TCRLA_Public/060310.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

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

          Friday, March 10, 2006, Vol. 7, Issue 50

                            Headlines

A R G E N T I N A

C 31 S.R.L.: Validation of Creditors' Claims Stops on May 10
ASOCIACION FRANCESA: Seeks Reorganization Approval from Court
BANCO PATAGONIA: S&P Assigns Superior to Standard Rating
BETELU S.A.: Concludes Reorganization
CANAL 9: Debt Restructuring Scheme Gets 69.82% Creditor Approval

CENTRAL PUERTO: Incurs 86,085,121 Loss for Year Ended Dec. 31
DANIEL BRUSCA: Creditors Must File Claims to Trustee by May 12
DANTO TOURS: Verification of Claims Ends on May 15
DUCK JIBE: Creditors' Claims Verification Ends April 11
FRIGOFRUIT S.A.: Trustee Stops Reviewing Claims on April 28

MACRO BANSUD: Offers 136,600,000 Class B Common Stock
PRONT INE: Claims Verification Begins, Ends June 14
TELCOOP S.A.: Individual Reports Due on April 7
VITALFARMA SRL: Files for Bankruptcy Before Buenos Aires Court


B E R M U D A

GLOBAL CROSSING: Triples Converged IP Customers in 2005


B R A Z I L

COPEL: Board Okays Removal of Chief GTT Officer
HSBC BANK: S&P Assigns Low B Credit Ratings
PETROLEO IPIRANGA: Commences Cash Tender Offer of US$133MM Notes
VARIG S.A.: Creditors Approve Recovery Plan Details
VARIG S.A.: New York Court Clarifies Scope of Injunction


C A Y M A N   I S L A N D S

BEAUFORT EUROPEAN: Shareholders' Final Meeting Set for March 23
BGG HOLDINGS: Shareholder, Liquidator's Final Meeting on Mar. 20
BRAZILIAN FUTURE: Shareholder, Liquidators' Meeting on Mar. 23
BRUELLAN PREMIUM: Shareholder, Liquidator Set April 6 Meeting
CDMA INVESTMENTS: Shareholders' Final Meeting Set for March 27

CHARTER AIR: Shareholder, Liquidator's Final Meeting on Mar. 22
CMO HOLDINGS: Shareholders' Final Meeting Scheduled for Mar. 23
COMREX HOLDING: Invites Shareholders for Last Meeting on Mar. 23
DIAMOND INVESTMENT: Shareholders' Final Meeting Set for March 21
FEROX CREDIT: Shareholder Meeting Liquidator March 23


C O S T A   R I C A

* COSTA RICA: Fitch Assigns BB Foreign Currency Ratings


C U B A

* Cuba Continues to Strengthen Business Ties with China


J A M A I C A

DIGICEL: Fitch Affirms B Senior Unsecured Debt Rating


M E X I C O

BALLY TOTAL: Gives Employment Inducement Awards to New Employees
CFE: Construction Works in Guerrero in Danger of Suspension
GRUPO POSADAS: Fitch Affirms BB- Sr. Unsecured Currency Rating
GRUPO TMM: Agrees to Purchase Remaining 40% of SMR Stake
PHELPS DODGE: Sells Conductor Business to Int'l Wire for $47-Mil


P A N A M A

* PANAMA: Relaunching Free Trade Talks with Central America


P A R A G U A Y

* PARAGUAY: Increases Price of Cement Goods Sold by INC


P E R U

* Peru Buys Back Siderperu for US$53 Million


P U E R T O   R I C O

MUSICLAND HOLDING: Panel Exploring Fraudulent Conveyance Claims


V E N E Z U E L A

PDVSA: Signing Joint Venture Pacts with Foreign Firms on Apr. 1
* VENEZUELA: Discusses Investment Ventures with Ternium

     -  -  -  -  -  -  -  -

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


C 31 S.R.L.: Validation of Creditors' Claims Stops on May 10
------------------------------------------------------------
Ms. Marita Addario, court-appointed trustee, has started
verifying claims against construction company C 31 S.R.L.

La Nacion relates that Buenos Aires' Court No. 11 declared the
company's bankruptcy in favor of Mr. Mario Samudio Aquino, the
company's creditor.  Mr. Aquino has claims amounting to
$42,753.50 against the company.

Clerk No. 21 assists the court in this case.

C 31 S.R.L. can be reached at:

         Vedia 1650
         Buenos Aires, Argentina

Ms. Marita Addario, the trustee, can be reached at:

         Moreno 442
         Buenos Aires, Argentina


ASOCIACION FRANCESA: Seeks Reorganization Approval from Court
-------------------------------------------------------------
A court based in Buenos Aires is currently reviewing the merits
of the reorganization petition filed by Asociacion Francesa
Filantropica y de Beneficencia.  Argentine daily Infobae reports
that the company filed the request after defaulting on its debt
payments.

The reorganization petition, if granted by the court, will allow
Asociacion Francesa Filantropica y de Beneficencia to negotiate
a settlement with its creditors in order to avoid a straight
liquidation.

Asociacion Francesa Filantropica y de Beneficencia can be
reached at:

         La Rioja 951
         Buenos Aires


BANCO PATAGONIA: S&P Assigns Superior to Standard Rating
--------------------------------------------------------
Standard & Poor's Ratings Service has given a rate of "Superior
to Standard" to the Banco Patagonia S.A. as "fiduciario" of the
argentine market.

In this way, Banco Patagonia becomes the first bank to get a
rate as a "fiduciario."

This rate is not related to its credit features nor a
recommendation for buying, selling or keeping titles of debt.
It shows the development and quality of the operations of this
institution for providing services.

Banco Patagonia specializes in Fideicomisos Financieros, having
participated on December 2005, in 88 structured transactions for
more than two million pesos.

The bank administrates a great variety of actives, including
personal borrows, credit cards coupons, mortgage borrows as well
as being responsable for the location of emissions of structured
funding.


BETELU S.A.: Concludes Reorganization
-------------------------------------
The reorganization of Buenos Aires-based Betelu S.A. has ended.
Data revealed by Infobae on its Web site indicated that the
process was concluded after the city's court approved the debt
agreement signed between the company and its creditors.


CANAL 9: Debt Restructuring Scheme Gets 69.82% Creditor Approval
----------------------------------------------------------------
The debt restructuring proposal of Argentine TV broadcaster,
Channel 9, reached a 69.82% (in number) and 68.87% (in capital)
of acceptance from creditors, Infobae reports.

Among the companies which accepted the Canal 9's offer are:

* Grupo Clarin
* Diario La Nación
* Telecom
* Televisa
* Venevisión
* Alejandro Romay

Under the scheme, creditors owed an aggregate amount of US$100
million will receive 68% of their claims.

The proposal includes a grace period of five years and a
repayment in seven annual equal installments with the first due
occuring six years after homolgation.  The interests will be 6%
over the amount.

Creditors whose claims are in dollars will be recognized on that
currency.

This plan will allow TV Channel 9 to mantain it services to more
than 100,000 families.


CENTRAL PUERTO: Incurs 86,085,121 Loss for Year Ended Dec. 31
-------------------------------------------------------------
Nosis reports that Central Puerto SA has obtained a negative
balance of 86,085,121 pesos for the year ended Dec. 31, 2005,
compared to a loss of 26.8 million pesos the previous year.

On the first nine months, the company registered a loss of 38.8
million pesos.

At the end of December 2005, the net patrimony of the major
electrical generator was US$304,207,002.

                        *    *    *

As reported on Aug. 8, 2005, the Argentine arm of Fitch
confirmed its Category 3 rating on shares of local thermo
generator Central Puerto. The rating reflects the Company's low
cash generation capacity and the shares' high liquidity.
Central Puerto suspended all capital and interest payments on
its due debt in February 2002 in order to safeguard its
operations and working capital and began a process of
renegotiating its debt.  France's Total owns 63.9% of Central
Puerto.


DANIEL BRUSCA: Creditors Must File Claims to Trustee by May 12
--------------------------------------------------------------
Daniel Brusca S.A.'s creditors are required to present their
claims against the company to Mr. Jorge Gerchkovich, the
company's trustee, on May 12, 2006.

Argentine daily La Nacion relates that Buenos Aires' Court No.
24 approved company's reorganization petition.

An informative assembly, the last phase of the reorganization,
is scheduled on Nov. 24, 2006.

Clerk No. 47 assists the court with the proceedings.

Daniel Brusca S.A. can be reached at:

         Alfredo Bufano 1560
         Buenos Aires, Argentina

Mr. Jorge Gerchkovich, the trustee, can be reached at:

         Araoz 1056
         Buenos Aires, Argentina


DANTO TOURS: Verification of Claims Ends on May 15
--------------------------------------------------
The verification of claims against Danto Tours S.R.L. is set to
end on May 15, 2006, Infobae reports.  Validated claims will be
presented in court as individual reports on June 28, 2006.

A general report on the case also expected in court on Aug. 9,
2006.

Danto Tours S.R.L. was declared bankrupt by a Buenos Aires
court.  Mr. Miguel Angel Loustau was appointed as trustee for
the case.

Mr. Miguel Angel Loustau, the trustee, can be reached at:

         Viamonte 993
         Buenos Aires, Argentina


DUCK JIBE: Creditors' Claims Verification Ends April 11
-------------------------------------------------------
Ms. Maria Andrea Di Salvo, the trustee appointed by the Mar del
Plata court for the Duck Jibe S.A. insolvency case, will stop
validating claims from the company's creditors on April 11,
2006.

Infobae reports that Ms. Di Salvio will present the validated
claims in court as individual reports on May 24, 2006.  The
trustee will also submit a general report on the case on July 7,
2006.

An informative assembly will be held on Feb. 1 next year.

Duck Jibe S.A. can be reached at:

         Avda. Independencia 891
         Mar del Plata
         Buenos Aires, Argentina

Ms. Maria Andrea Di Salvo, the trustee, can be reached at:

         Corrientes 1725
         Mar del Plata
         Buenos Aires, Argentina


FRIGOFRUIT S.A.: Trustee Stops Reviewing Claims on April 28
-----------------------------------------------------------
Court-appointed trustee Gustavo Daniel Micciullo will stop
reviewing claims submitted by creditors against bankrupt company
Frigofruit S.A. on April 28, 2006, Infobae reports.

The verified claims will serve as basis for the individual
reports to be presented for court approval on June 13, 2006.

Mr. Micciullo will also submit a general report on the case on
Aug. 9, 2006.

Frigofruit S.A.'s reorganization, which was reported in Troubled
Company Reporter on Feb. 21, 2005, was converted into bankruptcy
by a Buenos Aires court.

Mr. Gustavo Daniel Micciullo, the trustee, can be reached at:

         Avda. Cordoba 1417
         Buenos Aires


MACRO BANSUD: Offers 136,600,000 Class B Common Stock
-----------------------------------------------------
In a regulatory filing with the U.S. Securities and Exchange
Commission, Argentine bank Macro Bansud S.A. has registered
136,600,000 of its Class B Common Stock in a global offering.

The bank is offering Class B shares in the form of 9,418,281
American depositary shares, in the United States and other
countries outside Argentina through the underwriters, UBS
Securities LLC and Raymond James & Associates, Inc.

The Class B shares currently trade on the Bolsa de Comercio de
Buenos Aires, or the Buenos Aires Stock Exchange, under the
symbol BSUD.  On March 2, 2006, the last reported sale price of
the Class B shares on was Ps 5.90 per share, which is equivalent
to US$19.25 per ADS at the exchange rate in effect on that date.

On October 31, 2005, Macro Bansud's assets and deposits totaled
6.56 billion pesos (US$2.16bn) and 4.2 billion pesos
respectively.

                        *    *    *

On Dec. 13, 2005, Moody's Investors Service affirmed the credit
ratings of Banco Macro Bansud S.A. following the
latter's announcement that it has acquired the 75% stake in
Banco del Tucuman S.A. from Banco Comafi S.A. for
US$17.3 million.

In affirming Macro's ratings, Moody's said that the acquisition,
which is pending regulatory approval, does not change the bank's
risk or business profile.

Macro announced on November 9 it was taking over selected assets
and liabilities of Banco Empresario de Tucuman, worth
approximately US$35.8 million, which included eight branches in
the Province of Tucuman. These acquisitions should grant the
Macro group a dominant position in the province.

Banco Macro Bansud S.A. is headquartered in Buenos Aires,
Argentina. As of June 2005, the bank's total assets were US$2.4
billion.

The following ratings of Banco Macro Bansud S.A. were affirmed:

    -- Bank Financial Strength Rating: E -- Positive Outlook
    -- Long- Term Global Local Currency Deposits: Ba3
    -- Short -Term Global Local Currency Deposits: Not Prime
    -- National Scale Rating for Local Currency Deposits: Aa2.ar
    -- Long -Term Foreign Currency Deposits: Caa1
    -- Short -Term Foreign Currency Deposits: Not Prime
    -- National Scale Rating for Foreign Currency Deposits:
       Ba1.ar.


PRONT INE: Claims Verification Begins, Ends June 14
---------------------------------------------------
Ms. Clara Kremer, court-appointed trustee, has started verifying
claims against Pront ine S.A., La Nacion reports.  The
verification phase is set to end on June 14, 2006.

La Nacion relates that Buenos Aires' Court No. 8 declared the
company bankrupt in favor of Mr. Jaime L. Kleidermarcher, whom
the company has debts amounting to $1,942.06.

Clerk No. 16 assists the court in this case.

Pront ine S.A. can be reached at:

        Avenida del Libertador 4980
        Buenos Aires, Argentina

Ms. Clara Kremer, the trustee, can be reached at:

         Lavalle 1672
         Buenos Aires, Argentina


TELCOOP S.A.: Individual Reports Due on April 7
-----------------------------------------------
The individual reports on the validated claims presented by
creditors against bankrupt company Telcoop S.A. are due in court
on April 7, 2006, Infobae reports.

On Feb. 24, 2006, creditors submitted their claims to Mr. Hector
Mario Beim, the trustee appointed by the court for the case.

The company began reorganization following the approval of its
petition by a court based in Rosario, Santa Fe.

Mr. Hector Mario Beim, the trustee, can be reached at:

         Cerrito 163
         Santa Fe, Argentina


VITALFARMA SRL: Files for Bankruptcy Before Buenos Aires Court
--------------------------------------------------------------
Vitalfarma S.R.L., a company operating in Buenos Aires, has
filed for bankruptcy before the city's Court No. 24 after
failing to pay its liabilities, Argentine daily La Nacion
reports.  Clerk No. 48 assists the court on this case.

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

         Tucuman 764
         Buenos Aires, Argentina


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


GLOBAL CROSSING: Triples Converged IP Customers in 2005
-------------------------------------------------------
Global Crossing announced Wednesday that the number of customers
utilizing two or more converged IP services on its global fiber-
optic network more than tripled in 2005, highlighting the
company's success in attracting enterprises and carriers to its
high-performance, robust suite of IP solutions.

As another indicator of the growth of IP and adoption of
convergence, Global Crossing announced that its Internet
Protocol Virtual Private Network aka IP VPN traffic grew 300% in
2005.

"These milestones are proof that Global Crossing is meeting the
growing enterprise demand for converged IP services -- they're
what our network was built for," said John Legere, Global
Crossing's CEO.

Legere added, "More and more businesses are turning to Global
Crossing for seamless, end-to-end voice, data and conferencing
solutions and realizing the tremendous benefits of convergence.
By placing their confidence in our global capabilities, advanced
IP solutions and highly-responsive customer service, these
customers share our vision that IP is crucial to the future of
their businesses."

Global Crossing's portfolio of fully managed converged IP
services includes Voice over Internet Protocol aka VoIP, IP VPN,
Remote VPN access, Internet Access and IP video solutions
designed to meet the exacting performance and reliability needs
of customers' mission-critical communications.  These services
are supported by a comprehensive suite of managed solutions
simplifying management and maintenance, and improving the
security and reliability of the converged IP solution.

Global Crossing meets the security and high quality requirements
of global multinationals by delivering crystal-clear, virtually
jitter-free performance of real-time converged IP applications -
- guaranteed by industry-leading Service Level Agreements aka
SLAs.  All IP applications run over the company's highly secure,
privately owned and operated MPLS-based IP backbone.

"Global Crossing has always been a great business partner to
us," said John Daniel, director of information technology at
Master Halco.  "They've helped us understand how converging
voice and data would help meet our company's growth objectives
while saving us money -- and indeed, our response times have
improved, reliability has beaten expectations and costs have
come down.  We look forward to continuing a rewarding
relationship with Global Crossing."

According to industry experts, the primary application drivers
for convergence are VoIP and collaboration services over an IP
VPN. Global Crossing's VoIP traffic grew to more than 100
million IP interconnected minutes per month by year-end 2005,
representing an increase of more than 350%.  Global Crossing
currently runs more than two billion minutes per month on its
private VoIP global platform, which represents more than 70% of
all its voice traffic.

In-Stat, a leading market research firm in the communications
industry, projects that by 2009, annual IP VPN service revenues
will reach $7.8 billion and exceed frame relay service revenues
in the US data services market.  "Based on our latest survey
findings, IP convergence is a reality, and we see an accelerated
pace of enterprise migration from legacy data services to
converged IP networks," stated Bryan Van Dussen, director of
service provider and segmentation research at In-Stat.

Dussen said, "Its clear from these results that Global
Crossing's focused product and market strategies match these
trends and resonate with customers that seek to migrate to IP at
their own pace."

The convergence of data, voice and video onto a single IP-based
platform yields simplicity in network design and administration,
as well as connectivity, billing and care.  Converged IP
services enable customers to increase productivity by leveraging
essential services including e-mail, file sharing, databases,
streaming video, e-commerce and more.

Enterprises across all sectors, including legal, healthcare,
software development and financial services, have experienced
significant cost reductions and benefited from interoperable
solutions that facilitate information sharing, decision making
and collaboration on a global scale, with the ability to connect
remote users and disparate locations.

Headquartered in Florham Park, New Jersey, Global Crossing
Ltd. -- http://www.globalcrossing.com/-- provides
telecommunications solutions over the world's first integrated
global IP-based network, which reaches 27 countries and more
than 200 major cities around the globe.  Global Crossing serves
many of the world's largest corporations, providing a full range
of managed data and voice products and services.  The company
filed for chapter 11 protection on January 28, 2002
(Bankr.S.D.N.Y. Case No. 02-40188).  When the Debtors filed for
protection from their creditors, they listed $25,511,000,000 in
total assets and $15,467,000,000 in total debts.  Global
Crossing emerged from chapter 11 on Dec. 9, 2003.

As of Sept. 30, 2005, Global Crossing's balance sheet reflects a
$139 million equity deficit compared to $51 million of positive
equity at Dec. 31, 2005.


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


COPEL: Board Okays Removal of Chief GTT Officer
-----------------------------------------------
The Board of Directors of Companhia Paranaense De Energia aka
Copel approved during the 75th Extraordinary Board of Directors
Meeting on Tuesday the removal of Jose Ivan Morozowski as Chief
Generation and Transmission and Telecommunications Officer,
while electing Raul Munhoz Neto as replacement starting Jan. 8,
2006 to Dec. 31, 2008.

The Board also voted for the nomination of Neto as Executive
Officer of the wholly owned subsidiaries of Copel Geracao S.A.,
Copel Transmissao S.A. and Copel Telecomunicacoes S.A., with no
additional remuneration.

Headquartered in Parana, Brazil, COPEL aka Companhia Paranaense
de Energia SA -- http://www.copel.com/-- transmits and
distributes electricity to more than 3 million customers in the
state of Paran and has a generating capacity of nearly 4,600 MW,
primarily from hydroelectric plants.  COPEL also offers
telecommunications, natural gas, engineering, and water and
sanitation services.  The company restructured its utility
operations in 2001 into separate generation, transmission, and
distribution subsidiaries to prepare for full privatization,
which has been indefinitly postponed.  In response, COPEL is re-
evaluating its corporate structure.  The government of Paran
controls about 59% of COPEL.

                        *    *    *

Copel's BRL100,000,000 debentures due March 1, 2007, is rated
Ba3 by Moody's.


HSBC BANK: S&P Assigns Low B Credit Ratings
-------------------------------------------
Standard & Poor's Ratings Services assigned on Wednesday a 'BB'
credit rating to HSBC Bank Brasil S.A.

The company's outstanding ratings include:

      -- 'BB/Stable/B' rating on counterparty credit;
      -- 'BB/B' rating on certificate of deposit;
      -- 'BB' rating on senior unsecured foreign currency; and
      -- 'BB' on subordinated foreign currency.

Major Rating Factors

Strengths:

    -- The benefit of being fully owned by HSBC Holdings PLC,
       including the implicit parent support;

    -- Established market position in the consumer finance
       segment;

    -- Higher earning potential as a result of change in credit
       mix toward retail; and

    -- Good liquidity to face unexpected losses or volatility.

Weaknesses:

    -- The bank's focus on the consumer finance and middle-
       market segments, and consequent higher exposure to credit
       risk;

    -- The challenge to boost its profitability in a very
       competitive environment; and

    -- Inherent risk of operating in the volatile Brazilian
       economy.

Rationale

The local-currency rating assigned to HSBC Bank Brasil S.A. aka
HSBC Brasil reflects the bank's focus on the consumer finance --
after the Losango acquisition -- and middle-market segments, and
consequent higher exposure to credit risk; the challenge to
boost its profitability in a very competitive environment, and
the inherent risk of operating in the volatile Brazilian
economy.

The risk factors are partially tempered by the benefit of being
fully owned by HSBC Holdings PLC -- HSBC; A+/Positive/A-1 --
HSBC Brasil's established market position in the consumer
finance segment, higher earning potential as a result of change
in credit mix toward retail, and good liquidity to face
unexpected losses or volatility.

HSBC Brasil is the sixth-largest private bank operating in
Brazil by total assets as of September 2005.  With a network of
932 branches, the bank has a market share of 4.5% in total
deposits and 3.1% of total assets and loans.  Its business is
focused on retail -- consumer finance -- in the domestic market-
in line with HSBC Holdings' main strategy, while at the same
time providing a full range of traditional wholesale banking
products.

The high growth in both the consumer finance and middle-market -
- mainly retailers -- businesses is gradually bringing some
deterioration in the bank's portfolio, the nonperforming loans
ratio slightly increased to 7.9% in September 2005 from 7.0% in
2004.

S&P believes that this ratio may increase slightly going
forward, as the bank adds lower-income customers to its base,
which should be in part compensated by higher spreads.  The
change in revenues stream can also be perceived in the net
charge-offs-to-average customer loans ratio, which increased to
6.2% in June 2005 from 5.9% in 2004.

S&P expects the bank to adequately manage and control the credit
risks arising from the consumer portfolio through the creation
of adequate provisions -- the bank's provisioning coverage was
101% in June 2005 -- and its ability to maintain good credit
processes.

Even though HSBC has been able to improve the level of its
profitability -- 1.4% in June 2005 and 2004, above the 1% level
in prior years -- it is still somewhat lower than that of larger
retail banks due to the continuous investments in its
operational structure to support growth, the challenge to raise
the profitability of its branch network, and the provision costs
of its proportionally larger retail operation.

S&P believes that HSBC Brasil can still improve synergies among
businesses and improve efficiency ratios to compare better with
its Latin American peers -- noninterest expenses to revenues
reached 67% in June 2005 compared to roughly 60% of its major
peers.

Even though the bank has been able to sustain margins at a good
level, the increasingly competitive environment poses a great
challenge to the bank's effort to improve its profitability.

HSBC Brasil benefits from belonging to one of the largest
banking groups in the world, and the ratings incorporate the
implicit support from HSBC, although S&P does not expect such
support in times of systemic risk.  HSBC's strategy in Brazil is
aligned to the global strategy of its parent, which targets to
grow and diversify operations while consolidating its global
presence.  As opposed to some foreign players, even in times of
turbulence, HSBC has sustained a strong rhythm of growth for its
domestic operations.  The Brazilian operation is also aligned to
the global operation in terms of risk management, liquidity, and
risk culture.

HSBC Brasil has maintained a good liquidity position, sustained
by its capacity to grow its deposit base.  Liquid assets --
government securities, interbank deposits, and cash-net of repos
-- represented approximately 35% of assets as of June 2005 and
should be maintained at good levels to sustain its local
operations.

The stable outlook on the ratings balances the benefits of
implicit parental support and our expectation that the bank will
be able to maintain its credit quality ratios under control
while preserving profitability levels despite fierce
competition.

At its current level, the credit rating on HSBC Brasil would
automatically follow negative changes in the sovereign foreign
currency credit rating, although such changes are unlikely in
the short term.  On the other hand, a positive outlook or
raising of the ratings would depend on further improvements in
the country risks affecting Brazilian banks, and on HSBC's
ability to improve its profitability levels -- leveraging its
retail strategy while maintaining adequate credit risk.


PETROLEO IPIRANGA: Commences Cash Tender Offer of US$133MM Notes
----------------------------------------------------------------
Companhia Brasileira de Petroleo Ipiranga announced Wednesday
that it has commenced a cash tender offer for any and all of the
US$133,715,000 aggregate principal amount outstanding of its
7.875% Step-Up Notes due 2008.  The Tender Offer is being made
pursuant to an Offer to Purchase and Consent Solicitation
Statement and a Consent and Letter of Transmittal, each dated
March 8, 2006.

The Tender Offer is scheduled to expire at 5:00 p.m., New York
City time, on April 11, 2006, unless extended or earlier
terminated.

In conjunction with the Tender Offer, Ipiranga is also
soliciting consents to adopt certain proposed amendments to the
Notes and the fiscal agency agreement pursuant to which the
Notes were issued.  The proposed amendments would, among other
things, eliminate substantially all of the restrictive covenants
and certain events of default contained in the Notes.

The solicitation of consents is scheduled to end at 5:00 p.m.,
New York City time, on March 22, 2006, unless extended or
earlier terminated. Holders will be entitled to withdraw their
tenders and revoke their consents pursuant to the tender offer
only before 5:00 p.m., New York City time, on March 22, 2006.

To receive the total consideration, holders must validly tender
and not withdraw their Notes (and thereby consent to the
proposed amendments) by 5:00 p.m., New York City time, on March
22, 2006.  Holders who tender Notes after the Consent Payment
Deadline will receive the total consideration minus a US$30 per
US$1,000 principal amount consent payment.

The total consideration per US$1,000 principal amount of Notes
validly tendered and not withdrawn prior to the Consent Payment
Deadline will consist of an amount equal to the present value on
the settlement date (as defined in the Offer to Purchase) of
US$1,000 and the amount of interest that would accrue from the
settlement date to, but not including, the Notes' maturity date
of August 1, 2008, determined based on a fixed spread of 75
basis points over the bid-side yield on the price determination
date of the 2 5/8% U.S. Treasury Note due May 15, 2008.  In
addition, accrued and unpaid interest up to, but not including,
the settlement date will be paid in cash on all Notes validly
tendered and accepted for purchase.

The settlement date is expected to occur promptly after the
expiration of the Tender Offer.  The price determination date
will be 2:00 p.m., New York City time on a date at least 10
business days prior to the expiration of the Tender Offer.

                        *    *    *

As reported on Feb. 28, 2006, Moody's Investors Service upgraded
to Ba3 from B1 the foreign currency rating of Companhia
Brasileira de Petroleo
Ipiranga's outstanding US$134 million step-up senior unsecured
notes due 2008.  The outlook of the notes rating was changed
from positive to stable.  The Ba3 foreign currency rating of the
notes is presently not constrained by Brazil's sovereign
ceiling.

The rating is supported by Ipiranga's position as the second
largest fuel distribution company in Brazil, and its
demonstrated ability to defend and expand its market share in
the Brazilian fuel distribution market while maintaining
acceptable operating margins.  In addition, the rating
incorporates the company's efficient logistics and strong brand
recognition, as well as the improved competitive environment for
the diesel and gasoline markets in Brazil.

At the same time, the rating is constrained by Ipiranga's
volatile working capital needs, its high dependence on
Petrobras' for fuel supply, the increased capex and dividends
distribution which have negatively impacted its free cash flow
generation, and by the fierce competition in the fast-growing
ethanol market.


VARIG S.A.: Creditors Approve Recovery Plan Details
---------------------------------------------------
Creditors of Viacao Aerea Rio-Grandense approved by a majority
vote detailed provisions for the implementation of the company's
recovery plan.

About 95.8% of the airline's creditors approved changes to the
plan, Gazeta Mercantil (Brazil) reports.

Changes in the plan include having one fund manager --
originally three -- for the Investments and Participation Fund
that controls  VARIG.  The manager will be chosen at a March 13,
2006 assembly of creditors, Gazeta Mercantil relates.  Mellon
Bank is being considered a candidate.

A consultant will also be brought in to help administer the
company.  Candidates named include Galeazzi, Integra and Alvares
e Marsal, Gazeta Mercantil says.

In addition, a management committee will be established to lead
the company and define the new VARIG administrators when the FIP
Controle funding reaches BRL$750 million, according to Gazeta
Mercantil, citing Antonio Luis de Mello e Souza, partner-
director of SM Asset Management, VARIG's restructuring advisor.

The equity interest of Ruben Berta Foundation in VARIG will be
reduced to 5% under the Plan.

Headquartered in Rio de Janeiro, Brazil, VARIG S.A. is Brazil's
largest air carrier and the largest air carrier in Latin
America.  VARIG's principal business is the transportation of
passengers and cargo by air on domestic routes within Brazil and
on international routes between Brazil and North and South
America, Europe and Asia.  VARIG carries approximately 13
million passengers annually and employs approximately 11,456
full-time employees, of which approximately 133 are employed in
the United States.

The Company, along with two affiliates, filed for a judicial
reorganization proceeding under the New Bankruptcy and
Restructuring Law of Brazil on June 17, 2005, due to a
competitive landscape, high fuel costs, cash flow deficit, and
high operating leverage.  The Debtors may be the first case
under the new law, which took effect on June 9, 2005.  Similar
to a chapter 11 debtor-in-possession under the U.S. Bankruptcy
Code, the Debtors remain in possession and control of their
estate pending the Judicial Reorganization.  Sergio Bermudes,
Esq., at Escritorio de Advocacia Sergio Bermudes, represents the
carrier in Brazil.

Each of the Debtors' Boards of Directors authorized Vicente
Cervo as foreign representative.  In this capacity, Mr. Cervo
filed a Sec. 304 petition on June 17, 2005 (Bankr. S.D.N.Y. Case
Nos. 05-14400 and 05-14402).  Rick B. Antonoff, Esq., at
Pillsbury Winthrop Shaw Pittman LLP represents Mr. Cervo in the
United States.  As of March 31, 2005, the Debtors reported
BRL2,979,309,000 in total assets and BRL9,474,930,000 in total
debts. (VARIG Bankruptcy News, Issue No. 15; Bankruptcy
Creditors'Service, Inc., 215/945-7000)


VARIG S.A.: New York Court Clarifies Scope of Injunction
--------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
extended the Preliminary Injunction through and including March
21, 2006, and the Court will convene a hearing on March 17,
2006, at 10:00 a.m., to consider further continuation of the
injunction.

As reported in the Troubled Company Reporter on Nov. 29, 2005,
Central Air Leasing Limited, Wells Fargo Bank Northeast, N.A.,
Ansett Worldwide Aviation, U.S.A and its affiliated or related
corporations, and the Boeing Company asked for the removal of
the preliminary injunction to give the Foreign Debtors time to
close the sale of Varig Logistica S.A.

Judge Drain clarifies that the scope of the injunction will:

   a. not exceed the scope of the order of the Brazilian Court
      approving the Foreign Debtors' Judicial Recovery Plan or
      any injunction or other order issued by or as applied by,
      the Brazilian Court or any subsequent order modifying,
      superseding or supplementing the orders; and

   b. be automatically reduced to the extent of any reduction or
      modification by the Brazilian Court of any order in the
      Foreign Proceeding.

In the event that the Foreign Debtors are required to implement
the contingency plan that was ratified by the Brazilian Court,
Judge Drain rules that:

   a. to the extent that aircraft or engines are property of a
      lessor, the aircraft and engines will be repatriated to
      the lessor and the Foreign Debtors will cooperate with the
      repatriation by providing updated records of the location
      of aircraft parts and records and assisting with the
      delisting and recertification of the aircraft; and

   b. the Foreign Debtors will recognize that any claim arising
      from the lessors' right to the return of reassembled
      aircraft or engines and any other claim arising from the
      lessors' rights under the contingency plan will be treated
      in the Foreign Debtors' judicial restructuring plan as a
      postpetition claim under the New Bankruptcy and
      Restructuring Law of Brazil with priority of payment
      over prepetition claims.

Parties-in-interest have until March 14, 2006, to file any
objections to the continuation of the Preliminary Injunction.

Headquartered in Rio de Janeiro, Brazil, VARIG S.A. is Brazil's
largest air carrier and the largest air carrier in Latin
America.  VARIG's principal business is the transportation of
passengers and cargo by air on domestic routes within Brazil and
on international routes between Brazil and North and South
America, Europe and Asia.  VARIG carries approximately 13
million passengers annually and employs approximately 11,456
full-time employees, of which approximately 133 are employed in
the United States.

The Company, along with two affiliates, filed for a judicial
reorganization proceeding under the New Bankruptcy and
Restructuring Law of Brazil on June 17, 2005, due to a
competitive landscape, high fuel costs, cash flow deficit, and
high operating leverage.  The Debtors may be the first case
under the new law, which took effect on June 9, 2005.  Similar
to a chapter 11 debtor-in-possession under the U.S. Bankruptcy
Code, the Debtors remain in possession and control of their
estate pending the Judicial Reorganization.  Sergio Bermudes,
Esq., at Escritorio de Advocacia Sergio Bermudes, represents the
carrier in Brazil.

Each of the Debtors' Boards of Directors authorized Vicente
Cervo as foreign representative.  In this capacity, Mr. Cervo
filed a Sec. 304 petition on June 17, 2005 (Bankr. S.D.N.Y. Case
Nos. 05-14400 and 05-14402).  Rick B. Antonoff, Esq., at
Pillsbury Winthrop Shaw Pittman LLP represents Mr. Cervo in the
United States.  As of March 31, 2005, the Debtors reported
BRL2,979,309,000 in total assets and BRL9,474,930,000 in total
debts. (VARIG Bankruptcy News, Issue No. 15; Bankruptcy
Creditors'Service, Inc., 215/945-7000)


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


BEAUFORT EUROPEAN: Shareholders' Final Meeting Set for March 23
---------------------------------------------------------------
Shareholders of Beaufort European Fund will convene for a final
general meeting on Mar. 23, 2006, at the registered offices of:

             Maples Finance Limited
             Queensgate House, George Town
             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.
Destruction of the records may then be allowed after such
period.

The company's liquidators can be reached at:

             Johann Le Roux
             Jon Roney
             Maples Finance Limited
             P.O. Box 1093 George Town
             Grand Cayman, Cayman Islands


BGG HOLDINGS: Shareholder, Liquidator's Final Meeting on Mar. 20
----------------------------------------------------------------
The sole shareholder of BGG Holdings, Ltd., and the company's
liquidator, Robert W. Burke, Jr., will meet for a final meeting
at 9:00 a.m. on Mar. 20, 2006, at:

           835 Hamilton Street, 2nd Floor
           Allentown, Pennsylvania 18102
           Tel: 610-774-2081
           Fax: 610-774-2083

Accounts on the company's liquidation process will be presented
during the meeting.  The shareholder will also authorize the
liquidator to retain the records of the company for a period of
five years, starting from the dissolution of the company.
Destruction of the records may then be allowed after such
period.


BRAZILIAN FUTURE: Shareholder, Liquidators' Meeting on Mar. 23
--------------------------------------------------------------
The sole shareholder of Brazilian Future Flows Ltd. and the
company's liquidators will meet on Mar. 23, 2006, for a final
general meeting at the registered offices of:

          Maples Finance Limited
          Queensgate House, George Town
          Grand Cayman, Cayman Islands

Accounts on the company's liquidation process will be presented
during the meeting.  The shareholder 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.
Destruction of the records may then be allowed after that
period.

The liquidators can be reached at:

           Johann Le Roux
           Richard Gordon
           Maples Finance Limited
           P.O. Box 1093 George Town
           Grand Cayman, Cayman Islands


BRUELLAN PREMIUM: Shareholder, Liquidator Set April 6 Meeting
-------------------------------------------------------------
The sole shareholder of Bruellan Premium Investment Fund will
and the company's liquidator, Antoine Spillman, will meet on
April 6, 2006, at 10:00 p.m. for a final meeting at:

           2, rue Sigismond-Thalberg - CP-1208
           CH 1211 Geneve 1, Switzerland

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.
Destruction of the records may then be allowed after such
period.

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.


CDMA INVESTMENTS: Shareholders' Final Meeting Set for March 27
--------------------------------------------------------------
Shareholders of Cdma Investments Limited will gather for a final
meeting at the company's registered office at 10:15 a.m. on
March 27, 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.
Destruction of the records may then be allowed after such
period.

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.

Parties-in-interest may contact the liquidator at:

            Ms. Ica Eden
            P.O. Box 1111
            Grand Cayman, Cayman Islands
            Tel: 345 949 5122
            Fax: 345 949 7920


CHARTER AIR: Shareholder, Liquidator's Final Meeting on Mar. 22
---------------------------------------------------------------
The sole shareholder of Charter Air Centre and the company's
liquidator will hold a telephone conference on March 22, 2006.

Accounts on the company's liquidation process will be presented
during the conference.  The shareholder will also authorize the
liquidator to retain the records of the company for a period of
five years, starting from the dissolution of the company.
Destruction of the records may then be allowed after that
period.

The liquidator can be reached at:

          Damjan Glusica
          c/o Maples and Calder
          P.O. Box 309 George Town, Ugland House
          South Church Street, George Town
          Grand Cayman, Cayman Islands


CMO HOLDINGS: Shareholders' Final Meeting Scheduled for Mar. 23
---------------------------------------------------------------
Shareholders of CMO Holdings Corp. will convene for a final
general meeting on Mar. 23, 2006, at the registered offices of:

           Maples Finance Limited
           Queensgate House, George Town
           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.
Destruction of the records may then be allowed after such
period.

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.

The company's liquidator can be reached at:

          Richard Gordon
          Maples Finance Limited
          P.O. Box 1093 George Town
          Grand Cayman, Cayman Islands


COMREX HOLDING: Invites Shareholders for Last Meeting on Mar. 23
----------------------------------------------------------------
Shareholders of Comrex Holding, Inc., will gather on Mar. 23,
2006, for a final general meeting at the offices of:

           Maples Finance Limited
           Queensgate House, George Town
           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.
Destruction of the records may then be allowed after such
period.

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.


The company's liquidators can be reached at:

           Martin Couch
           Richard Gordon
           Maples Finance Limited
           P.O. Box 1093 George Town
           Grand Cayman, Cayman Islands


DIAMOND INVESTMENT: Shareholders' Final Meeting Set for March 21
----------------------------------------------------------------
Shareholders of Diamond Investment Services Limited will convene
on Mar. 21, 2006, for an extraordinary final general meeting at
the offices of:

           Deutsche Bank (Cayman) Limited
           Elizabethan Square, George Town
           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.
Destruction of the records may then be allowed after such
period.

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.

The company's liquidator can be reached at:

           David Dyer
           P.O. Box 1984 George Town
           Grand Cayman, Cayman Islands
           Tel: (345) 949 8244
           Fax: (345) 949 5223


FEROX CREDIT: Shareholder Meeting Liquidator March 23
-----------------------------------------------------
The sole Shareholders of Ferox Credit Fund Limited will meet on
Mar. 23, 2006, the company liquidators, Johann Le Roux and Jon
Roney, for a final meeting at the offices of:

                 Maples Finance Limited
                 Queensgate House, George Town
                 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.
Destruction of the records may then be allowed after such
period.


For inquiries, the liquidator can be reached at:

                 Maples Finance Limited
                 P.O. Box 1093 George Town
                 Grand Cayman, Cayman Islands


===================
C O S T A   R I C A
===================


* COSTA RICA: Fitch Assigns BB Foreign Currency Ratings
-------------------------------------------------------
Fitch rates Costa Rica's foreign and local currency issuer
default ratings 'BB' and 'BB+', respectively. The Rating Outlook
is Negative.

Fitch said Wednesday that while the victory of Oscar Arias in
Costa Rica's recent presidential elections bodes well for
reforms, the narrow victory margin could affect the pace of
reforms.

Contrary to pre-election polls in which Mr. Arias was leading by
several percentage points, he won only by a very narrow margin.
President Arias is viewed to be in favor of the US-Central
American Free Trade Agreement aka CAFTA and is pro-fiscal reform
and pro-private enterprise, but a weaker election mandate could
undermine his ability to spearhead reforms.

"As the PLN -- the party of President Arias -- has failed to
obtain a simple majority in Congress, it remains to be seen how
quickly the new administration will be able to garner sufficient
support in a divided Congress to enact crucial reforms," said
Shelly Shetty, Senior Director in Fitch's Sovereign Group in New
York.

Fitch believes that the newly elected Arias administration needs
to make headway in CAFTA and fiscal reforms in order to place
the country on a higher growth trajectory.

Although the fiscal reform has passed the first vote in the
legislative assembly, it is unclear whether it would be passed
before the next administration takes over in May.  Fiscal reform
entailing revenue-raising measures is necessary to improve the
medium-term outlook for the Costa Rican public finances.

Although Fitch recognizes the recent reduction in Costa Rica's
fiscal deficit, it believes that a permanent reduction in the
general government deficit would require a revenue-enhancing
reform.

Inflation in Costa Rica ended at 14% last year, which is among
the highest in the Latin American region.  Additional tax
revenues are needed to recapitalize the central bank in order to
improve the effectiveness of monetary policy.  The central
bank's much lauded goal of moving toward a more flexible
exchange rate regime and reversing the widespread financial
dollarization could only be achieved after a fiscal reform is
passed.

Fitch also notes that Costa Rica is the only Central American
country that has not yet approved CAFTA in its Congress.

"Approval of CAFTA is critical to further strengthen Costa
Rica's position as a leading destination for foreign direct
investment flows in the Central American region.  It is hoped
that the new government uses its political honeymoon period to
seek a speedy approval of CAFTA," said Shetty.

Although the Pacheco government submitted CAFTA in Congress last
year, the approval of this crucial trade pact has not been easy
to obtain because of opposition from the unions and some
political parties.  The treaty will not only provide Costa Rica
with the opportunity to gain permanent access to the US market,
but it will also indirectly benefit private businesses in Costa
Rica, as the treaty requires the liberalization of state-
dominated telecom and insurance sectors.

Costa Rica's economy has experienced relatively high growth in
the past few years.  Benefiting from a favorable external
backdrop and robust tourism flows, the economy is estimated to
have grown at 4% in 2005.  However, the approval of CAFTA along
with fiscal reforms could make higher growth more sustainable.

In the coming months, Fitch will assess the ability of the Arias
administration to push through reforms in Congress.  Continued
fiscal restraint, passage of a tax-enhancing package and/or
implementation of CAFTA could help in stabilizing Costa Rica's
ratings.


=======
C U B A
=======


* Cuba Continues to Strengthen Business Ties with China
--------------------------------------------------------
Cuba has purchased approximately US$1 billion worth of equipment
from China to upgrade its transportation system.  China was
Cuba's second largest trading partner after Venezuela in 2005.

The Financial Times relates that a lot of vehicles running in
Cuba's highways are from Chinese companies.  Evidences of
Chinese influence in Cuba includes:

    * port development using Chinese equipment,
    * use domestic appliances from China, and
    * oil exploration in the nation's northwest region by
      Chinese companies.

The FT quoted President Fidel Castro as saying that its business
relationship with China is governed by low-cost credit and
competitive prices.

In 2005, China has provided Cuba with approximately US$500
million in trade cover to develop communications and
electronics, the FT relates.

Cuban economist Omar Everleny told FT, "You can't say our
relations are like those with the Soviets.  They are strictly
commercial, though with very low interest, and behind that
political relations are excellent."

According to FT, the two countries were on opposite ends during
the Sino-Soviet war.  Even today, the two countries seem to be
heading to different directions.  China is intent on adopting
market economics while Cuba remains a command economy that
abhors entrepreneurship and where the economy is in the hands of
the government.

                        *    *    *

Moody's assigns these ratings to Cuba:

      -- CC LT Foreign Bank Depst, Caa2
      -- CC LT Foreign Curr Debt, Caa1
      -- CC ST Foreign Bank Depst, NP
      -- CC ST Foreign Curr Debt, NP
      -- Issuer Rating, Caa1


=============
J A M A I C A
=============


DIGICEL: Fitch Affirms B Senior Unsecured Debt Rating
-----------------------------------------------------
Fitch has affirmed the 'B' rating of Digicel Limited, senior
unsecured debt, including the US$300 million senior notes due
2012, following the announcement that it is in the process of
acquiring Bouygues Telecom Caraibe.  The Outlook for the Ratings
is Stable.

Based on the terms of the agreement, the acquisition is expected
to be entirely funded with additional senior debt and will
moderately increase leverage and subordination to the senior
note holders.  Better than expected operating cash flow and
EBITDA performance during the fiscal year, support the
incremental debt leverage, which should remain consistent with
the current rating category.  Any material changes to terms of
the acquisition could affect that rating level.

Fitch continues to expect improvements in financial leverage
over the next few years, although any additional future
acquisitions funded with debt could weaken the company's credit
quality.

The acquisition of BTC will improve the geographic
diversification, its revenue base, and moderately increase
operating EBITDA.  Proforma to the acquisition, Digicel's fiscal
year 2007 aka FY2007 hard currency revenue mix is also expected
to increase.

BTC has operations in the French West Indies -- consisting of
Martinique, Guadeloupe, French Guiana, St. Barth and French St.
Martin, serving 160 thousand subscribers, 63% postpaid.  BTC's
GSM network and spectrum licenses have enough capacity to grow
existing operations without additional material capital
expenditures.  BTC's main competitor, Orange Caraibe, has
approximately 80% market share.

Digicel's ratings reflects its position as the leading provider
of wireless services in the Caribbean, its strong brand
recognition and growing portfolio of wireless assets, and its
manageable, yet high, financial leverage.  Digicel benefits from
rapidly growing operating cash flow in its core operating
assets.

The company's operating cash flow is still concentrated in
Jamaica -- Digicel's largest market -- despite operating in a
diverse set of 13 Caribbean markets.  Jamaica is by far the most
populated country from the ones which it currently delivers
services, accounting for 75% of subscribers.

With the recently acquired licenses in Trinidad and Haiti,
licensed pops now amount to slightly over 14 million.

For the first nine months of FY2006, Digicel Jamaica represented
69% and 83% of revenues and EBITDA, respectively.  Jamaican
contribution to consolidated EBITDA should decrease to
approximately 60% to 65% by 2008, as newer operations start-up
and mature, primarily from its Trinidad & Tobago operation.  The
ratings incorporate sovereign risks including transfer and
convertibility risks associated with investments in Jamaica.

Digicel's short operating history has been successful.  The
company has rapidly gained leading market share in most of its
markets served by successfully executing a strategy of launching
operations with extensive initial geographic coverage, good
customer service, effective branding and strong product
offerings.  This strategy has proved successful in turning
operations EBITDA positive in a short period of time and gaining
subscribers at a rapid pace.  The company quickly gained leading
market share positions versus incumbent operators in most
markets it serves.

Digicel's market share range between 37% and 72% with an
aggregate market share of 67%; Digicel Jamaica's market share is
72%.  Both the growth in existing islands and the subscribers
acquired via this transaction will drive Digicel's subscriber
numbers to, in excess of 2 million.

Wireless penetration level in most of Digicel's markets is high,
ranging between 45% and 90%.  Aggregate estimated wireless
penetration in markets served is estimated to be approximately
71%.  Penetration rates in the new markets of Martinique,
Guadeloupe and French Guiana averages 67%.  High wireless
penetration rates are the result of low fixed-line penetration
levels, long waiting periods to get fixed-line connections, good
network coverage by wireless service providers, and substitution
of fix by mobile.  The combination of Digicel's high market
shares and wireless penetration rates should result in more
moderate EBITDA growth than has been in the recent past.

Digicel is expected to maintain relatively high leverage and
debt levels after the completion of the proposed debt issuance,
consistent with the rating category.

Proforma consolidated total debt to EBITDA ratio should increase
approximately to between 3.5-4 times from slightly below 3
times.  Better than expected operating performance and the
incorporation of BTC operations should partially offset increase
indebtedness related to the acquisition in order to meet Fitch
pre-acquisition expectations of leverage for FY2007 and FY2008.

Year-end FY2007 leverage is still expected to decrease between
2.5 times to 3 times, and below 2.5 times by the end of FY2008.
The company maintains good liquidity and debt service is
expected to be manageable.

The US$300 million senior notes will continue to be subordinated
to the senior secured bank debt after the completion of BTC's
acquisition. Structural subordination risks have been eliminated
through upstream guarantees from all of Digicel's existing 100%
owned operating companies.

Digicel Limited is a wireless services provider in the Caribbean
region founded in 2000, and controlled by Denis O'Brien.  The
company started operations in Jamaica in April 2001 and now
offers GSM mobile services in 13 countries of the Caribbean
including Jamaica, St. Lucia, St. Vincent, Aruba, Grenada,
Barbados, Cayman, and Curacao among others.  Digicel finished
FY2005 with 1.722 million total subscribers -- 97% pre-paid --
estimated market share of 67% and revenues and EBITDA of US$478
million and US$155 million, respectively.


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


BALLY TOTAL: Gives Employment Inducement Awards to New Employees
----------------------------------------------------------------
Bally Total Fitness reported Wednesday the grant of stock
options to new employees Guy Sellars -- CPA and Assistant Vice
President of Operation Accounting -- and Darrell Fox, CPA and
Manager of Corporate Accounting.

Sellars received 6,000 stock options and Fox received 1,500
stock options.  These inducement stock options vest in three
equal annual installments on the anniversary of the grant date
and are subject to forfeiture in the event of resignation or
termination for cause prior to vesting.

In accordance with NYSE Rule 303A.08, these inducement stock
option grants require a public announcement of the awards and
written notice to the NYSE.

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

                         *     *     *

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

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


CFE: Construction Works in Guerrero in Danger of Suspension
-----------------------------------------------------------
Construction of Comision Federal de Electricidad's 900MW La
Parota hydroelectric generation project in Guerrero could be
halted, Business News Americas reports.

This is due to legal disputes with nearby communities and NGOs,
CFE director Alfredo Elias told newspaper Milenio.

La Jornada, another newspaper, reveals that human rights and
environmental protection organizations are against the project.
Last weekend, they presented an injunction in Mexican courts to
cease the construction of the project.  The organizations
believe that the project has potentially negative impact on the
environment.

Business News states that in January, a Guerrero court blocked
the company's land expropriation process for the construction of
the US$900 million project.  According to the court, the August
2005 landowners' meeting in San Marcos -- where the construction
of La Parota was approved -- was illegal.

The court, according to Business News, found irregularities in
the meeting, including payments to voters and a conflict between
local police and the project's opponents.

According to a report by Milenio, Elias believed the judge in
the case will overturn the ruling after evaluating the
information that CFE provided regarding the legality of the
meeting.

Business News relates that according to Elias, La Parota is the
only option for communities near the project to evade extreme
poverty because it will provide jobs and a better standard of
living.

While waiting for a resolution to the La Parota dispute, CFE is
concentrating on a tender process for construction of the US$850
million, 750MW La Yesca hydroelectric generation project in
Nayarit, states Business News.

                        *    *    *

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

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


GRUPO POSADAS: Fitch Affirms BB- Sr. Unsecured Currency Rating
--------------------------------------------------------------
Fitch Ratings has removed the senior unsecured foreign currency
and local currency ratings of Grupo Posadas, S.A. de C.V., as
well as the national scale rating, from Rating Watch Negative.
The 'BB-' senior unsecured foreign currency and local currency
ratings and the 'A(mex)' national scale rating have been
affirmed. The Rating Outlook is Stable.

On Dec. 1, 2005, the ratings were placed on Rating Watch
Negative following the announcement that Posadas intended to buy
Mexico's largest airline carrier, Grupo Mexicana de Aviacion
S.A. de C.V.  The removal from Rating Watch Negative and
affirmation of the ratings reflect Fitch's assessment that the
acquisition by the company of a minority stake in Mexicana will
not significantly alter its credit profile.

Last December 2005, an investor group comprised of the company
and several other Mexican private investors paid US$165.5
million for 95% of Mexicana's equity and the assumption of its
debt and aircraft leases.  The company's stake in Mexicana is
49.7%, for which it paid approximately US$82 million funded with
a mix of cash, secured debt, a non-recourse loan guaranteed by
shares of Mexicana, and a capital contribution from a
shareholder.

The new debt in connection with the acquisition comprises US$15
million of secured debt, which is included in Posadas' balance
sheet at Dec. 31, 2005, and a US$35 million loan from Ixe Banco
S.A., which is secured with shares of Mexicana and is non-
recourse to Posadas.

The company believes its investment in Mexicana brings strategic
advantages and synergies in information, technology,
commercialization and marketing and strengthens their leadership
in tourism.

The ratings reflect the company's solid business position,
strong brand name and multiple hotel formats.  Posadas' presence
in all major urban and resort locations in Mexico, consistent
product offering and quality brand image have resulted in
occupancy levels above the industry average in Mexico.  The
company's use of multiple hotel formats allows them to target
domestic and international business travelers as well as
tourists.  Posadas' operations are primarily located in Mexico,
which limits diversification.

In recent years, the company's business strategy has evolved
toward managing and leasing as opposed to owning new hotel
properties.  This strategy has allowed Posadas to lower capital
investments and related borrowing while maintaining room growth.
The company faces a comfortable debt maturity schedule and has a
track record of positive free cash flow generation.

During 2005, revenues grew by 11% driven by an increase in the
number of rooms and in the average-revenue-per-available-room
aka REVPAR of owned and managed hotels.  Occupancy levels had
been growing during the first nine months of 2005 but during the
fourth quarter the effect of Hurricane Wilma on Cancun and
Cozumel coastal hotels partially off-set this growth.  The
company reported strong EBITDA for ther year, which reached
US$116 million compared to US$98 million in 2004.

Last September 2005, Hurricane Wilma damaged a total of five
Posadas Hotels located in the Yucatan peninsula -- three owned,
one managed and one leased.  These hotels accounted for
approximately 12% of all rooms operated by Posadas, 12% of
revenues and 9% of EBITDA for the first nine months of 2005.
The properties were insured against property damages and
business interruption and to date, insurance payments have
covered the majority of damages.  Damages were repaired within a
few months and only one of the five hotels remains to open.  It
is not known with certainty when will the area's infrastructure
fully recover from the devastation.  This could potentially
affect Posadas' occupancy levels in 2006.

At Dec. 31, 2005, total on-balance sheet debt reached US$370
million, the majority of which (70%) was dollar-denominated and
the remainder was in pesos.  The debt was comprised of US$225
million unsecured 8.75% notes due 2011, US$52 million of secured
debt with properties, including US$15 million of new debt
related to Posadas' investment in Mexicana, US$75 million of
Peso-denominated bonds -- Certificados Bursatiles -- and US$18
million of other debt.

In addition the company had US$158 million of off-balance sheet
debt related to hotel leases.  In November 2005, the company
closed a dual-currency credit facility due 2011 for US$50
million -- up to US$20 million equivalent can be drawn in pesos.
Proceeds from this facility will refinance upcoming maturities
on its peso notes maturing in February and July 2006 for MXN300
million and MXN250 million respectively.

At Dec. 31, 2005, the company had comfortable liquidity with a
balance of cash and marketable securities of US$35 million.  The
ratio of total adjusted debt to EBITDAR reached 3.9 times, an
improvement from 4.1 times in 2004.  Adjusted interest coverage
measured by the ratio of EBITDAR to financial expense plus rent
expense, was 2.4 times.

The acquisition of a minority stake in Mexicana did not have a
material effect on leverage and credit ratios.  According to
Mexican GAAP, the US$35 million secured non-recourse loan
incurred in connection with the acquisition is treated off-
balance sheet.  The non-recourse loan is to be repaid with
proceeds from a future public or private offering of Mexicana
shares and the creditor bank bears any price risk.  Adjusting
for the US$35 million off-balance sheet liability, total
adjusted debt/EBITDAR at the end of 2006 should remain
approximately flat from 2005 as incremental debt is offset by an
expected increase in EBITDAR.

Capital expenditures during 2005 reached US$25 million, an
increase from US$18 million during 2004.  The investment was
related to maintenance, conversion of hotels to the Vacation
Club format and corporate purposes.

Over the next three years, the company plans to open seven new
Fiesta Inn Hotels and two new Cesar Park Hotels.  It will also
launch a new hotel format, One, targeted to economy business
travelers, the first one of which will open during the second
half of 2006.

These investments, budgeted at approximately US$305 million for
the next three years, will require a cash flow outlay by Posadas
of 5% or approximately US$15 million, since the majority of the
new openings will be under management and lease agreements.

Grupo Posadas is the largest hotel operator in Mexico with more
than 30 years in business.  The company operates 92 hotels and
17,268 rooms across Mexico -- 83% of total rooms -- in the
United States (5%), Brazil (11%) and Argentina (1%).
Approximately 72% of rooms are in urban locations, with the
remaining 28% in coastal destinations.

The company manages different hotel formats under a combination
of owned, leased, and managed properties including Fiesta
Americana and Fiesta Inn in Mexico and Caesar Park and Caesar
Business in Argentina and Brazil.


GRUPO TMM: Agrees to Purchase Remaining 40% of SMR Stake
--------------------------------------------------------
Grupo TMM, S.A., announced Wednesday that it has agreed to
purchase the remaining 40% minority stake held by the Dutch
company Smit in Servicios Mexicanos en Remolcadores, S.A. de
C.V., aka SMR -- joint venture company dedicated to providing
harbor towing services at the Port of Manzanillo, Mexico.  The
agreed purchase price is $9.5 million.  After the transaction,
SMR will be a wholly owned subsidiary of TMM.

On March 6, 2006, the company announced that it had purchased
Seacor's 40% interest in Maritima Mexicana, S.A. de C.V., aka
Marmex -- joint venture company dedicated to providing maritime
offshore services in Mexico's Gulf Coast.

As part of the transaction, TMM also purchased five offshore
vessels owned by Seacor and flagged the vessels Mexican, and at
the same time converted three additional offshore vessels from
leased to owned status.  All eight vessels are working under
time charter contracts supporting offshore oil exploration and
production activities in the Gulf of Mexico.

Aggregate value of the transactions -- including the purchase of
Marmex's 40% shares, the purchase of five vessels from Seacor,
and the conversion to owned status of the three vessels under
lease -- was $77 million, of which $70 million was financed.
Interest expense will be $6.0 million during the first year
going forward, to be reduced in subsequent periods as principal
is repaid.

Pursuant to the purchase of these third-party minority stakes in
SMR and Marmex, Grupo TMM now wholly owns its Specialized
Maritime Operations, which consist of Product and Chemical
Tankers, Harbor Tugs and Offshore Supply Vessel operations.

Moreover, the TMM plans to increase its offshore fleet through
the acquisition of an additional AHTS -- Anchor Handler Tug
Supply -- vessel during the second quarter of 2006.

Javier Segovia -- president of TMM -- commented, "We made the
strategic decision to buy offshore vessels and the remaining
minority partnership interests in SMR and Marmex because these
transactions will improve cash flow to TMM by $18.8 million per
year, enable TMM to have full access to the cash flows generated
from these activities, and provide TMM with direct control over
the shipping assets under each business, reducing dependency on
third-party chartering of vessels and eliminating future charter
price volatility."

Segovia added, "The cost of operating our offshore fleet will be
reduced substantially, while at the same time we will
recapitalize the company by building equity into the vessels,
and generate additional cash flow to TMM under the umbrella of
Mexico's Navigation Law and long-term time charters with our
customers in the Gulf of Mexico".

Headquartered in Mexico City, Grupo TMM S.A. --
http://www.grupotmm.com/-- is a Latin American multimodal
transportation and logistics company.  Through its branch
offices and network of subsidiary companies, TMM provides a
dynamic combination of ocean and land transportation services.

                       *    *    *

As reported in the Troubled Company Reporter on Dec. 20, 2005,
Standard & Poor's Ratings Services raised its corporate credit
rating on Grupo TMM S.A. to 'B-' from 'CCC.'  The rating was
removed from Creditwatch, where it was placed on Dec. 15,
2004.  S&P said the outlook is positive.


PHELPS DODGE: Sells Conductor Business to Int'l Wire for $47-Mil
----------------------------------------------------------------
Phelps Dodge Corp. (NYSE:PD) agreed to sell Phelps Dodge High
Performance Conductors of SC & GA, Inc. to International Wire
Group.

Under the agreement, IWG will purchase the stock of HPC,
including certain copper inventory, for approximately $47
million in cash, subject to a working capital adjustment at the
time of closing, plus a contingent payment to Phelps Dodge of up
to $3 million based on HPC's 2006 results.  Phelps Dodge expects
to record a special, net after-tax loss on the transaction of
approximately $5 million.  The sale is subject to certain
regulatory approvals.

The sale will include HPC manufacturing operations in Inman,
South Carolina, and Trenton, Georgia.  The transaction will not
include a Phelps Dodge facility at Elizabeth, New Jersey, which
will become a unit of the Phelps Dodge Smelting, Refining and
Rod Group.  Under the agreement, Phelps Dodge will continue to
be a primary supplier of certain copper alloys to IWG.  Phelps
Dodge also is a primary supplier of copper rod to IWG.

HPC is a manufacturer of specialty high-performance conductors
for the aerospace, medical, automotive, computer,
telecommunications, mass transportation, geophysical and
electronics markets.

HPC products are present in Asia, Europe, Central America, and
South America. IWG, which manufactures and distributes in the
US, Mexico, France, Italy and the Philippines, produces wire
products, including bare and tin-plated copper wire and
insulated items.

Phelps Dodge Corp. -- http://www.phelpsdodge.com/-- produces
copper and molybdenum and is the largest producer of molybdenum-
based chemicals and continuous-cast copper rod.  The company and
its two divisions, Phelps Dodge Mining Co. and Phelps Dodge
Industries, employ approximately 15,000 people worldwide.

                        *     *     *

As reported in the Troubled Company Reporter on Mar. 29, 2005,
Moody's Investors Service upgraded Phelps Dodge Corporation's
senior unsecured ratings to Baa2 from Baa3.  Moody's also
upgraded the prospective ratings under Phelps Dodge's $600
million shelf filing.  The upgrade is based on the improvement
in Phelps Dodge's capital structure and operating performance
over the past three years as the company's efforts to reduce
debt were accelerated by greatly improved copper and molybdenum
prices over the past 18 months, and Moody's expectation that the
company will be able to sustain improved debt protection
measurements over the intermediate term.  The rating outlook is
stable.

Ratings upgraded are:

Phelps Dodge Corporation:

   * Senior unsecured notes, to Baa2 from Baa3;

   * Shelf registration for senior unsecured debt, to (P)Baa2
     from (P)Baa3;

   * junior subordinated debt to (P)Baa3 from (P)Ba1;

   * cumulative preferreds, subordinated preferreds and jr.
     participating cumulative preferreds to (P)Ba1 from (P)Ba2;

     and

   * PD Capital Trust I and PD Capital Trust II guaranteed trust
     preferreds to (P)Baa3 from (P)Ba1.


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


* PANAMA: Relaunching Free Trade Talks with Central America
-----------------------------------------------------------
The Prensa Latina reports that the Central American Integration
System Special Meeting of Heads of State or Government will
allow Panama to relaunch negotiations for a Free Trade Agreement
with the area.

The SICA Summit held yesterday on the sidelines of the 24th
Expocomer International Fair was attended by the Presidents of:

-- Costa Rica, Abel Pacheco;
-- Honduras, Manuel Zelaya, and
-- Dominican Republic, Leonel Fernandez.

Officials of the Ministry of Trade and Industries recalled that
Panama has only managed to set in motion an FTA with El
Salvador. However, the country is interested in promoting talks
to strengthen links with all Central American neighbors,
Business News Americas states.

Panama has just sealed an FTA with Singapore, reached an
understanding with Chile in this regard and is negotiating a
similar pact with the United States.

                        *    *    *

Moody's assigns these ratings to Panama

      -- CC LT Foreign Bank Deposit, Baa2
      -- CC LT Foreign Currency Debt, Baa1
      -- CC ST Foreign Bank Deposit, P-2
      -- CC ST Foreign Currency Debt, P-2
      -- Foreign Currency LT Debt, Ba1

                        *    *    *

Standard & Poor's assigns these ratings to Panama:

      -- Foreign Currency LT Debt, BB
      -- Local Currency LT Debt, BB
      -- Foreign Currency ST Debt, B

                        *    *    *

Fitch assigns these ratings to Panama:

      -- Foreign Currency LT Debt BB+
      -- Local Currency LT Debt   BB+
      -- Foreign Currency ST Debt B


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


* PARAGUAY: Increases Price of Cement Goods Sold by INC
-------------------------------------------------------
The Paraguayan government hikes up prices sold by state-owned
cement firm, INC, by an average of 32%, according to local
reports.

Business News Americas relates that the government's decision
was designed to meet rising costs of raw materials and to help
relieve current cement shortages, according to trade and
industry miniter, Raul Vera.

Minister Vera said that the price hike won't affect consumers
that much because while INC sells sacks of cement at 19,500
guaranies (US$3.27), on the market it is presently changing
hands at 32,000-34,000 guaranies, Business News relates.

"That price difference was benefiting speculators and those
persons smuggling to Brazil and Argentina," Minister Vera was
quoted by Business News as saying.  "With the previous prices,
Paraguay was subsidizing Brazil and Argentina with cement, while
here there was a shortage.  This decision will discourage sales
of the product in other countries and will reduce the shortage
to a great extent."

Segundo Espanola told Business News that despite the price
increase, the company will only realize a profit level of 12% to
13% because the firm has been running at a loss.  Mr. Espanola
said that 12%-13% profit is not sufficient and the ideal level
of profitability would be 30% like other companies operating in
the country.

                        *    *    *

Moody's assigns these ratings to Paraguay:

     -- CC LT Foreign Bank Deposit, Caa2
     -- CC LT Foreign Curr Debt, Caa1
     -- CC ST Foreign Bank Deposit, NP
     -- CC ST Foreign Currency Debt, NP
     -- LC Currency Issuer Rating, Caa1
     -- FC Curr Issuer Rating, Caa1
     -- Local Currency LT Debt, WR

                        *    *    *

Standard & Poor's assigns these ratings:

     -- Foreign Currency LT Debt B-
     -- Local Currency LT Debt   B-
     -- Foreign Currency ST Debt C
     -- Local Currency ST Debt   C


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


* Peru Buys Back Siderperu for US$53 Million
--------------------------------------------
The Peruvian government has retaken control of one of the
country's top steelmakers, Siderperu SA.

Reuters reports that the deal cost the government US$53 million,
but it plans to sell the company again soon.

The government bought 56.04% of Siderperu on the Lima Stock
Exchange.  Peru's Prime Minister Pedro Pablo Kuczynski was
quoted by Reuters as saying that has begun the privatization
process, publishing information about the company.

Peru's government says Siderperu under the control of private
investors, who bought the steelmaker in 1996, did not meet
investment obligations, Reuters relates.

Headquartered in Chimbote, Peru, Siderperu buys iron ore from
Peru's only iron miner, Chinese-owned Shougang Hierro Peru S.A.
(SHP.LM: Quote, Profile, Research).  Siderperu supplies Peru's
construction and mining industries.

                        *    *    *

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: Panel Exploring Fraudulent Conveyance Claims
---------------------------------------------------------------
The Official Committee of Unsecured Creditors seeks the Court's
permission, pursuant to Rules 2004 and 9016 of the Federal Rules
of Bankruptcy Procedure, to conduct examinations of and obtain
documents from certain persons and entities including, without
limitation:

    (a) certain present and former members of the Debtors'
        senior management and boards of directors;

    (b) certain officers and directors of Sun Music LLC, the
        controlling stockholder of the Debtors, and each of its
        owners, Sun Capital Partners III, LP, and Sun Capital
        Partners III, QP, LP;

    (c) the Trade Lien Creditors, certain trade creditors of the
        Debtors which allege a second priority security interest
        in the Debtors' inventory;

    (d) Best Buy Co., Inc., the prior owner of the Debtors until
        Aug. 11, 2003; and

    (e) Harris Bank N.A., a lender, which had advanced
        approximately $25,000,000 to the Debtors under an excess
        inventory line of credit, that was guaranteed by the Sun
        Entities and was repaid prior to its maturity shortly
        before the Petition Date.

As previously reported, Best Buy acquired the Debtors in 2001
for approximately $700,000,000.  Approximately two years later,
pursuant to a Stock Purchase Agreement, dated June 16, 2003, Sun
Music, an entity owned by SCP and SCPQ, acquired the Debtors
from Best Buy for $1 plus the assumption of substantially all of
the Debtors' liabilities.

Prior to the Petition Date, the Debtors entered into a number of
loan agreements to address their cash needs.

On Nov. 3, 2003, the Debtors entered into a Security Agreement
with the Trade Lien Creditors, whereby the Trade Lien Creditors
were granted a security interest in the Debtors' inventory to
secure debt owed to those creditors.  Pursuant to an
Intercreditor Agreement entered into with the Lenders, the TLC
Security Interest was made subordinate in priority to the
security interest granted in favor of the Lenders.  According to
the Debtors, the Trade Lien Creditors were owed approximately
$186,270,502 as of the Petition Date.

According to Mark T. Power, Esq., at Hahn & Hessen LLP, in New
York, while the Committee desires to conduct a thorough
examination of the Debtors' material prepetition activities and
relationships, its examinations will be principally focused on
these lines of inquiry:

    (a) Debtors' Senior Management and Directors

        The Committee desires to investigate the prepetition
        activities and decisions of the Debtor's senior officers
        and members of the Board of Directors, particularly with
        respect to the Debtors' decision to enter into the TLC
        Security Agreement with the Trade Lien Creditors and the
        decision to prepay the loan from Harris Bank, as certain
        Directors may have breached their duty of loyalty by
        directing the Debtors to prepay Harris Bank in order to
        ensure that the Sun Entities would not be called upon to
        honor their guaranty;

    (b) The Sun Entities

        In addition to the transaction concerning Harris Bank,
        the Committee desires to investigate the prepetition
        transactions between the Sun Entities and the Debtors,
        including any management fees or other payments that the
        Sun Entities received from the Debtors, any
        representations or promises that the Sun Entities may
        have made to the Debtors and any public statements or
        other representations made by the Sun Entities with
        respect to supporting the Debtors.  The Committee
        intends to determine whether the fees charged by the Sun
        Entities to the Debtors were reasonable in comparison to
        any value the Sun Entities to the estates and whether
        the Debtors' management or board breached any fiduciary
        duties by paying those fees.  The Committee also desires
        to investigate the details concerning Sun Music's
        acquisition of the Debtors and representations or
        promises made in connection therewith.

    (c) The Trade Lien Creditors

        Consistent with its fiduciary duties, the Committee
        desires to investigate a number of areas with respect to
        the Trade Lien Creditors, including:

           i. Preferential Transfers

              The Committee desires to investigate whether the
              Trade Lien Creditors received any preferential
              transfers under Sections 547 and 550 of the
              Bankruptcy Code, including any improvements in
              their collateral positions, both on an individual
              and aggregate basis, between the 90th day prior to
              the Petition Date and the Petition Date;

          ii. Individual Credit and Return Policies

              Based on a review of the TLC Security Agreement,
              it appears that the extent of the Trade Lien
              Creditors' obligations is governed by their
              individual credit agreements and return policies
              with the Debtors.  The Committee desires to review
              those individual agreements, including the
              Debtors' right to return any obsolete or outdated
              merchandise for full credit.

         iii. Verification that Specific Trade Lien Creditors
              Are the Actual Suppliers

              Based on a review of the TLC Security Agreement,
              only the specific corporate entities that are
              signatories to the Agreement belong to the pool of
              creditors with a security interest in the Debtors'
              inventory.  The Committee intends to verify that
              no other affiliated entities that have sold goods
              to the Debtors are improperly seeking to elevate
              their status from unsecured to secured.

          iv. Fraudulent Conveyances and Breach Claims

              The Committee understands that the Debtors agreed
              to enter into the TLC Agreement based on certain
              continuing commitments by the Trade Lien Creditors
              to extend credit terms to the Debtors.  The
              Committee intends to investigate whether in fact
              the Trade Lien Creditors complied with these
              commitments and whether any fraudulent conveyance
              or breach claims may exist as a result thereof;
              and

           v. Other Potential Claims

              The Committee also seeks authorization to conduct
              Rule 2004 investigations in order to discover
              information supporting potential claims against
              the Trade Lien Creditors in connection with any
              collusive or wrongful conduct they may have
              engaged in to the detriment of the Debtors and in
              violation of any federal or state laws.

     (d) Best Buy

         The Committee desires to investigate the prepetition
         transactions and relationship between Best Buy and the
         Debtors, including whether any intercompany
         Transactions were entered into between Best Buy and the
         Debtors, which were unfair or detrimental to the
         Debtors at a time when the Debtors were insolvent or
         rendered insolvent.  Those improper transactions may
         give rise to potential claims against Best Buy or the
         senior officers and directors of the Debtors at the
         time.

Mr. Power asserts that there is good cause for allowing the
requested discovery because it is necessary to determine the
facts and circumstances relating to the payoff of the Harris
Loan, the Sun Entities role in the Debtors' affairs, the Sun
Entities role in causing the Debtors to file for bankruptcy, the
propriety of the Trade Lien Creditors' secured position, the
sale of the Debtors to Sun Music by Best Buy, and the propriety
of the prepetition actions taken or not taken by the Debtors'
senior officers and board of directors.

                  Sun Entities & Directors Object

Norman N. Kinel, Esq., at Dreier LLP, in New York, argues that
Bankruptcy Rule 2004, while admittedly broad, does not allow
unlimited discovery.  "It provides a party with a means of
obtaining necessary discovery concerning matters affecting the
administration of a debtor's estate or otherwise relevant to a
case; it should not, however, enable a party to seek multiple
bites at the apple in an effort to cobble together some basis
for further unproductive litigation."

Mr. Kinel tells the Court that the Committee has already
obtained discovery relating to some of the same topics it now
purportedly wishes to investigate via the 2004 Application.
According to Mr. Kinel, the duplicative nature of the
Committee's requests may be a result of the fact that the
Committee is represented by two separate firms:

    (1) Olshan Grundman Frome Rosenzweig & Wolosky LLP, which
        filed an objection to the DIP Financing Motion and took
        discovery; and

    (2) Hahn & Hessen LLP, which now seeks discovery via the
        2004 Application.

"Whether this is an instance of the left hand not knowing what
the right hand is doing or not, the Sun Entities should not be
required to shoulder the burden of seriatim discovery," Mr.
Kinel says.

The Sun Entities, together with some members of the Board of
Directors of Musicland Holding Corp. -- Marc J. Leder, Rodger R.
Krouse, Clarence E. Terry, T. Scott King, Jason Neimark, and
James D. Allen -- also complain that the scope of the requested
discovery is unreasonably open-ended.  This request clearly goes
too far, Mr. Kinel says.

At a minimum, the Sun Entities and the Directors contend, the
Court should not allow the proposed discovery to commence absent
at least clarification and reasonable assurances concerning the
scope of that discovery.

Specifically, the Sun Entities and the Directors ask the Court
to:

    -- deny the 2004 Application altogether with respect to the
       Sun Entities and the Directors, or

    -- should the Court determine that additional discovery is
       proper, require the Committee to narrow the scope and set
       appropriate parameters of the propose discovery before
       allowing any Rule 2004 discovery to commence with respect
       to the Sun Entities and the Directors.

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: Signing Joint Venture Pacts with Foreign Firms on Apr. 1
---------------------------------------------------------------
Rafael Ramirez, Venezuela's energy and oil minister and
Petroleos de Venezuela president, was quoted by Business News
Americas during a press conference that the country will be
signing the joint venture agreements with private oil companies.

"We have the clear idea that by April 1 there should be no more
operating contracts," Reuters quoted Mr. Ramirez as saying.

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

The operating agreements run by 22 companies will be reduced to
19 JVs controlled by PDVSA.

In a statement, minister Ramirez said that Venezuela's national
assembly will hold a special session soon to respond to
questions about the preliminary scheme.  The ministry will
present a report with economic details of the JV model according
to the specifications of each of the now defunct operating
agreements.

The contracts now under PDVSA control represent combined
production of some 532,000 barrels a day of crude.

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.


* VENEZUELA: Discusses Investment Ventures with Ternium
-------------------------------------------------------
Victor Alvarez, Venezuela's minister of mining and basic
industries (Mibam), has met with officials from steel group
Ternium SA (NYSE: TX) to evaluate different investment scenarios
in the country's steel sector, Business News Americas reports.

During the meeting, participants discussed plans to up iron ore
production.  The attendees included Ternium executive president
Daniel Novegil, Sidor CEO Julian Eguren and Cesar Bertani, CEO
of state iron ore supplier Ferrominera Orinoco.

"Participants at the meeting discussed technical support for the
government's proposed new steelmaker," a Mibam press official
told Business News Americas.

Venezuela's proposed new state steelmaker will focus production
on thick plates for structures, shipbuilding, railcars and
large-diameter containers, as well as production of hot-rolled
coils for the car, shipbuilding and oil industries, Business
News relates.

It was also discussed in the meeting the possibility of holding
new investment rounds with Argentine businesspeople to boost
development of Venezuela's downstream steel industry, Business
News relates.

Ternium started up last year and is made up of steelmakers
Siderar of Argentina, Sidor of Venezuela and Mexico's Hylsamex.

                      About Ternium

Headquartered in Luxembourg, Ternium SA steel producer with
majority holdings in certain international steel companies, such
as Argentina's Siderar, Venezuela's Sidor, Mexico's Hylsamex,
and Techintrade.  Ternium's steel manufacturing and finishing
facilities have an annual production capacity of about 11.6
million tons.  The company sells its wares primarily to clients
in North, Central, and South America, and it is developing a
sales presence in Asia and Europe as well.

                        *    *    *

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

                        *    *    *

On Nov. 29, 2005, Fitch Ratings assigned expected 'BB-' ratings
to the pending issues of Venezuelan government bonds maturing
Feb. 26, 2016, and Dec. 9, 2020.  The 2016 bond has a 5.75%
fixed coupon and the 2020 bond has a 6% fixed coupon.  The bonds
are being marketed in Venezuela to be purchased in local
currency at the official exchange rate but under New York law,
with all coupon and principal payments in U.S. dollars.

Venezuela's sovereign ratings are supported by superior
international liquidity and low external financing
requirements relative to similarly rated sovereigns.  The
ratings are constrained by vulnerability to external shocks
because of oil dependency; diminished capacity of the private
sector to absorb shocks because of heavy government
intervention in the productive sector; recent spending
increases that reduce fiscal flexibility; and concerns about
the rule of law and potential political instability.  Fitch said
the Rating Outlook is Stable.


                            ***********


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

Troubled Company Reporter - Latin America is a daily newsletter
co-published by Bankruptcy Creditors' Service, Inc., Fairless
Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick,
Maryland USA. John D. Resnick, Marjorie C. Sabijon and Sheryl
Joy P. Olano, Editors.

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

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

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

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


* * * End of Transmission * * *