35% of Aracruz's wood requirements were outsourced from
Veracel; in 2005 the volume was only 10%, and it is expected to
be self sufficient in fiber again by early 2006, due to several
self-sufficiency projects developed.

                         Liquidity

Liquidity remains comfortable and is one of the key rating
factors that sustains Aracruz's average financial risk.  The
company has a stable and significant level of cash holdings, and
its short-term debt is 22% of the total debt in FYE2005.
Moreover, Aracruz has established a financial policy in which
cash holdings are targeted to be at least equivalent to 12
months of amortization, in first-half 2005 it represents 24
months, which improves its financial flexibility in the event of
an unexpected credit crunch.  The cash position is also used to
offset Brazil's local currency volatilities, which primarily
affects its income statement.

The acquisitions of the Guaiba mill in 2003 and the Veracel
project led its formerly average debt position to increase about
$800 million from second-half 2003 until now.

Aracruz has shown a positive free cash flow since 2004, and our
projections indicate that it will remain positive.  The company
is expected to use its free cash to amortize long-term debt.  It
is also part of Aracruz's financial strategy to seek to stretch
the total debt amortization schedule, which is aimed at
strengthening the company's financial flexibility.

Even though Aracruz has focused on the international credit
markets, it also enjoys strong access to the local credit market
and benefits from a flight to quality during a stressed
macroeconomic environment.

About 42% of Aracruz's $1.7 billion debt, partially consolidated
with Veracel, is its export receivables future flow
securitization, and the remaining is trade finance (15%) and
BNDES transactions that financed the Fiberline C and Veracel
(some 35%), with a comfortable amortization schedule.

According to S&P's projections, total gross debt is expected to
remain about $1.5 billion at the end of 2006 -- or about $1
billion when considering the total debt net of cash holdings --
yet reflecting intra-year amortizations.

From 2006 on, Aracruz will face higher debt amortization
amounts, but the company should benefit from larger cash
generation as a result of the Veracel full output coming on
stream.

                            Outlook

The stable outlook on Aracruz's ratings reflects the expectation
that the current economic, financial, and political conditions
in Brazil will allow it to sustain strong profitability and
access to long-term funding either internationally or locally.
Rating stability also considers that the company -- whose
financial figures are partially consolidated with Veracel --
will be able to sustain-from 2006 on-FFO to total debt of 35%,
EBITDA to gross interest coverage of about 6x, and total gross
debt to EBITDA of about 2x, as Aracruz will benefit from
Veracel's full output coming on stream.

If the company's performance deteriorates as a result of a
change in the market fundamentals, market pulp price, and from
2006 on, Aracruz fails to deliver the above metrics the outlook
could be revised to negative.

The cyclical and volatile nature of the market pulp business
pose certain limitations for ratings upside potential.  However,
the continuity of Aracruz's performance at those levels, in the
next three years when market pulp prices are expected to
decline, coupled with debt reduction and a conservative long-
term growth plan, might lead us to consider revising the outlook
to positive.


PETROLEO BRASILEIRO: Starts Production in Peroa Field
-----------------------------------------------------
Petroleo Brasileiro S.A. aka Petrobras announced that on Feb.
21, 2002, it began gas production in the Peroa field in the
Espirito Santo Basin.  The first of three wells -- 3-ESS-89A --
is being gradually brought into production and is expected to
reach full daily capacity of more than 1 million cubic meters by
next week.

The gas is being processed at the Cacimbas Gas Treatment Unit
aka UTGC, in the municipal district of Linhares, and will
provide additional supplies of 1.3 million m3/day to the state
of Espirito Santo.

Once the first 100 kms of the Southeast-Northeast Gas Pipeline,
Gasoduto Sudeste-Nordeste or Gasene, linking the cities of
Cacimbas and Vitoria, become operational, supplies can be
doubled.  This stretch of pipeline is scheduled to come on
stream in the second half of this year.

The Peroa platform is located off the northern Espirito Santo
coast in a water depth of 67 meters and has a processing
capacity of 8 million m3/day.

Petrobras has invested BRL550 million in Phase 1 of the Peroa
project, which includes the platform, the submarine gas pipeline
and the UTGC.  In all, 1,350 direct jobs were created, including
construction and operation.  Phase II, which is still at the
project stage, will increase supplies from the current level of
1.3 million to 8 million m3/day of gas from 2008.

                        *    *    *

Petroleo Brasileiro SA's long-term corporate family rating is
rated Ba3 by Moody's and its foreign currency long-term debt is
rated BB- by Fitch.


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


CORALIE LIMITED: Shareholders Convene March 3 for Final Meeting
---------------------------------------------------------------
Shareholders of Coralie Limited will hold a final meeting on
March 3, 2006, at 2:00 p.m. at:

         Whiteley Chambers
         Don Street, St. Helier, Jersey

During the meeting, the shareholders will:

  -- know how the winding-up of the company has been conducted
     and how the estate's property has been disposed to date;

  -- listen to the reports of the liquidator;

  -- approve the report of the liquidator;

  -- approve the remuneration of the liquidator; and

  -- authorize the liquidator to retain the records of the
     company for a period of five years from the dissolution of
     the company, after which they may be destroyed.

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 a creditor.


FORMULA OFFSHORE: Shareholders' Final Meeting Set on March 7
------------------------------------------------------------
Shareholders of Formula Offshore Investment Fund will hold an
extraordinary final meeting on March 7, 2006, at 9:00 a.m., at

         4th Floor, Bermuda House
         Dr. Roy's Drive
         Grand Cayman, Cayman Islands

Accounts on the company's liquidation process will be presented
during the meeting.  The shareholders will also authorize the
liquidators to retain the records of the company for a period of
five years, starting 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 a creditor.

Mr. Richard E. L. Fogerty, the joint voluntary liquidator, can
be reached at:

         Kroll (Cayman) Limited
         Attention: Korie Drummond
         4th Floor, Bermuda House
         Dr. Roy's Drive
         Grand Cayman, Cayman Islands
         Tel: (345) 946-0081
         Fax: (345) 946-0082


POWIS SQUARE LIMITED: Shareholders' Final Meeting Set on March 8
----------------------------------------------------------------
Shareholders of Powis Square Limited will have an extraordinary
final meeting on March 8, 2006.

Accounts on the company's liquidation process will be presented
during the meeting.  The shareholders will also authorize the
liquidators to retain the records of the company for a period of
five years, starting from the dissolution of the company.

As reported in the Troubled Company Reporter on Jan. 4, 2006,
Powis Square started voluntary wind up process on Dec. 14, 2005.
Mr. Thomas Olsson was appointed as liquidator.

Creditors of the company were given until Jan. 9, 2006, to prove
their claims.

Mr. Thomas Olsson, the joint voluntary liquidator, can be
reached at:

   11 David Mews
   London, W1U 6EG, UK
   Telephone: (44) 20 7434 4131
   Facsimile: (44) 20 7287 6059


STATE REINSURANCE: Shareholders' Final Meeting Scheduled Mar. 8
---------------------------------------------------------------
Shareholders of State Reinsurance Co. Ltd. will hold its final
meeting at 9:00 a.m. on March 8, 2006, which will be held at:

         Global Captive Management Ltd.
         Genesis Building
         P.O. Box 1363 George Town
         Grand Cayman, Cayman Islands

Company's accounts on liquidation process will be laid before
them and the shareholders will also authorize the liquidators to
retain its records for a period of five years, starting from the
dissolution of the company.

As reported in the Troubled Company Reporter on Feb. 20, 2006,
State Reinsurance Co. Ltd. started winding up operations on Dec.
15, 2005.  Global Captive Management Ltd. was appointed as
liquidator.

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.

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

         Global Captive Management Ltd.
         Attention: Mr. Peter Mackay
         Genesis Building
         P.O. Box 1363 George Town
         Grand Cayman, Cayman Islands
         Telephone: (345) 949 7966


WHITECHAPEL CORPORATION: Shareholders Final Meeting Is on Mar. 7
----------------------------------------------------------------
Whitechapel Corporation's shareholders will convene at 2.00 p.m.
on March 7, 2006, for a final meeting at the registered office
of the company.

Accounts on the company's liquidation process will be presented
during the meeting.  The shareholders will also authorize the
liquidators to retain the company's records for five years from
the dissolution and after which they may be destroyed.

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 a creditor.

For more information contact, John Cullinane and Derrie Boggess,
the joint Voluntary Liquidators, at:

         c/o Walkers SPV Limited
         Walker House, P.O. Box 908
         George Town, Grand Cayman


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


* Chile's Energy Panel Warns of Argentina Gas Supply Cuts
---------------------------------------------------------
Luis Sanchez Castellon, Chile's head of the Energy Committee
warned that the industrial sector must be prepared to pay higher
prices for fuel given the new set of cuts in natural gas supply
from Argentina, the Merco Press reports.

"We have to get used to the idea that energy costs are and will
be dearer," Mr. Castellon said.  "We will have to learn to
survive with these natural gas shortages for the next three
years at least, which is the time we estimate it will take Chile
to diversify its natural gas sources."

Last week, 235 small and medium sized industrial companies in
Santiago were forced to paralyze activities totally or partially
following greater cuts in the Argentine natural gas supply, the
Merco Press reports.

The 700 cubic metres supply cut was caused by a greater demand
particularly in Buenos Aires, Argentina, which underwent a heat
wave, the Merco Press relates.

Chile imports almost 90% of its natural gas, 22 million cubic
metres per day, from Argentina, according to Merco Press.

Chilean industrialists complain that the surprise cuts not only
cause havoc to the production line but increase considerably
costs when forced to use alternative fuels.

The energy cuts, according to the business sector, will cause
reduction in investment and cause job losses.

Last week Argentina also shut gas supply to Uruguay.

Since taking office, Argentine President Nestor Kirchner has
established that domestic consumption will be privileged over
surplus exports, in spite of standing long term contracts signed
in the nineties with Chile, the Merco Press relates.

                        *    *    *

Fitch Ratings assigns these ratings on Peru:

                     Rating     Rating Date
                     ------     -----------
   Country Ceiling     B       Jun.  3, 2005
   Long Term IDR       RD      Dec. 14, 2005
   Short Term IDR      B       Dec. 14, 2005
   Local Currency
   Long Term Issuer
   Default Rating      B-      Jun.  3, 2005


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


* Colombia Inks Free Trade Deal with United States
--------------------------------------------------
Colombia signed a free trade deal with the United States that
aims to tear down barriers to commerce and help fight drugs in
the Latin American nation.

The agreement makes Colombia the 14th country to ink an FTA with
the United States.  Negotiations begain in May 2004.

U.S. trade representative Rob Portman said the deal with
Colombia would "help foster economic development in Colombia,
and contribute to efforts to counter narco-terrorism, which
threatens democracy and regional stability," the AFP reports.
"The free trade agreement with Colombia will generate export
opportunities for US agriculture, industry, and service
providers, and help create jobs in the United States."

The Colombian trade minister told reporters that the deal was
worth their effort and he believes will bring much good to his
country.

The Colombian talks were given a significant push when President
Alvaro Uribe came to Washington for face-to-face talks earlier
this month, the AFP relates.  The two sides managed to resolve
outstanding disagreements over rice, poultry and other products
to clinch the deal.

The United States has already negotiated FTAs with 13 countries
-- Australia, Bahrain, Chile, Costa Rica, the Dominican
Republic, El Salvador, Guatemala, Honduras, Morocco, Nicaragua,
Oman, Peru and Singapore.


* Colombia Intends to Buy Back US$4.3 Billion of Bonds
------------------------------------------------------
Colombia said it will buy back as much as $4.3 billion of euro-
and dollar-denominated bonds, joining Brazil and Venezuela in
using a surge in commodity export revenue to reduce foreign
debt, Bloomberg reports.

Colombia's Finance Ministry was quoted by Bloomberg as saying
that the country may use cash-on-hand or sell peso-denominated
bonds in international markets to fund the buyback of debt
maturing between 2006 and 2011.

Colombia's peso has risen 32% over the past three years against
the dollar, making the bond buyback cheaper for the government
in peso-terms, Bloomberg says.

"These buybacks are great news," Alberto Ramos, a Latin America
economist with Goldman, Sachs & Co., told Bloomberg in a
telephone interview from New York.  He said the repurchases may
help the countries earn higher credit ratings by reducing their
vulnerability to currency declines against the dollar.

Colombian bonds -- which are rated Ba2 by Moody's Investors
Service and BB by Standard & Poor's, both two levels below
investment grade -- gained after the announcement.

According to Bloombeg eight Colombian bonds in euros and dollars
are eligible to be bought back.  The government said investors
have until March 3 to tender their bonds in the buyback offer,
which is being managed by JPMorgan and Morgan Stanley.

The buyback is expected to be funded by the government with a
peso bond sale abroad.  Colombia has sold two peso-denominated
bond sales in international markets since November 2004, tapping
into investor demand for higher-yielding securities, Bloomberg
says.


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


* Dominican Republic Looks to Ethanol to Lower Petroleum Expense
----------------------------------------------------------------
The Dominican Republic is preparing to add ethanol to gasoline
to reduce expenditure on petroleum products and boost sugar cane
production, the EFE News Service relates.

The country's Industry and Commerce Ministry will impose,
through a resolution, that content of ethanol in gasoline in a
proportion beginning at 5% and gradually increasing until it
reaches 22%, according to local press.

Rafael Lopez, head of the ministry's hydrocarbons division, said
in reports that the introduction of ethanol in the country will
encourage production of the fuel that it will become an export
product, while reducing gasoline imports in a "sustainable" way.

According to official statistics, the Dominican Republic spends
$2.45 billion on petroleum products, of which $336 million go to
gasoline imports, the EFE says.

The obligatory mixture of ethanol and gasoline is expected to
boost the nation's ethanol production and contribute to the
expansion of sugar-cane crops.  The sugar industry has seen hard
times over the past 15 years when the United States, the
country's main buyer, gradually reduce its imports, the EFE
relates.

Proalcohol, a program for the mass production of ethanol from
sugar cane, was introduced by the Brazilian government in 1975
as a measure for dealing with the effects of the first global
energy crisis, the EFE relates.  Ethanol was hailed at the time
as "the fuel of the future" because it was cheaper than
gasoline, came from a renewable source and burned cleanly,
unlike fossil fuels.

                        *    *    *

Fitch Ratings assigns these ratings on Dominican Republic:

                     Rating     Rating Date
                     ------     -----------
   Country Ceiling     B-       May 11, 2005
   Long Term IDR       B-      Dec. 14, 2005
   Short Term IDR      B       Dec. 14, 2005
   Local Currency
   Long Term Issuer
   Default Rating      B        May 11, 2005



=====================
E L   S A L V A D O R
=====================


* El Salvador Enters Free Trade Deal with United States
-------------------------------------------------------
The United States has formally agreed to a free trade agreement
with El Salvador, BBC News reports.

The United States has also encouraged five more Central American
nations that they must do more to finalize similar deals.

U.S. Congress sanctioned a Central American Free-Trade Agreement
last year but official implementation has been delayed by a
series of legal wrangles, BBC News relates.  The United States
complained that CAFTA partners were failing to harmonize key
laws and regulations, as obliged by the treaty.

The U.S.-El Salvador agreement will take effect on 1 March.  The
announcement, by the U.S. Trade Representative's office, came
ahead of a meeting between U.S. President George W. Bush and his
Salvadorian counterpart Antonio Saca, BBC News says.

According to BBC, the U.S. has urged Costa Rica, Guatemala,
Honduras, Nicaragua and the Dominican Republic to make greater
efforts to bring domestic regulations into line with
multilateral standards required by the treaty.  Rules governing
meat inspection remain a major sticking point.

The U.S. views certain countries' reluctance to recognize its
own system as equivalent to their own as a barrier to its
exports, BBC News says.

                        *    *    *

Fitch Ratings assigns these ratings on El Salvador:

                     Rating     Rating Date
                     ------     -----------
   Country Ceiling     BB+      Jun. 18, 2004
   Long Term IDR       BB+      Dec. 14, 2005
   Short Term IDR      B        Dec. 14, 2005
   Local Currency
   Long Term Issuer
   Default Rating      BB+      Dec. 14, 2005


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


CORPORACION DURANGO: Net Sales Up 1% at Quarter Ended Dec. 31
-------------------------------------------------------------
Corporacion Durango, S.A. de C.V. -- the largest integrated
paper producer in Mexico -- announced its unaudited consolidated
results for the 2005 fourth quarter and full year.  All figures
were prepared in accordance with Mexican generally accepted
accounting principles and are stated in constant Mexican pesos
as of Dec. 31, 2005, converted into US dollars using the
exchange rate at Dec. 31, 2005.

              Industry Business Environment 2005

Continuing high energy, transportation, and chemical cost again
ripped into the earnings of US pulp, paper and packaging
companies in the fourth quarter, as well as for the full year
2005.  This was particularly harder for the Canadian and Mexican
industry, due to its stronger currencies, which continued
hurting competitiveness and profits

                         Highlights

  -- Financial and operating fundamentals of company
     strengthened in 2005;

  -- Durango believes that its operating results outperformed
     the industry average in 2005 and in fourth quarter last
     year;

  -- In 2005, EBITDA was US$80.3 million compared with US$85.8
     million in 2004;

  -- In fourth quarter 2005, the company's EBITDA was US$18.2
     million compared to US$29.6 million in the same period in
     2004;

  -- In 2005, Durango implemented a successful cost reduction
     program and capital expenditure discipline; and

  -- In 2005, Durango achieved net debt reduction of US$35
     million.

                          Goals For 2006

Durango's management has designed a strategic plan to further
improve its financial and operating fundamentals during 2006.

On the financial side, Durango plans to reduce debt prepaying
US$100 million during 2006.  In line with this commitment during
the last two months the company has already prepaid US$55
million of its debt.

On the operating side, Durango plans to increase capacity and
domestic market share through the incorporation of certain
productive asset that would not require the company to incur
additional debt.

Both initiatives would substantially enhance the company's
fundamentals after a successful financial restructuring.

             Durango's Business Environment 2005

The company was able to weather, better than the industry, the
tough Mexican business environment, largely due to initiatives
carried out during 2005 to exploit its four key competitive
advantages:

  -- Lower energy mix cost than for the US industry;

  -- Lower domestic fiber mix cost than for the US industry;

  -- Lower SG&A and overhead expenses than that of its peers;
     and

  -- Dominant market share position in Mexico.

                         Shipments

The company's total shipments increased by 2% in 2005 compared
with 2004 and increased by 5% in fourth quarter 2005 compared
with the same period in 2004.

                           Price

Durango's average sales price per short ton increased by 6% to
US$556 in 2005 from US$524 in 2004, and decreased by 4% to
US$543 in fourth quarter 2005 from US$567 in the same period in
2004.

                         Net Sales

Total net sales increased by 9% to US$743.0 million in 2005 from
US$683.8 million in 2004, and increased by 1% to US$182.7
million in fourth quarter 2005 from US$181.5 million in the same
period in 2004.

                       Production Cost

Unit production cost increased by 8% in 2005 compared to 2004
due to increases in the cost of energy, fuel, labor,
transportation and chemicals and an increase in the rate of
appreciation of the Mexican peso against the US dollar rate.
Unit production cost remained flat in fourth quarter 2005
compared to the same period in 2004.

        Selling, General And Administrative Expenses

SG&A expenses increased by 3% to US$60.9 million in 2005 from
US$58.9 million in 2004, and decreased by 6% to US$17.2 in
fourth quarter 2005 from US$18.2 million in the same period in
2004.

                           EBITDA

EBITDA decreased by 6% in 2005 compared to 2004.  EBITDA as a
percentage of net sales was 11% in 2005 compared to 13% in 2004.

EBITDA decreased by 39% in 4Q05 compared to 4Q04.  EBITDA as a
percentage of net sales was 10% in 4Q05 compared to 16% in 4Q04,
due to our inability to pass higher costs completely to
customers and to the weakness of the international pricing of
containerboard and newsprint.

                         Net Income

Net income decreased to US$0.4 million in 2005 from US$8.9
million in 2004.  Net income was a loss of US$4.9 million in
4Q05 from a gain of US$76.4 million in 4Q04 due to a non-cash
item during 2004, which is not recurrent.

                   Debt Reduction Program

The company has adopted a debt reduction program under which it
plans to reduce its outstanding debt by US$100 Million during
2006.  During the first two moths of this year the company has
prepaid US$55 Million.  The program has been and will be funded
by equity contributions from the company's principal
shareholders by US$30.0 Million, the divestment of non-strategic
assets, and internal cash flow.  Under this program, the company
plans to prepay certain secured debt of its subsidiaries this
initiative should allow the company to reduce approximately
US$20.0 Million annually in debt service -- interest and
amortization.

                        *    *    *

As reported by Troubled Company Reporter on Jan. 18, 2005, Fitch
Ratings has withdrawn the 'D' foreign and local currency ratings
of Corporacion Durango S.A, de C.V. (Durango).  Fitch also
withdraws its 'D' ratings of Durango's notes due in 2003, 2006,
2008 and 2009. The 'D' ratings for these defaulted notes suggest
potential recovery levels for creditors of less than 50%.


EMPRESAS ICA: Releases Fin'l Reports for FY Ended Dec. 31, 2005
---------------------------------------------------------------
Empresas ICA, S.A. de C.V., announced its unaudited consolidated
results for the fourth quarter and full year 2005.  As
previously announced, ICA's year-end 2005 balance sheet
consolidates the operations of the North Central Airport Group
aka GACN, ICA's airport operator subsidiary.  GACN's income
statement will be consolidated beginning with the first quarter
of 2006.

                          Highlights

  -- Total revenues for the fourth quarter of 2005 were MXN5,121
     million, an increase of MXN1,384 million, or 37%, as
     compared to MXN3,736 million in the fourth quarter of 2004.
     Full year 2005 revenues were MXN18,405 million, an increase
     of MXN5,287 million, or 40%, as compared to MXN13,118
     million in 2004.

  -- Operating income for the fourth quarter of 2005 was MXN296
     million, an increase of MXN79 million, or 36%, as compared
     to MXN217 million in the same period of 2004.  Operating
     income for the year 2005 was MXN1,055 million, an increase
     of MXN532 million, or 102%, as compared to MXN523 million
     in 2004.

  -- Net income of majority interest was MXN212 million in the
     fourth quarter of 2005.  Net income of majority interest
     for the year 2005 was MXN502 million, equivalent to MXN0.53
     per share or US$0.60 per ADS.

  -- ICA's consolidated construction backlog as of Dec. 31,
     2005, was MXN13,693 million; new contract awards and net
     contract additions during the fourth quarter of 2005 were
     MXN2,622 million.

  -- The consolidation of the GACN's balance sheet as of Dec.
     31, 2005, increased ICA's consolidated assets by MXN8,001
     million, or 26%.

  -- As of Dec. 31, 2005, cash and cash equivalents were
     MXN6,264 million, an increase of 77% as compared to
     MXN3,545 million at the end of 2004.  Of the increase of
     MXN2,719 million, MXN1,657 million results from the
     consolidation of GACN.

  -- As of Dec. 31, 2005, there were 402,657,260 total shares
     outstanding, reflecting the reverse split carried out on
     Dec. 13, 2005.  The ADS-share ratio was also adjusted to
     one ADS per 12 shares.

ICA recorded fourth quarter 2005 revenues of MXN5,121 million,
an increase of 37% compared to the fourth quarter of 2004.  The
El Cajon hydroelectric project accounted for 21% of total
revenues and was 80.5% complete as of Dec. 31, 2005.  During the
fourth quarter of 2005, revenues in Mexico represented 89% of
the total. Revenues denominated in foreign currency, principally
US dollars, were 63% of the total.

Cost of sales was MXN4,470 million, an increase of 38% as
compared to MXN3,238 million in the same period of 2004.  Costs
were 87% of revenues, unchanged from the fourth quarter of 2004.

General and administrative expenses in the fourth quarter of
2005 totaled MXN354 million, a 26% increase compared to MXN281
million in the fourth quarter of 2004.  Expenses in the 2005
period include a MXN50 million provision for bonuses based on
2005 profits, and which will be distributed in accordance with
the bylaws.  This amount is in addition to the bonus provision
made in the third quarter, bringing the full year 2005 amount to
MXN100 million.  Expenses also included bid preparation expenses
of MXN23 million during the fourth quarter of 2005, compared to
MXN8 million registered during the same period of 2004.

Operating income during the fourth quarter of 2005 was MXN296
million, an increase of MXN79 million, or 36 percent, compared
to MXN217 million recorded during the same period of 2004.  The
El Cajon hydroelectric project generated MXN66 million, or 22%,
of total operating income.

EBITDA generated in the fourth quarter of 2005 was MXN489
million, equivalent to 9.5% of revenues, an increase of MXN47
million compared to MXN442 million in EBITDA generated in the
fourth quarter of 2004.  The El Cajon hydroelectric project
generated 23%of the total.

The company's accounting policies provide that financial costs
of financed works be recognized in the cost of sales.  As a
result, financial costs for the El Cajon hydroelectric project
are included in cost of sales.  Adjusted EBITDA adds back net
capitalized interest expense to EBITDA.  In the fourth quarter
of 2005, adjusted EBITDA was MXN583 million compared to MXN527
million during the fourth quarter of 2004, an increase of MXN56
million or 11%.  EBITDA and adjusted EBITDA should not be
considered as indicators of financial performance or free cash
flow under Mexican or US GAAP; other companies may define
similarly titled concepts differently.

The integral financing cost aka CIF in the fourth quarter of
2005 was a gain of MXN17 million, compared to a gain of MXN105
million recorded in the fourth quarter of 2004.  Financial
expense increased to MXN91 million in the fourth quarter of 2005
compared to MXN71 million in the same period of 2004.  The
increase is due to a higher level of debt as a result of the
refinancing of the Corredor Sur and Acapulco Tunnel projects in
the second quarter of 2005.  Financial income during the quarter
was MXN128 million, a MXN15 million, or 13%, increase as
compared to MXN113 million in the fourth quarter of 2004.  The
increase is primarily due to an increase in cash and cash
equivalents as a result of the capital increase in August 2005
and a higher level of customer advances.  The exchange loss in
the fourth quarter 2005 was MXN11 million, compared to a MXN7
million gain in the same period of last year.

The weighted average interest rate on total debt was 7.8% during
the quarter, including MXN193 million in capitalized interest
expense on financed public works, compared to 8.1% registered
during the same period in 2004.

The reduction in the weighted average interest rate is the
result of an increase in the debt of the El Cajon hydroelectric
project, which carries a relatively low rate, and the improved
terms from the refinancing of the Corredor Sur project in Panama
and the Acapulco Tunnel.

Other income was MXN69 million during the fourth quarter of
2005, resulting primarily from the sale of certain land rights
located in the city of Queretaro resulting that had previously
been adjudicated in favor of ICA.

The tax provision in the fourth quarter of 2005 was MXN151
million, of which MXN74 million was deferred taxes, MXN18
million was income tax, and MXN58 million was employee statutory
profit sharing.

ICA recognized MXN24 million during the fourth quarter of 2005
from its share in the earnings of unconsolidated affiliates,
which included the Dravica Consortium, CIMA, and Dicomex
Holding, among others.

Net income of majority interest was MXN212 million in the fourth
quarter of 2005, or MXN0.53 per share (US$ 0.60 per ADS) based
on 402.66 million weighted average shares outstanding, compared
to net income of majority interest of MXN262 million recorded in
the fourth quarter of 2004, or MXN0.84 per share (US$0.95 per
ADS), based on a weighted average of 310.84 million shares
outstanding.  The 2004 earnings per share and earnings per ADS
are adjusted for the 1:6 reverse split and the new 1:12 ADS
ratio.

                      Segment Results

Starting this quarter, ICA has expanded the information provided
for each segment, in order to facilitate analysis of the
company's performance.

Total construction revenues increased 46% during the fourth
quarter of 2005, as compared to the previous year.  Civil
construction and industrial construction grew significantly,
which offset a decrease in Rodio revenues.

Together, construction activities generated an operating margin
of 6.9% during the fourth quarter of 2005, compared to 6.2%
during the same quarter of 2004.  Fourth quarter 2005 EBITDA was
MXN484 million, with an EBITDA margin of 10.1%.

Civil construction revenues resulted principally from work on
the El Cajon hydroelectric project, the Tejocotal-Nuevo Necaxa
section of the Mexico-Tuxpan highway, projects at the Mexico
City International Airport, including work on Terminal II, the
renovation of the Moon Palace Hotel in Cancun, the Federal
Justice building in Cholula, Puebla, and the IMSS General
Hospital in Cancun.

The civil construction-operating margin was 8.7% in the fourth
quarter of 2005, compared to 6.1% in the 2004 period.  During
the fourth quarter of 2005, revenues of MXN12 million were
recorded as a result of client recognition of increased costs
for the Mexico-Tuxpan highway and collection of a MXN26 million
account receivable for the Chiapas Bridge II, for which the
related costs were registered in prior periods.  The operating
margin would have been 7.6% had these revenues not been
registered in the fourth quarter of 2005.

Civil Construction EBITDA was MXN313 million, an increase of 62%
compared to MXN193 million in the 2004 fourth quarter.  The El
Cajon hydroelectric project generated EBITDA of MXN136 million
in 2005 and MXN143 million in the 2004 period.  This reduction
reflects a lower level of amortization of financial costs El
Cajon during 2005, in accordance with the amortization schedule
for these costs adopted in the third quarter of 2004.  Civil
construction net income of majority interest was MXN146 million,
compared to MXN206 million in the fourth quarter of 2004.  The
decrease is due to a lower level of participation in the
earnings of unconsolidated construction affiliates.  Provisions
for completing ancillary works for the Caruachi hydroelectric
project in Venezuela resulted in a fourth quarter 2005 loss of
MXN26 million, compared to income of MXN174 million in the last
quarter of 2004.

Industrial construction revenues rose 52% as a result of an
increased volume of work performed on existing projects.  The
projects that contributed most to revenues were Package II of
the Minatitlan refinery reconfiguration, the Altamira V combined
cycle power plant in Tamaulipas, the Chicontepec oil field
project in Veracruz, the liquefied natural gas terminal and
storage tanks in Altamira, Tamaulipas, and the Reynosa IV
cryogenic plant in Tamaulipas.  The industrial construction-
operating margin was 7.0% in the fourth quarter of 2005,
compared to 6.3% in the 2004 period.  The increase in operating
income primarily reflects the increased volume of work on
Package II of the Minatitlan refinery reconfiguration project
and the recovery of US$1 million in bid preparation expenses
previously recorded.  Bid preparation expenses were MXN7.7
million for the fourth quarter of 2005, compared to MXN8.0
million in the fourth quarter of 2004.

Industrial construction EBITDA was MXN163 million in the fourth
quarter of 2005, an increase of 48% compared to MXN110 million
during the same quarter of 2004.  Industrial construction net
income of majority interest was MXN37 million, basically
unchanged from the 2004 period, principally as a result of
higher tax payments.

Rodio generated revenues of MXN499 million, a reduction of 30%
compared to MXN710 million in the same quarter of 2004.  This
reflects a lower level of work and the contraction of the market
in Portugal.  Rodio's operating margin for the fourth quarter of
2005 was (1.6) percent, as a result of MXN24 million in
additional costs for a project in Portugal.  Rodio's most
important project is the M30 expressway around Madrid.

Rodio EBITDA was MXN7 million, a reduction of 91% compared to
MXN76 million registered during the same quarter of 2004.  Rodio
net income of majority interest was MXN1 million in the fourth
quarter of 2005, compared to MXN10 million registered in the
same quarter of 2004.  The decrease was a result of a reduction
in work volumes and the additional costs for a project in
Portugal.

            Housing and Infrastructure Segments

Housing sold 1,049 units during the fourth quarter of 2005,
compared to 1,288 units in the 2004 period.  Included in the
totals are revenues from the sale of 77 and 196 lots,
respectively, corresponding to the Arcos de Aragon project that
ViveICA is jointly developing with GEO.  The reduction in the
number of units sold is principally the result of delays in
opening to the general public sales of units at Arcos de Aragon.
Revenues for the fourth quarter of 2005 were MXN284 million, a
14% reduction compared to MXN329 million in the same period of
2004.  The decrease in sales reflects the decrease of units
sold.  The operating margin in the fourth quarter of 2005 was
8.1%, compared to 8.8% in the same quarter of 2004.

Forty-nine percent of the housing units sold in the fourth
quarter of 2005 were in the traditional housing -- vivienda
tradicional -- category, which provides the highest margins; 42%
were in the affordable -- vivienda de bajos ingresos --
category; and 9% were in the entry-level -- vivienda economica
-- category.  Housing's EBITDA during the fourth quarter of 2005
was MXN35 million, an increase of 16% compared to MXN30 million
during the same quarter of 2004.  Housing's net income of
majority interest was MXN13 million in the fourth quarter of
2005, compared to MXN30 million in the 2004 period.

Infrastructure operations revenues were MXN88 million in the
fourth quarter of 2005.  The fourth quarter 2005 operating loss
for infrastructure operations was MXN20 million, principally as
a result of one-time expenses in Panama, compared to operating
income of MXN1 million registered in the same period of 2004.
Without the Panama expenses, the operating margin would have
been zero.

The Corredor Sur's average traffic volume in the fourth quarter
of 2005 increased to 53,206 vehicles per day, compared to 46,589
in the same quarter of 2004.

Tolls rates were increased by 2% during December 2005.

In Dec. 30, 2005, ICA received from the government of Panama
US$28.8 million in ten-year government notes, with a 7% per
annum coupon, in payment for the arbitration award in favor of
ICA and additional investment in the rehabilitation of the
Albrook airport.  These notes were sold in the secondary market
on Jan. 31, 2006, for US$29.2 million.

The Acapulco Tunnel's daily average traffic volume increased to
8,694 vehicles in the fourth quarter of 2005, compared to 8,021
in the same quarter 2004.

During December 2005, tolls on non-resident vehicles increased
4.8%, in accordance with the concession agreement.

During December 2005, ICA acquired 44.94% of the shares of the
North Central Airport Group aka GACN in a series of
transactions.  First, ICA acquired an additional 59.6% of the
company Servicios de Tecnologia Aeroportuaria aka SETA, which is
the operating partner of GACN and owns 15% of GACN.

ICA's total ownership of SETA is now 74.5%. Second, ICA
purchased 36% of the GACN shares owned by the Mexican
government.  As a result of these transactions, ICA now controls
47.2% of GACN.  The aggregate US$289.8 million purchase price
was funded using US$164.8 million in cash and US$125 million
from an 18-month bridge financing provided by West LB and Nord
LB.

            Twelve-Month Consolidated Results

Revenues increased 40% to MXN18,405 million in 2005, as compared
to MXN13,118 million in 2004.  Operating income was MXN1,055
million, a 102% increase from the MXN523 million in 2004.

Full year 2005 EBITDA was MXN1,785 million, an increase of
MXN338 million compared to MXN1,447 million in 2004.  The EBITDA
margin was 9.7% for 2005.

During the full year 2005, adjusted EBITDA was MXN2,154 million,
compared to MXN1,637 million in 2004, an increase of MXN518
million, or 32%.

Net income of majority interest in 2005 was MXN502 million, an
increase of MXN409 million from MXN93 million in 2004.  Earnings
per share for 2005 were MXN1.45 (US$ 1.64 per ADS), based on
347.13 million weighted average shares outstanding, compared to
MXN0.30 (US$ 0.34 per ADS) in 2004, based on 310.18 million
weighted average shares outstanding, after adjusting for the
reverse split and change in ADS ratio.

                   Construction Backlog

Beginning with the fourth quarter, ICA will provide, in addition
to construction backlog, the value of investments to be
performed on concessioned projects, as an additional information
item.

During the fourth quarter of 2005, all these amounts
corresponded to the Irapuato - La Piedad highway PPP aka public-
private partnership.

At the end of December 2005, the construction backlog was
MXN13,693 million, a decrease of MXN2,146 million, or 14%,
compared the construction backlog registered at the end of
September 2005.  Construction backlog was equivalent to nine
months of work at fourth quarter 2005 levels.

The investment to be performed in concessioned projects was
MXN726 million at the end of 2005.

During the fourth quarter of 2005, ICA had new contract awards
and net contract additions of MXN2,622 million.  New projects
included: the ramps for Terminal II of the Mexico City
International Airport, new contracts in Spain, the Alvaro
Obregon hospital in Mexico City, the Taxquena traffic
distributor in Mexico City, the renovation of the Moon Palace
Hotel in Cancun, an industrial plant in Queretaro, and the
Convention Center in Irapuato, Guanajuato.

Construction on the Irapuato - La Piedad highway PPP began at
the end of the fourth quarter.  The transfer of resources to the
concessionaire in the form of a capital contribution has been
made, and the concessionaire is in the process of obtaining a
MXN580 million loan.

At the end of the fourth quarter of 2005, projects in Mexico
represented 94.1% of total backlog, while projects abroad
represented 5.9%.  Of the total, 81.6% are for public sector
clients, and 18.4% are for private sector clients.

              El Cajon Hydroelectric Project

The El Cajon hydroelectric project was 80.5% complete as of Dec.
31, 2005, and during the fourth quarter generated MXN1,093
million in revenues and MXN66 million in operating income, with
a 6% operating margin.

At the end of 2005, US$521 million in long term financing for
the project had been disbursed, or 76.35% of the long term
financing of US$682.4 million from the syndicated loan and the
144A bond.

Total liabilities for the El Cajon hydroelectric project rose to
MXN7,832 million, of which 12% was short term and 88% long term.
The syndicated loan is shown on ICA's balance sheet as it is
disbursed.  The entire amount of the 144A bond, for US$230
million, has been recorded as long-term securities debt since
the date of its issuance.  The bond proceeds are used pari passu
with the syndicated loan, and the cash obtained from the bond
placement is recorded as a long term investment until it is
used.

ICA's balance sheet as of Dec. 31, 2005, consolidates the
operations of GACN.  The income statement of GACN will, however,
only be consolidated effective Jan. 1, 2006.

At the close of the fourth quarter 2005, total assets increased
49%, total liabilities rose 24%, and shareholders' equity rose
112%, as compared to the end of 2004.

ICA had total assets of MXN31,027 million as of Dec. 31, 2005,
an increase of MXN10,255 million, or 49%, compared to MXN20,773
million at the end of 2004.  Of the increase, MXN8,001 million
was accounted for by the consolidation of GACN.  The remaining
increase is a result of the combined effect of the capital
increase in August 2005, client advances, higher levels of
construction activity, faster invoicing and collection for
completed work, and execution of the El Cajon hydroelectric
project.

At the end of the fourth quarter of 2005, ICA had total cash and
cash equivalents of MXN6,264 million, an increase of 77% as
compared to MXN3,545 million at the end of the fourth quarter of
2004.  Of the MXN2,719 million increase, MXN1,657 million is
attributable to the consolidation of GACN.  At the end of 2005,
63% of cash and cash equivalents were in these subsidiaries:

  -- 26% in GACN,
  -- 25% in ICA Fluor,
  -- 9% in the El Cajon hydroelectric project,
  -- 5% in the reserves established to secure the Acapulco
     Tunnel and Corredor Sur financings, and
  -- 2% in Rodio.

This cash generally cannot be used by ICA without the approval
of its joint venture partners.  The remaining 33%, or MXN2,056
million, was held at the parent company or other operating
subsidiaries.  Of total cash as of December 2005, 25%
represented client advances.

While ICA's revenues rose 40% in 2005 as compared to 2004,
short-term accounts receivable increased only MXN317 million, or
10%, to MXN3,528 million at the end of December 2005 from
MXN3,211 million at the end of December 2004; GACN contributed
MXN220 million of the increase.  Excluding GACN, the increase
was 3%, reflecting an improvement in ICA's collections and
invoicing processes.  Accounts receivable include deferred
payments from clients that are subject to reaching defined
milestones and that, in large part, require financing, since the
contracts do not provide for client advances.  The main projects
that meet these characteristics are in industrial construction
and totaled MXN805 million at the end of 2005, of which MXN505
million is for the Chicontepec oil field project and MXN300
million is for Package II of the Minatitlan Refinery
reconfiguration project.

Total long-term assets of MXN15,776 million include MXN7,871
million in accounts and documents receivable, which include
client certifications at the El Cajon hydroelectric project and
the unused portion of the proceeds from the 144A bond, and
MXN7,446 million in completed works in concessions.

Total liabilities increased MXN3,464 million to MXN18,198
million in the fourth quarter of 2005, compared to MXN14,734
million in the same quarter of 2004.  The acquisition of GACN,
including the financing of US$125 million, accounted for
MXN2,158 million of the increase in liabilities.

Shareholders' equity increased by MXN6,791 million to MXN12,829
million on Dec. 31, 2005, as compared to MXN6,038 million on
Dec. 31, 2004.  Of the total increase in shareholders' equity,
the minority interests in GACN represented MXN3,806 million, and
the balance is the result of the capital increase in August 2005
and 2005 net income.

                           Debt

Total debt at the end of the 2005 was MXN10,504 million, an
increase of MXN2,594 million compared to the MXN7,910 million at
the end of the prior year.

Excluding the El Cajon hydroelectric project, total debt
increased MXN1,082 million.  The increase in debt reflects the
refinancing of the Corredor Sur and Acapulco Tunnel concessions,
an increase in short term working capital loans for Rodio,
short-term working capital financing for Package II of the
Minatitlan refinery reconfiguration and the financing of the
GACN acquisition, which were offset in part by the payment of
parent company and subsidiary debt related to projects that have
been completed, principally in the Housing segment.

Net debt excluding the El Cajon hydroelectric project was
MXN(1,333) million, compared to MXN372 million at the end of
2004.  This is the third consecutive quarter with a positive net
cash position excluding El Cajon, and is the result of the
increase in capital, the payment of parent company debt, and the
refinancing of projects that generated cash for the company.
About US$521 million of the El Cajon hydroelectric project long
term financing has been used by ICA.

Of ICA's total debt, 85%, or MXN8,914 million, corresponds to
projects and 15%, or MXN1,590 million, is operating company
debt.  ICA had no parent company debt outstanding at the end of
2005.  During the fourth quarter of 2005, ICA's wholly owned
subsidiary Aeroinvest incurred debt to acquire the additional
GACN shares.  The 18-month bridge loan for US$125 million was
provided by West LB and Nord LB.  As of Dec. 31, 2005, 5% of
ICA's total debt matured in less than one year; 46% is
securities debt; and 91% is denominated in foreign currency,
principally dollars.

              Liquidity and Financial Ratios

The current ratio as of the end of the fourth quarter of 2005
increased to 1.65, compared to 1.22 at year-end 2004.  The
increase was principally the result of the consolidation of
GACN`s balance sheet at year-end 2005, the capital increase in
the third quarter of 2005, the payment of parent company debt,
client advances, the refinancing of liabilities at lower rates,
and an increase in the company's level of activity.  It should
be noted that a portion of ICA's cash and cash equivalents has
been pledged to obtain letters of credit required by clients to
secure project advances and performance on various projects.

The interest coverage ratio -- Adjusted EBITDA/net interest
expense, including capitalized interest -- was 10.14 in the
fourth quarter of 2005, compared to 12.13 in the same period of
the prior year.  The decrease in the coverage ratio is a result
of the increase in debt.  The leverage ratio -- total
debt/equity -- fell to 0.82 as of Dec. 31, 2005, as compared to
1.31 at the close of 2004.

                    CAPEX and Divestments

Capital expenditures, including investments in fixed assets and
deferred expenses, totaled MXN234 million in the fourth quarter
of 2005, same amount registered in 2004.  For the year 2005,
capital expenditures totaled MXN993 million, compared to
MXN1,080 million in 2004.

Divestments during 2005 were MXN549 million.  The main
divestments during the year were the sale of 40% of the
municipal water treatment affiliate CIMA to ICA's partner
Proactiva Medio Ambiente, the previously discussed sale of
adjudicated land rights in Queretaro, and the sale of
construction machinery.

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

                        *    *    *

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


GRUPO MEXICO: 65 Miners Trapped Inside Mine Believed to be Dead
---------------------------------------------------------------
According to reports, the 65 miners trapped inside Grupo
Mexico's Pasta de Conchos mine are believed to be dead, as more
than a week has passed since the accident.  Mine officials say
it is unlikely that the miners could still be alive due to the
high levels of methane gas inside the mine.

A gas explosion 600 feet underground on Feb. 19 caused the three
main tunnels into the coal mine to collapse.

Rescuers arrived at the spot where two miners were believed to
have taken refuge, but found no one.

Ruben Escudero, administrator of the Pasta de Conchos mine, said
in a news conference that rescuers had advanced 680 meters
inside the mine, more than 100 meters beyond where two conveyor
belt operators were believed to be trapped.

Coahuila state Gov. Humberto Moreira said in reports that he
didn't like how the mining company has handled delivering of the
news to the miners' relatives.  The governor wanted the families
not to be given false hope.  Late last week, there was
tremendous confusion over whether rescue efforts were continuing
or had been halted.

According to EFE News, Mexican President Vicente Fox assured
everyone that his government will thoroughly investigate the
incident.

Grupo Mexico had offered to pay the miners' relatives 750,000
pesos ($71,428) for each trapped worker and create a trust fund
to cover their children's education costs, EFE reports.

Grupo Mexico SA de CV -- http://www.grupomexico.com/--  
through its ownership of Asarco and the Southern Peru Copper
Company, Grupo Mexico is the world's third largest copper
producer, fourth largest silver producer and fifth largest
producer of zinc and molybdenum.

                        *    *     *

Fitch Ratings assigned these ratings to Grupo Mexico SA de CV:

     -- foreign currency long-term debt, BB; and
     -- local currency long-term debt, BB.


VITRO: 4Q05 Consolidated Sales Up 9.3%
--------------------------------------
Vitro S.A. de C.V. disclosed its fourth quarter 2005 unaudited
financial results.

Year-over-year consolidated net sales rose 9.3% and EBITDA
increased 13.1%.  EBITDA margins of 16.1% for the quarter
reflect an increase of 0.5 percentage points.  EBITDA rose 14.6%
at glass containers and fell 21.5% at flat glass.

Alvaro Rodriguez -- Chief Financial Officer -- commented, "I
want to highlight that 2005 was a very good year for Vitro,
especially in light of the difficult year in terms of energy
prices.  In addition, for the second consecutive year we have
met or exceeded our consolidated EBITDA targets.  At Vitro we
are delivering on our commitments."

"Talking about the year," he said, "I am pleased to report that
glass containers put in an excellent performance, with a record
year in terms of sales and EBITDA.  This performance is a
reflection of Vitro's strength and capacity to adapt to
challenging times. It is also a reflection of our world class
management team."

"In flat glass, we continue to face a challenging environment
and are becoming smarter about managing the recent market
changes.  The quarter-over- quarter business unit performance,
the extraordinary results in OEMs, and the good outcome in our
foreign operations are a reflection of this."

"Cost reduction initiatives remain a top priority at Vitro.  In
fact, this quarter, SG&A as a percentage of sales fell by 1.5
percent year-over-year.  This is particularly important given
the pressure from high natural gas prices which continues to
impact glass companies worldwide."

"We are moving ahead with our strategic plan aimed at unlocking
the value at Vitro.  As part of this plan, during this quarter
we reduced gross debt at the holding company by US$26 million to
US$583 million from US$609 million in 3Q05, and by US$144
million compared with 4Q'04.  We are fully focused on reaching
our objective of further reducing holding company debt.  In
addition, we've made progress in our strategy to divest certain
assets as we continue negotiations for the sale of Crisa.  In
this report we are considering Crisa as a discontinued operation
according to GAAP as we are optimistic for the positive
conclusion of this process.  In real estate, we sold a parcel of
land for US$18 million and expect to close the sale of ancillary
land for an additional US$22 million."

                            Sales

Consolidated net sales for 4Q'05 increased 9.3% to US$565
million and 6.6% to US$2,212 for fiscal year 2005.  Flat glass
and glass containers sales for the quarter rose 9.3% and 14.3%
respectively.

During the quarter domestic, export, and foreign subsidiaries'
sales grew 9.4%, 14.9%, and 5.2% respectively.

The US dollar amounts of the peso-denominated operations are
higher when compared to the peso figures, owing to a revaluation
of the Mexican peso against the US dollar.

                        EBIT and EBITDA

Consolidated EBIT for the quarter increased 72.4% to US$42
million from US$24 million last year.  EBIT margin increased 2.7
percentage points to 7.4%.  For 2005, EBIT margin increased 0.7
percentage points.

On a comparable basis, excluding Vitro Fibras, S.A. de C.V., aka
VIFISA, Vitro American National Can, S.A. de C.V., aka VANCAN
and Plasticos Bosco S.A. de C.V. aka Bosco, which were divested
March 2004, September 2004 and April 2005, respectively,
consolidated EBIT for the year rose 26%.

EBIT for the quarter at glass containers increased by 94.7%,
while at flat glass EBIT declined 29.1%.

Consolidated EBITDA for the quarter increased 13.1% to US$91
million from US$80 million in 4Q'04.  The EBITDA margin
increased 0.5 percentage points to 16.1%.  For 2005,
consolidated EBITDA increased 2.9% to US$336 million from US$327
million in 2004.  On a comparable basis, excluding VIFISA,
VANCAN and Bosco, consolidated EBITDA for 2005 rose 6.4%
compared to 2004.

During the quarter, EBITDA decreased 21.5% at flat glass.
EBITDA at glass containers rose 14.6%.  Glass containers
contributed heavily to EBITDA for the quarter and the year.

                Consolidated Financing Cost

Consolidated financing cost for the quarter increased to US$32
million compared with US$12 million during 4Q'04.  This was
primarily driven by higher interest expense of US$44 million
compared with US$38 million during 4Q'04, lower non-cash
monetary position gain of US$14 million compared with US$20
million during 4Q'04 and a US$ 10 million increase in other
financial expenses driven mainly by losses in derivative
transactions

For 2005, total consolidated financing cost increased to US$127
million from US$115 million due to higher interest expense
during the year and a lower non-cash monetary position gain of
US$38 million compared with US$60 million in 2004.

                            Taxes

Total Taxes and PSW for the year ended Dec. 31 2005, represented
an income of US$40 million compared with and expense of US$9
million for the year ended Dec. 31, 2004.  As mentioned in 2Q05,
the company recognized a deferred tax benefit of approximately
US$55 million due to the recognition of the tax basis of certain
assets of some foreign subsidiaries subject to be repatriated.
Additionally, during 2005, there was a reform in the Mexican Tax
Law, which considers cost of goods sold as the deduction base,
instead of considering the total amount of purchased goods.
This change in law, negatively affected the taxable basis of
some subsidiaries.

                  Consolidated Net Income

During the quarter, the company recorded a consolidated net
income of US$18 million compared to US$3 million during the same
quarter last year.  Higher EBIT and a US$4 million other income
figure, compared to US$29 million of other expenses during
4Q'04, helped compensate for higher financing cost and higher
taxes and PTU paid and a lower gain in income tax.

               Capital Expenditures aka CAPEX

Capital expenditures for the quarter totaled US$26 million,
compared with US$56 million in 4Q'04.  Flat glass accounted for
18 percent and was mainly invested for maintenance purposes.
Glass containers represented 82 percent of total Capex
consumption and included investment in a new IS machine, a major
furnace repair, and maintenance.

               Consolidated Financial Position

Consolidated gross debt as of Dec. 31, 2005, totaled US$1,383
million, a QoQ decrease of US$57 million.

Net debt, which is calculated by deducting cash and cash
equivalents as well as cash collateralizing debt accounted for
in other long-term assets, decreased QoQ by US$2 million to
US$1,218.  On a year-on-year comparison, net debt increased
US$47 million.

As of 4Q'05, the company had a cash balance of US$165 million,
of which US$141 million was recorded as cash and cash
equivalents and US$24 million, which corresponded to cash
collateralizing debt, that was classified as other long term
assets.  As of Dec. 31, 2005, 25% of this cash balance was
restricted.  Restricted cash includes cash collateralizing debt.

The company's average life of debt as of 4Q'05 was 3.9 years
compared with 3.8 years for 4Q'04.

Short-term debt as of Dec. 31, 2005, increased by US$8 million
to 22 % as a percentage of total debt, compared with 21% in
3Q'05.  These amounts include current maturities of long-term
debt.

About 38% of total short-term debt maturities are at the holding
company level.

Revolving and other short-term debt, including trade related,
accounted for 36% of total short-term debt.  This type of debt
is usually renewed within 28 to 180 days.

Current maturities of long-term debt, including current
maturities of market debt, increased by US$61 million to US$199
million from US$138 as of Sep. 30, 2005, and as of 4Q'05
represented 64% of total short-term debt.

Approximately 62% of debt maturities due in 2006 are at the
operating subsidiary level and are principally related to
syndicated facilities.

Market maturities during 2006 include medium-term notes
denominated in UDI's.  Maturities for 2007 include the senior
notes at the holding company level.

Market maturities from 2008, 2009 and thereafter, include the
senior notes due 2011 at VENA, the 2010 Secured Term Loan at
VENA, long-term Certificados Bursatiles -- a Private Placement
-- and the senior notes due 2013 at the holding company level.

                          Cash Flow

Net free cash flow for the quarter increased to US$23 million
compared to a negative US$22 million in 4Q'04.  Lower investment
in capex during 4Q'05 as a result of the flat glass investment
in the repair of the VF1 furnace during 4Q'04 and a working
capital recovery helped compensate for higher net interest
expense and cash taxes paid during the quarter.

For 2005, the company recorded net free cash flow of US$29
million compared with US$6 million in the same period last year.
Recovery of working capital helped compensate for higher
interest expenses and cash taxes paid.

Vitro, S.A. de C.V. -- http://www.vitro.com-- is a major
participant in three principal businesses: flat glass, glass
containers and glassware.  Founded in 1909 in Monterrey, Mexico-
based Vitro has joint ventures with major world-class partners
and industry leaders that provide its subsidiaries with access
to international markets, distribution channels and state-of-
the-art technology.  Vitro's subsidiaries have facilities and
distribution centers in eight countries, located in North,
Central and South America, and Europe, and export to more than
70 countries worldwide.

                       *    *    *

As reported by Troubled Company Reporter on Nov. 14, 2005,
Standard & Poor's Ratings Services has revised its outlook on
its 'B' long-term corporate credit rating on Vitro S.A. de C.V.,
and Vitro's glass containers subsidiary Vitro Envases
Norteamerica S.A. de C.V., to negative from stable.

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


* Panama Inks Free Trade Accord with Singapore Today
----------------------------------------------------
Channel NewsAsia reports that Panama will sign today a free
trade agreement with Singapore.

Panama's Vice-President Rubern Arosemena Valdes will sign the
trade pact during his visit to Singapore.  He will be
accompanied by government officials and a business delegation,
CNA states.

Singapore's Foreign Affairs Ministry told CNA that Mr. Arosemena
and Deputy Prime Minister Professor S. Jayakumar would witness
the signing of the Panama-Singapore Free Trade Agreement.

                        *    *    *

Fitch Ratings assigns these ratings on Panama:

                     Rating     Rating Date
                     ------     -----------
   Country Ceiling    BBB      Apr.  8, 2005
   Long Term IDR      BB+      Dec. 14, 2005
   Short Term IDR       B      Dec. 14, 2005
   Local Currency
   Long Term Issuer
   Default Rating     BB+      Dec. 14, 2005


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

* PARAGUAY: S&P Affirms B- Foreign Currency Rating
--------------------------------------------------
Standard & Poor's Ratings Services said Friday that it revised
its outlook on the Republic of Paraguay to positive from stable,
and affirmed its 'B-' long-term and 'C' short-term foreign
currency and local currency sovereign credit ratings on the
republic.

"The revised outlook reflects the increasing likelihood that the
improvement in Paraguay's economic and fiscal profile in recent
years will continue over the medium term," explained Standard &
Poor's credit analyst Sebastian Briozzo.  "This improvement is
supported by President Nicanor Duarte Frutos's leadership,
notwithstanding a less favorable external environment for the
country."

Since taking office in August 2003, the current administration
has approved a significant number of economic reforms, including
changes to the tax structure, custom regulations, pension
system, and government-owned banks.

These reforms were intended to institutionalize the economic
policy management in Paraguay.  Prudent fiscal management, which
resulted in two consecutive years of general government
surpluses (2004 and 2005), will continue to consolidate the
already relative low debt burden.

Despite the advances of the last three years, several factors
will continue to constrain the ratings severely, likely limiting
them to the still low 'B' category.  Among them, underdeveloped
political institutions, resulting from a long track record of
political instability, are Paraguay's major credit weakness, as
shown by the still very high perception of corruption despite
recent improvements in this area.

Although Paraguay has historically achieved only moderate fiscal
deficits and debt levels have been traditionally low, fiscal
flexibility remains extremely limited, as demonstrated by
Paraguay's default on a domestic bond on February 2003.  In
addition, Paraguay's economic structure continues to be
characterized by high informality, low GDP per capita, and high
poverty, which will continue to limit GDP growth over the medium
term and, therefore, affect the rating trajectory.

The positive outlook reflects Standard & Poor's growing
expectation that the government of President Nicanor Duarte
Frutos will maintain the recently achieved macroeconomic
stability in a level consistent with a 'B' credit rating.
However, political pressure will continue to limit the
government's ability to move ahead on the reform agenda, in
particular in the context of the municipal elections of November
2006.  In contrast, renewed political pressure that erodes the
support of the economic team or fiscal slippage that could
jeopardize compliance with government financial obligations
could lead to a downgrade.


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

* PERU: Reaches Extrajudicial Agreement with Lan Airlines
---------------------------------------------------------
The Latin Lawyer reports that the Peruvian government has
reached an out-of-court settlement with the Peruvian unit of
Chilean national airline, Lan Airlines.

Peru's government filed a case against the airline after it
showed an in-flight tourism video that portrayed the nation
negatively.  In Lan's video, images of an old man urinating in
the street and gutters filled with litter prompted members of
congress to complain about the video, saying it depicted Peru as
"a pigsty," the Latin Lawyer relates.

According to the Latin Lawyer, the extrajudicial conciliation
agreement was reached in January and contains provisions for
making new, more positive videos, and for making amends for the
offence caused.  These include funding training for Peruvian
pilots.  The new videos will be funded by the airline and
overseen by Peru's tourism commission.  The airline will also be
responsible for transporting promotional material on Peru to any
international events the commission will be involved with in
2006, without charge.

Amidst protests against the video, the airline apologized and
three of its senior executives resigned.

Jorge Vega Velasco represents the Republic of Peru.

Desiree Orsini represents Lan Peru.

Jose Miguel Bambach represents Lan Airlines.

Partners Emilio RodrĄguez Larrain, Francisco Franco, Luis
Enrique Galvez and Jorge Harten Costa


                        *    *    *

Fitch Ratings assigns these ratings on Peru:

                     Rating     Rating Date
                     ------     -----------
   Country Ceiling     BB      Nov. 18, 2004
   Long Term IDR       BB      Dec. 14, 2005
   Short Term IDR      B       Dec. 14, 2005
   Local Currency
   Long Term Issuer
   Default Rating      BB+     Dec. 14, 2005


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

MUSICLAND HOLDING: Gets Final Okay to Use Cash Collateral
---------------------------------------------------------
The Honorable Stuart M. Bernstein of the U.S. Bankruptcy Court
for the Northern District of Georgia approved Musicland Group
Inc. and its debtor-affiliates' request to use the Cash
Collateral on a final basis.

According to Craig Wassenaar, chief financial officer of
Musicland Holding Corp., the Debtors required the use of the
Cash Collateral to, among other things, pay present operating
expenses, including payroll, and to pay vendors on a going-
forward basis to ensure a continued supply of materials
essential to the Debtors' continued viability.

The Debtors will limit their use of cash collateral to amounts
specified in a 12-Week Budget.  A full-text copy of Musicland's
week-by-week Cash Flow Forecast through March 31, 2006, is
available at no charge at http://ResearchArchives.com/t/s?476

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.   Mark T.
Power, Esq., at Hahn & Hessen LLP, represents the Official
Committee of Unsecured Creditors.  When the Debtors filed for
protection from their creditors, they estimated more than $100
million in assets and debts.  (Musicland Bankruptcy News, Issue
No. 6; Bankruptcy Creditors' Service, Inc., 215/945-7000)


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


PDVSA: Acquires 46% Stake in Argentine Fuel Distributor
-------------------------------------------------------
State oil firm Petroleos de Venezuela aka PDVSA bought a 46%
stake in Petrolera del Cono Sur, the Argentine fuel distributor
to 162 petrol stations operating under the Sol Petroleo,
Economist Intelligence Unit reports.

PDVSA is set to pay about US$15 million to Ancap, Uruguay's
state oil company, relates EIU.  Ancap will hold a 46%
participation in Petrolera after the conclusion of the deal.

According to EIU, Sol Petroleo's remaining 8% trades as shares
on the Buenos Aires stock exchange.

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

                        *    *    *

On Jan. 23, 2005, Fitch Ratings upgraded the local and foreign
currency ratings of Petroleos de Venezuela S.A. aka PDVSA to
'BB-' from 'B+'.  The rating of PDVSA's export receivable future
flow securitization, PDVSA Finance Ltd, was also upgraded to
'BB+' from 'BB'.  In addition, Fitch has assigned PDVSA a
'AAA(ven)' national scale rating.  The Rating Outlook is Stable.
Both rating actions follow Fitch's November 2005 upgrade of
Venezuela's sovereign rating.


PDVSA: Says Dragon Deposit Doesn't Cross into Trinidad Waters
-------------------------------------------------------------
Petroleos de Venezuela SA said that the Dragon, the natural gas
deposit off the shores of eastern Venezuela, does not cross over
into Trinidad & Tobago's sovereign waters, the El Universal
daily reports.

"With the 3-D seismic technique available today, we can
visualize the gas deposits underground. Everything tells us that
Dragon, with probable reserves of 4 trillion cubic feet [Tf3],
ends before the border," Venezuela's state oil firm PDVSA
director Eulogio del Pino was quoted as saying by El Universal.

The official also said another major Drilling deposit, Hibiscus,
begins in Trinidad territory but "extends a little into the
Venezuelan side."

PDVSA has already notified Trinidad & Tobago of the need for the
two countries to develop Hibiscus jointly.

El Universal relates that Trinidad & Tobago and Venezuela signed
a memorandum of understanding in 2003 to develop jointly certain
natural gas deposits that extend into the national waters of
both countries. Director Del Pino did not say when the final
agreement would be signed.

Venezuela is currently producing 7 billion cubic feet a day
(Bf3/d) of gas but has said it needs to produce at least 11Bf3/d
in the short term.  The country has total reserves -- proven,
probable, possible plus resources -- of 426Tf3, the world's
fourth largest.

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

                        *    *    *

On Jan. 23, 2005, Fitch Ratings upgraded the local and foreign
currency ratings of Petroleos de Venezuela S.A. aka PDVSA to
'BB-' from 'B+'.  The rating of PDVSA's export receivable future
flow securitization, PDVSA Finance Ltd, was also upgraded to
'BB+' from 'BB'.  In addition, Fitch has assigned PDVSA a
'AAA(ven)' national scale rating.  The Rating Outlook is Stable.
Both rating actions follow Fitch's November 2005 upgrade of
Venezuela's sovereign rating.


* Argentina Selling US$308 Million Bonds Due 2012 to Venezuela
--------------------------------------------------------------
In an announcement published in the Official Bulletin, the
Argentinian government disclosed its intention to sell US$308.1
million Boden 2012 bonds to the Venezuelan government at market
prices.

Venezuela is Argentina's biggest buyer of debt since the
country's US$95 billion bond default in 2001.

The sale will raise Argentina's total bond sale to Venezuela to
US$2.4 billion.

Argentina opted to directly sale the bonds to Venezuela rather
than auctioning them because rates in international credit
markets are too high.


* Venezuela Buying Back US$3.9 Billion of Brady Bonds
-----------------------------------------------------
Venezuela, like some of its neighboring nations, plans to buy
back its US$3.9 billion of outstanding discount and par Brady
bonds, taking advantage of record oil exports to reduce its
foreign currency debt, Bloomberg reports.

The Venezuelan Finance Ministry said in a statement it plans to
buy back about US$700 million of the bonds "on or about March
1." The government will buy back the rest of the bonds over the
next two months using the repurchase, or call, options the bonds
have, said a ministry official, who asked not to be identified
by name.

All the debt, known as Brady bonds after former U.S. Treasury
Secretary Nicholas Brady, who orchestrated a 1990s restructuring
plan, was slated to mature in 2020, Bloomberg relates.

Venezuela's oil exports surged to US$48 billion last year,
helping drive the country's foreign reserves up to US$28.6
billion from US$9.3 billion in March 2002, Bloomberg says.

Countries throughout Latin America -- from Mexico to Colombia to
Argentina -- are paying down foreign debt as their commodity
exports surge.  Brazil is also planning to buy back its
remaining US$6.6 billion of Brady bonds.

                        *    *    *

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


* Venezuela Delays Suspension of U.S. Flights Until March 30
------------------------------------------------------------
According to Bloomberg, Venezuela delayed until March 30 a ban
on some U.S. flights as the government seeks to negotiate
greater access for domestic carriers to the United States.

Reports say that flights by Delta Air and Continental Airlines
will be cut by up to 70%, and American Airlines flights will
also be affected.

Bloomberg relates that Venezuela had said it would bar
Continental and Delta from flying to Caracas and reduce flights
by AMR Corp. until Venezuelan carriers are allowed to expand
service to the U.S.  The ban, which will apply to passenger and
cargo flights, will also force FedEx Corp. to scale back its
flights to Venezuela.

Continental Airlines has been running a daily service from
Venezuela to Houston, and weekly flights to New York.  Delta
Airlines currently flies daily to Atlanta, and American Airlines
to Puerto Rico and Miami.

The Venezuelan government said in reports that the United States
failed to give Venezuelan carriers equal access to American
soil.  The U.S. imposed a similar ban to Venezuela ten years
ago.

Venezuelan carriers are blocked from adding to their U.S.
flights by a U.S. Federal Aviation Administration decision in
1995 that downgraded the country's security, safety and
technical rating.

                        *    *    *

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

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members of the same firm for the term of the initial
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* * * End of Transmission * * *