/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/060426.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 Wednesday, April 26, 2006, Vol. 7, Issue 82 Headlines A R G E N T I N A ARADANAZ SAICIF: Creditors' Claims Verification Ends May 12 HIPOTECARIO: S&P Says Bond Offering Raise Won't Change Ratings BODEGAS CUVILLIER: Court Approves Reorganization Petition EFE CONSTRUCCIONES: Proofs of Claim Filing Ends on May 31 FRISAC ARGENTINA: Claims Verification Deadline Is May 19 GUIDO VENTURA: Last Day for Filing Proofs of Claim on May 18 HEROMETAL SA: Trustee Stops Accepting Claims After June 26 LOMA NEGRA: S&P Upgrades Corporate Credit Rating to BB- from B+ MULTICANAL: APE In Danger of Getting Rejected by New York Court PAN AMERICAN: S&P Ups Corporate Credit Rating to BB- from B+ PEDRO STORM: Seeks Court Approval to Restructure Debts PRINCESA PARK: Trustee Stops Validating Claims After June 29 RIVERA INMOBILIARIA: Validation of Claims Ends on May 17 SOLANO LOPEZ: Creditors Must Submit Proofs of Claim by June 8 TELECOM ARGENTINA: S&P Upgrades Corporate Credit Rating to B TELECOM PERSONAL: S&P Ups Corporate Credit Rating to B from B- TELEFONICA DE ARGENTINA: S&P Raises Corporate Credit Rating to B TELEFONICA HOLDING: S&P Upgrades Corporate Credit Rating to B * ARGENTINA: S&P Upgrades Currency Ratings to B from B- B E R M U D A GALVEX HOLDINGS: Committee Hires DLA Piper as Bankruptcy Counsel B O L I V I A * BOLIVIA: Expels EBX After Failing to Secure Env't Clearance * BOLIVIA: President Sacks Deputy Telecoms Minister B R A Z I L BANCO DO BRASIL: Signs Financial Services Pact with Lojas Maia BRASIL TELECOM: Records 13% Corporate Sales Growth in 2005 COMPANHIA FORCA: S&P Affirms B+ Ratings With Stable Outlook COMPANHIA SIDERURGICA: Export Revenues Up by 140% to US$84.3M GERDAU SA: Wants Spot Among World's Top Ten Steelmakers GOL LINHAS: Announces Payment of Quarterly Dividends PETROLEO BRASILEIRO: Denies Seizure of Bolivian Oilfields PETROLEO BRASILEIRO: Likely Purchaser of Citgo-Lyondell Refinery PRODUTOS ALIMENTICIOS: Completes Restructuring of US$57M Debt USINAS SIDERURGICAS: Plans to Increase Capital to US$2.52 Bil. VARIG: Crisis Proves Good for Gol's and Tam Airlines' Stocks C A Y M A N I S L A N D S FK CAPITAL: Final Shareholders Meeting Set for May 4 GPF ALMATIS: Final Shareholders General Meeting Set for May 8 GPF ALMATIS HOLDINGS: Holds Last Shareholders Meeting on May 8 LION HEART: Liquidator Presenting Liquidation Progress on May 4 C O L O M B I A * COLOMBIA: Venezuela Will Impose Trade Barriers Against Country C O S T A R I C A * COSTA RICA: Limon & Moin Work Stoppage Dispute May Escalate D O M I N I C A N R E P U B L I C * DOMINICAN REPUBLIC: Energy Sector Incurred Higher Losses E C U A D O R * ECUADOR: Firms Will File Suit Over Reform on Oil Tax Law E L S A L V A D O R * EL SALVADOR: Social Groups Rally Against Canadian Mining Firms G U A T E M A L A * GUATEMALA: Seeks Deal to Buy Discounted Crude from Venezuela M E X I C O ALMACENADORA SUR: Moody's Puts B2 Global Local Currency Rating DIRECTV GROUP: Extends Service & Support Pact with TiVo P A N A M A * PANAMA: President Seeks Citizens' Support on Canal Expansion P E R U * PERU: Venezuela Will Impose Trade Barriers Against Country P U E R T O R I C O G+G RETAIL: Panel Hires Jaspan Schlesinger as Conflicts Counsel GLOBAL HOME: Section 341(a) Meeting Scheduled for May 8 OCA INC: Panel Taps Loughlin Meghji+Company as Financial Advisor V E N E Z U E L A CITGO: Hires Morgan Stanley as Refinery Sale Financial Adviser CITGO: Valero Energy May Present Bid for Houston Refinery EMPRESAS ICA: Venezuelan Unit Inks Four Civil Construction Deal * VENEZUELA: Guatemala Seeks Deal to Buy Discounted Crude * VENEZUELA: Sudeban Proposes to Supervise Microbanks * VENEZUELA: Will Impose Trade Barriers on Colombia & Peru - - - - - ================= A R G E N T I N A ================= ARADANAZ SAICIF: Creditors' Claims Verification Ends May 12 ----------------------------------------------------------- The verification of creditors' claims against Aradanaz S.A.I.C.I.F. y A. will end on May 12, 2006, states Infobae. Liliana Ethel Villar, the court-appointed trustee, will submit the validation results as individual reports on June 30, 2006. She will also present a general report in court on Aug. 2, 2006. On Nov. 30, 2006, the company's creditors will vote on the settlement proposal prepared by the company. Infobae adds that a Mendoza court handles the company's reorganization case. The debtor can be reached at: Aradanaz S.A.I.C.I.F. y A. Ruta 228 Km. 1,200 Necochea Buenos Aires, Argentina The trustee can be reached at: Liliana Ethel Villar Calle 54 Nro. 3276 Necochea Buenos Aires, Argentina HIPOTECARIO: S&P Says Bond Offering Raise Won't Change Ratings -------------------------------------------------------------- Standard & Poor's Ratings Services said that its ratings on Banco Hipotecario S.A. (B/Stable/--) will not be affected by the increase in the amount of the new note to US$250 million from US$200 million, rated 'B' on April 6, 2006. The new notes, issued under the US$1.2 billion senior unsecured global MTN program, will bear interest at a fixed rate of 9.75% and have bullet maturity in 2016. The issuance is part of a liability management initiative that will allow Banco Hipotecario to expand its loan portfolio without damaging its currently high liquidity position, as well as to retire part of the debt issued in the context of its debt restructuring in 2004. With this transaction, the bank will have successfully placed US$500 million during the past six months, showing the bank's ability to tap once again the international capital markets. BODEGAS CUVILLIER: Court Approves Reorganization Petition --------------------------------------------------------- Buenos Aires' Court No. 1 approved a petition for reorganization filed by Bodegas Cuvillier S.A., according to a report from Argentine daily La Nacion. Trustee Estudio Guaita-Suez Asociados will verify claims from the company's creditors. After a verification period, the trustee will submit the individual and general reports in court. Dates for submission of these reports and the verification period are yet to be disclosed. La Nacion did not reveal in its Web site the deadlines for the submission of claims and the presentation of the individual reports in court. The informative assembly will be held on April 13, 2007. Creditors will vote to ratify the completed settlement plan during the said assembly. The city's Clerk No. 2 assists the court on the case. The debtor can be reached at: Bodegas Cuvillier S.A. Cerrito S.A. Buenos Aires, Argentina The trustee can be reached at: Estudio Guaita-Suez Asociados Carlos Calvo 839 Buenos Aires, Argentina EFE CONSTRUCCIONES: Proofs of Claim Filing Ends on May 31 --------------------------------------------------------- Creditors of bankrupt company Efe Construcciones S.R.L. are required to present proofs of their claim to Bartolome Bavio, the court-appointed trustee, for verification on or before May 31, 2006, La Nacion reports. Creditors who fail to submit the required documents will not qualify for any post- liquidation distributions. Buenos Aires' Court No. 25 declared the company bankrupt, in favor of the company's creditor, Hierros Campana S.A., whom the company owes US$30,630.28. Clerk No. 49 assists the court on the case. The debtor can be reached at: Efe Construcciones S.R.L. Avenida Corrientes 2024 Buenos Aires, Argentina The trustee can be reached at: Bartolome Bavio Avenida de Mayo 1324 Buenos Aires, Argentina FRISAC ARGENTINA: Claims Verification Deadline Is May 19 -------------------------------------------------------- The verification of creditors' claims against Frisac Argentina S.A. -- company under reorganization -- will end on May 19, 2006, states Infobae. Miguel Angel Amalfitano, Juan Francisco Arrechea and Omar Daniel Brandan, the court-appointed trustees, will submit the validation results as individual reports on July 4, 2006. They will also present a general report in court on Aug. 15, 2006. The trustees can be reached at: Miguel Angel Amalfitano Juan Francisco Arrechea Omar Daniel Brandan Avenida Colon 2727 Mar del Plata Buenos Aires, Argentina GUIDO VENTURA: Last Day for Filing Proofs of Claim on May 18 ------------------------------------------------------------ Marcelo Fabian Francisco -- the trustee appointed by the Buenos Aires court for the Guido Ventura S.A. bankruptcy case -- will stop validating claims from the company's creditors on May 18, 2006, Infobae relates. The trustee will present the validated claims in court as individual reports on July 3, 2006. He will also submit a general report on the case on Aug. 14, 2006. Guido Ventura S.A. can be reached at: Paraguay 4394 Buenos Aires, Argentina The trustee can be reached at: Marcelo Fabian Francisco Uruguay 328 Buenos Aires, Argentina HEROMETAL SA: Trustee Stops Accepting Claims After June 26 ---------------------------------------------------------- Gustavo Alejandro Pagliere, the trustee appointed by the Buenos Aires court for the bankruptcy proceeding of Herometal S.A., will no longer entertain claims that are submitted after June 26, 2006, Infobae reports. Creditors whose claims are not validated will be disqualified from receiving any payment that the company will make. Individual reports on the validated claims will be presented in court on Aug. 21, 2006. The submission of a general report on the case will follow on Oct. 10, 2006. The trustee can be reached at: Gustavo Alejandro Pagliere Tucuman 1424 Buenos Aires, Argentina LOMA NEGRA: S&P Upgrades Corporate Credit Rating to BB- from B+ --------------------------------------------------------------- Standard & Poor's Ratings Services raised its foreign and local currency corporate credit ratings on several Argentine entities and removed them from CreditWatch, where they were placed with positive implications on March 23, 2006. The rating of Loma Negra C.I.A.S.A. was upgraded to BB- from B+. The rating actions follow the upgrade on the global foreign and local currency ratings on the Republic of Argentina to 'B' from 'B-' and the ratings on Argentina's national scale to 'raAA-' from 'raA'. Together with the sovereign upgrade, the perception of the transfer and convertibility risk for Argentina was raised to 'BB-', reflecting Standard & Poor's perception that the government's willingness to intervene in the foreign exchange market has reduced consistently with its stronger repayment ability. Following the upgrade on the Republic of Argentina, Standard & Poor's has evaluated the impact of the improved external and macroeconomic environment and fiscal flexibility that led to that rating action over its perception of the general economic risks that the private sector faces when operating in the country. The upgrade on Loma is based on Standard & Poor's perception of increased incentives for its shareholder, Camargo Correa Cimentos S.A (BB/Stable/--) to support its Argentine subsidiary as a result of the strong demand prospects given the actual and expected performance of construction activity in Argentina, Loma's adequate financial profile supported by its sound cash generation ability, and a manageable maturity profile. Standard & Poor's expects to announce any potential changes in national scale ratings within the next few days. MULTICANAL: APE In Danger of Getting Rejected by New York Court --------------------------------------------------------------- Multicanal SA's acuerdo preventivo extrajudicial agreement formulated in 2003 is in danger of being rebuffed by the U.S. Bankruptcy Court for the Southern District of New York. At a hearing last month, the Honorable Allan Gropper ruled that Multicanal is governed by US Securities laws, which means, the Court could refuse implementation of the APE. The judge found that there was no "safe harbour" for Multicanal's offer to its creditors under rule 152 of the 1933 Securities Act, and that a fairness hearing would have to be held to decide whether another section -- section 3(a)(10) -- could create the necessary exemption. The APE was confirmed on April 14, 2004, and got the US Court's recognition, pursuant to Section 304 of the US Bankruptcy Code, on Sept. 28, 2005. The Honorable Allan Gropper's decision is available free of charge at: http://bankrupt.com/misc/Multicanal.pdf However, Judge Gropper noted during last month's hearing that the APE's implementation has taken a long time, which he says, could prejudice creditors' rights. Judge Gropper emphasized that he recognized the APE's legality in 2005 under Section 304 to provide for "an expeditious and economical administration" of the foreign company's bankruptcy proceeding. The delay, the judge said, is making him question the fairness of the APE. Multicanal is represented by: Andres de la Cruz, Esq. Lindsee P. Granfield, Esq. Cleary Gottlieb Steen & Hamilton LLP One Liberty Plaza New York, NY 10006-1470 Tel: +1 212 225 2000 Fax: +1 212 225 3999 -- and -- Jose Mar�a Saenz Valiente Maria Lucila Romero Ivan Lorenzo Saenz Valiente Asociados Parana 754 - 8� Piso (C1017AAP) Ciudad Autonoma de Buenos Aires Argentina Tel: (54 11) 4816-6996 Email: laura@ssvyasoc.com.ar Multicanal S.A. -- http://www.multicanal.com.ar/-- is an Argentinean multiple cable systems operator with its principal operations in Argentina and smaller operations in Uruguay and Paraguay. Grupo Clarin SA owns Multicanal. * * * The Argentine arm of Standard & Poor's Ratings Services assigned raD ratings on Multicanal SA's debts: -- Obligaciones Negociables Serie C for US$150,000,000, included under the program of ON for US$1050 million, -- Obligaciones Negociables simples, with due in 10 years for US$125,000,000, -- Serie J of ON for US$144,000,000, under the program of ON for US$1050 million, and -- Obligaciones Negociables simples, with due in 5 years for US$125,000,000. PAN AMERICAN: S&P Ups Corporate Credit Rating to BB- from B+ ------------------------------------------------------------ Standard & Poor's Ratings Services raised its foreign and local currency corporate credit ratings on several Argentine entities and removed them from CreditWatch, where they were placed with positive implications on March 23, 2006. Pan American Energy LLC's rating was upgraded to BB- from B+. The rating actions follow the upgrade on the global foreign and local currency ratings on the Republic of Argentina to 'B' from 'B-' and the ratings on Argentina's national scale to 'raAA-' from 'raA'. Together with the sovereign upgrade, the perception of the transfer and convertibility risk for Argentina was raised to 'BB-', reflecting Standard & Poor's perception that the government's willingness to intervene in the foreign exchange market has reduced consistently with its stronger repayment ability. Following the upgrade on the Republic of Argentina, Standard & Poor's has evaluated the impact of the improved external and macroeconomic environment and fiscal flexibility that led to that rating action over its perception of the general economic risks that the private sector faces when operating in the country. The upgrade on Pan American Energy LLC to 'BB-' from 'B+' reflects Standard & Poor's conclusion that the company's outstanding financial and adequate operating performance coupled with short- and medium-term positive price prospects have strengthened PAE's financial profile and the company's ability to service its financial obligations even under more severe stress scenarios and within the uncertainties of operating in the volatile Argentine environment. Standard & Poor's expects to announce any potential changes in national scale ratings within the next few days. PEDRO STORM: Seeks Court Approval to Restructure Debts ------------------------------------------------------ Pedro Storm & Cia Ltda., a company operating in Buenos Aires, has requested for reorganization after failing to pay its liabilities. The reorganization petition, once approved by the court, will allow the company to negotiate a settlement with its creditors in order to avoid a straight liquidation. The case is pending before Court No. 21. Clerk No. 41 assists on this case. The debtor can be reached at: Pedro Storm & Cia Ltda. Andonaequi 1706 Planta en Salta 238, Lanus Buenos Aires, Argentina PRINCESA PARK: Trustee Stops Validating Claims After June 29 ------------------------------------------------------------ Court-appointed trustee Armando Raimundo will no longer validate creditors' claims against bankrupt company Princesa Park S.A. that are submitted after June 29, 2006, Infobae reports. Creditors whose claims are not verified by the trustee will be disqualified from receiving any distribution or payment from the company. Infobae did not reveal in its Web site the dates for the presentation of individual and general reports. The trustee can be reached at: Armando Raimundo 25 de Mayo 2980 Mar del Plata Buenos Aires, Argentina RIVERA INMOBILIARIA: Validation of Claims Ends on May 17 -------------------------------------------------------- Luis Gabriel Plizzo, trustee appointed by the Buenos Aires court for the bankruptcy proceeding of Rivera Inmobiliaria S.A., will no longer entertain claims that are submitted after May 17, 2006, Infobae reports. Creditors whose claims are not validated will be disqualified from receiving any payment that the company will make. Individual reports on the validated claims will be presented in court on July 3, 2006. The submission of the general report on the case will follow on Aug. 29, 2006. The debtor can be reached at: Juan F. Aranguren 2941 Buenos Aires, Argentina The trustee can be reached at: Avenida Roque Saenz Pena 651 Buenos Aires, Argentina SOLANO LOPEZ: Creditors Must Submit Proofs of Claim by June 8 ------------------------------------------------------------- Creditors of Solano Lopez S.R.L. are required to submit proofs of claim by June 8, 2006. Infobae relates that the claims will undergo a verification phase. Claims that are verified will then be submitted in court as individual reports on Aug. 4, 2006. 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 Sept. 20, 2006. Solano Lopez S.R.L. was declared bankrupt by a Buenos Aires court. Pablo L. Peregal was appointed as trustee. The trustee can be reached at: Pablo L. Peregal L.N. Alem 651 Buenos Aires, Argentina TELECOM ARGENTINA: S&P Upgrades Corporate Credit Rating to B ------------------------------------------------------------ Standard & Poor's Ratings Services raised its foreign and local currency corporate credit ratings on several Argentine entities and removed them from CreditWatch, where they were placed with positive implications on March 23, 2006. Telecom Argentina S.A.'s rating was upgraded to B from B-. The rating actions follow the upgrade on the global foreign and local currency ratings on the Republic of Argentina to 'B' from 'B-' and the ratings on Argentina's national scale to 'raAA-' from 'raA'. Together with the sovereign upgrade, the perception of the transfer and convertibility risk for Argentina was raised to 'BB-', reflecting Standard & Poor's perception that the government's willingness to intervene in the foreign exchange market has reduced consistently with its stronger repayment ability. Following the upgrade on the Republic of Argentina, Standard & Poor's has evaluated the impact of the improved external and macroeconomic environment and fiscal flexibility that led to that rating action over its perception of the general economic risks that the private sector faces when operating in the country. While the telecom sector is strongly influenced by regulations and prior to the sovereign rating action was somewhat limited by the credit quality of the government, Standard & Poor's believe that the financial performance of the players offsets to different degrees the regulatory challenges that lie ahead, mainly the renegotiation of the fixed-line tariffs and licenses. The upgrade on Telecom Argentina S.A. mirrors Standard & Poor's expectations that the company will further consolidate its financial profile and credit metrics over the short to medium term as a result of additional debt reductions and improving mobile operational results. Standard & Poor's expects to announce any potential changes in national scale ratings within the next few days. TELECOM PERSONAL: S&P Ups Corporate Credit Rating to B from B- -------------------------------------------------------------- Standard & Poor's Ratings Services raised its foreign and local currency corporate credit ratings on several Argentine entities and removed them from CreditWatch, where they were placed with positive implications on March 23, 2006. Telecom Personal S.A.'s rating was upgraded to B from B-. The rating actions follow the upgrade on the global foreign and local currency ratings on the Republic of Argentina to 'B' from 'B-' and the ratings on Argentina's national scale to 'raAA-' from 'raA'. Together with the sovereign upgrade, the perception of the transfer and convertibility risk for Argentina was raised to 'BB-', reflecting Standard & Poor's perception that the government's willingness to intervene in the foreign exchange market has reduced consistently with its stronger repayment ability. Following the upgrade on the Republic of Argentina, Standard & Poor's has evaluated the impact of the improved external and macroeconomic environment and fiscal flexibility that led to that rating action over its perception of the general economic risks that the private sector faces when operating in the country. While the telecom sector is strongly influenced by regulations and prior to the sovereign rating action was somewhat limited by the credit quality of the government, Standard & Poor's believe that the financial performance of the players offsets to different degrees the regulatory challenges that lie ahead, mainly the renegotiation of the fixed-line tariffs and licenses. The upgrade on Telecom Argentina S.A. mirrors Standard & Poor's expectations that the company will further consolidate its financial profile and credit metrics over the short to medium term as a result of additional debt reductions and improving mobile operational results. The rating action on Telecom Personal S.A. follows the upgrade of Telecom Argentina, reflecting the close linkage between the credit quality of both entities. The strengths highlighted should allow all these companies to weather a certain level of unfavorable changes in Argentina's macroeconomic environment under a scenario of continuing regulatory risk and no or minimal tariff increases. Standard & Poor's expects to announce any potential changes in national scale ratings within the next few days. TELEFONICA DE ARGENTINA: S&P Raises Corporate Credit Rating to B ---------------------------------------------------------------- Standard & Poor's Ratings Services raised its foreign and local currency corporate credit ratings on several Argentine entities and removed them from CreditWatch, where they were placed with positive implications on March 23, 2006. Telefonica de Argentina S.A.'s foreign currency rating was upgraded to B from B-. The rating actions follow the upgrade on the global foreign and local currency ratings on the Republic of Argentina to 'B' from 'B-' and the ratings on Argentina's national scale to 'raAA-' from 'raA'. Together with the sovereign upgrade, the perception of the transfer and convertibility risk for Argentina was raised to 'BB-', reflecting Standard & Poor's perception that the government's willingness to intervene in the foreign exchange market has reduced consistently with its stronger repayment ability. Following the upgrade on the Republic of Argentina, Standard & Poor's has evaluated the impact of the improved external and macroeconomic environment and fiscal flexibility that led to that rating action over its perception of the general economic risks that the private sector faces when operating in the country. While the telecom sector is strongly influenced by regulations and prior to the sovereign rating action was somewhat limited by the credit quality of the government, Standard & Poor's believe that the financial performance of the players offsets to different degrees the regulatory challenges that lie ahead, mainly the renegotiation of the fixed-line tariffs and licenses. In this context, the upgrade on Telefonica de Argentina S.A reflects the strengthening in the company's ability to service its financial obligations as a result of significant debt reductions and positive demand prospects. Standard & Poor's expects to announce any potential changes in national scale ratings within the next few days. TELEFONICA HOLDING: S&P Upgrades Corporate Credit Rating to B ------------------------------------------------------------- Standard & Poor's Ratings Services raised its foreign and local currency corporate credit ratings on several Argentine entities and removed them from CreditWatch, where they were placed with positive implications on March 23, 2006. Telefonica Holding de Argentina's rating was upgraded to B from B-. The rating actions follow the upgrade on the global foreign and local currency ratings on the Republic of Argentina to 'B' from 'B-' and the ratings on Argentina's national scale to 'raAA-' from 'raA'. Together with the sovereign upgrade, the perception of the transfer and convertibility risk for Argentina was raised to 'BB-', reflecting Standard & Poor's perception that the government's willingness to intervene in the foreign exchange market has reduced consistently with its stronger repayment ability. Following the upgrade on the Republic of Argentina, Standard & Poor's has evaluated the impact of the improved external and macroeconomic environment and fiscal flexibility that led to that rating action over its perception of the general economic risks that the private sector faces when operating in the country. While the telecom sector is strongly influenced by regulations and prior to the sovereign rating action was somewhat limited by the credit quality of the government, Standard & Poor's believe that the financial performance of the players offsets to different degrees the regulatory challenges that lie ahead, mainly the renegotiation of the fixed-line tariffs and licenses. In this context, the upgrade on Telefonica de Argentina S.A reflects the strengthening in the company's ability to service its financial obligations as a result of significant debt reductions and positive demand prospects. The rating action on Telefonica Holding de Argentina follows the upgrade of Telefonica de Argentina, its main source of funds. Standard & Poor's expects to announce any potential changes in national scale ratings within the next few days. * ARGENTINA: S&P Upgrades Currency Ratings to B from B- ------------------------------------------------------- Standard & Poor's Ratings Services raised its foreign and local currency corporate credit ratings on several Argentine entities and removed them from CreditWatch, where they were placed with positive implications on March 23, 2006. The rating actions follow the upgrade on the global foreign and local currency ratings on the Republic of Argentina to 'B' from 'B-' and the ratings on Argentina's national scale to 'raAA-' from 'raA'. Together with the sovereign upgrade, the perception of the transfer and convertibility risk for Argentina was raised to 'BB-', reflecting Standard & Poor's perception that the government's willingness to intervene in the foreign exchange market has reduced consistently with its stronger repayment ability. Following the upgrade on the Republic of Argentina, Standard & Poor's has evaluated the impact of the improved external and macroeconomic environment and fiscal flexibility that led to that rating action over its perception of the general economic risks that the private sector faces when operating in the country. "While there is a direct impact on the financial sector given the close linkage between the credit quality of the sovereign and that of the financial system, we do not perceive a significant change in the operating environment for Argentine corporations, and therefore most of the corporate ratings in the country will remain unchanged," said Standard & Poor's credit analyst Marta Castelli. The rating upside for Argentine companies remains limited not only by the institutional environment in the country but also by some company-specific factors such as the very high dollar-denominated indebtedness. The upgrade on the sovereign rating of Argentina reflects Standard & Poor's opinion about the country's ability and willingness to meet its financial obligations as they come due. Although intertwined, the ability of the companies operating in the country to serve its own financial obligations does not follow the same pattern and is influenced by other risks, such as the strength of institutions, the predictability of the regulatory environment, the influence of macroeconomic variables, the ability to borrow in favorable conditions, and so forth. "Companies operating in Argentina continue to face significant regulatory and institutional risks. In addition, inflationary pressures as well as the mechanisms used by the government to try to control them have introduced additional risks that might condition credit quality going forward. On the positive side, continuing economic growth ensures that demand will remain strong at least in the medium term. In addition, significant fiscal surpluses result in modest needs for the government to access capital markets and therefore contribute to the existing abundant liquidity in the country," added Standard & Poor's credit analyst Pablo Lutereau. As a result, the rating changes reflect sector- and credit- specific factors rather than a perception of a general improvement in credit quality in the country. Standard & Poor's expects to announce any potential changes in national scale ratings within the next few days. The local and foreign currency issuer credit ratings affected are listed below: To From Pan American Energy LLC BB-/Stable/-- B+/Watch Pos/-- Loma Negra C.I.A.S.A. B+/Stable/-- B/Watch Pos/-- Telecom Argentina S.A. B/Stable/-- B-/Watch Pos/-- Telecom Personal S.A. B/Stable/-- B-/Watch Pos/-- Telefonica de Argentina S.A. B/Stable/-- B-/Watch Pos/-- Telefonica Holding B/Stable/-- B-/Watch Pos/-- de Argentina SA ============= B E R M U D A ============= GALVEX HOLDINGS: Committee Hires DLA Piper as Bankruptcy Counsel ---------------------------------------------------------------- The Official Committee of Unsecured Creditors appointed in Galvex Holdings Limited and its debtor-affiliates' chapter 11 cases sought and obtained authority from the U.S. Bankruptcy Court for the Southern District of New York to employ DLA Piper Rudnick Gray Cary US LLP as its bankruptcy counsel. As reported in the Troubled Company Reporter on Mar. 27, 2006, DLA Piper is expected to: (a) advise the Committee with respect to its rights, duties and powers in the Debtors' chapter 11 cases; (b) assist and advise the Committee in its consultations with the Debtors relative to the administration of the chapter 11 cases; (c) assist the Committee in its review and analysis of any and all offers to purchase the Debtors' assets and asset purchase agreements; (d) assist the Committee in examining and analyzing the propriety of inter-Debtor agreements; (e) assist and advise the Committee as to whether dismissal of the Debtors' cases is appropriate and in the best interest of creditors; (f) assist the Committee in analyzing the claims of the Debtors' creditors and the Debtors' capital structure And in negotiating with holders of claims and equity interests; (g) assist the Committee in its investigation of the acts, conduct, assets, liabilities and financial condition of the Debtors and of the operation of the Debtors' businesses; (h) assist the Committee in its analysis of, and negotiations with, the Debtors or any third party concerning matters related to, among other things, the assumption or rejection of certain leases of non- residential real property and executory contracts, asset dispositions, financing of other transactions and the terms of one or more plans of reorganization for the Debtors and accompanying disclosure statements and related plan documents; (i) assist and advise the Committee as to its communications to the general creditor body regarding significant matters in these chapter 11 cases; (j) represent the Committee at all hearings and other proceedings; (k) review and analyze applications, orders, statements of operations and schedules filed with the Court and advise the Committee as to their propriety, and to the extent deemed appropriate by the Committee support, join or object thereto; (l) advise and assist the Committee with respect to any legislative, regulatory or governmental activities; (m) assist the Committee in preparing pleadings and applications as may be necessary in furtherance of the Committee's interests and objectives; (n) prepare, on behalf of the Committee, any pleadings, including without limitation, motions, memoranda, complaints, adversary complaints, objections or comments in connection with any of the foregoing; (o) investigate and analyze any claims against the Debtor's secured lenders; (p) advise and assist the Committee in its review and analysis of the Debtors' corporate governance; and (q) perform such other legal services as may be required or are otherwise deemed to be in the interests of the Committee in accordance with the Committee's powers and duties as set forth in the Bankruptcy Code, Bankruptcy Rules or other applicable law. Thomas R. Califano, Esq., a partner at DLA Piper, tells the Court that the Firm's professionals bill: Professional Hourly Rate ------------ ----------- Partners $610 - $650 Special Counsel and Counsel $550 Associates $275 - $485 Paraprofessionals $225 Mr. Califano assures the Court that the Firm is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Court. About Galvex Holdings Headquartered in New York City, New York, Galvex Holdings Limited -- http://www.galvex.com/-- and its affiliates operate the largest independent galvanizing line in Europe. The Debtors have offices in New York, Tallinn, Bermuda, Finland, Ukraine, Germany and the United Kingdom. The company and four of its affiliates filed for chapter 11 protection on Jan. 17, 2006 (Bankr. S.D.N.Y. Case No. 06-10082). David Neier, Esq., at Winston & Strawn LLP, represents the Debtors in their restructuring efforts. Galvex Capital, LLC, is represented by Gerard DiConza, Esq., at DiConza Law, P.C. Thomas R. Califano, Esq., at DLA Piper Rudnick Gray Cary US LLP, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they estimated assets and debts of more than US$100 million. ============= B O L I V I A ============= * BOLIVIA: Expels EBX After Failing to Secure Env't Clearance ------------------------------------------------------------- The Bolivian government has asked Brazilian steelmaker, EBX, to exit the country after failing to secure an environmental license to build a US$148 million pig-iron plant along the Bolivia-Brazil border. The government's move is also dictated by a need to settle a power struggle between the Morales administration and the local officials of Puerto Suarez in Santa Cruz, Bolivia, whose citizens are threatened by the termination of the plant's construction. The protests resulted to the kidnapping of three cabinet ministers and the closure of the international border. According to the Financial Times, Santa Cruz has been at odds with the Morales administration because the province is a right- wing stronghold where President Evo Morales does not have a strong support. Local civic committees in Santa Cruz called on President Morales not to forget his fiduciary duty to his people. The groups accused the administration of depriving the region's populace of jobs and livelihood opportunities and has generated an economic depression in the area. Meanwhile, Bolivia's vice president Alvaro Garcia accused EBX of disrespecting the country's law by violating a ban on foreign companies operating within 50 km of Bolivia's borders. An EBX spokesperson denied to FT the government's allegations. EBX said the Bolivian government distorted facts, refused to discuss the project constructively and denied the company access to the procedures necessary to obtain an environmental license. EBX further told FT that should the plant have been constructed as planned, it would have been followed by a US$120 million steel plant, providing 5,620 jobs. By refusing to budge on the EBX dispute, the government hopes that foreign companies will take that as a warning that it won't be afraid to take a hard stance while warning local opponents that it won't cave in to protests. Fitch Ratings assigns these ratings on Bolivia: Rating Rating Date ------ ----------- Country Ceiling B- Jun. 17, 2004 Long Term IDR B- Dec. 14, 2005 Local Currency Long Term Issuer Default Rating B- Dec. 14, 2005 * BOLIVIA: President Sacks Deputy Telecoms Minister --------------------------------------------------- Jorge Estrella Ayala, Bolivia's deputy telecoms minister, was fired by President Evo Morales due to allegations on corruption, Business News Americas reports. Local daily La Prensa relates that mobile operator Startel reportedly wrote to the president on April 20, 2006, about Mr. Ayala's demand for a US$100,000 bribe to make the awarding of a rural telephony concession more viable and to insure the concession process continues, an accusation that Mr. Ayala denied. BNamericas states that President Morales issued an executive order to have Mr. Ayala removed from his post almost immediately after reading the accusation. The president also ordered that criminal proceedings be initiated against the former minister. According to BNamericas, judicial proceedings was scheduled Monday, when it would be decided if he would undergo trial. Rodolfo Illanes, the president's chief of staff, revealed to BNamericas that Estrella reportedly has a criminal record in Sucre. "When he was a member of the Sucre telephony cooperative, Estrella founded his own telephony company without the knowledge of the other members of the cooperative, and used his post to benefit himself through concessions and tenders. That is a crime," Mr. Illanes told BNamericas. * * * Fitch Ratings assigned these ratings on Bolivia: Rating Rating Date ------ ----------- Country Ceiling B- Jun. 17, 2004 Long Term IDR B- Dec. 14, 2005 Local Currency Long Term Issuer Default Rating B- Dec. 14, 2005 =========== B R A Z I L =========== BANCO DO BRASIL: Signs Financial Services Pact with Lojas Maia -------------------------------------------------------------- Brazilian federal bank Banco do Brasil has entered into a multi- faceted agreement with regional household appliance and furniture retailer Lojas Maia to offer loans and financial services, Business News Americas reports, citing a statement from the bank. Under the agreement, Banco do Brasil will issue loans and Visa- branded private label credit cards to Lojas Maia customers, international business and wholesale vice president Jose Maria Rabelo told BNamericas. The products include unemployment and accidental death insurance, as well as P&C and homeowner policies. The partnership aims for a loan portfolio of 2 billion reals (US$939 million) within the next five years. On the other hand, Lojas Maia will offer savings bonds and various insurance products to its costumers. These products will be provided by the bank's insurance unit -- Alianca do Brasil, BNamericas relats "We spent eight months looking at different models and decided the Banco do Brasil model was the most far-reaching," Maia said in a statement. Furthermore, Lojas Maia gets backing from the bank on future expansions. The retailer operates 110 outlets in seven northeastern states and has opened 23 of a projected 50 new stores this year. "This is new ground for us," Banco do Brasil retail and distribution vice president Antonio Francisco de Lima Neto told BNamericas. "The BB name adds value to the store and helps increase business by offering loans, credit cards and insurance." * * * As reported on Mar. 3, 2006, Standard & Poor's Ratings Services raised its foreign currency counterparty credit ratings on Banco do Brasil S.A. to 'BB' from 'BB-'. The foreign and local currency ratings of this bank are now equalized at 'BB'. S&P said the outlook is stable. BRASIL TELECOM: Records 13% Corporate Sales Growth in 2005 ---------------------------------------------------------- Brasil Telecom Participacoes SA achieved a 13% sales growth in its corporate sector in 2005, a company spokesperson disclosed to Business News Americas. Brasil Telecom's corporate sector grew as a result of its successful marketing of fixed and mobile voice services, as well as data services for the corporate and government sectors, to nine states from west to south of Brazil. "We are in contact with all parts of the productive chain, listening to all their needs," Zilma Goncalves, manager for corporate and government business, was reported as saying by local newspaper Gazeta Mercantil. In agriculture, Brasil Telecom has targeted farmers, suppliers, cooperatives, grain processors and big industrial companies. * * * Brasil Telecom SA is controlled by Brasil Telecom Participacoes SA which is the publicly-listed holding company for 10 fixed- line operating companies located in the western, central, and southern regions of Brazil and in the Federal District region. Brasil Telecom Participacoes' local currency long-term debt carries Fitch's BB+ rating. COMPANHIA FORCA: S&P Affirms B+ Ratings With Stable Outlook ----------------------------------------------------------- Standard & Poor's Ratings Services revised to stable from negative the outlook on the global and national scale ratings assigned to electric utility Companhia Forca e Luz Cataguazes- Leopoldina or Cataguazes-Leopoldina. The 'B+' foreign and local currency corporate credit ratings on the global scale and the 'brBBB+' national scale ratings on Cataguazes-Leopoldina and its sixth debentures issue were all affirmed. "The outlook revision to stable results from the BrR100 million capitalization recently received by the company and the forthcoming change in its business structure upon the completion of the Cataguazes Group's regulatory 'de-verticalization' process taking place during 2006," said Standard & Poor's credit analyst Marcelo Costa. For this process, Law 10.848/2004 requires the company to divest investments outside its own concession and no longer bear the role of an operating holding company. "The ratings assigned to Cataguazes-Leopoldina reflect the challenges of smoothly promoting the de-verticalization process, the company's small size, an expectation of higher dividend upstream, and exposure to Brazil's electricity regulatory model, which is new and still evolving," said Mr. Costa. On the other hand, the ratings are supported by the company's improved debt profile, its present low exposure to foreign currency debt, the good profile of its consumer base (60% of its revenues come from fairly steady classes of consumers, such as residential, commercial and rural), the exclusive concession to distribute electricity in part of Minas Gerais state, and the company's above-average profitability. The stable outlook on Cataguazes-Leopoldina reflects Standard & Poor's expectation that the company will continue to post short- term debt that is no greater than 30% of the total debt, materially reduce the level of working-capital loans through the capital injection, and decrease the level of interest burden. COMPANHIA SIDERURGICA: Export Revenues Up by 140% to US$84.3M ------------------------------------------------------------- Companhia Siderurgica Nacional's export revenues for the first two months of 2006 expanded compared to the same period in 2005, the company reported to the foreign trade ministry -- Secex. CSN's shipments abroad for January and February totaled US$202 million, up 140% from the US$84.3 million registered year-on- year. CSN is one of the lowest-cost steel producers in the world, which is a result of its access to proprietary, high-quality iron ore (at the Casa de Pedra mine); self-sufficiency in energy; streamlined facilities; and logistics advantages. This is in addition to the group's strong market position in the fairly concentrated steel industry in Brazil. * * * On Jan. 26, 2006, Standard and Poor's Rating Services assigned a 'BB' corporate credit rating on Brazilian flat carbon steelmaker Companhia Siderurgica Nacional. The 'BB' corporate credit rating on CSN reflects the company's exposure to volatile demand and price cycles, increasing competition in its home and predominant market of Brazil, aggressive dividend policy and capital investment plan, and sizable gross-debt position. These risks are partly offset by CSN's privileged cost position and sound operating profile, favorable market position in Brazil, strong export capabilities to offset occasional domestic demand sluggishness, and increasing business diversification. GERDAU SA: Wants Spot Among World's Top Ten Steelmakers ------------------------------------------------------- Brazilian long steel producer Gerdau SA aims to rank among the world's top 10 largest steel companies in coming years, senior vice president Frederico Gerdau Johannpeter told journalists during a conference call. Business News Americas says that Gerdau ranks 14th among worldwide steelmakers, according to the latest data from the International Iron and Steel Institute. Gerdau's output last year came in at 13.7 million tons, up 1.7% compared to 2004. Mr. Gerdau Johannpeter sees the company actively involved in consolidations and acquisitions. "The steelmaking sector is consolidating worldwide and we want to be one of the players in this movement," Mr. Gerdau Johannpeter was quoted by BNamericas as saying. "In Brazil it is practically impossible to grow, so we are investing to maintain our market share and in exports operations. There is no condition to purchase companies in the country as steelmakers here are also buyers." "We are prospecting, looking and checking opportunities in the region," Mr. Gerdau Johannpeter said when asked about possible Latin American acquisitions. Headquartered in Porto Alegre, Brazil, Gerdau S.A. -- http://www.gerdau.com.br-- produces and distributes crude steel and related long rolled products, drawn products, and long specialty products. In addition to Brazil, Gerdau operates in Argentina, Canada, Chile, Colombia, Uruguay and the United States. Gerdau SA's $600 million 8-7/8% perpetual bond is rated Ba1 by Moody's, BB+ by S&P, and BB- by Fitch. GOL LINHAS: Announces Payment of Quarterly Dividends --------------------------------------------------- Gol Linhas Aereas Inteligentes, Brazil's low-cost, low- fare airline, told shareholders that its Board of Directors, at a meeting held on April 20, 2006, approved the payment of quarterly intercalary dividends to shareholders, calculated based on the profits verified on the financial statements dated on March 31, 2006, as follows: Amount of Dividends -- Total amount of R$8,079,167.77 corresponding to R$0.041226 per share. Ex-Dividends Date -- The shareholders listed in the shareholder registry as of May 8, 2006, will be entitled to receive the dividends now approved, and company's shares will be traded, on the Sao Paulo Stock Exchange and New York Stock Exchange, "ex" dividends as of, and including, May 9, 2006. Payment of Dividends -- Dividends will be paid on May 23, 2006. The payment of the dividends referred to above was resolved in accordance with the company's policy of payment of quarterly intercalary dividends. The amount of the quarterly intercalary dividends approved on April 20, 2006, and the interest on capital approved on March 9, 2006, related to the first quarter of 2006, net of withholding income tax, shall both be imputed to the mandatory dividends related to the corporate year of 2006. * * * On March 21, 2006, Moody's Rating Services assigned a Ba2 rating on Gol's Long-Term Corporate Family Rating. PETROLEO BRASILEIRO: Denies Seizure of Bolivian Oilfields --------------------------------------------------------- Petroleo Brasileiro SA denied that its San Alberto and San Antonio oil fields in Bolivia have been occupied by demonstrators, InvestNews reports. Brazil's state-owned oil company confirmed reports of demonstrators blocking the region's highways but said that operations in the oil fields are normal. However, the blockages have hindered the repair of oil pipes that have been damaged by heavy rainfall. InvestNews did not say what was the cause of the demonstrations. Headquartered in Rio de Janeiro, Brazil, Petroleo Brasileiro S.A. aka Petrobras was founded in 1953. The company explores, produces, refines, transports, markets, distributes oil and natural gas and power to various wholesale customers and retail distributors in the country. * * * Petroleo Brasileiro SA's long-term corporate family rating is rated Ba3 by Moody's and its foreign currency long-term debt is rated BB- by Fitch. * * * Fitch assigned these ratings on Petroleo Brasileiro's senior unsecured notes: Maturity Date Amount Rate Ratings ------------- ------ ---- ------- April 1, 2008 $400,000,000 9% BB- July 2, 2013 $750,000,000 9.125% BB- Sept. 15, 2014 $650,000,000 7.75% BB- Dec. 10, 2018 $750,000,000 8.375% BB- PETROLEO BRASILEIRO: Likely Purchaser of Citgo-Lyondell Refinery ---------------------------------------------------------------- Petroleo Brasileiro SA is a likely candidate to buy the Lyondell-Citgo Refining L.P. refinery in Houston, Texas, Dow Jones Newswires reported industry analysts as saying. As previously reported, Lyondell Chemical Co. and Citgo Petroleum Corp. -- the U.S. refining arm of Petroleos de Venezuela S.A. -- said they'll explore the sale of their joint Houston refinery with a crude oil processing capacity of 268,000 barrels per day. Lyondell holds a 58.75% stake in the refinery, and Citgo the remainder. "I think Petrobras is a candidate to buy the refinery," said Monica Araujo, an oil analyst at BES Securities in Rio de Janeiro, told Dow Jones. "They gave many signals that they want to buy more refining assets abroad." The company has started to market refined crude in lucrative markets like the United States. Acquiring the Houston refinery will add value to Petrobras' exports. In line with its marketing of refined crude, Petrobras in February approved a deal to buy a 50% stake in the Pasadena Refining System Inc. refinery from Astra Oil Co., a unit of Belgian Compagnie Nationale a Portefeuille, for about US$370 million. That refinery has a capacity to process 100,000 b/d of crude. Petrobras said that it plans, along with Astra, to jointly invest up to US$500 million to upgrade the refinery to be able to process heavy Brazilian crude, Dow Jones relates. The Pasadena refinery, Dow Jones quote Ms. Araujo as saying, has a very small refining capacity. "It makes total sense for them to buy more." Ms. Araujo said. A statement from Petrobras Downstream Director Paulo Roberto Costa confirmed that the company is considering acquisitions of refineries outside of Brazil. Petrobras, however, doesn't comment about which assets it may be eyeing, Dow Jones says. The crucial question is how much Petrobras would be willing to spend. "The Lyondell-Citgo refinery seems really big. It depends very much on what the sale price would be," Luiz Broad, an oil analyst at the Agora Senior brokerage in Rio de Janeiro told Dow Jones. Citgo's refinery is estimated to fetch between US$3.5 billion to US$5 billion. Petrobras, according to Dow Jones, is flushed with cash due to record revenues amid sky-high oil prices. The company reported net earnings of BRL23.73 billion (US$11.10 billion at today's exchange rate) in 2005. Its current stock market capitalization stands at US$57.5 billion, and Petrobras has a favorable debt-to-equity ratio of 0.643. Petrobras said in a statement that 14% of its 2006 capital budget of US$12.3 billion would go into refining, and the company's 2006-2010 business plan has earmarked US$6 billion a year for downstream activities. However, Mr. Broad stressed to Dow Jones, Petrobras may have a lot of cash but it is already engaged in other ventures elsewhere. "Maybe buying the Lyondell-Citgo unit would be a bit heavy. I could imagine them being a candidate, but more likely in a consortium with other companies," Mr. Broad said. Mr. Broad noted that a possible cash to share offer to finance a refinery acquisition was unlikely as Petrobras in its last strategic plan abandoned the idea of issuing more shares, Dow Jones continues. Another analyst, Mark Routt, a senior consultant at Energy Security Analysis Inc. in Boston, spoke with Dow Jones that Petrobras could easily finance an acquisition through debt issuance. He calculates that roughly US$500 million of the possible acquisition costs would be for the crude oil and oil products inventories of the refinery. About Citgo Headquartered in Houston, Texas, CITGO is owned by PDV America, an indirect, wholly owned subsidiary of Petroleos de Venezuela S.A., the state-owned oil company of Venezuela. PDVSA is Venezuela's state oil company in charge of the development of the petroleum, petrochemical and coal industry, as well as planning, coordinating, supervising and controlling the operational activities of its divisions, both in Venezuela and abroad. * * * 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. As reported on Feb. 16, 2006, Standard and Poor's Ratings Services assigned a 'BB' rating on CITGO Petroleum Corp. Standard & Poor's 'BB' rating on CITGO is higher than the 'B+' corporate credit rating on PDVSA, because of the relative strength of the refiner's financial profile and the asset protection afforded to CITGO creditors, if CITGO defaults for PDVSA-specific reasons, for example, a Venezuela sovereign default. Nevertheless, CITGO could be challenged by events surrounding PDVSA. About Petroleo Brasileiro Headquartered in Houston, Texas, CITGO is owned by PDV America, an indirect, wholly owned subsidiary of Petroleos de Venezuela S.A., the state-owned oil company of Venezuela. PDVSA is Venezuela's state oil company in charge of the development of the petroleum, petrochemical and coal industry, as well as planning, coordinating, supervising and controlling the operational activities of its divisions, both in Venezuela and abroad. * * * 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. As reported on Feb. 16, 2006, Standard and Poor's Ratings Services assigned a 'BB' rating on CITGO Petroleum Corp. Standard & Poor's 'BB' rating on CITGO is higher than the 'B+' corporate credit rating on PDVSA, because of the relative strength of the refiner's financial profile and the asset protection afforded to CITGO creditors, if CITGO defaults for PDVSA-specific reasons, for example, a Venezuela sovereign default. Nevertheless, CITGO could be challenged by events surrounding PDVSA. PRODUTOS ALIMENTICIOS: Completes Restructuring of US$57M Debt ------------------------------------------------------------- The Latin Lawyer online edition reports that Brazilian biscuit and sweet manufacturer Industria de Produtos Alimenticios Cory has successfully restructured 123 million reals (US$57 million) in debts under the new Brazilian bankruptcy law. Credits were restructured for a term of 15 years at premium interest rates. Among the company's creditors are: -- the State of Minas Gerais Development Bank, -- 13 banks, -- 328 commercial suppliers, and -- 150 employees. A recovery plan was approved in a creditors' meeting on March 29. Under the plan, banks were given: -- seats on the company's board of directors, -- the right to appoint executive officers, and -- the right to receive part of the proceeds of a possible sale of the company's equity. "The biggest challenge of the transaction was to accommodate the interests of a state development bank as well as those of preferred and ordinary creditors, and to create mechanisms allowing the creditors to participate in any possible operational upside as well as developing corporate governance rules which let them monitor the performance of the company," Antonio Carlos Mazzuco at Madrona, Hong, Mazzuco, Kawamura Sociedade de Advogados, who represented Cory, was quoted by the Latin Lawyer as saying. Industria de Produtos Alimenticios is represented by: Antonio Carlos Mazzuco Deborah Lorenzi Marques Madrona, Hong, Mazzuco, Kawamura Sociedade de Advogados Av. Brigadeiro Faria Lima Sao Paulo, Brazil Industria de Produtos Alimenticios Cory is a family-owned, traditional Brazilian biscuits and sweet manufacturer with plants in the states of Sao Paulo and Minas Gerais. USINAS SIDERURGICAS: Plans to Increase Capital to US$2.52 Bil. -------------------------------------------------------------- Usiminas aka Usinas Siderurgicas de Minas Gerais SA disclosed to Brazil's securities regulator -- Comissao de Valores Mobiliarios -- its plan to increase capital from 2.4 billion reals to 5.4 billion reals (US$2.52 billion). The capital increase will be made using investment reserves and working capital worth 3 billion reals. Headquartered in Minas Gerais, Brazil, Usiminas is among the world's 20 largest steel manufacturing complexes, with a production capacity of approximately 10 million tons of steel. Usiminas System companies produces galvanized and non-coated flat steel products for the automotive, small and large diameter pipe, civil construction, hydro-electronic, rerolling, agriculture, and road machinery industries. Brazil consumes 80% of its products and the company's largest export markets are the U.S. and Latin America. * * * 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. VARIG: Crisis Proves Good for Gol's and Tam Airlines' Stocks ------------------------------------------------------------ Dow Jones Newswires reports that as the crisis on Viacao Aerea Rio-Grandense or Varig deepened, the stocks in Gol Linhas Aereas Inteligentes and TAM Airlines surged in contrast. If and when Varig's crisis proceeds to a collapse of its operations, the two airlines will take over most of Varig's domestic flight schedules and may include some of the international slots. A growing speculation of Varig's flights to soon stop is being supported by reasons that the airline has no credit access to pay the operating costs and no sign of a government bailout is in process. Dow Jones reports that Brazil's National Civil Aviation Authority is drafting a contingency plan in the eventuality that Varig's planes will be grounded. Headquartered in Rio de Janeiro, Brazil, VARIG S.A. is Brazil's largest air carrier and the largest air carrier in Latin America. VARIG's principal business is the transportation of passengers and cargo by air on domestic routes within Brazil and on international routes between Brazil and North and South America, Europe and Asia. VARIG carries approximately 13 million passengers annually and employs approximately 11,456 full-time employees, of which approximately 133 are employed in the United States. The Company, along with two affiliates, filed for a judicial reorganization proceeding under the New Bankruptcy and Restructuring Law of Brazil on June 17, 2005, due to a competitive landscape, high fuel costs, cash flow deficit, and high operating leverage. The Debtors may be the first case under the new law, which took effect on June 9, 2005. Similar to a chapter 11 debtor-in-possession under the U.S. Bankruptcy Code, the Debtors remain in possession and control of their estate pending the Judicial Reorganization. Sergio Bermudes, Esq., at Escritorio de Advocacia Sergio Bermudes, represents the carrier in Brazil. Each of the Debtors' Boards of Directors authorized Vicente Cervo as foreign representative. In this capacity, Mr. Cervo filed a Sec. 304 petition on June 17, 2005 (Bankr. S.D.N.Y. Case Nos. 05-14400 and 05-14402). Rick B. Antonoff, Esq., at Pillsbury Winthrop Shaw Pittman LLP represents Mr. Cervo in the United States. As of March 31, 2005, the Debtors reported BRL2,979,309,000 in total assets and BRL9,474,930,000 in total debts. =========================== C A Y M A N I S L A N D S =========================== FK CAPITAL: Final Shareholders Meeting Set for May 4 ---------------------------------------------------- Shareholders of FK Capital will gather for a final meeting on May 4, 2006, at: Maples Finance Jersey Limited 2nd Floor, Le Masurier House La Rue Le Masurier, St. Helier Jersey JE2 4YE Accounts on the company's liquidation process will be presented during the meeting. As reported in the Troubled Company Reporter on March 13, 2006, FK Capital started liquidating assets on Feb. 8, 2006. Creditors of the company were 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. Parties-in-interest may contact the liquidator at: Mark Wanless Maples Finance Jersey Limited 2nd Floor, Le Masurier House La Rue Le Masurier, St. Helier Jersey JE2 4YE GPF ALMATIS: Final Shareholders General Meeting Set for May 8 ------------------------------------------------------------- Shareholders of GPF Almatis Debt Limited will convene on May 8, 2006, for an extraordinary final general meeting at 11:45 a.m. at the company's registered office. Accounts on the company's liquidation process will be presented during the meeting. The shareholders will also authorize the liquidators to retain the records of the company for a period of six years, starting from the dissolution of the company. Destruction of the records may then be allowed after such period. Any person who is entitled to attend and vote at this meeting may appoint a proxy to attend and vote in his stead. A proxy need not be a member or a creditor. As reported in the Troubled Company Reporter on April 13, 2006, creditors of GPF Almatis are given until April 24 to present proofs of claim to Westport Services Limited, the company's liquidator. Failure to present claims would mean exclusion from the benefit of any distribution that the company will make. The company's liquidator can be reached at: Westport Services Limited Attention: Patricia Tricarico P.O. Box 1111 Grand Cayman, Cayman Islands Tel: (345) 949-5122 Fax: (345) 949-7920 GPF ALMATIS HOLDINGS: Holds Last Shareholders Meeting on May 8 -------------------------------------------------------------- Shareholders of GPF Almatis Holdings Limited will gather on May 8, 2006, for a final general meeting at 11:45 a.m. at the company's registered office. Accounts on the company's liquidation process will be presented during the meeting. The shareholders will also authorize the liquidators to retain the records of the company for a period of six years, starting from the dissolution of the company. Destruction of the records may then be allowed after such period. Any person who is entitled to attend and vote at this meeting may appoint a proxy to attend and vote in his stead. A proxy need not be a member or a creditor. As reported in the Troubled Company Reporter on April 13, 2006, GPF Almatis Holdings Limited started liquidating assets on March 13, 2006. Verification of creditors' claims against GPF Almatis Holdings will end on April 24, 2006. The company's liquidators can be reached at: Westport Services Limited Attention: Patricia Tricarico P.O. Box 1111 Grand Cayman, Cayman Islands Tel: (345) 949-5122 Fax: (345) 949-7920 LION HEART: Liquidator Presenting Liquidation Progress on May 4 --------------------------------------------------------------- The sole shareholder of Lion Heart Corporation will meet with the company's liquidators, Richard Gordon and Jon Roney, for a final meeting on May 4, 2006, at: Maples Finance Limited, Queensgate House, George Town Grand Cayman, Cayman Islands Accounts on the company's liquidation process will be presented during the meeting. The liquidators can be reached at: Jon Roney Richard Gordon Maples Finance Limited P.O. Box 1093 George Town Grand Cayman, Cayman Islands =============== C O L O M B I A =============== * COLOMBIA: Venezuela Will Impose Trade Barriers Against Country ---------------------------------------------------------------- Peru, along with Colombia, will be barred from trading with Venezuela after it signed the free-trade agreement aka FTA with the US, the Associated Press reports. Venezuela's President Hugo Chavez said in a radio station on April 13 that he would protect his country's economy by preventing an invasion of subsidized North American products coming through Peru and Colombia. AP relates that President Chavez withdrew his country from the Andean Community of Nations trade bloc due to Peru and Colombia's decision to enter FTA. According to Vheadline, President Chavez reasoned that the withdrawal was a strategy aimed at protecting domestic agricultural and industrial production. Vheadline states that President Chavez argues that if Venezuela stays in the trade bloc, it would be flooded by USA subsidized products from Colombia. Venezuela will not join the FTAA, President Chavez told Vheadline. President Chavez instead proposed the Bolivarian Alternative for the Americas aka ALBA and is inviting Peru and Colombia to join, Vheadline reports. * * * Fitch Ratings assigned 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 * * * Fitch Ratings assigned these ratings on Bolivia: Rating Rating Date ------ ----------- Country Ceiling B- Jun. 17, 2004 Long Term IDR B- Dec. 14, 2005 Local Currency Long Term Issuer Default Rating B- Dec. 14, 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. =================== C O S T A R I C A =================== * COSTA RICA: Limon & Moin Work Stoppage Dispute May Escalate ------------------------------------------------------------- Disputes on work slowdown at the Limon and Moin docks between the government of Costa Rica and union officials could complicate into a full blown strike, Inside Costa Rica reports. Talks between the government and the union have failed, according to Inside Costa Rica. An accord has been reached and signed at Casa Presidencial on two occasions but still the agreement went nowhere. Among those who are leading the slowdown are: -- Mauricio Wilson of the Union de Transportistas del Caribe; -- Julio Jimenez of the Asociacion de Campesinos Limonenses; and -- Winston Norman of the Federaci�n de Trabajadores Limonenses. These leaders said to Inside Costa Rica that they are tired of the promises and no action by government. Inside Costa Rica relates that truckers demanding government action have blocked the streets to the docks. Among workers' demands is the repair of the roads and bridges. Making matters worse is Limon's Mayor Roger Rivera's announcement of closing down the garbage dump on Monday. The anti-riot police who were called in to clear the docks earlier last week have also angered workers, who resent their labor rights being trampled. However, Israel Oconitrillo -- a spokesperson for the Junta de Administracion Portuaria y de Desarrollo Economico de la Vertiente Atlantica aka Japdeva -- explained to Inside Costa Rica that the police action was necessary to remove the responsibility on Japdeva for the losses caused by the work action. According to Inside Costa Rica, the slowdown is causing hundreds of thousands of dollars in losses especially to fruit exporters who need to deliver their product to markets outside of Costa Rica. It is expected that many more will join the slowdown and paralyze the Caribbean ports, Inside Costa Rica relates. * * * As reported in the Troubled Company Reporter on Mar. 10, 2006, Fitch rated Costa Rica's foreign and local currency issuer default ratings 'BB' and 'BB+', respectively. Fitch said the Rating Outlook is Negative. =================================== D O M I N I C A N R E P U B L I C =================================== * DOMINICAN REPUBLIC: Energy Sector Incurred Higher Losses ---------------------------------------------------------- Dominican Republic's losses in the energy sector has increased 10.4% in 2005, the Dominican Today reports. From 2003 to 2005, losses in energy production and distribution has raised to 44.6% from 38.4%, according to a report from the Central Bank's National Accounts Department. Official reports state that losses in transmission and distribution are rising each year. Dominican Today relates that the government has contributed about US$1,000 million to sustain the weakening energy system but the losses have not decreased. The contributions have been insufficient for distribution firms to reduce operational losses. Official reports indicate that, each year, losses in transmission and distribution are on the rise, notwithstanding that only during two years -- 2005 and 2006 -- the government has contributed over US$1,000 million to sustain the deteriorated energy system. * * * Fitch Ratings assigned these ratings on the Dominican Republic: Rating Rating Date ------ ----------- Country Ceiling B- May 11, 2005 Long Term IDR B- Dec. 14, 2005 Short Term IDR B Dec. 14, 2005 Local Currency Long Term Issuer Default Rating B May 11, 2005 ============= E C U A D O R ============= * ECUADOR: Firms Will File Suit Over Reform on Oil Tax Law ---------------------------------------------------------- A lawsuit by the business community against the Ecuadorian government is expected in the next few days due to the new oil tax law passed by the nation's congress, Dow Jones Newswires reports. According to Dow Jones, the firms claim that the new law is unconstitutional. "In changing clauses in contracts signed long ago, the law becomes retroactive, which is unconstitutional," Blasco Penaherrera, head of a federation representing chambers of commerce and business associations in Ecuador, told Dow Jones. Mr. Penaherrera was quoted by Dow Jones saying that the lawsuit seeks to protect fundamental free market principles and the rule of law, which must come first in any country. Dow Jones states that the law violates an international treaty, which the government ratified in 1997 to protect foreign investments. Marti Estell, a US Embassy spokeswoman, told the Channel 4 television that the law violates a bilateral investment treaty signed in August 1993 as the law was imposed in a unilateral manner. The treaty, which was created for the encouragement and reciprocal protection of investment, stipulates that disagreements should be first settled through consultation and negotiation, suggesting the aid of an independent arbtitrator or the courts as the last resort. Mr. Penaherrera blames the law as the main reason that talks seeking a free-trade deal with the US have been stagnant, Dow Jones relates. According to him, the Trade Minister Jorge Illingworth said the negotiations were going well until the new law was sent to the Congress. However, Economy Minister Diego Borja, the author of the reform on the tax law and one of its most passionate supporters, rejected the idea that the new law had obstructed FTA talks, according to Dow Jones. There were several problems to be solved even before the reform, Mr. Borja told Dow Jones. He assured that the government will continue to try to salvage the more than two years of FTA talks. Dow Jones states that the law increases state revenue from private oil firms by requiring them to share additional income whenever oil prices rise above previously set contract prices. The companies have to split half of that revenue with the government. Mr. Borja told reporters that as soon as the law takes into effect the country will start receiving from the private oil firms an additional US$2 million per day, which will go to a special account to be used in social project or to be spent in buying back debt. "That is how much we were losing because the (foreign) oil companies refused to negotiate," Mr. Borja commented to Dow Jones. The suit would be brought to the Ecuadorian constitutional court as soon as the new law is printed in the official record and is put into effect, Mr. Penaherrera revealed to Dow Jones. Mr. Penaherrera was quoted by Dow Jones saying that the court could make a decision in three to four months. Energy Minister Ivan Rodriguez admitted to Dow Jones relates that the government is seeking ways to soften the blow dealt to private oil firms by the law. Mr. Rodriguez informed Dow Jones on Thursday that the companies are worried about the investments they made beyond what's established in their contracts. He said that the companies want to be sure they will recover these investments. Mr. Rodriguez assured that the government is going through the numbers to, through regulation, guarantee the recovery and to promote new investments, Dow Jones relates. Dow Jones states that Mr. Rodriguez, who works alongside Mr. Borja with the renegotiation, said that the companies' requests are being studied in the ongoing contract renegotiation talks between the private firms and the government and that renegotiation could be completed in the next couple of months. * * * Fitch Ratings assigned these ratings on Ecuador: Rating Rating Date ------ ----------- Country Ceiling B- Aug. 29, 2005 Long Term IDR B- Dec. 14, 2005 Short Term IDR B Dec. 14, 2005 ===================== E L S A L V A D O R ===================== * EL SALVADOR: Social Groups Rally Against Canadian Mining Firms ---------------------------------------------------------------- Social groups in El Salvador, along with environmentalists, held demonstrations on Friday in front of the Canadian Embassy to protest the exploitation of mines by Canadian mining companies, Inside Costa Rica reports. Inside Costa Rica relates that environmentalists and community leaders demanded that the embassy and El Salvador's Economy and Environment ministries halt the mining exploitation. According to Inside Costa Rica, the demonstrators claimed that Canadian Martinnique Minerals SA's activities are damaging the environment in the northern part of the country, affecting the ecosystem and the residents. Canadian Marinnique is planning to launch mines in the states of Chalatenango, Cabanas and Morazan, which prompted the Catholic Church to support protesters in the communities, Inside Costa Rica relates. Inside Costa Rica states that the Center for Research on Investment and Trade has repeatedly criticized mining, saying that it is a new form of expropriation of the county's natural resources. Angel Ibarra, head of the Unidad Ecologic Salvadorena, expressed her contempt of the free trade deal with the US that includes mining in its scope, according to Inside Costa Rica. * * * Fitch Ratings assigned these ratings on El Salvador: Rating Rating Date ------ ----------- Country Ceiling BB+ Jun. 18, 2004 Long Term IDR BB+ Dec. 14, 2005 Short Term IDR B Dec. 14, 2005 Local Currency Long Term Issuer Default Rating BB+ Dec. 14, 2005 ================= G U A T E M A L A ================= * GUATEMALA: Seeks Deal to Buy Discounted Crude from Venezuela -------------------------------------------------------------- President Oscar Berger of Guatemala plans to meet with Venezuela's President Hugo Chavez to discuss a deal on the purchase of discounted petroleum from Venezuela, Energy and Mines Minister Luis Ortiz told the Associated Press. The meeting is planned to be held in May in Costa Rica, AP relates. Mr. Ortiz was quoted by AP saying that President Berger wants Venezuela to increase investments in Guatemala oil and natural gas exploration. According to AP, President Chavez has made deals to give oil under preferential terms in the region. * * * Fitch Ratings assigned these ratings on Guatemala: Rating Rating Date ------ ----------- Country Ceiling BB+ Feb. 22, 2006 Long Term IDR BB+ Feb. 22, 2006 Short Term IDR B Feb. 22, 2006 Local Currency Long Term Issuer Default Rating BB+ Feb. 22, 2006 Fitch also rated Guatemala's senior unsecured bonds: Maturity Date Amount Rate Ratings ------------- ------ ---- ------- Aug. 3, 2007 $150,000,000 8.5% BB+ Nov. 8, 2011 $325,000,000 10.25% BB+ Aug. 1, 2013 $300,000,000 9.25% BB+ Oct. 6, 2034 $330,000,000 8.125% BB+ * * * 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. =========== M E X I C O =========== ALMACENADORA SUR: Moody's Puts B2 Global Local Currency Rating -------------------------------------------------------------- Moody's de Mexico assigned long- and short-term global local currency issuer ratings of B2 and Not-Prime, respectively, to Almacenadora Sur, S.A. or Alsur. At the same time, Moody's assigned long- and short-term Mexican National Scale issuer ratings of Ba2.mx and MX-4, respectively, to Alsur. The outlooks on all these ratings are stable. The ratings on Alsur reflect its small franchise and short-track record under its actual ownership structure and relatively new strategic goals. The ratings are constrained by Alsur's low profitability --a structural characteristic inherent to its sector -- as well as by the company's developing franchise and still-untested ability to generate stable and consistent earnings. Alsur's small business diversification and poor client granularity are also rating considerations. Moody's noted that the potential for synergies with companies of its economic group should help develop Alsur's franchise. Through a defined business model, Alsur plays an important role in its economic group's vertical integration, therefore high profitability would not necessarily be a strategic goal for management, the rating agency added. Moody's national scale ratings are intended for use primarily by Mexican domestic investors, and thus they are not comparable to the globally applicable ratings of Moody's Investors Service, which do not carry the "mx/MX" notation. National scale ratings, therefore, rank Mexican issuers relative to each other, but not relative to absolute default risks. National Scale ratings isolate systemic risks: they do not address loss expectation associated with systemic events that could affect all issuers, even those that receive the highest ratings on the National Scale. A Ba2.mx/MX-4 rating on Moody's Mexican National Scale indicates an issuer or issue with below average creditworthiness relative to the domestic market. Almacenadora Alsur, S.A. is headquartered in Mexico City. As of December 2005, it ranked fourth in its sector, with a market share of approximately 6% in terms of goods under custody. The following issuer ratings were assigned: -- Long-term global local currency rating: B2 -- Short-term global local currency rating: Not-Prime -- Long-term Mexican National Scale rating: Ba2.mx -- Short-term Mexican National Scale rating: MX-4 The outlooks on all these ratings are stable. DIRECTV GROUP: Extends Service & Support Pact with TiVo ------------------------------------------------------- Reuters reports that DirecTV Group Inc. and TiVO Inc. inked a new deal that would expand their service and support agreement for three years. In August last year, DirecTV said it would stop Satellite TV broadcaster DirecTV said last August that it would no longer market TiVo's digital video recorders and would use its own system made by News Corp. (NWS.N: Quote, Profile, Research)-controlled NDS Group Plc (NNDS.O: Quote, Profile, Research). While DirecTV still will not be marketing TiVo, the two companies extended a deal under which customers can receive TiVo through DirecTV. Maintenance and support for the service will be provided by TiVo, which would have been under no obligation to service DirecTV customers without an extension to the agreement, due to expire in 2007. The statement from the two companies did not give financial terms of the extension, but said "the recurring monthly economics of the agreement are similar to the economics for DirecTV receivers with TiVo service activated since 2003." DirecTV is a top TiVo customer and the extension of the deal was initially greeted positively on Wall Street, where there had been concerns that DirecTV would transition their TiVo customers to its own service if an extension was not reached. DirecTV's decision to stop marketing TiVo and instead focus on News Corp. technology is part of a broader plan to replicate video-on-demand viewing, which has been a defining competitive advantage of cable operators. Satellite television technology only provides for a one-way broadcast of video programming, unlike cable TV, which also lets users send requests back to the cable system. Cable customers are able to order movies and shows with a click of their remote control. Another part of Wednesday's deal includes a provision under which TiVo and DirecTV agreed not to assert patent rights against the other. TiVo is currently in a legal battle with satellite television company EchoStar Communications Corp. (DISH.O: Quote, Profile, Research) over patent claims. In the case, TiVo charges EchoStar with stealing technology that allows users to record one TV program while watching another via a DVR. The DIRECTV Group, Inc., formerly Hughes Electronics Corporation, headquartered in El Segundo, California, is a world-leading provider of multi-channel television entertainment, and broadband satellite networks and services. The DIRECTV Group, Inc. with sales in 2004 of approximately $11.4 billion is 34% owned by Fox Entertainment Group, Inc., which is owned by News Corporation. DIRECTV is currently available in Latin American countries: Argentina, Brazil, Chile, Colombia, Costa Rica, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Puerto Rico, Trinidad & Tobago, Uruguay, Venezuela and several Caribbean island nations. * * * Moody's Investor Service assigned on June 8, 2005, a Ba2 rating on DirecTV Group Inc.'s US$1.0 billion senior unsecured notes. =========== P A N A M A =========== * PANAMA: President Seeks Citizens' Support on Canal Expansion -------------------------------------------------------------- Panama's President Martin Torrijos is seeking citizens' support on the US$6 billion Panama Canal expansion project, the Associated Press reports. AP relates that the project would add a third series of locks big enough to accommodate the world's biggest cargo ships and another shipping lane. These locks would be just under 180 feet wide, to allow passage of big ships, which carry 8,000 containers. According to AP, the biggest ships that can currently pass through the canal's locks are the Panamax vessels that can carry 4,000 cargo containers. They, however, barely fit in the 109 feet locks. AP states that the government sees the wider locks in Panama Canal are crucial to the income-generating capacity of the canal. AP recalls that in 2005, about 13,000 ships passed through the waterway, paying US$1.2 billion for canal fees and maintenance and other related services. The government is also expecting that the construction, which is expected to last at least five years, would bring in 7,000 new jobs. The project's estimated cost would be a big investment for Panama, whose government budget is US$6.5 billion a year. Officials are considering private bank financing, AP relates. According to AP, recent polls showed: -- 56% of Panamanians support the expansion project, -- 19% are against it, and -- the rest are yet to decide. Heated arguments are expected during the referendum that would decide the canal's future, AP states. Opponents of the project believe the expansion is unnecessary because there are only about 300 mammoth ships operating and their trade routes are mostly within the Pacific, AP reveals. They also say that the project is risky because it is affected by the growth of maritime world trade and the world economy. Fernando Manfredo, former canal administrator, told AP that the canal is not the most important natural resource but the country's geographic position. AP reports that the opposition group suggested that instead of the canal's expansion, a $600 million megaport would be built at the Pacific end of the canal. They said it would allow the bigger ships to transfer their loads to smaller vessels for carrying through the canal and on to ports in the Atlantic. The canal will remain the best alternative regardless of the size of the ships," Mr. Manfredo told AP. * * * Fitch Ratings assigned these ratings on Panama: Rating Rating Date ------ ----------- Country Ceiling BBB Apr. 8, 2005 Long Term IDR BB+ Dec. 14, 2005 Short Term IDR B Dec. 14, 2005 Local Currency Long Term Issuer Default Rating BB+ Dec. 14, 2005 ======= P E R U ======= * PERU: Venezuela Will Impose Trade Barriers Against Country ------------------------------------------------------------ Peru, along with Colombia, will be barred from trading with Venezuela after it signed the free-trade agreement aka FTA with the US, the Associated Press reports. Venezuela's President Hugo Chavez said in a radio station on April 13 that he would protect his country's economy by preventing an invasion of subsidized North American products coming through Peru and Colombia. AP relates that President Chavez withdrew his country from the Andean Community of Nations trade bloc due to Peru and Colombia's decision to enter FTA. According to Vheadline, President Chavez reasoned that the withdrawal was a strategy aimed at protecting domestic agricultural and industrial production. Vheadline states that President Chavez argues that if Venezuela stays in the trade bloc, it would be flooded by USA subsidized products from Colombia. Venezuela will not join the FTAA, President Chavez told Vheadline. President Chavez instead proposed the Bolivarian Alternative for the Americas aka ALBA and is inviting Peru and Colombia to join, Vheadline reports. * * * Fitch Ratings assigned 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 * * * Fitch Ratings assigned these ratings on Bolivia: Rating Rating Date ------ ----------- Country Ceiling B- Jun. 17, 2004 Long Term IDR B- Dec. 14, 2005 Local Currency Long Term Issuer Default Rating B- Dec. 14, 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. ===================== P U E R T O R I C O ===================== G+G RETAIL: Panel Hires Jaspan Schlesinger as Conflicts Counsel --------------------------------------------------------------- The Official Committee of Unsecured Creditors of G+G Retail, Inc.'s chapter 11 cases, sought and obtained authority from the United States Bankruptcy Court for the Southern District of New York, to retain Jaspan Schlesinger Hoffman LLP as conflicts counsel. The Committee selected Jaspan Schlesinger because of the firm's extensive experience, expertise and knowledge in the field of litigation in and outside of bankruptcy and in the fields of debtors' and creditors' rights and business reorganizations under Chapter 11 of the Bankruptcy Code. As conflicts counsel, Jaspan Schlesinger will: a) assist and advise the Committee in the investigation of the security interests, liens and claims of The CIT Group; b) commence, if necessary, and prosecute adversary proceedings against CIT; c) attend meetings and negotiate with the representatives of the Debtor or any party which is the subject of investigation by the Committee or against which the Committee may commence an adversary proceeding; d) take all necessary action to protect and preserve the interests of the Committee and unsecured creditors, including: * the prosecution of actions on their behalf; and * negotiations concerning litigation in which the Debtor is involved; and e) prepare on behalf of the Committee all necessary adversary complaints and related motions, applications, answers, orders, reports and other papers in support of positions taken by the Committee. The CIT Group is a duly appointed co-chairperson to the Committee and is represented by Patrick Rohan. To the best of the Committee's knowledge, Jaspan Schlesinger does not hold or represent any interest adverse to the Debtor and is "disinterested" pursuant to Sec. 101(14) of the Bankruptcy Code. Jaspan Schlesinger's professionals bill: Professional Hourly Rate ------------ ----------- Partners/Counsel $415 - $525 Associates $250 - $390 Legal Assistants $185 Founded in 1946, Jaspan Schlesinger Hoffman LLP -- http://www.jshllp.com/-- is a general practice law firm, with a substantial bankruptcy law practice. The firm is also active in estate and tax planning, probate, education and municipal matters, tax certiorari and condemnation matters, commercial and corporate matters, litigation, real estate, zoning, environmental, international transactions, securities, lending, intellectual property, and matrimonial and family matters. The firm maintains offices in Garden City, New York and Wilmington, Delaware. Headquartered in New York, New York, G+G Retail Inc. retails ladies wear and operates 566 stores in the United States and Puerto Rico under the names Rave, Rave Girl and G+G. The Debtor filed for Chapter 11 protection on Jan. 25, 2006 (Bankr. S.D.N.Y. Case No. 06-10152). William P. Weintraub, Esq., Laura Davis Jones, Esq., David M. Bertenthal, Esq., and Curtis A. Hehn, Esq., at Pachulski, Stang, Ziehl, Young & Jones P.C. represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated assets of more than US$100 million and debts between US$10 million to US$50 million. GLOBAL HOME: Section 341(a) Meeting Scheduled for May 8 ------------------------------------------------------- Kelly Beaudin Stapleton, the U.S. Trustee for Region 3, will convene a meeting of Global Home Products, LLC, and its debtor- affiliates' creditors at 2:00 p.m., on May 8, 2006, at Room 2112, Second Floor, J. Caleb Boggs Federal Building, 844 King Street in Wilmington, Delaware. This is the first meeting of creditors required in all bankruptcy cases under Section 341(a) of the Bankruptcy Code. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Headquartered in Westerville, Ohio, Global Home Products, LLC -- http://www.anchorhocking.com/and http://www.burnesgroup.com/ -- sells houseware and home products and manufactures high quality glass products for consumers and the food services industry. The company also designs and markets photo frames, photo albums and related home decor products. The company and 16 of its affiliates, including Burnes Puerto Rico, Inc., and Mirro Puerto Rico, Inc., filed for Chapter 11 protection on Apr. 10, 2006 (Bankr. D. Del. Case No. 06-10340). Laura Davis Jones, Esq., Bruce Grohsgal, Esq., James E. O'Neill, Esq., and Sandra G.M. Selzer, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub LLP, represent the Debtors. When the company filed for protection from their creditors, they estimated assets between $50 million and $100 million and debts of more than $100 million. OCA INC: Panel Taps Loughlin Meghji+Company as Financial Advisor ---------------------------------------------------------------- The Official Committee of Unsecured Creditors of OCA, Inc., and its debtor-affiliates asks the U.S. Bankruptcy Court for the Eastern District of Louisiana for authority to retain Loughlin Meghji+Company as its financial advisor. Loughlin will: a) evaluate the assets and liabilities of the Debtor; b) analyze and review the financial and operating statements of the Debtor; c) analyze the business plans and any financial and cash flow forecasts of the Debtor; d) review contractual arrangements between the Debtor and related entities; e) review and assist with the claims resolution process and distributions; f) review cash flow forecasts and other related issues; g) provide valuation and other financial analysis as the Committee may require; h) assess various strategic alternatives proposed by the Debtor and evaluate these alternatives, including: -- the Debtor's viability as a standalone entity; -- sale of all or some of the assets of the Debtor's estate; and -- any plan of reorganization proposed by the Debtor. i) provide testimony in Court on behalf of the Committee; and j) provide other appropriate and necessary services as requested by the Committee. Loughlin will charge an advisory fee of $75,000 per month for the first three months of its engagement. The firm will charge $50,000 in the succeeding months. Mohsin Y. Meghji, a principal at Loughlin, assures the Bankruptcy Court that his firm does not hold any interest materially adverse to the Debtor's estate and is disinterested as that term is defined in Section 101(14) of the Bankruptcy Code. A full-text copy of the Committee's eight-page engagement agreement with Loughlin is available for free at: http://researcharchives.com/t/s?806 Based in Metairie, Louisiana, OCA, Inc. -- http://www.ocai.com/ -- provides a full range of operational, purchasing, financial, marketing, administrative and other business services, as well as capital and proprietary information systems to approximately 200 orthodontic and dental practices representing approximately almost 400 offices. The Company's client practices provide treatment to patients throughout the United States and in Japan, Mexico, Spain, Brazil and Puerto Rico. The Company and its debtor-affiliates filed for Chapter 11 protection on March 14, 2006 (Bankr. E.D. La. Case No. 06-10179). William H. Patrick, III, Esq., at Heller Draper Hayden Patrick & Horn, LLC, represents the Debtors. When the Debtors filed for protection from their creditors, they listed $545,220,000 in total assets and $196,337,000 in total debts. ================= V E N E Z U E L A ================= CITGO: Hires Morgan Stanley as Refinery Sale Financial Adviser -------------------------------------------------------------- Citgo Petroleum Corp., the US refining arm of Venezuelan state- owned oil firm Petroleos de Venezuela aka PDVSA, and Lyondell Chemical Co. appointed Morgan Stanley as financial adviser for the proposed sale of jointly owned Lyondell-Citgo Refining L.P., Reuters reports. Citgo and Lyondell said in a statement that they will work with Morgan Stanley to prepare an offering memorandum and establish a data room for interested bidders. As reported in the Troubled Company Reporter on April 10, 2006, Citgo signed a letter of intent with Lyondell to jointly explore the sale of their Lyondell-Citgo Refining L.P. According to Dow Jones Newswires, PDVSA said last September that it wanted to sell its stake in the refinery to recover its $5 billion investment. According to the Associated Press, Venezuela's President Hugo Chavez said the Citgo refineries have been a bad deal for his country because they buy Venezuelan oil at a discount while paying taxes in the US, the largest buyer of Venezuelan crude. President Chavez has been vocal with his contempt of the US and had repeatedly threatened halt on supplying oil to the country, saying that Venezuela has been looking for new markets. Lyondell, Citgo and PDVSA has resolved all litigation related to the refinery, Dow Jones states. The Troubled Company Reporter also reported on April 21, 2006, that Citgo will pay Lyondell US$50 million in fuel supplies to silence disputes and go on with the sale of jointly owned Lyondell-Citgo Refining L.P. "The dispute was resolved. We agreed it was an exaggerated sum and we are paying $50 million not in cash but in consumables," Mr. Ramirez said during an interview with newspaper El Universal. Dow Jones recalls that Lyondell had sued PDVSA in February 2002 for $90 million. Lyondell claimed that the Venezuelan firm had ceased supplying feedstock to the refinery, violating a long- term crude supply contract. Lyondell had demanded a sum that was too high as compensation for disrupted Venezuelan crude oil supplies during a crippling 2002-2003 oil strike that virtually paralyzed exports, Mr. Ramirez told El Universal. Dow Jones adds that the US Department of Labor issued in March citations against Lyondell-Cito Refining L.P. for health and safety violations. It fined the venture about $55,000. PDVSA, Citgo and Lyondell planned to move diligently to solicit offers for the refinery and it was decided any deal would be subject to approval by the appropriate governing bodies, Dow Jones reports. According to Dow Jones, the Houston-based refinery was created in 1993, with Lyondell having a 58.75% stake and Citgo owning about 41.25%. The plant has a crude oil processing capacity of 268,000 barrels a day. Headquartered in Houston, Texas, CITGO is owned by PDV America, an indirect, wholly owned subsidiary of Petroleos de Venezuela S.A., the state-owned oil company of Venezuela. PDVSA is Venezuela's state oil company in charge of the development of the petroleum, petrochemical and coal industry, as well as planning, coordinating, supervising and controlling the operational activities of its divisions, both in Venezuela and abroad. * * * 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. As reported on Feb. 16, 2006, Standard and Poor's Ratings Services assigned a 'BB' rating on CITGO Petroleum Corp. Standard & Poor's 'BB' rating on CITGO is higher than the 'B+' corporate credit rating on PDVSA, because of the relative strength of the refiner's financial profile and the asset protection afforded to CITGO creditors, if CITGO defaults for PDVSA-specific reasons, for example, a Venezuela sovereign default. Nevertheless, CITGO could be challenged by events surrounding PDVSA. CITGO: Valero Energy May Present Bid for Houston Refinery --------------------------------------------------------- As previously reported, Citgo Petroleum Corp. signed early this month a letter of intent with Lyondell Chemical Company to study the sale of their refining plant in Houston, Texas. Valero Energy Corporation said it would consider buying the Lyondell-Citgo refinery for a fair price, the Wall Street Journal reports. Valero Energy did not say how much it is willing to pay for the refinery. Analysts have pegged the price from US$3.5 billion to US$5 billion. In a separate report from El Universal, Valero's vice president Mary Brown said that the company is interested in the refinery even if it has to acquire the crude "from other sources." The refinery will no longer receive discounted crude from its parent -- Petroleos de Venezuela SA. According to the Journal, the 268,000 barrel-a-day Lyondell- Citgo refinery is among the more problematic Gulf Coast refineries in terms of operations. The most recent major accident in the refinery happened in Oct. 16, 2005, when explosion and fire ravaged the plant as a result of a botched restart operation following the pre precautionary shutdown ahead of Hurricane Rita. The U.S. Labor Department fined the refinery US$55,000 for the incident. After a 1997 major upgrade, the Houston refinery has the ability to transform very heavy high-sulfur crude oil into clean fuels including reformulated gasoline and low-sulfur diesel as well as other high-value products such as jet fuel and aromatics, El Universal relates. Lyondell holds a 58.75% interest in the partnership and Citgo the remaining 41.25%. Venezuela's daily delivery of one million barrels of crude and liquid fuels to the United States end up being processed by Citgo's eight facilities or by some other PDVSA-affiliated refineries such as Chalmette, Sweeney or Hovensa. The resulting fuels are then marketed through the 14,000 gas stations Citgo banners in the U.S., El Universal says. Headquartered in Houston, Texas, CITGO is owned by PDV America, an indirect, wholly owned subsidiary of Petroleos de Venezuela S.A., the state-owned oil company of Venezuela. * * * As reported on Feb. 16, 2006, Standard and Poor's Ratings Services assigned a 'BB' rating on CITGO Petroleum Corp. Standard & Poor's 'BB' rating on CITGO is higher than the 'B+' corporate credit rating on PDVSA, because of the relative strength of the refiner's financial profile and the asset protection afforded to CITGO creditors, if CITGO defaults for PDVSA-specific reasons, for example, a Venezuela sovereign default. Nevertheless, CITGO could be challenged by events surrounding PDVSA. EMPRESAS ICA: Venezuelan Unit Inks Four Civil Construction Deal --------------------------------------------------------------- Empresas ICA, S.A. de C.V., reported Monday the signing of four civil construction contracts for a total of MXN1,324.4 million. The projects include: -- Expansion and renovation of the Cachamay Sports Complex, with a capacity of 40,000 persons, located in Puerto Ordaz, Independent Municipality of Caroni, Bolivar State, Venezuela and the construction of access roads. The VEB106,000 million contract was awarded by the State of Bolivar to ICA Venezuela in a public bidding process. The unit price contract is expected to be completed in May 2007. The project is part of the Venezuelan government's initiative to update the sports infrastructure for the Americas Soccer Cup, which it will host in 2007. The Government of Bolivar has deposited the required economic resources in a trust to ensure the continuous execution of the project. -- Construction of the Rio de la Compania Tunnel, in the State of Mexico. The MXN437 million contract was awarded to ICA by the National Water Commission, through the Trust 1928, in a public biding process. The unit price, fixed term contract will be executed over a period of 817 days. The project is part of the drainage works in the Valley of Mexico and will provide significant relief from rain and waste water in the Chalco and Ixtapaluca Valleys and for the urban settlements along the Mexico City-Puebla highway corridor. The tunnel, with a total length of 6.78 km and an external diameter of 6.24m, will be constructed along the left bank of the Rio de la Compania, from the Municipality of Valle del Chalco-Solidaridad to the Municipality of Ixtapaluca, where it will empty into the Rio de la Compania. -- Construction of the Ricardo Flores Magon Interchange, located where Flores Magon Avenue crosses the railway in the Cuauhtemoc district of Mexico City. The contract for MXN195 million was awarded to ICA by the Ministry of Communications and Transport in a public bidding process. The unit price, fixed term contract will be executed over a 425 day period. -- Construction of the Michoacon Regional Center for the Arts and renovation of the Obrero Theater in Zamora, Michoacan. The contract for MXN137.4 million was awarded to ICA by the Administrative Committee of the Federal School Construction Program. The unit price, fixed term contract will be executed over a period of 187 days. Empresas ICA -- http://www.ica.com.mx/-- the largest engineering, construction, and procurement company in Mexico, was founded in 1947. ICA has completed construction and engineering projects in 21 countries. ICA's principal business units include civil construction and industrial construction. Through its subsidiaries, ICA also develops housing, manages airports, and operates tunnels, highways, and municipal services under government concession contracts and/or partial sale of long-term contract rights. * * * Standard & Poor's assigned these ratings to Empresas ICA, with stable outlook: -- LT Foreign Issuer Credit B; and -- LT Local Issuer Credit B. * VENEZUELA: Guatemala Seeks Deal to Buy Discounted Crude --------------------------------------------------------- President Oscar Berger of Guatemala plans to meet with Venezuela's President Hugo Chavez to discuss a deal on the purchase of discounted petroleum from Venezuela, Energy and Mines Minister Luis Ortiz told the Associated Press. The meeting will is planned to be held in May in Costa Rica, AP relates. Mr. Ortiz was quoted by AP saying that President Berger wants Venezuela to increase investments in Guatemala oil and natural gas exploration. According to AP, President Chavez has made deals to give oil under preferential terms in the region, particularly Cuba. * * * Fitch Ratings assigned these ratings on Guatemala: Rating Rating Date ------ ----------- Country Ceiling BB+ Feb. 22, 2006 Long Term IDR BB+ Feb. 22, 2006 Short Term IDR B Feb. 22, 2006 Local Currency Long Term Issuer Default Rating BB+ Feb. 22, 2006 Fitch also rated Guatemala's senior unsecured bonds: Maturity Date Amount Rate Ratings ------------- ------ ---- ------- Aug. 3, 2007 $150,000,000 8.5% BB+ Nov. 8, 2011 $325,000,000 10.25% BB+ Aug. 1, 2013 $300,000,000 9.25% BB+ Oct. 6, 2034 $330,000,000 8.125% BB+ * * * 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: Sudeban Proposes to Supervise Microbanks ----------------------------------------------------- Venezuela's local daily El Universal reports that the country's banking regulator Sudeban has submitted a proposal to oversee community microbanks. The Venezuelan government said in March that it has plans to create 800 community microbanks that have an investment of 480 billion bolivars or about US$223 million. Community council members will run the banks that will grant loans to projects that will be useful to the community. The microbanks are not created under the banking law but their operations are under the microfinance law. Sudeban head Trino Alcides told El Universal that Sudeban should in some way supervise the operations of the microbanks even though they are not under the banking law because they will grant loans. The banks are also entitled to receive funds from public resources such as the National Community Councils Fund that will provide 2.7 trillion bolivars this year. Hence, they should report on their balance sheets and the management of the public fund must be administered, Mr. Alcides told El Universal. * * * Venezuela's foreign currency long-term debt is rated B2 by Moody's, B+ by Standard & Poor's, and BB- by Fitch. * VENEZUELA: Will Impose Trade Barriers on Colombia & Peru ---------------------------------------------------------- Peru, along with Colombia, will be barred from trading with Venezuela after it signed the free-trade agreement aka FTA with the US, the Associated Press reports. Venezuela's President Hugo Chavez said in a radio station on April 13 that he would protect his country's economy by preventing an invasion of subsidized North American products coming through Peru and Colombia. AP relates that President Chavez withdrew his country from the Andean Community of Nations trade bloc due to Peru and Colombia's decision to enter FTA. According to Vheadline, President Chavez reasoned that the withdrawal was a strategy aimed at protecting domestic agricultural and industrial production. Vheadline states that President Chavez argues that if Venezuela stays in the trade bloc, it would be flooded by USA subsidized products from Colombia. Venezuela will not join the FTAA, President Chavez told Vheadline. President Chavez instead proposed the Bolivarian Alternative for the Americas aka ALBA and is inviting Peru and Colombia to join, Vheadline reports. * * * Fitch Ratings assigned 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 * * * Fitch Ratings assigned these ratings on Bolivia: Rating Rating Date ------ ----------- Country Ceiling B- Jun. 17, 2004 Long Term IDR B- Dec. 14, 2005 Local Currency Long Term Issuer Default Rating B- Dec. 14, 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. Marjorie C. Sabijon, Sheryl Joy P. Olano, and Stella Mae Hechanova, 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 * * *