/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/060313.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Monday, March 13, 2006, Vol. 7, Issue 51 Headlines A R G E N T I N A BANCO HIPOTECARIO: Will Structure US$25 Million Securitization INDUSTRIAL SODERA: Verification of Creditors Claims Ends Mar. 28 LESCOT SRL: Creditors Must Present Claims to Trustee by May 30 REPAS S.A.: Concludes Reorganization After Debt Pact Approved SCADUTO S.A.: Claims Verification Deadline Moved to March 8 SIDERAR: Releases Financial Results for the Year-Ended Dec. 31 SLA SISTEMAS: Trustee to Stop Accepting Claims on April 19 TALENTOS S.R.L.: Claims Verification Begins, Ends April 24 TARAI S.A.: Debt Payments Halted, Moves to Reorganize TELECOM ARGENTINA: Net Revenues Up 27% in Fiscal Year 2005 VICENTE TRAPANI: Individual Reports Due on Aug. 4 B A R B A D O S DIGICEL: Hopes to Better Market Position with Cingular Purchase B E L I Z E BELIZE: S&P Assigns CCC- Rating on US$283 Million Debt B R A Z I L BANCO PANAMERICANO: Net Profits Climbed 71.7% in 2005 BNDES: Opto Eletronica Receives BRL6.7 Million Financing BRAZIL LETRAS: S&P Assigns BB+ Currency Long-term Debt Rating CVRD: May be Willing to Lower Bar on Iron-Ore Prices TV GLOBO: Inks Video Images Distribution Partnership with Claro USIMINAS: Posts Net Profit of BRL3.9 Billion in 2005 C A Y M A N I S L A N D S DIAMOND INVESTMENT: Sets March 20 Claims Filing Deadline FEROX CREDIT: Creditors Must File Proofs of Claim by Mar. 23 FK CAPITAL: Sets March 20 Deadline for Creditors to File Claims HOTEL FINANCE: Creditors Claim Filing Deadline Is Today HUTCHISON WHAMPOA: Sets Mar. 20 Deadline for Claims Filing C O L O M B I A BANCO DE BOGOTA: Moody's Assigns D+ Financial Strength Rating BANCOLOMBIA S.A.: Moody's Assigns Ba3 Foreign Currency Rating BBVA COLOMBIA: Moody's Assigns Ba3 Foreign Currency Rating * BOGOTA: Moody's Assigns Ba2 Currency Rating, Outlook Stable * COLOMBIA: Moody's Assigns Ba2 Foreign Currency Rating E C U A D O R * ECUADOR: Oil Output Plummets Due to Strike, Results in Losses * ECUADOR: Strike Put to End, Oil Production Continues E L S A L V A D O R BANISTMO: Posts 10% Increase in Earnings in 2005 M E X I C O RCN CORP: Sells 48.93% of Mexican Units to Pay Debt UNIDAS: S&P Assigns B Currency Corporate Credit Ratings XIGNUX S.A.: S&P Assigns B+ Rating on Notes Due 2009 P E R U * PERU: Government Allows Rate Hike to Expand Water Services P U E R T O R I C O MUSICLAND HOLDING: Committee Hires Hahn & Hessen as Counsel T R I N I D A D & T O B A G O CITIZEN INSURANCE: Fin'l Weakness Cues Central Bank to Intervene GOODWILL GEN: Weak Fin'l Status Cues Central Bank to Intervene U R U G U A Y * URUGUAY: Government Inks IT Solution Pact with Venezuela V E N E Z U E L A PDVSA: Surpasses Daily Output and Sales by 9,200 Barrels * ALAV Believes U.S. Flight Ban Will Yield Positive Outcome * VENEZUELA: Government Inks IT Solution Pact with Uruguay - - - - - - - - ================= A R G E N T I N A ================= BANCO HIPOTECARIO: Will Structure US$25 Million Securitization -------------------------------------------------------------- The 5% of Banco Hipotecario's US$25 million securitization will be structured, El Pais reports. Credit Agricole, KPMG and a law firm were appointed to do the job. Business News Americas reports that the securities will be offered to institutional and retail investors. Proceeds of the transaction will be used to raise the bank's liquidity and regenerate credit lines. In January, Banco Hipotecario President Miguel Piperno, told Business News that the company will be able to call for bidders for this portfolio in July after a credit risk certifier is chosen. Banco Hipotecario, a government-owned bank, offers home mortgages in Argentina. The Bank underwrites mortgage insurance and services its own and third parties' mortgage portfolios. Banco Hipotecario distributes its products through its own branch network and through commercial banks. Banco Hipotecario posted net income of 253 million pesos (US$83 million) in 2005, down 9.3% compared to the previous year due to higher expenses and lower loan volume. * * * On Jan. 25, 2006, Standard & Poor's Ratings Services assigned 'B-' foreign currency senior unsecured debt rating to Banco Hipotecario S.A.'s $100 million issuance. The issuance constituted the second tranche of BH's Series IV notes due Nov. 16, 2010, issued under the $1.2 billion senior unsecured global MTN program. With this issuance, the series (whose first tranche was rated 'B-' on Nov. 16, 2005) will total US$250 million. At the same time, Standard & Poor's affirmed its ratings on the Argentine bank's outstanding debt and its 'B- /Stable/--' counterparty credit ratings. S&P said the outlook is stable. INDUSTRIAL SODERA: Verification of Creditors Claims Ends Mar. 28 ---------------------------------------------------------------- The verification phase for the claims submitted by creditors against Industrial Sodera S.R.L. will end on March 28, 2006, Infobae reports. Industrial Sodera S.R.L. started reorganization after Santa Fe's court approved its petition. Ms. Nelida Mokdasy was appointed as trustee. Industrial Sodera S.R.L. can be reached at: Pedro Vittori 3781 Ciudad de Santa Fe Santa Fe, Argentina Ms. Nelida Mokdasy, the trustee, can be reached at: Balcarce 2132 Ciudad de Santa Fe Santa Fe, Argentina LESCOT SRL: Creditors Must Present Claims to Trustee by May 30 -------------------------------------------------------------- Lescot S.R.L.'s creditors are required to present their claims against the company to Ms. Analia Chelala, the company's trustee, on May 30, 2006. Argentine daily La Nacion relates that Buenos Aires' Court No. 3 declared the company's bankruptcy in favor of the company's creditor Ms. Marta Zamora for nonpayment of about $112,029.96 in debt. Clerk No. 6 assists the court with the proceedings. Lescot S.R.L. can be reached at: Lavalle 2330 Buenos Aires, Argentina Ms. Analia Chelala, the trustee, can be reached at: Corrientes 2335 Buenos Aires, Argentina REPAS S.A.: Concludes Reorganization After Debt Pact Approved ------------------------------------------------------------- The reorganization of Buenos Aires-based Repas S.A. has ended. Data revealed by Infobae on its Web site indicated that the process was concluded after a Buenos Aires court homologated the debt agreement signed between the company and its creditors. SCADUTO S.A.: Claims Verification Deadline Moved to March 8 ----------------------------------------------------------- The deadline for verification of creditors' claims for the Scaduto S.A. insolvency case will be on May 8, 2006, Infobae reports. Infobae relates that Mr. Juan Roque Treppo, the court-appointed trustee tasked with examining the claims, will submit the validation results as individual reports on June 22, 2006. He will also present a general report in court on Aug. 15, 2006. On Feb. 19, 2007, the company's creditors will vote on the settlement proposal prepared by the company. Infobae adds that a Buenos Aires court handles the company's reorganization case. Mr. Juan Roque Treppo, the trustee, can be reached at: Sarmiento 1183 Buenos Aires, Argentina SIDERAR: Releases Financial Results for the Year-Ended Dec. 31 -------------------------------------------------------------- Nosis reports the financial results of Siderar for the year ended Dec. 31, 2005. The company gained 1,164,914,910 pesos, 13.3% less than its earnings in 2004. The company, which Techint group has recently included in the siderurgic Ternium, together with Hylsamex and Sidor, indicated that the lower utility was basically generated by the extraordinary results and the investments on the related societies. The operative ordinary result was of 1,450,3,000 pesos, against 1,416,6 00 acquired during the same period of the previous exercise. The net income for 4,405,5,000 pesos, which means an interannual growth of the 20.2%, while costs increased 31.4% to 2,679,000. The operating generation reached 1,674,000 pesos, equivalent to the 35% of the income, when on the last exercise it reached 1,642,4,000. The financial results showed a gain of 154.8 million pesos. Lastly, the results for investments in related societies reached a gain of 254.6 million pesos, a 33.5% less than on the previous exercise. During the fourth quarter, the gain was of 232.6 million pesos, compared with October/December 2004 where it gained 487.3 million. The net patrimony of the company reached 3,692,800 pesos. SLA SISTEMAS: Trustee to Stop Accepting Claims on April 19 ---------------------------------------------------------- Ms. Liliana Rodriguez, the trustee appointed for the bankruptcy of Buenos Aires-based SLA Sistemas Logisticos Argentinos S.R.L., will no longer accept claims from the company's creditors after April 19, 2006. La Nacion relates that the company was declared bankrupt by the city's Court No. 21, with the assistance of Clerk No. 41. The court made the ruling in favor of the company's creditor, Mediterranean Shipping Company. SLA Sistemas Logisticos Argentinos S.R.L. can be reached at: Bolivar 218 Buenos Aires, Argentina Ms. Liliana Rodriguez, the trustee, can be reached at: Viamonte 2359 Buenos Aires, Argentina TALENTOS S.R.L.: Claims Verification Begins, Ends April 24 ---------------------------------------------------------- Mr. Oscar Epstein, court-appointed trustee, has started verifying claims against Talentos S.R.L. Verification is set to end on April 24, 2006. La Nacion relates that Buenos Aires' Court No. 25 declared the company's bankruptcy in favor of Mr. Hugo Dominguez, to whom the company owes debts amounting to $27,967.99. Clerk No. 49 assists the court in this case. Talentos S.R.L. can be reached at: Sarmiento 643 Buenos Aires, Argentina Mr. Oscar Epstein, the trustee, can be reached at: Viamonte 1620 Buenos Aires, Argentina TARAI S.A.: Debt Payments Halted, Moves to Reorganize ----------------------------------------------------- Court No. 22 of Buenos Aires is studying the request for reorganization submitted by local company Tarai S.A., says La Nacion. The report adds that that the company filed for reorganization following cessation of debt payments on Feb. 10, 2006. The city's Clerk No. 43 assists the court on this case. Tarai S.A. can be reached at: Rivadavia 3265 Buenos Aires, Argentina TELECOM ARGENTINA: Net Revenues Up 27% in Fiscal Year 2005 ---------------------------------------------------------- Telecom Argentina announced Thursday consolidated net income of ARS1,334 million for the fiscal year ended Dec. 31, 2005, mainly due to the positive effect of ARS1,424 million as a consequence of the closing of the debt restructuring process of Telecom Argentina. Comparatively, consolidated net loss for fiscal year 2004 was ARS666 million. Consolidated net loss for the fourth quarter of fiscal year 2005 was ARS289 million, affected by the depreciation of the Argentine Peso. Comparatively, consolidated net loss for the fourth quarter of fiscal year 2004 was ARS175 million. Earnings/loss per share and ADR for fiscal year 2005 amounted to ARS1.36 and ARS6.78, respectively. In comparison, (loss) per share and ADR for fiscal year 2004 were ARS(0.68) and ARS(3.38), respectively. Earnings/loss per share and ADR for the fourth quarter of 2005 amounted to ARS(0.29) and ARS(1.47), respectively. In comparison, (loss) per share and ADR for the fourth quarter of 2004 were ARS(0.18) and ARS(0.89), respectively. Consolidated net revenues for the fiscal year 2005 totaled ARS5,718 million, an increase of ARS1,224 million, or 27%, compared with ARS4,494 million for fiscal year 2004, mainly as a consequence of the increase in revenues generated by the cellular and Internet businesses. Operating profit before depreciation and amortization, operating profit/(loss) and net income/(loss) for fiscal year 2005 represented 35%, 9% and 23% of net sales, respectively, compared with 46%, 9% and (15%), respectively, for fiscal year 2004. Operating profit before depreciation and amortization, operating profit/(loss) and net income/(loss) for the fourth quarter of 2005 represented 31%, 9% and (17%) of net sales, respectively, compared with 44%, 15% and (14%), respectively, for the fourth quarter of 2004. The strong expansion evidenced in the cellular market, and resulted in a substantial increase in subscriber acquisition cost -- including handset subsidies, agent commissions and advertising -- eroding the operational margins. Evolution of Consolidated Net Revenues -- Fixed Telephony In fixed telephony operations, local measured service revenues increased by ARS6 million to ARS524 million. Domestic long distance aka DLD revenues increased by ARS8 million, reaching ARS449 million. Revenues in both services increased as a consequence of higher numbers of lines in service. Total traffic volume -- Local and DLD -- measured in minutes, increased by 2% when compared to fiscal year of 2004. Monthly charges increased by ARS41 million, or 6%, to ARS676 million, mainly due to the increase in customer lines that had reached 3,625,000, equivalent to an increase of 4%. It must be noted that the number of lines in service recovered by the end of 2005 to the same level it had as of December 2001, when the economic crisis began. Revenues generated by interconnection services increased by ARS44 million, or 21%, to ARS254 million, mainly due to the increases in cellular traffic transported and terminated on Telecom's fixed line network. During fiscal year 2005 revenues, international telephony activities reached ARS224 million, increasing by ARS9 million, or 4%, mainly due to higher incoming and outgoing traffic partially offset by a decrease in prices. -- Internet and Data Transmission Revenues generated by the data transmission and Internet business totaled ARS467 million, representing an increase of ARS51 million, or 12%, due to the increase in ADSL connections as a consequence of commercial policies, an enhanced portfolio of products and an increased coverage of the services. As of Dec. 31, 2005, total lines in service with ADSL connections amounted to 226,000, an increase of 98,000, or 77%. ADSL subscribers with Telecom ISP reached approximately 162,000, increasing by 100%, while Internet dial-up customers reached approximately 125,000, decreasing 18%. In addition, migration of customers to ADSL connections has provoked a decrease in dial-up traffic. -- Cellular Telephony The economic environment and the implementation of new technologies and state-of-the-art services fueled the significant growth in the cellular market, increasing penetration to over 50% of the population. This resulted in the increase of the customer base and consumption of cellular services. In this context, total cellular subscribers of Telecom Personal in Argentina reached approximately 6,150,000 as of Dec. 31, 2005, representing an increase of approximately 2,315,000 customers, or 60%. This increase in the client base was fueled by an impressive growth in the number of GSM subscribers, which currently represents 64% of the total customer base. In spite of the strong competition, the average monthly revenue per customer in Argentina increased to ARS36, or 3%, when compared with fiscal year 2004. Additionally, total cellular traffic increased by 55% when compared with the fiscal year 2004. Outgoing SMS grew from an average of 33 million per month in fiscal year 2004 to an average of 243 million per month in fiscal year 2005. Nucleo, Telecom Personal's controlled subsidiary that provides cellular services in Paraguay, generated the equivalent of ARS221 million in revenues during the fiscal year 2005, representing an increase of ARS55 million, or 33%. As of Dec. 31, 2005, Nucleo had approximately 651,000 customers, an increase of prepaid subscribers, representing 66% of the total 149,000, or 30%. Nucleo's postpaid and Cuentas Claras subscribers increased by 29%, reaching 121,000 clients, representing 19% of the customer base. Prepaid customers increased by 30%, reaching 530,000, equivalent to 81% of the customer base. GSM subscribers as of Dec. 31, 2005, represented 43% of the subscriber base. The customer base in Argentina as of Dec. 31, 2005, amounted to approximately 4,038,000 customer base, and approximately 2,112,000 postpaid subscribers, representing the remaining 34% -- including clients of Cuentas Claras a hybrid prepaid/postpaid product. These percentages were 74% and 26%, respectively, as of Dec. 31, 2004. The substantial improvement in the composition of the customer base results from Telecom Personal's strategy in Argentina of focusing in the acquisition of high-value subscribers and increasing the participation in the postpaid services, among them the Cuentas Claras product, taking into account the current demand of the cellular market. Telecom Personal revenues in Argentina, after inter-company revenue elimination, reached ARS2,797 million, increasing by ARS1,064 million, or 61%. This growth is explained by the increase in the customer base, total traffic, and sales of handsets. -- Directories Publicom sales increased by ARS7 million, or 16%, reaching ARS50 million due to higher advertising space sales and the acquisition of new customers. Customer base grew by 39% in fiscal year 2005. -- Evolution of Operating Costs The cost of services provided, administrative expenses and selling expenses for the fiscal year 2005 totaled ARS5,214 million increasing ARS1,120, or 27%. The evolution of costs is mainly related to the increase in sales, the effect of inflation in the overall cost structure and the competition in the mobile telephony business in Argentina. For example, subscriber acquisition cost -- including handset subsidies, agent commissions and advertising -- increased by ARS391 million or 157% reaching ARS640 million. Salaries and social security contributions increased by ARS92 million, or 16%, to ARS685 million, primarily due to the increase in salaries. As of Dec. 31, 2005, the headcount totaled 14,542, compared to 14,053 employees as of Dec. 31, 2004. The increase in headcount is also related to the expansion of the cellular business. Taxes reached $395 million, an increase of $94 million when compared with the fiscal year 2004, due to the impact of taxes that are calculated on the basis of revenues and higher fees paid to the regulator, the latter, in the cellular telephony activity. The allowance for doubtful accounts increased to ARS29 million, equivalent to 0.5% of net revenues. Sales commissions increased by ARS209 million, or 118%, to ARS386 million for fiscal year 2005, mainly as a consequence of the commissions paid for the acquisition of new customers and higher sales of prepaid cards, mainly in the cellular business. Costs related to advertising increased by ARS59 million, or 63%, to ARS152 million, mainly due to higher media advertising expenses for the cellular and Internet businesses. The cost of cellular handsets increased by ARS376 million, reaching ARS613 million, mainly due to the increase in handset sales related to the expansion of the subscriber base. TLRD -- termination charges in third parties cellular networks -- and roaming cost increased by ARS184 million, reaching ARS386 million, due to the increase in traffic among cellular operators. Depreciation of fixed and intangible assets decreased by ARS148 million, or 9%, to ARS1,498 million during FY05 as a consequence of the end of the amortization period of certain assets in the fixed telephony business. -- Financial and Holding Results The Financial and Holding Results resulted in a loss of ARS306 million for fiscal year 2005, compared to a loss of ARS1,172 million in fiscal year 2004. The difference can be largely attributed to the ARS865 million gain registered as net currency exchange differences. The gain was a consequence of the effect of the appreciation of the Argentine Peso against the Euro and the Dollar registered during fiscal year 2005. -- Other Expenses Other expenses (net) increased by ARS87 million, or 112%, to ARS165 million mainly as a consequence of higher provisions for lawsuits and other contingencies. Net Financial Debt (Nominal Value) -- Debt Restructuring Results On Aug. 31, 2005, Telecom Argentina successfully completed its debt restructuring process by issuing the new Notes and paying the cash consideration in exchange for the Outstanding Debt, in accordance with the terms of the Acuerdo Preventivo Extrajudicial entered into by Telecom Argentina and its financial creditors, the APE, resulting in the extinguishment of all Outstanding Debt pursuant to the APE. The company also made prepayments on the new Notes issued pursuant to the APE, further strengthening it post restructuring debt profile. As a consequence, the company has registered a profit of ARS1,424 million in the third quarter of 2005. The nominal value of Net Debt -- Loans minus Cash and Banks plus Investments -- decreased by ARS2,527 million, or 36%, to ARS4,505 million for fiscal year 2005, compared to ARS7,032 million in FY04, mainly as a consequence of debt reduction due to the successful restructuring of Telecom Argentina and the positive cash flow generation in fiscal year 2005. Telecom Personal Refinancing On Dec. 22, 2005, Telecom Personal successfully concluded the refinancing of all the debt instruments issued as a consequence of its financial restructuring process. The new debt incurred in this refinancing transaction was approximately US$381 million. The main objective of this transaction was to improve the amortization profile of the debt and eliminate certain restrictions affecting Telecom Personal's ability to continue developing its growing cellular business. Capital Expenditures Of the total amount of ARS553 million invested in fixed assets during fiscal year 2005, ARS260 million, or 47%, corresponds to fixed-line telephony, data transmission and Internet, and ARS293 million, or 53%, to the cellular business. The most significant expenditures in the cellular business are related to the development and expansion of the GSM network. Others matters On March 6, 2006, the company subscribed a Letter of Understanding with the Unidad de Renegociacion y Analisis de Contratos de Servicios Publicos aka UNIREN on behalf of the Argentine government. Among the terms agreed upon, Telecom Group committed to continue making investments in its network, the termination charge for incoming international call will be adjusted and hour bands for reduced local tariff will be reduced. In addition, the company and its indirect shareholders Telecom Italia SpA and the W de Argentina-Inversiones, S.L., assume certain commitments related to demands presented, or that could be presented in relation to the effects of Law No. 25.561 of the Public Emergency Law. The parties agree to comply and maintain the contractual conditions established in the Transfer Agreement and in the current regulation. Finally, the Executive Branch compromises its efforts to consolidate an adequate and homogeneous regulatory framework for the telecommunication industry. To that effect, a bill will be presented to the Legislative Branch. Bondholders' Meeting Consent Solicitation Aiming to eliminate certain restrictions affecting the subsidiary Telecom Personal, Telecom Argentina has summoned to Holders of notes to attend an extraordinary meeting of noteholders on March 27, 2006, in order to deal with some amendments to the covenants of the notes issued under the Indenture dated Aug. 31, 2005. The company is soliciting authorizations from holders of its notes, authorizing representatives to vote in favor of the proposed modifications. The solicitation period will expire on March 17, 2006. Telecom is the parent company of a leading telecommunications group in Argentina, where it offers, directly or through its controlled subsidiaries, local and long distance fixed-line telephony, cellular, data transmission and Internet services, among other services. Additionally, through a controlled subsidiary, the Telecom Group offers cellular services in Paraguay. The company commenced operations on Nov. 8, 1990, upon the Argentine government's transfer of the telecommunications system in the northern region. Nortel Inversora S.A., which acquired the majority of the company from the Argentine government, holds 54.74% of Telecom's common stock. Nortel is a holding company where the common stock -- approximately 68% of capital stock -- is owned by Sofora Telecomunicaciones S.A. Additionally, Nortel capital stock is comprised of preferred shares held by minority shareholders. On Dec. 31, 2005, Telecom had 984,380,978 shares outstanding. Non-financial data unaudited As of December 31 2005 2004 Change % Change Consolidated net revenues (in ARS million) 5,718 4,494 1,224 27% Fixed Telephony 2,871 2,718 153 6% Cellular 2,797 1,733 1,064 61% Directories edition 50 43 7 16% Operating Profit before D&A (in ARS million) 2,002 2,046 (44) -2% Operating Profit (in ARS million) 504 400 104 26% Net income/(Loss) (in ARS million) 1,334 (666) 2,000 -300% Shareholder's equity (in ARS milllion) 1,836 502 1,334 266% Net financial debt -- Nominal value (in ARS million) 4,505 7,032 (2,527) -36% CAPEX (in ARS million) 553 425 128 30% Lines in service (Fixed lines - in thousands) 3,950 3,790 160 4% Cellular customers (in thousands) 6,801 4,337 2,464 57% Telecom Personal 6,150 3,835 2,315 60% Nucleo (Paraguay) 651 502 149 30% ADSL Total lines (in thousands) 226 128 98 77% Arnet subscribers (in thousands) 287 233 54 23% Dial-up and others 125 152 (27) -18% ADSL 162 81 81 100% Fixed line traffic (in MM minutes, Internet Traffic not included) 16,949 16,642 307 2% Incoming/Outgoing cellular traffic in Argentina (in MM minutes) 5,578 3,602 1,976 55% Average Revenue per user (ARPU) Fixed Telephony/voice (in ARS) 40 40 0 0% Average Revenue per user (ARPU) Cellular Telephony Arg. (in ARS) 36 35 1 3% Headquartered in Buenos Aires, Telecom Argentina S.A. -- http://www.telecom.com.ar/index-flash.html-- is the fixed-line operator for local and long-distance services in northern and southern Argentina. It also provides cellular and PCS phone services in Argentina, as well as in Paraguay through a 68% stake in Nocleo. France Telecom formerly controlled the company through its Nortel Inversora venture with Telecom Italia. France Telecom sold most of its stake in 2003 to the Werthein Group, an Argentine agricultural concern owned in part by vice chairman Gerardo Werthein. Nortel continues to be Telecom Argentina's largest shareholder with a 55% stake. Nortel is owned by Sofora, a consortium owned by Telecom Italia (50%), the Werthein Group (48%), and France Telecom (2%). * * * Telecom Argentina's $64,128,000 and $54,124,000 notes due Oct. 15, 2014, carry Standard & Poor's and Fitch's B- ratings. VICENTE TRAPANI: Individual Reports Due on Aug. 4 ------------------------------------------------- The individual reports on the validated claims of Vicente Trapani S.A.'s creditors are due in court on Aug. 4, 2006, Infobae reports. A general report, which will contain the company's audited business records as well as a summary of events pertaining to the liquidation, will be presented in court on Sep. 18, 2006. An informative assembly is scheduled on May 18 next year. Vicente Trapani S.A. started reorganization after a Buenos Aires court approved its petition to reorganize. Vicente Trapani S.A., the trustee, can be reached at: San Miguel de Tucuman Tucuman, Argentina =============== B A R B A D O S =============== DIGICEL: Hopes to Better Market Position with Cingular Purchase --------------------------------------------------------------- Digicel Limited sees opportunity for more growth and is planning to expand its operations in new areas, the Caribbean Broadcasting Corporation relates. Digicel has recently acquired Cingular Wireless and hopes to integrate the two operations in six to eight weeks time in order to strengthen its position in Barbados' mobile phone market. Chief Executive Officer, Kevin White, says that the full integration of the two companies within the next six to eight weeks will provide customers with wider coverage and competitive rates, BBC relates. Mobile phone rates in the nation have fallen by about 60% in the last two years. There has been about a 20% growth in the industry the last 12 months, according to BBC. Digicel Limited is the largest provider of wireless telecommunications in the Caribbean with over 1.7 million subscribers and LTM revenues of $477 million. Digicel's $300 million 9-1/4% senior notes due Sept. 1, 2012, is rated B3 by Moody's and B by Fitch. =========== B E L I Z E =========== BELIZE: S&P Assigns CCC- Rating on US$283 Million Debt ------------------------------------------------------ Standard & Poor's Ratings Services assigned a 'CCC-' credit rating to Belize's US$283 million debt issuance. Along with two issuers from Europe particularly in the UK and one issuer from Canada, Latin America's Belize was featured on S&P's weakest-links list. As of March 9, 2006, a total of 17 weakest links entities remained vulnerable to default on rated debt worth US$5.4 billion, one more than a month earlier but lower than the average of 20 entities recorded over full-year 2005. These weakest-link issuers are defined as issuers rated 'CCC' or lower with either a negative outlook or ratings on CreditWatch with negative implications. Negative outlooks and CreditWatch placements serve as good leading indicators of actual downgrades. A long-term study published by Standard & Poor's Global Fixed Income Research corroborates this unequivocally. CreditWatch status and outlooks are strong predictors of ratings behavior, both in the aggregate as well as when broken out by rating category, region, or sector. For example, of all ratings that are 'CCC' or lower and are on CreditWatch with negative implications, 54% are lowered. =========== B R A Z I L =========== BANCO PANAMERICANO: Net Profits Climbed 71.7% in 2005 ----------------------------------------------------- Banco PanAmericano's net profits climbed 71.7% in 2005, Business News Americas reports. The year 2005 resulted to about BRL72.1 million in net profits. According to PanAmericano CFO Wilson de Aro, the boost in the profits was due to the bank's growing loan portfolio, which increased 37.3% to BRL3.42 billion for the year. PanAmericano disclosed in its annual report that it entered an accord with another Brazilian bank, Banco Bradesco, in 2005 and handed over all consigned credit operations. Business News relates that the company also operates credit card ventures with Banco Itau, Unibanco and Banco Votorantim. Minus the partnerships and agreements mentioned, PanAmericano's loan portfolio reached BRL1.84 billion on the year -- a 9.5% growth, the bank said. The bank, states Business News, ended the year with 11.7 million credit cards in circulation -- both Visa and MasterCard. This means a boost of about 24.5% from end-2004. Expenses to cover credit risks were up 40.9%, reaching BRL276 million. * * * As reported by Troubled Company Reporter on Feb. 3, 2006, Standard & Poor's Ratings Services assigned its 'B/B' corporate credit rating to Banco PanAmericano S.A. The outlook is stable. At the same time, Standard & Poor's assigned its 'B' senior unsecured debt rating to the company's proposed $50 million bonds to be issued under the $300 million MTN program with three years' tenor. BNDES: Opto Eletronica Receives BRL6.7 Million Financing -------------------------------------------------------- Opto Eletronica S/A will be the first company to receive BNDES financing for the new credit line created to stimulate the production at industrial scale of products that aggregate technological innovations. The financing of the bank will be BRL6.7 million -- equivalent to 55% of the investments that will be carried out by the company to implant a new production line of vitreous anaspheric lenses -- with unprecedented technology in the country and creation of a generation of products that will utilize the new lenses. Currently, Opto is known for the production of high technology optical equipment, based on aspheric lenses. The anaspheric lenses are more advanced, as they have surfaces with no constant curvature ray and allow clearer images. Opto was established in 1985 by a group of professors, researchers and technicians of Instituto de Fisica of the campus of Universidade de Sao Paulo in the city of Sao Carlos. With 100% national control, Opto produces medical-ophthalmic equipment -- in addition to optical system of industrial use -- with sales in the internal market and also in exports to the USA, Latin America and Europe. The project that will receive BNDES financing forecasts machines and equipment imports that have no equivalent in Brazil, for the production of anaspheric lenses, the expansion of the company's constructed area, as well as researches and development of products based on the new lenses. For such, there will be hiring of new professionals and competence in the use of techniques and high precision machines. With the knowledge of the new technology, Opto Eletronica S/A will have more competitiveness regarding its international competitors. For Brazil, the development of the project has strategic interests, providing more exports with high added value and also internalizing advanced technology for the use in medical and odontological areas, in addition to employment in the defense area. The credit line Innovation Production has financial cost composed only by the Long Term Interest Rate -- currently 9% per year -- without the collection of remuneration for the Bank, plus the assessment of the risk spread. * * * As reported by Troubled Company Reporter on March 3, 2006, Standard & Poor's Ratings Services raised its foreign currency counterparty credit rating on Banco Nacional de Desenvolvimento Economico e Social S.A. aka BNDES to 'BB' with a stable outlook from 'BB-' with a positive outlook. The company's local currency credit rating was also shifted to 'BB+' with a stable outlook from 'BB' with a positive outlook. BRAZIL LETRAS: S&P Assigns BB+ Currency Long-term Debt Rating ------------------------------------------------------------- Standard & Poor's Ratings Services raised its local currency long-term debt rating on Brazil Letras Financeiras do Tesouro to 'BB+' from 'BB'. Meanwhile, the foreign and local currency ratings on government- supported banks were raised to 'BB' and 'BB+', respectively, moving in tandem with the sovereign credit rating on Brazil. S&P raised earlier its foreign-currency rating on the country to 'BB' from 'BB-' and its local-currency rating to 'BB+' from 'BB'. The outlook on the sovereign ratings is stable. "All changes in foreign currency and national scale credit ratings reflect the raising of the foreign-currency sovereign rating on Brazil," S&P's credit analyst Laura Feinland Katz had said. CVRD: May be Willing to Lower Bar on Iron-Ore Prices ---------------------------------------------------- Geraldo Samor, writing for the Wall Street Journal, relates that Brazil's CVRD aka Companhia Vale do Rio Doce, the world's largest iron-ore producer, said it is taking a "long-term view" toward ongoing price talks with steelmakers, a sign that it may be willing to accept an increase on the low end of analysts' expectations. "We are not being opportunistic," Roger Agnelli, chief executive of CVRD, was quoted by the Journal. "When the steel industry is well, we are well. When it's weak, we're weak." Iron-ore companies are calling for a 20% increase or more in contract prices for 2006, but steelmakers are resisting. Rising iron-ore prices have contributed to higher steel prices for makers of everything from appliances to automobiles, according to the Journal. Higher iron-ore prices have helped pushed CVRD's bottom line. Fiscal-year 2005 net profit rose 88% to $4.8 billion from $2.6 billion in 2004. Gross revenue surged 58% to $13.4 billion. This year, the Journal relates, steelmakers have added clout because the Chinese government has assured that Chinese steelmakers follow a single line on price negotiations, after years of following Japan's lead. In February, Beijing said it will only allow one company, Shanghai Baosteel Group Corp., from negotiating with global iron-ore companies. China is seen as building a cartel of buyers but won't be able to impose a price that isn't reflective of market conditions, the Journal relates. According to the Journal, mining stocks worldwide sold off on concern about China's role, rising U.S. interest rates and a belief that iron-ore prices may have peaked. The start of the Japanese fiscal year, which begins April 1, is usually seen as an unofficial deadline for negotiations because Asian steelmakers want to be able to start their business year knowing what costs will be. Headquartered in Rio de Janeiro, Brazil, Companhia Vale do Rio Doce -- http://www.cvrd.com.br/-- engages primarily in mining and logistics businesses. It engages in iron ore mining, pellet production, manganese ore mining, and ferroalloy production, as well as in the production of nonferrous minerals, such as kaolin, potash, copper, and gold. * * * On Jan. 5, 2006, Fitch Ratings assigned a long-term foreign currency rating of 'BB' to Vale Overseas Limited's proposed US$300 million issuance due 2016. Vale Overseas is a wholly owned subsidiary of Companhia Vale do Rio Doce, a large diversified mining company located in Brazil. The notes are unsecured obligations of Vale Overseas and are unconditionally guaranteed by CVRD. The obligation to guarantee the notes rank pari passu with all of CVRD's other unsecured and unsubordinated debt obligations. Fitch expects the proceeds of this issuance to be used for general corporate purposes and primarily to pay down US$300 million of Vale Overseas' 9.0% guaranteed notes due 2013. Fitch also maintains these ratings for CVRD and CVRD Finance Ltd., a wholly owned subsidiary of CVRD: -- CVRD foreign currency rating: 'BB', Outlook Positive; -- CVRD local currency rating: 'BBB' Outlook Stable; -- CVRD national scale rating: 'AAA(bra)', Outlook Stable; -- CVRD Finance Ltd.: series 2000-1 and series 2000-3: 'BBB'; -- CVRD Finance Ltd., series 2000-2 and series 2003-1: 'AAA'. TV GLOBO: Inks Video Images Distribution Partnership with Claro --------------------------------------------------------------- Brazilian mobile operator Claro has partnered with local broadcaster TV Globo Ltda. to offer its clients soccer related video images, according to a report from Valor Economico. Claro, a subsidiary of Mexican Telmex will offer videos of goals from key Sao Paulo championship football matches. The images can be copied from Claro's internet portal and cost 1.10 reals (US$0.50) each, Economico relates. * * * On Oct. 19, 2005, Standard & Poor's Rating Services raised its corporate credit ratings on Brazilian media companies Globopar S.A. and TV Globo Ltda. to 'B+' from 'CCC-'. The ratings were removed from CreditWatch Positive, where they were placed on July 21, 2005. S&P said the outlook is stable. USIMINAS: Posts Net Profit of BRL3.9 Billion in 2005 ---------------------------------------------------- USIMINAS aka Usinas Siderurgicas de Minas Gerais S.A. reported net profit of BRL3.9 billion in 2005, the highest so far in the company's history. The company's Chief Executive Officer, Rinaldo Campos Soares, said: "For the Usiminas System, 2005 is a landmark in the company's history as a year of great challenges and major victories. The results herein presented are fruit of strategic decision and of integrated, perseverant work, which confirms our capability of overcoming obstacles in a year marked by high interest rates over the entire period, slowdown in the level of domestic economic activity and tepid growth of the country. "On the external front, we faced oscillations in the international steel market, which suffered from high inventory levels of steel products -- similar to what occurred in the domestic market -- imbalance of supply and demand and, as a consequence, lower prices, putting pressure on company margins. "In spite of the above, such occurrences did not intimidate us and our performance made it possible for us to reach record net profit of R$ 3.9 billion, the highest in our history. The focus on value creation also produced results for our shareholders -- BRL1.1 billion are being earmarked for payment of dividends. Our actions were not just limited to the influence of the operational excellence of the mills. Participation in the creation of Ternium is an example of this, because it expands the solid partnership Usiminas has with the Techint Group and strengthens even further our position in Latin America. "The excellent current financial situation allied to our strategic vision allows us to seek new challenges. Thus, the new investment cycle we have already communicated has a focus on two fronts -- quality and improvement of the product mix of both mills with a view to maintain our local market leadership taking into account the potential future demand and the internationalization of the company. "For all of this, we may say that these results do not surprise us. They result from long-range strategic planning and provide benefits to everyone participating in this System integrated with technology and quality, strengthened in its competitive position and domestic market leadership. This increasingly evidences concrete commitment to value creation for its shareholders with sustainable growth and social responsibility." Highlights Chg. Var. BRL million 4Q 4Q 3Q 4Q05/ 2005 2004 2005/ 2005 2004 2005 4Q04 2004 Total Sales Volume (000 t) 1,981 2,170 1,769 -9% 7,348 8,062 -9% Net Revenues 2,969 3,809 3,126 -22% 13,041 12,243 7% Gross Profit 912 1,752 1,221 -48% 5,415 5,606 -3% Operating Result (EBIT) (a) 743 1,589 1,098 -53% 4,760 4,983 -4% Financial Result (162) (81) (171) 99% (666) (769) -13% Net Income 1,325 1,127 782 18% 3,918 3,019 30% EBITDA (b) 910 1,816 1,265 -50% 5,525 5,666 -2% EBITDA (R$/t) 459 837 715 -45% 752 703 7% Total Assets 18,195 16,967 16,981 7% 18,195 16,967 7% Net Debt 2,012 3,486 2,243 -42% 2,012 3,486 -42% Stockholders' Equity 8,753 5,949 7,994 47% 8,753 5,949 47% (a) Earnings before interest, tax and participations. (b) Earnings before interest, taxes, depreciation, amortization and participations. * * * As reported by Troubled Company Reporter on March 2, 2006, Standard & Poor's Ratings Services placed the 'BB' corporate credit ratings of Usinas Siderurgicas de Minas Gerais S.A. aka Usiminas on CreditWatch with positive implications following the raising of the foreign and local currency sovereign credit ratings on Brazil. =========================== C A Y M A N I S L A N D S =========================== DIAMOND INVESTMENT: Sets March 20 Claims Filing Deadline -------------------------------------------------------- Creditors of Diamond Investment Services Limited are required to submit particulars of their debts or claims on or before March 20, 2006, to Mr. David Dyer, the company's appointed liquidators. Failure to do so will exclude them from receiving the benefit of any distribution that the company will make. Diamond Investment Services Limited started liquidating assets on February 10, 2006. The liquidator can be reached at: Mr. David Dyer Deutsche Bank (Cayman) Limited P.O. Box 1984 George Town Grand Cayman, Cayman Islands FEROX CREDIT: Creditors Must File Proofs of Claim by Mar. 23 ------------------------------------------------------------ Creditors of Ferox Credit Master Fund Limited are required to submit particulars of their debts or claims on or before March 23, 2006, to Mr. Johann Le Roux and Mr. Jon Roney, the company's appointed liquidators. Failure to do so will exclude them from receiving the benefit of any distribution that the company will make. Ferox Credit Master Fund Limited started liquidating assets on February 6, 2006. Creditors must send their full names, addresses, descriptions, the full particulars of their debts or claims and the names and addresses of their solicitors (if any) to the liquidator. The liquidators can be reached at: Mr. Johann Le Roux and Mr. Jon Roney Maples Finance Limited P.O. Box 1093 George Town Grand Cayman, Cayman Islands FK CAPITAL: Sets March 20 Deadline for Creditors to File Claims --------------------------------------------------------------- Creditors of FK Capital are required to submit particulars of their debts or claims on or before March 20, 2006, to Mr. Mark Wanless and Mr. Liam Jones, the company's appointed liquidators. Failure to do so will exclude them from receiving the benefit of any distribution that the company will make. FK Capital started liquidating assets on February 8, 2006. The liquidators can be reached at: Maples Finance Jersey Limited, 2nd Floor Le Masurier House, La Rue Le Masurier St. Helier, Jersey JE2 4YE HOTEL FINANCE: Creditors Claim Filing Deadline Is Today ------------------------------------------------------- Creditors of Hotel Finance Limited, which is being voluntarily wound up, are required on or before March 13, 2006, to present proofs of claim to Mr. Ica Eden, the company's liquidator. Creditors must send their full names, addresses, descriptions, the full particulars of their debts or claims and the names and addresses of their solicitors (if any) to the liquidator. Ica Eden, the liquidator can be reached at: Westport Services Ltd. P.O. Box 1111 Grand Cayman, Cayman Islands Tel: 345 949 5122 Fax: 345 949 7920 HUTCHISON WHAMPOA: Sets Mar. 20 Deadline for Claims Filing ---------------------------------------------------------- Creditors of Hutchison Whampoa Finance Limited, which is being voluntarily wound up, are required on or before March 20, 2006, to present proofs of claim to Mr. Ying Hing Chiu and Ms. Diana Chung Miu Yin, the company's liquidator. Hutchison Whampoa Finance Limited started liquidating assets on January 26, 2006. The liquidators can be reached at: Level 28, Three Pacific Place 1 Queen's Road East, Hong Kong =============== C O L O M B I A =============== BANCO DE BOGOTA: Moody's Assigns D+ Financial Strength Rating ------------------------------------------------------------- Moody's Investors Service assigned a 'Ba3' long-term foreign currency deposit rating on Banco de Bogota and changed the outlook to stable from negative. Moody's also assigned a 'D+' bank financial strength rating on the company, while the outlook remained stable. Moody's changed to stable from negative the outlook on the foreign currency deposit ratings assigned to the three banks it rates in Colombia. This action is the direct result of Moody's decision to change the outlook on Colombia's foreign currency country ceilings for bonds and deposits to stable from negative. This action does not affect the Colombian banks' bank financial strength ratings aka BFSR. Moody's indicated that the outlook for Banco de Bogota's BFSR of D+ changed to stable from stable (m), reflecting the alignment of outlooks between the bank's BFSR and the foreign currency deposit ratings. BANCOLOMBIA S.A.: Moody's Assigns Ba3 Foreign Currency Rating ------------------------------------------------------------- Moody's Investors Service assigned a 'Ba3' rating on Bancolombia S.A.'s long-term foreign currency deposit and changed the outlook to stable from negative. Moody's changed to stable from negative the outlook on the foreign currency deposit ratings assigned to the three banks it rates in Colombia. This action is the direct result of Moody's decision to change the outlook on Colombia's foreign currency country ceilings for bonds and deposits to stable from negative. This action does not affect the Colombian banks' bank financial strength ratings aka BFSR. Moody's noted that Bancolombia's BFSR of D remains under review for possible upgrade. BBVA COLOMBIA: Moody's Assigns Ba3 Foreign Currency Rating ---------------------------------------------------------- Moody's Investors Service assigned a 'Ba3' long-term foreign currency deposit rating on BBVA Colombia. The outlook was changed to stable from negative. Moody's has changed to stable from negative the outlook on the foreign currency deposit ratings assigned to the three banks it rates in Colombia. This action is the direct result of Moody's decision to change the outlook on Colombia's foreign currency country ceilings for bonds and deposits to stable from negative. This action does not affect the Colombian banks' bank financial strength ratings aka BFSR. Moody's noted that the outlook for BBVA Colombia's BFSR of D remains positive (m). * BOGOTA: Moody's Assigns Ba2 Currency Rating, Outlook Stable ------------------------------------------------------------- Moody's Investors Service has changed a 'Ba2' foreign currency bond rating for Bogota, Distrito Capital and changed the outlook to stable from negative. The action followed a similar change made earlier on Thursday to Colombia's foreign currency country ceiling for bonds. Concurrently, Moody's affirms the stable outlook on Bogota's 'Baa3' domestic currency rating. * COLOMBIA: Moody's Assigns Ba2 Foreign Currency Rating ------------------------------------------------------- Moody's Investors Service has changed the outlook on Colombia's 'Ba2' foreign currency country ceiling for bonds and 'Ba3' foreign currency country ceiling for deposits to stable from negative. The outlook for the government's 'Ba2' foreign currency bond rating is also changed to stable. At the same time, Moody's has placed the government's 'Baa2' domestic currency bond rating on review for possible downgrade. The Local Currency Guideline and the Local Currency Deposit Ceiling remain unchanged at 'A1'. Moody's said that the move to stable on the foreign currency ratings was supported by the significant improvement in the country's external finances, including a steep decline in the ratios of external debt to current account receipts and to GDP. In addition, the government's active debt management policies have reduced the amount of government debt denominated in foreign currencies. These factors have lessened the country's vulnerability to external shocks and reduced the burden of servicing the foreign-currency debt, according to Moody's. The review of the domestic currency bond rating was prompted primarily by Moody's view that the foreign and domestic currency ratings should be more closely aligned. The gap between the two ratings is high in the case of Colombia. In addition, however, the rating agency said that the trajectory of central government finance over the next few years indicated somewhat larger deficits and higher ratios of central government debt to GDP. Thus, although the consolidated public sector moved to a balanced position in 2005, central government debt may continue to rise in the future. As a result, the review will focus on the outlook for the central government deficit and its financing over the medium term. Moody's noted that Colombia's economy strengthened in recent years, with strong nominal export growth and rising domestic demand. In addition, improved macroeconomic management brought about increased investment, rising domestic demand, and lower inflation and interest rates. All these factors combined to strengthen the medium-term outlook, according to the rating agency. Nonetheless, Moody's said, risks remain, as these improvements have come at a time of very high prices for Colombia's exports and ample liquidity in global financial markets. A change in these conditions over the medium term could affect Colombia's external financial position. ============= E C U A D O R ============= * ECUADOR: Oil Output Plummets Due to Strike, Results in Losses --------------------------------------------------------------- Oil production in Ecuador decreased due to protest for payment of three months back wages by oil workers. Oil revenues, which represent about 43% of the national budget, were affected by the production slowdown. Normally, production of Ecuador's state and private companies total about 535,000 barrels of crude daily. The strike could affect oil export, said state oil firm Petroecuador, chief money-earner and the source of 35% of government's yearly spending. Petroecuador's output has dropped 72% since the strike began. Output report on Thursday revealed a production of about 55,696 barrels per day, while production before the strike was about 200,000 barrels a day. On Wednesday Petroecuador reported lost production of 197,545 barrels, costing the company $9.8 million. Its E&P arm Petroproduccion also missed about 156,992 barrels of oil production -- equivalent to about US$8 million in lost revenue. The strike halted the company's production on Monday. The strike started with job walkouts on Monday, which was followed by oil installations takeover on the Auca field in Orellana on Tuesday. Operations in 291 wells in Petroproduccion's five oil fields, Sacha, Auca, Shushufindi, Libertador and Lago Agrio, have ceased. Petroecuador technicians tried to reactivate several wells to no avail, due to lack of personnel. According to Petroecuador, the technicians said some facility damage has been discovered. Unionists alongside professors at the state-funded university aired demands for back payments and higher payment during the two-day strike. While professors asked for higher pay, striking oil workers demanded payment of three months back wages, direct hiring by Petroecuador and reforms to the company's budget law. The workers were also pushing for the payment of the company's US$51 million debt to oil service companies. Petroecuador is behind in its payments to private companies, which are essential to keeping the oil flowing. The government has withheld payments to the state oil company, demanding improvement in its accounting's transparency. As a result, a state of emergency has been declared in Orellana, Sucumbios and Napo, three of the country's oil-producing regions. It was the second time this year that the government has had taken such measures. Four demonstration leaders were arrested. According to a report by Channel 4 television, the oil workers federation president, Remigio Sornoza, was detained by police and handed over to military authorities, charged for attacking oil production. Fernando Gonzalez, the new president of Petroecuador, met with workers on Tuesday to explain his perspective on the oil industry. Gonzalez said it was necessary for the government to develop an oil policy that would enable the country to take full advantage of its hydrocarbons resources, improving the standard of living for all Ecuadorians. Private participation in the oil industry is important but on equitable terms so that both parties receive a fair share of profits, said Gonzalez. The state oil head revealed to the workers that he plans to submit to congress a bill that would permit the company to recover its autonomy from the finance ministry. David Medranda, another strike leader, said that talks between the government and the workers continue. Business activity was normal in Ecuador's main urban centers. In Quito operations went on, although there were still strikers in the streets as well as in the immediate vicinity of protests, where many stores and offices closed. * ECUADOR: Strike Put to End, Oil Production Continues ------------------------------------------------------ The 48-hour strike carried out by Ecuadorian oil workers ended on Wednesday, Business News Americas reports. Oil operations have resumed. In a statement, state oil company Petroecuador said that armed forces cleared access roads to the main oil producing fields, allowing production to continue. Business News states that the first areas where production was partially restored were the fields of Lago Agrio, Sacha, Libertador and Shushufindi. On Wednesday night, these fields were producing at a rate of 96,360 barrels a day (b/d), an improvement from the 40,600b/d reported on Wednesday morning. Petroproduccion, state oil company Petroecuador's E&P arm, has also restarted operations, according to Business News. Petroproduccion ceased production on Monday at around 12:00 a.m. when workers took over the oil installations on the Auca field. Business News relates that Petroproduccion technicians will inspect the fields where operations halted for any possible damage that would prevent resumption of certain operations. Petroproduccion Vice President Jaime Crow told Business News that production will reach the normal 200,000b/d rate once damaged equipment is replaced. Crow was also positive that by March 13, total production levels would reach 180,000- 190,000b/d. Oil production in Ecuador had decreased due to protest for payment of three months back wages by oil workers. Oil revenues, which represent about 43% of the national budget, were affected by the production slowdown. Normally, production of Ecuador's state and private companies total about 535,000 barrels of crude daily. The strike could affect oil export, according to Petroecuador -- chief money-earner and the source of 35% of government's yearly spending. In the state oil firm alone, output dropped 72% after the strike began. Output report on Thursday revealed a production of about 55,696 barrels per day, while production before the strike was about 200,000 barrels a day. By Wednesday Petroecuador reported lost production of 197,545 barrels, costing the company $9.8 million. Its E&P arm Petroproduccion also missed about 156,992 barrels of oil production, equivalent to about US$8 million in lost revenue. The strike halted the company's production on Monday. The strike started with job walkouts on Monday, which was followed by oil installations takeover on the Auca field in Orellana on Tuesday. A state of emergency was declared in Orellana, Sucumbios and Napo, three of the country's oil-producing regions. It was the second time this year that the government took such measures. ===================== E L S A L V A D O R ===================== BANISTMO: Posts 10% Increase in Earnings in 2005 ------------------------------------------------ Primer Banco del Istmo aka Banistmo's saw a 10% boost in its earnings last year, Business News Americas reports. The company earned US$115 million in 2005 while in 2004 it acquired only about US$104. The company said in its website that the increase was due to strong revenues. Business News states that net interest income climbed 29% to US$257 million, net commission income reached US$33.6 million -- a 30% increase -- and trading gains were up 38% to US$59.4 million. This is despite an increase of 48% in the general and administrative expenses -- US$178 million. There was a 12% growth in assets at year-end, arriving at US$6.96 billion, according to Business News. Net loans rose 16% to US$4.49 billion. Total retail and wholesale deposits increased 10% to US$4.34 billion. Business News relates that Banistmo and its subsidiaries reorganized under holding company Grupo Banistmo in 2005. The group will serve as an acquisition medium for further expansion in Central America. * * * As previously reported Nov. 9, 2005, Moody's Investors Service affirmed the D+ financial strength rating and Ba1 foreign currency deposit rating of Primer Banco del Istmo, S.A. The affirmation follows the announcement that Banistmo's shareholder, Grupo Banistmo, S.A., has agreed to purchase between 51% and 60% of Inversiones Financieras Bancosal S.A., the owner of Banco Salvadoreno, El Salvador's third largest bank. =========== M E X I C O =========== RCN CORP: Sells 48.93% of Mexican Units to Pay Debt --------------------------------------------------- RCN Corporation (NASDAQ: RCNI), announced that it has reached an agreement to sell its 48.93% interests in Megacable, S.A. de C.V. and Megacable Communicaciones de Mexico S.A. for net after- tax proceeds of $300 million in cash. Teleholding, S.A. de C.V., a Mexican entity comprised of the current shareholders of Megacable and MCM, will purchase the interests. The boards of directors of both companies have approved this transaction. RCN will apply the proceeds from the sale to repay debt, as required under its various debt agreements, resulting in nearly $30 million of annualized interest savings. On a pro forma basis (as of September 30, 2005), after these repayments, and after adjusting for the previously announced acquisition of Consolidated Edison Communications Holding Company, Inc., RCN's total debt outstanding will be reduced to approximately $200 million, and net debt will be reduced to approximately $80 million. "The sale of our stake in Megacable and MCM represents an important milestone for RCN," stated James F. Mooney, Chairman of RCN's board of directors. "By unlocking the value of these assets, we can significantly reduce our debt and enhance our financial and strategic flexibility." Peter Aquino, President and Chief Executive Officer of RCN added, "This win-win deal represents a timely opportunity to realize strong asset value, and enables us to now focus all of our attention on RCN's core business in the U.S. We continue to execute well on all facets of our strategic plan, including the pursuit of selected acquisition and divestiture opportunities." Mike Sicoli, Chief Financial Officer of RCN, stated, "We worked closely with our Mexican partners to structure a transaction that was tax efficient for RCN. Taking into account the tax structure and related indemnities that we received in the transaction, we estimate the sale to be worth approximately $350 million to RCN on a pre-tax basis. This transaction serves as a catalyst for us to realize an immediate and dramatic improvement in our credit profile by significantly reducing our leverage and positioning us to generate positive free cash flow in 2006, well ahead of schedule." The transaction is expected to close in March 2006. The sale is conditioned upon certain regulatory filings to be made by Teleholding, but is not subject to the receipt of any regulatory approvals or consents. Deutsche Bank Securities, Inc. acted as financial advisors, and Milbank, Tweed, Hadley & McCloy LLP acted as legal advisors to RCN in connection with the transaction. RCN will report fourth quarter and full-year 2005 results on Wednesday, March 15, 2006 and will provide a 2006 financial outlook at that time. About RCN Corp. Headquartered in Princeton, New Jersey, RCN Corporation -- http://www.rcn.com-- is one of the largest facilities-based competitive providers of cable, high-speed internet and phone services delivered over its own fiber-optic local network to residential customers in the most densely populated markets in the U.S. The Company, along with its affiliates, filed for chapter 11 protection (Bankr. S.D.N.Y. Case No. 04-13638) on May 27, 2004. The Debtors' confirmed chapter 11 Plan took effect on December 21, 2004. Frederick D. Morris, Esq., and Jay M. Goffman, Esq., at Skadden Arps Slate Meagher & Flom LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $1,486,782,000 in assets and $1,820,323,000 in liabilities. The Debtor consummated its plan of reorganization and formally emerged from Chapter 11 protection. The plan, confirmed on Dec. 8, 2004, by Judge Robert Drain of the Bankruptcy Court in New York, converted approximately $1.2 billion in unsecured obligations into 100% of RCN's new equity, and eliminated approximately $1.8 billion in preferred share obligations. UNIDAS: S&P Assigns B Currency Corporate Credit Ratings ------------------------------------------------------- Standard & Poor's Ratings Services assigned 'B' long-term local and foreign currency corporate credit ratings on Industrias Unidas S.A. de C.V. aka IUSA. The outlook is stable. The ratings assigned to Industrias Unidas S.A. de C.V. reflect the inherent cyclicality of the construction industry, the company's high leverage, commodity price volatility, competitive pressure on core products and markets, tight liquidity, and low operational margins. These factors are partially offset by the company's leading market positions in Mexico and the US, product mix, and some geographic diversification in the manufacturing and distribution of copper tubing, copper-alloy products, valves, controls, watt-hour meters, wire and cable, and electrical devices. IUSA is one of Mexico's largest diversified industrial companies, offering a large variety of products through integrated manufacturing and distribution operations located principally in Mexico and the US. The company's operations are conducted by seven principal business groups: copper tubing, wire and cable, copper alloys, electrical products, watt-hour meters, valves and controls, and diversified assets group. IUSA's performance in the second half of the year was strong. Nevertheless, it was not enough to offset completely the weakness of the group's first-half results. During 2005, IUSA posted EBITDA interest coverage, total debt/EBITDA, and FFO/total debt ratios of 2.0 times, 3.8 times and 5.4%, respectively. Including working capital, facilities total debt-to-EBITDA and FFO/total debt ratios stand at about 5.1 times and 4.0%, respectively. Notwithstanding the improvements in profitability due to a more disciplined commercial strategy, pricing pressure, particularly in the US, and higher copper prices -- that have led to margin pressures in the past and demand higher working capital investments -- could lead to renewed weakness in the issuer's operating performance. IUSA's liquidity is tight. As of Dec. 31, 2005, the company had about $22 million in unrestricted cash and equivalents, which compares unfavorably to debt maturities of $144 million -- including about $56 million under its euro CP program -- during the next 12 months. Nevertheless, the group refinancing efforts, and to a lesser extent its cash balances, have enabled it to meet debt maturities as they come due. In light of what was stated, and the group's commitment to maintaining a disciplined commercial strategy, we expect that it will continue to meet its debt maturities and obtain waivers under its credit facilities. Free operating cash flow generation has historically been weak, as evidenced by the negative free operating cash flow posted in 2005, which highlights the need to obtain long-term financing to improve the company's debt maturity schedule to reduce its refinancing risk, particularly of its CP program, and to free liens, which also limits the company's liquidity. S&P also anticipates that the company will seek to resume its refinancing plans. The stable outlook reflects our expectations that IUSA's refinancing efforts, and to a lesser extent its cash balance, coupled with its commitment to maintain a disciplined commercial strategy, should allow it to continue to meet its debt maturities as they come due. Nevertheless, renewed weakness in the group's operating performance could lead to further weakness in liquidity and a negative rating action. XIGNUX S.A.: S&P Assigns B+ Rating on Notes Due 2009 ---------------------------------------------------- Standard & Poor's Ratings Services assigned a 'B+' rating on Xignux S.A. de C.V.'s notes due 2009. The ratings on Xignux reflect its high leverage and the cyclical nature of most of its end markets, particularly the construction and automotive industries. The ratings also consider Xignux's significant market share positions, product diversity, and vertical integration. Its emphasis on high quality has attracted world-recognized joint-venture partners, providing Xignux, a diversified holding company, with low-cost access to state-of-the-art technology and enhancement of its export possibilities. The rating on Xignux's notes reflects the structural subordination of the issue relative to the company's priority liabilities. Despite the debt at the holding company being guaranteed by some of the subholding and operating subsidiaries, the proportion of priority liabilities -- for example, current and long-term liabilities as well as short- and long-term debt at the operating-company level -- relative to consolidated total assets is significant, more than 15%, leading to a possible low residual claim for Xignux's holding-company creditors. Xignux is a diversified holding company. Its subsidiaries manufacture a variety of products, mostly for industrial markets. The company sells auto parts, food, cable, foundry, power, and distribution transformers. Over the next two years, Xignux is expected to focus its efforts on increasing value-added products and services to increase its market share in the cable & wire and power transformers business. During the same period, the group is expected to continue its tight control on costs and expenses in the automotive business. Of particular importance in this business segment are the operations that have been established in Central America in order to contain the continued pricing pressure from original equipment manufacturers. In the food division, S&P expects that the group will continue its efforts to increase its market share -- particularly in the mom and pop distribution channel -- and improve its productivity. Notwithstanding the aforementioned, S&P believes that the nature of Xignux's business portfolio still leaves the company exposed to the inherent risks associated with the cyclicality of the construction and automotive industries. As a result, to weather the potential weakening of the group's top line during the down part of the cycle, S&P believes that Xignux's capital expenditures and investment program should not exceed $100 million over the next two calendar years. As expected, Xignux posted a solid performance during the fourth quarter, particularly the wire & cable segment. As a result, the group's key financial ratios remained in line with those posted during the third quarter. During 2005, Xignux posted EBTIDA interest coverage, total debt/EBITDA, and FFO/total debt ratios of 3.7x, 2.4x, and 24.4%, respectively. Adjusting for the sale of Grupo Primex, Xignux posted double-digit growth in revenues and EBITDA during the year. Xignux's liquidity is adequate. As of Dec. 31, 2005, Xignux held about $38 million in cash and equivalents and had about $60 million available under committed credit facilities, which compares favorably with short-term debt of $78 million. Free operating cash flow totaled $68 million during 2005 and should be about $30 million during 2006. The outlook is positive. Xignux's efforts to reduce its debt and improve its capital structure -- coupled with the group's ongoing initiatives to strengthen its competitive position -- have laid a foundation that could lead to a stronger financial profile. A positive rating action is possible should Xignux's LTM EBITDA interest coverage, total debt/EBITDA, and FFO/total debt ratios remain steady at about 4.5x, 2.5x, and 25% during 2006 and going forward. A weakening of the company's financial and operating performance, particularly as a result of lower operating margins in the down part of the cycle, could lead to a negative rating action. Headquartered in San Pedro Garza Garcia, Mexico, Xignux -- http://xignux.com/-- manufactures and sells auto-part, lighting, chemicals, food, cable, foundry and electrical goods in more than 40 countries. ======= P E R U ======= * PERU: Government Allows Rate Hike to Expand Water Services ------------------------------------------------------------ The Peruvian government will allow utility companies to hike rates in order to expand water services throughout the country, El Peruano reports. The government plans to implement a number of measures to improve water services, which include modifying the law to allow a readjustment in water rates in line with inflation every three months, Business News Americas relates. One of the first measures to be implemented is the restructuring of the debts assumed by public sanitation companies -- EPS. The EPS's financial standing will be further strengthened with the government's promotion of private investment in the sanitation sector, Business News relates. Furthermore, municipal companies will expand services into rural areas. Also, the government will create two work groups that will discuss and solve the current water rates crisis in Peru -- especially with water utility Sedapal, which serves capital Lima and port city Callao -- the government has created two work groups to discuss the matter, Business News relates. The groups are composed of technicians from the housing ministry and the country's basic service regulator -- Sunass. One of the groups will address the Sedapal issue, while the other will review the EPSs' current situation within the national context. The groups are scheduled to meet March 13, Business News relates. * * * 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: Committee Hires Hahn & Hessen as Counsel ----------------------------------------------------------- The Official Committee of Unsecured Creditors seeks authority from the U.S. Bankruptcy Court for the Southern District of New York to retain Hahn & Hessen LLP as its counsel in Musicland Holding Corp. and its debtor-affiliates' chapter 11 cases, under a general retainer. According to Curtis Roberts, co-chairman of the Committee, Hahn & Hessen is thoroughly familiar with and experienced in chapter 11 matters. The Committee believes that Hahn & Hessen's attorneys are well qualified to represent the interest of the Committee and its constituency. Hahn & Hessen has been representing creditors' interests in insolvency proceedings for more than 70 years. As counsel, Hahn & Hessen will: (a) render legal advice to the; (b) assist the Committee in its investigation of the acts, conduct, assets, liabilities and financial condition of the Debtors, the operation of the Debtors' businesses, the desirability of continuing business and any other matters relevant to the proceedings or to the business affairs of the Debtors; (c) advise the Committee on any proposed reorganization plan, the Debtor's prosecution of claims against third parties, and any other matters relevant to the proceeding or to the formulation of a plan of reorganization; (d) assist the Committee in requesting the appointment of a trustee or examiner pursuant to Section 1104 of the Bankruptcy Code, if necessary; and (e) perform other legal services, which may be required by the unsecured creditors. Mr. Roberts says that Hahn & Hessen has assured the Committee that it will not represent any other entity in connection with the Chapter 11 cases. Mark S. Indelicato, Esq., a member of Hahn & Hessen LLP, assures the Court that to the best of his knowledge, the firm does not have any connection with the Debtor. In addition, Mr. Indelicato attests that Hahn & Hessen does not represent any interest adverse to that of the Committee or the Debtors' estates in the matters upon which it is to be engaged. Hahn & Hessen will be paid at its customary hourly rates for services rendered and for actual expenses incurred: Partners $410 to $595 Associates $280 to $350 Paralegals $90 to $175 Mr. Indelicato notes that Hahn & Hessen has not received a retainer from the Committee or from anyone else for its retention. * * * Judge Bernstein authorizes the Committee to retain Hahn & Hessen LLP, as its counsel, under a general retainer, effective as of Jan. 20, 2006. Headquartered in New York, New York, Musicland Holding Corp., is a specialty retailer of music, movies and entertainment-related products. The Debtor and 14 of its affiliates filed for chapter 11 protection on Jan. 12, 2006 (Bankr. S.D.N.Y. Lead Case No. 06-10064). James H.M. Sprayregen, Esq., at Kirkland & Ellis, represents the Debtors in their restructuring efforts. 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) ================================= T R I N I D A D & T O B A G O ================================= CITIZEN INSURANCE: Fin'l Weakness Cues Central Bank to Intervene ---------------------------------------------------------------- The Trinidad Guardian reports that Trinidad and Tobago's Central Bank has served a notice of intervention on Goodwill General Insurance Company and Citizen Insurance Company due to their financially weak conditions. According to Central Bank notices appearing in the daily newspapers, both Citizen Insurance and Goodwill General Insurance were described as unable to pay their debts under section 77 of the Insurance Act. The Central Bank has identified other financially weak institutions but kept the information private until it has exhausted its consultative process, the Guardian relates. The consultative process will be done among Inspector and Deputy Inspector of Financial Institutions at the bank, Catherine Kumar and Wendy Ho Sing. The Central Bank would advise companies as to the best way forward during various meetings with management. Letters will follow those meetings and if no corrective action is taken, the bank will make a determination on the appropriate time to serve notice of its intention to intervene in the affairs of those companies, the Guardian relates. Speaking of the Goodwill and Citizen scenarios, Ms. Kumar said: "The Central Bank determined that intervention in the affairs of Citizen Insurance Company and Goodwill General Insurance Company was necessary to prevent further deterioration of the financial condition of the companies. "There is precedence for this action both in Trinidad and Tobago and other jurisdictions. It is important to note that the Central Bank does not have the authority to take over the management of the companies and this remains the responsibility of the directors and managers." Kumar described the current Insurance Act as "outdated and certainly not in keeping with the Financial Institutions Act and international best practice." "The powers of the regulator are not wide enough to allow for active, risk focused supervisory process where issues can be identified early enough so that timely and appropriate action can be taken to resolve problems," Ms. Kumar said. According to the intervention requirements for Goodwill, the company has to refrain from effecting any contracts of insurance whether new or renewal or varying existing contracts of insurance with effect from March 7, 2006, until such time as the company obtains a share capital injection in cash of an amount determined by the Central Bank, the Guardian says. As for Citizen, the intervention notice provides that it has to refrain from effecting any new contracts of insurance in all classes of business with effect from January 4, 2006, but is permitted to effect renewal business only, the Guardian says. In a separate report, Ms. Kumar scolded companies who delayed in paying or were unwilling to pay claims to their policy holders. GOODWILL GEN: Weak Fin'l Status Cues Central Bank to Intervene -------------------------------------------------------------- The Trinidad Guardian reports that Trinidad and Tobago's Central Bank has served a notice of intervention on Goodwill General Insurance Company and Citizen Insurance Company due to their financially weak conditions. According to Central Bank notices appearing in the daily newspapers, both Citizen Insurance and Goodwill General Insurance were described as unable to pay their debts under section 77 of the Insurance Act. The Central Bank has identified other financially weak institutions but kept the information private until it has exhausted its consultative process, the Guardian relates. The consultative process will be done among Inspector and Deputy Inspector of Financial Institutions at the bank, Catherine Kumar and Wendy Ho Sing. The Central Bank would advise companies as to the best way forward during various meetings with management. Letters will follow those meetings and if no corrective action is taken, the bank will make a determination on the appropriate time to serve notice of its intention to intervene in the affairs of those companies, the Guardian relates. Speaking of the Goodwill and Citizen scenarios, Ms. Kumar said: "The Central Bank determined that intervention in the affairs of Citizen Insurance Company and Goodwill General Insurance Company was necessary to prevent further deterioration of the financial condition of the companies. "There is precedence for this action both in Trinidad and Tobago and other jurisdictions. It is important to note that the Central Bank does not have the authority to take over the management of the companies and this remains the responsibility of the directors and managers." Kumar described the current Insurance Act as "outdated and certainly not in keeping with the Financial Institutions Act and international best practice." "The powers of the regulator are not wide enough to allow for active, risk focused supervisory process where issues can be identified early enough so that timely and appropriate action can be taken to resolve problems," Ms. Kumar said. According to the intervention requirements for Goodwill, the company has to refrain from effecting any contracts of insurance whether new or renewal or varying existing contracts of insurance with effect from March 7, 2006, until such time as the company obtains a share capital injection in cash of an amount determined by the Central Bank, the Guardian says. As for Citizen, the intervention notice provides that it has to refrain from effecting any new contracts of insurance in all classes of business with effect from January 4, 2006, but is permitted to effect renewal business only, the Guardian says. In a separate report, Ms. Kumar scolded companies who delayed in paying or were unwilling to pay claims to their policy holders. ============= U R U G U A Y ============= * URUGUAY: Government Inks IT Solution Pact with Venezuela ---------------------------------------------------------- The Uruguayan government, through the basic industry and mining ministry, has signed an agreement with the Venezuelan government to implement an IT solution for state-owned telecoms operator CVG Telecom, Business News reports. Under the terms of the agreement, Uruguay will implement a solution that will allow CVG to operate information systems, databases, prepaid platforms, text messages, customer support and human resources platforms, Business News relates. The agreement will allow Venezuela to have access to new technology and develop software solutions within CVG that will add more value to primary resources, Business News states. It will also allow Venezuela to to sell the solution, once developed, to other state-run companies in other countries in the region. Genexus, the company selected to deploy the project, will also provide all the software and hardware infrastructure needed to improve CVG administration, Business News relates. * * * Fitch Ratings assigns these ratings on Uruguay: Rating Rating Date ------ ----------- Country Ceiling BB- Mar. 7, 2005 Long Term IDR B+ Dec. 14, 2005 Short Term IDR B Dec. 14, 2005 Local Currency Long Term Issuer Default Rating BB- Mar. 7, 2005 * * * 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. ================= V E N E Z U E L A ================= PDVSA: Surpasses Daily Output and Sales by 9,200 Barrels -------------------------------------------------------- State oil firm Petroleos de Venezuela aka PDVSA surpassed daily production and sales by about 9,200 barrels in February, the company's Western Division told Prensa Latina last week. Prensa Latina reports that of Venezuela's 3.3 million barrels produced daily production, 953,500 barrels come from the Western Division. A press release by PDVSA stated that the company said that such performance stems from the recovery of additional boilers for steam generation, the repair of lift gas lines in wells and wires connected to pumping wells, among others. 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. * ALAV Believes U.S. Flight Ban Will Yield Positive Outcome ----------------------------------------------------------- Humberto Figuera, the vice-president of the Venezuelan Airlines Association or ALAV, displayed optimism about U.S. Federal Aviation Administration, the FAA, and the Venezuelan Aviation Institute or INAC, overcoming an impasse involving a flight ban on U.S. carriers in Venezuela, the El Universal reports. Mr. Figuera told El Universal that the problem regarding the suspension of certain American airlines from flying to Venezuela won't be solved before the March 30 deadline that the country set. Venezuela declared the ban in hopes of negotiating greater access for domestic carriers in the United States. Venezuelan carriers are blocked from adding to their U.S. flights by a U.S. Federal Aviation Administration decision in 1995 that downgraded the country's security, safety and technical rating. Flights by Delta Air and Continental Airlines will be cut by up to 70%, and American Airlines flights will also be affected. Mr. Figuera informed El Universal that both the FAA and INAC have showed willingness to reach an agreement. "There is a climate of full understanding of Venezuelan stance. I think a meeting between aviation authorities should be set very soon. And we are very optimistic about solution of this issue in the short term," he said. * * * 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. * VENEZUELA: Government Inks IT Solution Pact with Uruguay ---------------------------------------------------------- The Uruguayan government, through the basic industry and mining ministry, has signed an agreement with the Venezuelan government to implement an IT solution for state-owned telecoms operator CVG Telecom, Business News reports. Under the terms of the agreement, Uruguay will implement a solution that will allow CVG to operate information systems, databases, prepaid platforms, text messages, customer support and human resources platforms, Business News relates. The agreement will allow Venezuela to have access to new technology and develop software solutions within CVG that will add more value to primary resources, Business News states. It will also allow Venezuela to to sell the solution, once developed, to other state-run companies in other countries in the region. Genexus, the company selected to deploy the project, will also provide all the software and hardware infrastructure needed to improve CVG administration, Business News relates. * * * Fitch Ratings assigns these ratings on Uruguay: Rating Rating Date ------ ----------- Country Ceiling BB- Mar. 7, 2005 Long Term IDR B+ Dec. 14, 2005 Short Term IDR B Dec. 14, 2005 Local Currency Long Term Issuer Default Rating BB- Mar. 7, 2005 * * * 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 * * *