/raid1/www/Hosts/bankrupt/TCRLA_Public/060620.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
Tuesday, June 20, 2006, Vol. 7, Issue 121
Headlines
A R G E N T I N A
ANDRES PONSA: Concludes Reorganization Proceeding
BANCO CETELEM: Moody's Puts E+ Bank Financial Strength Rating
CAMATU SACIFI: Submission of Individual Reports Moved to June 30
EMPRESA DE TRANSPORTE: Sets July 14 as Last Day to Verify Claims
GAS NATURAL: Moody's Rates Global Local Currency Rating at B2
INDUSTRIAS METALURGICAS: Fitch Arg Rates US$804,000 Debt at D
INTELSERV SRL: Trustee Won't Verify Proofs of Claim After Aug. 9
INVERPAT.AR SA: Verification of Proofs of Claim Ends on July 10
JORSAR SA: Schedules July 3 Deadline to Verify Proofs of Claim
MACRO BANSUD: Sells Stake in Fideicomiso Puerto for ARS47.13MM
M.P. UNISEX: Trustee Presents Individual Reports on Aug. 4
PETROBRAS ENERGIA: Accepts Eton's Offer to Buy 50% Citelec Stake
REPSOL YPF: Considers Public Offering of 15% to 20% of YPF SA
SANATORIO METROPOLITANO: Reorganization Converts to Bankruptcy
SIPTA SA: Trustee Will Verify Proofs of Claim Until August 11
TRANSPORTES EL: Trustee Verifies Proofs of Claim Until Aug. 10
* ARGENTINA: S&P Says B- Rating Shows Better Fiscal Flexibility
B A R B A D O S
INTERPOOL INC: Moody's Ups Corporate Family Rating to B1 from B2
B E R M U D A
FOSTER WHEELER: Increases Cash Rewards to Non-Employee Directors
LORAL SPACE: Unit Successfully Launched Galaxy 16 Satellite
B O L I V I A
* BOLIVIA: Lebanese Firm Plans to Revive Carlos Montenegro Plant
B R A Z I L
BANCO BRADESCO: Deciding on Payment to Shareholders on June 30
BANCO NACIONAL: Provides BRL306 Mil. for Subway Expansion in Rio
C A Y M A N I S L A N D S
AMERADA HESS: Declares Voluntary Liquidation of Business
AMERADA HESS: Proofs of Claim Must be Filed by July 13
AQUILA ALTERNATIVE: Proofs of Claim Filing Ends on July 13
BIBBY INTERNATIONAL: Holds Final Shareholders Meeting on June 25
BLUE METAL: Last Day for Filing Proofs of Claim Is on July 13
C1ME LIMITED: Shareholders Declare Company's Liquidation
CANE FUND: Creditors Have Until July 5 to File Proofs of Claim
HOURGLASS MASTER: Proofs of Claim Filing Will End on July 13
MW POST: Sets July 13 Deadline for Filing of Proofs of Claim
RIMINI LIMITED: Liquidator Presents Wind Up Accounts on July 3
TAKASAGODEN CORP: Proofs of Claim Filing Deadline Is on July 17
C H I L E
AES GENER: Fitch Ups Issuer Default Ratings to BB+ from BB
C O L O M B I A
* PETROLEOS DE VENEZUELA: Pequiven Increasing Market in Colombia
C O S T A R I C A
* COSTA RICA: Dollar Reserves Drop to US$2.53 Bil. in Two Months
* COSTA RICA: Ornamental Plant Exports Increase to US$35 Mil.
C U B A
* CUBA: US Allows Farmers to Sell Agricultural Products
D O M I N I C A N R E P U B L I C
DELTA AIR: Dominican Republic Unit Reports Credit Card Scam
* DOMINICAN REPUBLIC: Pres. Visits South Korea for Econ. Talks
E C U A D O R
* ECUADOR: Court Imposes US$31.3 Million Fine to Andinatel
* ECUADOR: Discards Latin American Alliance to Run Oxy Fields
G U A T E M A L A
* GUATEMALA: Lauching Feasibility Studies on 11 Hydro Projects
H A I T I
* HAITI: IMF Holds Talks With Country on New Economic Program
J A M A I C A
KAISER ALUMINUM: Court Approves Amended Claims Sale Protocols
KAISER ALUMINUM: Creditors Balk at ACE Insurers Settlement Pact
M E X I C O
BALLY TOTAL: Will File Financials Before July 10 Waiver Deadline
FORD MOTOR: Confirms Reports of Investing in Mexican Facilities
GRUPO MEXICO: Sonora Governor Mediates Talks with Workers
KANSAS CITY SOUTHERN: Investing US$110MM on Infrastructure Works
LIBBEY INC: To Use Offering Proceeds to Close Crisa Acquisition
MERIDIAN AUTOMOTIVE: U.S. Trustee Objects to Watson Wyatt's Fees
MERIDIAN AUTOMOTIVE: Wants Ionia GenCorp Benefits Pact Approved
VITRO SA: Libbey Buys Out Remaining Crisa Stake
P A N A M A
* PANAMA: Posts 7.9% Boost in Economy in First Quarter 2006
P E R U
* PERU: Posts US$1.16 Billion in Exports for Mining Sector
P U E R T O R I C O
ADELPHIA COMMS: Plan Voting Deadline Extended Until July 26
KMART CORPORATION: Reports 13-Week Sales Revenue Ended April 29
KOOSHAREM CORP: S&P Assigns B- Corporate Credit Rating
T R I N I D A D & T O B A G O
MIRANT CORP: Asks Court to Okay NY Independent System Settlement
MIRANT CORP: Examiner, et al. Ask Court for Fee Adjustment
U R U G U A Y
NUEVO BANCO: Inks Accord to Issue American Express Credit Cards
V E N E Z U E L A
BRASKEM: Inks Accord with Pequiven to Build Olefins Refinery
BRASKEM: Working with Petroquimicas on El Tablazo Plan
PETROLEOS DE VENEZUELA: Unit to Build Olefins Plant with Braskem
PETROLEOS DE VENEZUELA: Working with Braskem on El Tablazo Plan
- - - - -
=================
A R G E N T I N A
=================
ANDRES PONSA: Concludes Reorganization Proceeding
-------------------------------------------------
The reorganization of Buenos Aires-based Andres Ponsa
S.A.C.I.A.F. has ended. Infobae states on its Web site that the
process was concluded after a court in Buenos Aires approved the
debt agreement signed between the company and its creditors.
BANCO CETELEM: Moody's Puts E+ Bank Financial Strength Rating
-------------------------------------------------------------
Moody's Investors Service has assigned first-time ratings to
Banco Cetelem S.A. These are the bank financial strength rating
of E+ and the long-term global local-currency deposit rating of
Ba1. Moody's also assigned long- and short-term global foreign-
currency deposit ratings of Caa1 and not prime to Banco Cetelem.
First-time national scale ratings for local-currency deposits of
Aaa.ar and Ba1.ar for foreign-currency deposits were also
awarded. The outlooks on all of these ratings are stable.
Moody's said that the bank financial strength rating for Banco
Cetelem reflects its relatively small market position in the
niche consumer-loan business. The bank's weak core-earnings
generation and asset-quality indicators also reflect its
concentration in the middle- and low-income customer segments.
Moody's indicated that management might need to bolster the
quality of its loan portfolio in the context of high loan
growth. Under this scenario, Moody's said, the bank's credit
practices will be the key to reducing credit costs and to
maintaining healthy capitalization. The relatively low BFSR
also reflects the bank's still-reduced operation in an
increasingly competitive environment.
Banco Cetelem S.A. is a subsidiary of Cetelem S.A., France. As
such, it represents an integral part of Cetelem's Latin American
strategy, and the bank receives support in terms of its business
model, strategies, and controls. Banco Cetelem is its parent's
sole operating entity in the Argentine market, and it replicates
its parent's risk-management procedures and controls. Because
of this integration, Banco Cetelem has established a good loan-
origination network of retailers.
The local-currency deposit ratings reflect Cetelem's status as a
subsidiary of Cetelem S.A., France, as well as the formal
support provided by BNP Paribas (France) to the liabilities of
Banco Cetelem in Argentina.
The foreign-currency deposit ratings are constrained by the
Argentine country ceiling for foreign-currency deposits. The
foreign-currency national scale rating is much lower than the
rating for the local currency national scale because it reflects
foreign currency transferability and convertibility risk, which
continues to be high in the case of Argentina.
Headquartered in Buenos Aires, Argentina, Banco Cetelem S.A.,
specializes in consumer and credit card lending. As of March
2006, the bank had total assets of Ar$ 71.7million (US$23.3
million) and equity of Ars32.1 million (US$10.4 million).
These six ratings were assigned to Banco Cetelem S.A.:
-- Bank Financial Strength Rating: E+ with stable outlook;
-- Long- Term Global Local-Currency Deposits: Ba1;
-- Long -Term Foreign-Currency Deposits: Caa1;
-- Short -Term Foreign-Currency Deposits: Not Prime;
-- National Scale Rating for Local-Currency Deposits: Aaa.ar;
and
-- National Scale Rating for Foreign-Currency Deposits:
Ba1.ar.
CAMATU SACIFI: Submission of Individual Reports Moved to June 30
----------------------------------------------------------------
A court in San Miguel de Tucuman moved the date of submission of
the individual reports of Camatu S.A.C.I.F.I.'s bankruptcy case
to June 30, 2006. The court previously ordered that the reports
be presented on March 31, 2006.
The submission of a general report, which contains an audit of
Camatu's accounting and banking records as well as a summary of
events pertaining to the proceeding, is also rescheduled to
Aug. 28, 2006. The general report submission was previously set
for May 17, 2006.
Ricardo Guillermo Chelala, the court-appointed trustee, verified
creditors' proofs of claim until Dec. 2, 2005.
The trustee can be reached at:
Ricardo Guillermo Chelala
La Rioja 37/39, San Miguel de Tucuman
Tucuman , Argentina
EMPRESA DE TRANSPORTE: Sets July 14 as Last Day to Verify Claims
----------------------------------------------------------------
The verification of creditors' proofs of claim for the Empresa
de Transporte San Cayetano S.R.L. insolvency case is set to end
on July 14, 2006, Infobae states. A court in Santiago del
Estero appointed Carlos Alberto Flaja as trustee for the
proceeding.
Mr. Flaja will submit individual reports and a general report
that contains an audit of the company's accounting and banking
records after the claims are verified.
The dates of submission of these reports are yet to be
disclosed.
The debtor can be reached at:
Empresa de Transporte San Cayetano S.R.L.
Libertad 2128
Santiago del Estero, Argentina
The trustee can be reached at:
Carlos Alberto Flaja
Avenida Belgrano 188
Santiago del Estero, Argentina
GAS NATURAL: Moody's Rates Global Local Currency Rating at B2
-------------------------------------------------------------
Moody's Investors Service assigned a B2 global local currency
rating to Gas Natural Ban S.A. aka Gas Ban and A1.ar national
scale rating for Gas Ban's announced notes, with a stable
outlook. This is the first time that Moody's has rated Gas Ban.
After issuance of the announced notes, which will not increase
Gas Ban's total indebtedness, the company will have eliminated
its exposure to dollar denominated debt. The ratings reflect Gas
Ban's success at generating cash flows and reducing debt but
also the risk posed by its uncertain regulatory environment.
Moody's National Scale Ratings are intended as relative measures
of creditworthiness among debt issues and issuers within a
country, enabling market participants to better differentiate
relative risks. NSRs in Argentina are designated by the ".ar"
suffix. NSRs differ from global scale ratings in that they are
not globally comparable to the full universe of Moody's rated
entities, but only with other rated entities within the same
country.
Gas Ban is issuing new Class 1 notes, with a two-year term, up
to an amount of ARS125 million; it is also negotiating a
syndicated loan up to an amount of pesos 70 million, with a one-
year term (not rated). Proceeds from the issuance will be used
in part to redeem the US$50 million un-swapped portion of a US
dollar credit facility of US$108 million.
The ratings reflect how Gas Ban managed to generate positive
cash flows and reduce debt despite the shock of devaluation and
pesification. It reduced debt from ARS770 million at the end of
fiscal year 2002 to ARS418 million at the end of fiscal year
2005. During this period, debt-to-EBITDA fell from more than 6
times to 4 times. We do not expect debt to grow.
Gas Ban's business is quite simple as the concession establishes
a cost pass-through mechanism that results in predictable cash-
flow. With no plans for either material capital expenditures or
dividend payments, the company will be able to generate adequate
levels of cash in relation to debt, even in the absence of
tariff relief. Debt to EBITDA is expected to continue in the 4
times range.
Moody's says Gas Ban financially conservative management, along
with the financial support of its main shareholder, Gas Natural
SDG, made the debt reduction possible during difficult times.
Gas Ban is one of the few companies that never defaulted on its
debt during Argentina's financial crisis.
Last year management decided to pursue a dollar debt
substitution program to reduce foreign exchange exposure.
Although it will shorten maturities, this new issuance is in
line with that goal. After the issuance of the notes and the
projected repayment of approximately US$ 22 million bank loans
at maturity during the last quarter of the year, all of Gas
Ban's debt will be peso denominated.
Uncertainties in the regulatory framework pose the greatest risk
for Gas Ban. Tariffs have been frozen since 2002. Despite
advances in negotiations with the government, with an increase
of 25% agreed upon, the implementation of the increase is still
pending.
The stable outlook reflects Moody's expectation of adequate
levels of cash in relation to debt and balanced operations even
in the absence of tariffs relief. It also acknowledges that an
increase would materially improve the company's financial
situation and position it more comfortably in its rating
categories.
GasBan was created in 1992 with the privatization of the estate-
owned gas company, Gas del Estado. One of the eight gas
distribution companies in Argentina, it has operations in the
north area of Buenos Aires Province, the area in Argentina with
the healthiest population by income. Gas Ban is controlled by
Invergas (51%) and Gas Natural SDG Argentina (19%). In turn,
both companies are controlled by Gas Natural SDG Spain.
INDUSTRIAS METALURGICAS: Fitch Arg Rates US$804,000 Debt at D
-------------------------------------------------------------
The Argentine arm of Fitch assigned these ratings on Industrias
Metalurgicas Pescarmona S.A.I.C.& F's debt:
-- Obligaciones Negociabkes Series 8, 9, 10, 11 and 12, BB-
(arg)
-- ON Serie 2 for US$150 million (remaining US$804,000), D
(arg)
The rate given to the Obligaciones Negociables Series 8, 9, 10,
11 and 12 shows the improvement in the payment capacity from new
projects to be done in the next four years. Also, the rate of D
was confirmed for the remaining US$804,000 and US$342,649 of
interests, of the Serie 2 of ON, because of remaining balance.
Industrias Metalurgicas has reported lower debts last year. The
company's balances are expected to be paid from income generated
from its projects. Despite constraint on access to new funding,
the signing of new contracts would not be limited. It is also
expected that the company will be able to reduce its level of
debt.
Industrias Metalurgicas has been showing a reduction on its
backlog during the last 4 years. From a total of US$500 million
in infrastructure in 1999, the amount was reduced to US$225
million on Oct. 2005.
On Jan. 2006, after the important project signed in Venezuela
with Macagia, which means an income of US$202 million, as well
as a contract signed with the Simplicio project in Brazil, with
future income for
US$100 million, the backlog would reach in future US$472
million.
Industrias Metalurgicas Pescarmona S.A.I.C.& F is one of the
largest worldwide providers of integrated energy solutions for
hydropower and wind energy projects through the production of
capital goods and by investing in power generation projects.
The company's main shareholder is Corporacion IMPSA-CORIM,
holding 93.73%. Corim belongs to the Pescarmona family.
INTELSERV SRL: Trustee Won't Verify Proofs of Claim After Aug. 9
----------------------------------------------------------------
Carlos Alberto Chaud Perez, the court-appointed trustee for the
bankruptcy case of Intelserv S.R.L., won't verify creditors'
proofs of claim after Aug. 9, 2006.
Mr. Perez will present individual reports and a general report
that contains an audit of the company's accounting and banking
records after the claims are verified.
The dates of submission of these reports are yet to be
disclosed.
The debtor can be reached at:
Intelserv S.R.L.
Peru 375
Buenos Aires, Argentina
The trustee can be reached at:
Carlos Alberto Chaud Perez
Tacuari 643
Buenos Aires, Argentina
INVERPAT.AR SA: Verification of Proofs of Claim Ends on July 10
---------------------------------------------------------------
Jose Angel Sallon, the court-appointed trustee for the
bankruptcy case of Inverpat.ar S.A., will verify creditors'
proofs of claim until July 10, 2006, La Nacion reports.
Creditors who fail to submit the required documents won't
receive any post-liquidation distributions.
Buenos Aires Court No. 15, with assistance from Clerk NO. 29,
declared the company bankrupt at the behest of Gustavo Lausi,
Inverpat.ar's creditor.
The debtor can be reached at:
Inverpat.ar S.A.
Avenida Presidente Roque Saenz Pena 846
Buenos Aires, Argentina
The trustee can be reached at:
Jose Angel Sallon
Libertad 860
Buenos Aires, Argentina
JORSAR SA: Schedules July 3 Deadline to Verify Proofs of Claim
--------------------------------------------------------------
Estudio Casella Manfredi y Asociados, the court-appointed
trustee for the bankruptcy proceeding of Jorsar S.A., will
verify creditors' proofs of claim until July 3, 2006. Creditors
who fail to submit the required documents won't receive any
post-liquidation distributions.
The verified claims will be submitted in court as individual
reports on Aug. 29, 2006. A general report that contains an
audit of Jorsar's accounting and banking records is expected on
Oct. 10, 2006.
As reported in the Troubled Company Reporter-Latin America on
June 5, 2006, a Buenos Aires court converted Jorsar's
reorganization into a bankruptcy proceeding. Consequently, all
of the debtor's assets will be liquidated and proceeds
distributed to creditors.
The debtor can be reached at:
Jorsar S.A.
Bruselas 513
Buenos Aires, Argentina
The trustee can be reached at:
Estudio Casella Manfredi y Asociados
Juan Domingo Peron 1671
Buenos Aires, Argentina
MACRO BANSUD: Sells Stake in Fideicomiso Puerto for ARS47.13MM
--------------------------------------------------------------
Nosis reports that Banco Macro Bansud has sold all of its stake
in Fideicomiso Puerto Madero Siete to firm's director, Mr.
Fernando Andres Sansuste, for 47.125 million pesos.
The bank did not say how much of its stake in Fideicomiso Puerto
it sold, though sources familiar with the matter told Nosis that
it would be about 30%.
The proceeds from the sale will be used to build a shopping area
along the port of Buenos Aires, a project estimated to cost
US$160 million.
* * *
On Dec. 13, 2005, Moody's Investors Service affirmed the credit
ratings of Banco Macro:
-- Bank Financial Strength Rating: E -- Positive Outlook
-- Long- Term Global Local Currency Deposits: Ba3
-- Short -Term Global Local Currency Deposits: Not Prime
-- National Scale Rating for Local Currency Deposits: Aa2.ar
-- Long -Term Foreign Currency Deposits: Caa1
-- Short -Term Foreign Currency Deposits: Not Prime
-- National Scale Rating for Foreign Currency Deposits:
Ba1.ar.
M.P. UNISEX: Trustee Presents Individual Reports on Aug. 4
----------------------------------------------------------
Maria Guadalupe Arias, the court appointed trustee for the
bankruptcy proceeding of M.P. Unisex S.R.L., will present
individual reports in court on Aug. 4, 2006, Infobae states.
A general report that contains an audit of the company's
accounting and banking records is expected on Sept. 21, 2006.
Ms. Arias stopped verifying creditors' proofs of claim on
June 5, 2006.
The debtor can be reached at:
M.P. Unisex S.R.L.
Avenida Virrey Toledo 702,
Nuevo Noa Shopping Center, Ciudad de Salta
Salta, Argentina
The trustee can be reached at:
Maria Guadalupe Arias
Pueyrredon 913, Ciudad de Salta
Salta, Argentina
PETROBRAS ENERGIA: Accepts Eton's Offer to Buy 50% Citelec Stake
----------------------------------------------------------------
Petrobras Energia Participaciones S.A. accepted the terms of
Eton Park Capital Management's offer to acquire:
-- Petrobras Energia's 50% equity interest in Compania
Inversora en Transmision Electrica Citelec S.A. aka
Citelec;
-- Citelec's 52.67% interest in Compania de Transporte en
Energia Electrica en Alta Tension Transener S.A. aka
Transener; and
-- Petrobras Energia's 22.22% interest in Yacylec S.A.
This is in compliance with its commitment to divest Citelec upon
the approval of the Argentine anti-trust authorities -- Comision
Nacional de Defensa de la Competencia.
The terms of the offer provide for the transfer of the interests
in Citelec at a fixed price of US$54 million, plus an earn out
relating to the result of the comprehensive rate review
determined for Transener. The price for the transfer of the
equity interest in Yacylec is US$6 million.
Citelec is the controlling company of Transener.
The parties will sign a letter of intent that shows the proposed
terms. The parties will agree upon the terms and conditions of
the respective stock purchase agreements that will abide by the
applicable shareholders' agreements of Transener and Yacylec.
The transfer of Citelec's shares is yet to be approved by the
regulatory agencies and authorities.
Following the acceptance of the offer for the purchase of shares
by Petrobras EnergĦa S.A.'s Board of Directors, the parties will
sign a letter of intent reflecting the proposal terms. The
parties will agree upon the terms and conditions of the
respective stock purchase agreements that shall abide by the
applicable shareholders' agreements in Transener and Yacylec.
The pertinent regulatory agencies and authorities will approve
the transfer of Citelec's shares. Eton Park Capital Management
is a multi-disciplinary investment fund that manages a capital
base of approximately US$5.3 billion, with offices in New York
and London.
About Eton Park
Eton Park Capital Management is a multi-disciplinary investment
fund that manages a capital base of approximately US$5.3
billion, with offices in New York and London
About Transener
Transener owns the national network of high-voltage power
transmission lines, which consist of nearly 8,800km of lines
together with the approximately 5,500km in its Transba
subsidiary's network.
* * *
As reported on Dec. 16, 2005, the Argentine arm of Fitch Ratings
upgraded to BB(arg) from B(arg) its rating on the country's
largest power transmission company, Compania de Transporte de
Energia Electrica en Alta Tension aka Transener S.A.
* * *
On Feb. 23, 2006, Standard & Poor's Ratings Services raised its
local and foreign currency ratings on Argentina's largest
electricity transmitter, Compania de Transporte de Energia
Electrica en Alta Tension Transener S.A. aka Transener to 'B-'
from 'CCC+', and removed the ratings from CreditWatch with
positive implications.
S&P said the outlook is stable. The ratings were originally
placed on CreditWatch Dec. 2, 2005.
About Petrobras Energia
Petrobras Energia Participaciones S.A., through its subsidiary,
explores, produces, and refines oil and gas, as well as
generates, transmits, and distributes electricity. It also
offers petrochemicals, as well as markets and transports
hydrocarbons. The company conducts oil and gas exploration and
production operations in Argentina, Venezuela, Peru, Ecuador,
and Bolivia
* * *
As reported on Feb. 6, 2006, Standard & Poor's Ratings Services
said that its ratings on Petrobras Energia S.A. (PESA; B/Watch
Neg/--) will not be affected by the company's announced
accounting adjustment that will be reflected in the financial
statements as of Dec. 31, 2005. Net worth will decrease by
approximately US$60 million as a result of a provision of US$140
million against its Venezuelan assets to adjust their expected
recovery value, and the reversal of certain allowances for tax
credits for about US$83 million.
Since the accounting adjustments do not imply cash movements,
they do not have an impact on the ratings on PESA at this point.
Nevertheless, in line with S&P's concerns, the adjustments
reflect lower than previously expected future cash generation
due to changing business conditions in Venezuela. The ratings
will remain on CreditWatch Negative, reflecting the
uncertainties of oil and gas concessions' renegotiation in
Venezuela.
REPSOL YPF: Considers Public Offering of 15% to 20% of YPF SA
-------------------------------------------------------------
Repsol YPF S.A. is considering an initial public offering of 15%
to 20% of its Argentine unit, YPF S.A., the company's corporate
strategy director Martinez San Martin told Dow Jones Newswires.
Repsol is expected to present its decision next month after it
completes an evaluation of YPF. The company intends to launch
the IPO by year-end, Dow Jones relates.
Previously, Repsol's president Antonio Brufau said that the
company will increase its investments in YPF by US$700 million,
for a total investment of US$6.7 billion between 2005 and 2009.
Repsol's move to float a percentage of YPF is aimed at evading
political risks as local media reports that Argentina will
follow Venezuela's and Bolivia's paths in nationalizing its
energy industries, Dow Jones says.
* * *
Standard & Poor's Rating Services revised on Jan. 27, 2006, its
outlook on its 'BB+' local currency rating for Argentina-based
integrated oil and gas producer YPF S.A. to negative from
positive following the company's announcement of a 22% downward
revision of its 2004 year-end consolidated proven reserves.
* * *
On April 26, 2006, in conjunction with Fitch's roll out of
Issuer Default Ratings and Recovery Ratings for Latin America
Corporates, these rating changes were made to YPF S.A.:
Local Currency
-- Previous Rating: 'BB'
-- New RR: 'BBB-', Rating Outlook Stable
US$350 million, Senior Unsecured Notes due 2007, 2009, 2028
-- Previous Rating: 'BB'
-- New IDR: 'BB+'
* * *
Moody's Investors Service upgraded on June 8, 2006, this rating
of YPF Sociedad Anonima under the revised foreign currency
ceilings:
-- Foreign Currency Corporate Family Rating: to B2 from B3;
Outlook remains Negative.
These five ratings are affirmed:
-- Issuer Rating (domestic currency): Baa2/NEG;
-- Senior Unsecured Rating (foreign currency): Ba2/NEG;
-- Senior Unsecured Rating MTN (foreign currency): Ba2/NEG;
-- Senior Secured Shelf Rating (foreign currency):
(P)Ba2/NEG; and
-- Senior Unsecured Shelf Rating (foreign
currency):(P)Ba2/NEG.
* * *
On June 20, 2005, Moody's Investors Service upgraded the ratings
of Spanish-Argentine oil company Repsol YPF's local subsidiary
YPF S.A. Moody's upgraded YPF's senior unsecured rating to Ba3
from B1 and the unit's domestic currency issuer rating to Baa2
from Baa3.
YPF's foreign currency issuer rating of Caa1 remained unchanged,
as it is constrained by the sovereign ceiling of Argentina.
YPF's Corporate Family Rating (formerly known as the senior
implied rating) is aligned with the foreign currency issuer
rating at Caa1.
SANATORIO METROPOLITANO: Reorganization Converts to Bankruptcy
--------------------------------------------------------------
A court in Resistencia, Chaco, has declared that Sanatorio
Metropolitano S.A.'s reorganization must be converted into a
bankruptcy proceeding. Consequently, all of the debtor's assets
will be liquidated and proceeds distributed to creditors.
Eduardo Roberto Perez and Jose Omar Abujal, the court-appointed
trustees, will verify creditors' proofs of claim against
Sanatorio Metropolitano. The trustees will also prepare and
present in court individual and general reports after the claims
verification phase.
The verification deadline and the dates of submission of the
reports are yet to be disclosed.
The debtor can be reached at:
Sanatorio Metropolitano S.A.
Concepcion del Bermejo 54, Resistencia
Chaco, Argentina
The trustees can be reached at:
Eduardo Roberto Perez
Jose Omar Abujal
Ayacucho 712, Resistencia
Chaco, Argentina
SIPTA SA: Trustee Will Verify Proofs of Claim Until August 11
-------------------------------------------------------------
Gustavo Daniel Micciulo, the court-appointed trustee for the
bankruptcy proceeding of Sipta S.A., will verify creditors'
proofs of claim until August 11, 2006. Creditors who fail to
submit the required documents won't receive any post-liquidation
distributions.
Court No. 7 in Buenos Aires, declared the company bankrupt at
the request of Liberty ART, which the company owes US$16,691.89.
Clerk No. 14 assists the court in this proceeding.
The debtor can be reached at:
Sipta S.A.
Carlos Maria Ramirez 890
Buenos Aires, Argentina
The trustee can be reached at:
Gustavo Daniel Micciulo
Avenida Cordoba 1417
Buenos Aires, Argentina
TRANSPORTES EL: Trustee Verifies Proofs of Claim Until Aug. 10
--------------------------------------------------------------
Julio Cesar Capovilla, the court-appointed trustee for the
bankruptcy proceeding of Transportes El Rayo S.R.L., will verify
creditors' proofs of claim until Aug. 10, 2006.
The verified claims will be submitted in court as individual
reports on Sept. 25, 2006. A general report that contains an
audit of the company's accounting and banking records is
expected on Nov. 9, 2006.
Buenos Aires Court No. 5 declared the company bankrupt at the
request of Cooperativa de Vivienda, Credito y Consumo Dinamica
Ltda., which Transportes El Rayo owes US$2,000.
Clerk No. 9 assists the court in this case.
The debtor can be reached at:
Transportes El Rayo S.R.L.
Avenida Eva Peron 6190
Buenos Aires, Argentina
The trustee can be reached at:
Julio Cesar Capovilla
Avenida Corrientes 3859
Buenos Aires, Argentina
* ARGENTINA: S&P Says B- Rating Shows Better Fiscal Flexibility
---------------------------------------------------------------
Standard & Poor's Rating Services raised on March 23, 2006,
Argentina's long-term local and foreign currency sovereign
credit ratings to 'B' from 'B-', with a stable outlook.
The ratings on the Republic of Argentina reflect improved
external and fiscal flexibility. Recent years of impressive
economic growth and fiscal surpluses, combined with the
reduction in the sovereign's debt burden in 2005 after debt
rescheduling, have strengthened the sovereign's financial
profile. The threat of economic disruption caused by the
acrimonious process of debt rescheduling, the creditors who did
not participate in the offer, and by a tense relationship with
the International Monetary Fund has also abated.
The ratings on Argentina are supported by:
-- A declining external debt burden. Net external debt is
projected to decline to 100% of projected current account
earnings in 2006, almost one-third the level in 2004. The
lower debt levels, the diminished risk of economic
disruption caused by creditors who rejected the 2005
sovereign debt rescheduling offer, and the return of
flight capital have consolidated the country's external
liquidity; and
-- A higher level of human development than other similarly
rated sovereigns. Argentina enjoys better health and
education indicators and has a better physical
infrastructure than its rated peers and has greater
technical and managerial depth.
The ratings are constrained by
-- The legacy of weak public institutions and legal and
regulatory uncertainties that affect investment and growth
prospects over the medium term. The government's poor
relationship with regulated privatized utilities, as well
as its recent intervention in nonregulated markets to
control prices, threatens to constrain private investment
and GDP growth over the medium term;
-- A high debt burden. Despite the impact of debt
rescheduling, the public sector's debt burden of 60% of
GDP in 2006 is similar to the level immediately prior to
the country's sovereign default in 2001. Acrimonious
relations with creditors that rejected the 2005 debt
rescheduling offer, and strained ties with IMF, could
adversely affect the sovereign's ability to gain access to
external funding in coming years; and
-- Limited monetary flexibility. The orientation of monetary
policy to promote GDP growth and maintain a weak exchange
rate has contributed to the recent rise in inflation,
which may hover around 12% again this year. The
government's recourse to price accords with selected
producers is not likely to address the underlying cause of
the inflation, raising the risk that higher inflation
expectations become reembedded in economic contracts.
Moreover, monetary flexibility is also constrained by the
legacy of the recent financial crisis, which led to the
loss of the central bank's autonomy and damaged both the
transmission mechanism of monetary policy and its
credibility.
Outlook
The stable outlook is based upon the expectation of a favorable
economic performance in 2006 and in the following year, with
continued good GDP growth and fiscal and current account
surpluses. Fiscal performance is key to reducing the country's
historically volatile growth path. Success in containing the
recent rise in inflation would help reduce political pressure to
raise public sector salaries, allowing the government to
maintain the recent gain in fiscal flexibility as economic
growth declines to moderate levels. That, combined with steps
to resolve regulatory disputes that have constrained investment
in key infrastructure sectors, would raise the likelihood of a
more sustained and stable growth trajectory over the medium
term, strengthening the country's credit standing.
Conversely, continued discretionary government intervention in
key economic sectors (e.g., recent steps to reduce prices for
specific items) could undermine private investment over the
medium term, lowering GDP growth prospects and market
confidence, potentially weakening the sovereign's credit rating.
Comparative Analysis: Very Volatile Economic Performance
-- Social and educational indicators in Argentina are much
better than in those in other sovereigns at a similar
rating level;
-- Argentina enjoys modestly better fiscal flexibility than
its rating peers; and
-- The sovereign's debt burden is higher than the median
level for rated peers.
Argentina has many of the structural features of wealthy
countries with investment-grade credit ratings, including nearly
full literacy and impressive technical and managerial depth.
Nevertheless, its economic performance over the long-term is
poor, with bursts of good growth followed by sharp contractions
and debt defaults. Latin America as a region has suffered from
a similar growth pattern in recent decades, but Argentina has
been especially volatile. Argentina has defaulted twice on its
sovereign debt since 1945 (1982-93 and 2001-2005). The
Argentine economy was in recession for 30 of the last 105 years.
The legacy of volatility weighs upon the current credit rating,
balanced by the recent improvement in several economic and
financial indicators.
Argentina enjoys greater democracy, political stability, and
higher levels of education than most countries emerging from
default. It also faces no external political threat. However,
its public institutions (including legal and regulatory systems)
are as weak as those in very low-rated sovereigns. Argentina
has less political polarization than the Republics of
-- Bolivia ('B-'; all ratings herein are long-term foreign
currency sovereign credit ratings),
-- Paraguay ('B-'),
-- Ecuador ('CCC+'), and
-- Bolivarian Republic of Venezuela ('BB-').
Moreover, its resilient political parties have maintained their
dominance, effectively blocking the chances of an "anti-
systemic" candidate like Presidents Hugo Chavez in Venezuela or
Evo Morales in Bolivia.
However, political institutions are weak, in common with low-
rated sovereigns, increasing the likelihood of unexpected
changes in regulatory and financial policies. The
administration of President Nestor Kirchner-in common with much
of the political Left in Latin America-seeks a more activist
role for the state in all matters. The Left has become more
pragmatic and eclectic than in the past, and less hostile to
market forces. Nevertheless, its instincts and predisposition
are to use the mechanisms available to the state to directly
affect outcomes in markets that do not meet its political needs.
Per capita GDP growth could decelerate toward 2%-3% over the
medium term, slightly below the median level in rated peers.
Argentina's dependence upon external capital to stimulate GDP
expansion may lessen in the coming years thanks to debt
reduction, but the country is likely to remain vulnerable to
external conditions and experience volatile growth rates. The
policy challenge over the longer term is to sustain GDP growth
with stability, breaking with Argentina's record of volatile
economic performance. Greater regulatory certainty, along with
slowly improving access to external financing, could sustain an
investment rate sufficient to keep GDP growth at 3% or higher
over the medium term. Retained earnings and drawings upon
private sector assets held abroad (US$100 billion-US$120
billion) should help fund investment over the coming years,
while renewed consumer lending by banks should also help.
Argentina has slightly more fiscal flexibility than its rated
peers. The government may run modest general government budget
surpluses in 2006 and 2007, in contrast with deficits in almost
all sovereigns with a similar rating. The general government
primary budget surplus is likely to be around 3% of GDP or
better, higher than the level in most similarly rated
sovereigns.
Thanks to the low interest rates associated with the rescheduled
debt, the Argentine government's interest burden will be
comparatively lighter than that of other countries with the same
debt levels, giving it slightly more fiscal flexibility. The
general government debt burden fell dramatically after the 2005
debt rescheduling, to just below 70% of GDP, modestly above the
median level in rated peers and the 73% level in Uruguay.
However, new debts may appear over the coming years, as has been
the case in other countries, especially if the government moves
to address pricing problems with the utility companies or makes
a subsequent debt-exchange offer to holdout creditors. General
government interest payments are likely to hover below 10% of
revenue in 2006, compared with 15% in the Oriental Republic of
Uruguay ('B') and 43% in the Republic of Lebanon ('B-'). The
interest burden will be similar to that in Paraguay and Bolivia,
both of which have proportionately less commercial debt.
Monetary stability will remain poor for many years, comparable
with the lowest-rated sovereigns. Inflation is likely to remain
just above 10% in 2006 and perhaps in 2007, higher than in
dollarized Ecuador or in Uruguay, Lebanon, and Bolivia.
Monetary policy will remain geared toward sustaining GDP growth
through a weak exchange rate, resulting in negative real
interest rates in 2006.
Argentina's banking system suffered greatly in the recent
crisis, but has recovered in recent years. However, domestic
credit to the private sector is barely above 10% of GDP,
reducing the effectiveness of the financial system in promoting
growth and resource allocation.
Argentina is likely to enjoy a current account surplus in 2006
and in 2007, in contrast with the deficit in most sovereigns
with a similar rating. However, it will continue to bear a
heavier burden of external debt than its rated peers but enjoy a
comparable level of flexibility thanks to a low interest bill.
Total external debt may fall to around 200% of current account
receipts in 2006, above the 125% median level for its rated
peers (and below the 243% level projected for Ecuador). Net
external debt, projected at about 100% of CAR in 2006, is also
about double the projected median level for rated peers (and
well above the projected 38% level for Uruguay). However, debt
service (including short-term debt) is projected to be similar
to the median level for rated peers, thanks to the low interest
rates on its restructured debt. Total debt service is likely to
hover around 20% of CAR in coming years, similar to the median
level in rated peers.
The aggressive approach toward debt management has been
successful in meeting Mr. Kirchner's political goals and in
reducing the debt burden. However, the potential long-term
consequences of such an approach, especially from holdout
creditors, could have an impact on Argentina's ability to gain
access to external funding in capital markets over the medium
term. In that sense, Argentina faces a possible disruption risk
or litigation threat that other sovereigns at the same rating
level do not.
Political Environment: The President
Has Consolidated His Power
-- President Nestor Kirchner has strengthened his political
position through recent congressional elections;
-- The government's priority is to maintain economic growth;
and
-- The Peronist Justicialista Party continues to dominate
Argentina, thanks in part to a very weak opposition.
President Kirchner strongly consolidated his political power in
the late 2005 congressional elections, as his supporters won
decisive victories in both houses of Congress and seriously
weakened the power of former President Duhalde (who brought
Kirchner into the national scene when he was a provincial
governor). Kirchner was officially elected in 2003, but the
incomplete nature of the elections denied him a convincing
mandate with which to assert his authority over other powerful
political forces (e.g., governors and much of the machinery of
the Peronist Party itself; his opponent Mr. Carlos Menem
withdrew from the second round of the elections when it became
clear that Mr. Kirchner would win by a large majority).
Mr. Kirchner has taken control of the machinery of the dominant
Peronist (Justicialista) Party and has received the allegiance
of much of the country's fickle political class. His popularity
has been strengthened by good economic performance, the
political success of the debt renegotiation, and the nationalism
unleashed by prepaying IMF in early 2006. He has skillfully used
aggressive tactics to confront specific groups (e.g., the
military, the judiciary, sovereign creditors, IMF, recently
privatized utilities, and the portion of the media that are
critical of him) to polarize public opinion and gain support.
There are no obvious challengers to him in the 2007 presidential
elections, and President Kirchner remains an overwhelming
favorite at the moment and the opposition weak and divided.
President Kirchner has used his mandate to consolidate his grip
over both his party and the various branches of the government.
The departure of former Finance Minister Roberto Lavagna in late
2005 did not lead to any change in economic policies. Fiscal
policy is clearly anchored with the president himself, and is
unlikely to change substantially over the coming years. The new
Finance Minister, Ms. Felisa Miceli, has maintained continuity
with Mr. Lavagna's policies, but is politically weaker than her
predecessor. However, Mr. Lavagna's departure reduces-but does
not eliminate-the prospects for implementing medium-term
policies that could set the country on a stable and sustainable
growth trajectory based upon cautious economic management.
The president's most controversial step in recent times has been
reform to reduce the size of the council that appoints and
supervises judges. This step led to criticism that the changes
would enable him to exert more influence over the judiciary, an
institution that has traditionally been politicized in
Argentina. More pertinently for policymaking, the Argentine
Congress is too weak to offer any meaningful balance to the
president's power. All in all, the country's political
institutions remain as weak as they were before the crisis.
However, Argentina is now very stable politically and the
popular Mr. Kirchner is clearly in charge. Political power
remains with the resilient Justicialista Party, which represents
Argentina's Peronist movement.
The government's priority is to maintain economic growth. The
approach is largely cautious and discretionary, reflecting a
political consensus on semimarket policies and on avoiding
fiscal deficits. However, economic policy is interventionist
from a microeconomic perspective, as shown by the government's
recent pursuit of price capping agreements with supermarkets and
producers in order to contain inflation.
In external affairs, the government has been involved in a
dispute with neighboring Uruguay over its plans to build two
large pulp and paper mills near the Argentine border. The
dispute, along with other trade disputes with neighboring
Federative Republic of Brazil ('BB'), has highlighted the
weakness of the economic links of Mercosur, the regional body
that incorporates the Southern Cone nations. Relations with the
Republic of Chile ('A') have also been affected by Argentina's
decision to restrict exports of natural gas to that country in
the face of domestic shortages.
Economic Prospects: Economic Growth Exceeds Expectations
-- GDP growth exceeded 9% in 2005, and is likely to decline
only modestly in 2006;
-- Rapid economic growth, along with rising investment, has
increased output levels beyond their previous 1998 peak
(prior to the country's severe recession); and
-- The policy challenge over the longer term is to sustain
GDP growth with stability, breaking with Argentina's
record of volatile economic performance.
The Argentine economy has been growing faster than expected.
GDP grew over 9% in 2005 after averaging about 9% in 2003 and
2004 combined. The level of output now exceeds the 1998's peak
GDP level, after which the economy began to contract. New
investment is expanding capacity and there has been an
impressive recovery in industry.
Growth, which goes beyond a bounce back from a recession, is
impressive on all fronts. The weaker currency has, with a lag,
had a big impact on international competitiveness. The
government has managed to contain its spending (as a share of
GDP) and contribute toward lower costs in the economy (by not
hiking public sector salaries back to their real levels before
the crisis). Favorable external economic conditions have also
helped, but they are only one aspect of the growth performance.
GDP growth may decelerate towards 6%-7% in 2006, while the trade
and current accounts should remain in declining surpluses over
the coming year.
Investment has recovered rapidly, reaching 21% of GDP-a high
level historically for Argentina (and compared with a low of 12%
in 2001). Much of the funding comes from the reinvested profits
of firms. The country's investment rate could stay above 20% of
GDP, slightly above its precrisis level, if the government
maintains macroeconomic stability. Capacity utilization in
industry has been hovering around 70% in the last year,
indicating that the expansion has not led to severe supply
constraints in much of the economy.
The main sectors suffering from a lack of investment are those
utilities whose prices are regulated by the government (power,
gas, and, to a lesser extent, telecom). Other sectors, ranging
from mining, agro-industry, and tourism to construction, are
receiving major investment and building up new capacity.
Foreign direct investment could reach about US$4 billion in
2006, or 2% of GDP.
Negotiations with the privatized utilities have made little
progress. While the government has signed agreements with some
of the over 60 firms with contracts under dispute, many have yet
to be implemented. The government has allowed some firms to
raise their rates to industrial, but not retail, users. Several
firms have bent to government pressure and withdrawn lawsuits
against the sovereign in international courts, setting the stage
for them to seek some tariff increases, likely in exchange for
promises to increase investment.
The government's approach to the negotiations has hindered
private investment in large-scale projects with a long-term
horizon, especially in energy. Hence, there is a risk of energy
shortages in future. Moreover, the persistence of this problem
constrains long-term investment in the country in those sectors
that are sensitive to government regulations.
The reduction in public sector debt following the 2005 debt
exchange has substantially lifted Argentina's debt overhang,
loosening a long-term constraint on growth and the ratings.
While uncertainties remain about the sovereign's ability to
issue debt in external markets due to potential intervention by
holdout creditors, the lower debt burden and relatively good
access to funding in the local market (including from foreign
creditors) has materially improved the sovereign's liquidity
profile.
The country's poverty rate is around 40%, down from a peak of at
58% in 2002. While the rate is likely to decline in the coming
year, it is not likely to approach its 1992 level of just below
20% any time soon. Unemployment fell to 10.1% at year-end 2005
from a peak of 21.5% in May 2002 (excluding a substantial amount
of the population that receives household subsidies).
Nevertheless, the level of poverty will remain higher than
before 1998 for some years and the middle class may be
proportionately smaller as a share of the population than in the
1990s. The labor market remains very segmented, with workers in
the organized private sector enjoying rapid increases in real
wages (now above their precrisis levels), while workers in the
unorganized sector still suffer from lower real wages than in
1998.
Fiscal Flexibility: The Picture Remains Good For 2006
-- The government's debt burden fell dramatically after its
rescheduling, but will still constrain the new rating;
-- The central government's primary budget surplus exceeded
3% of GDP in 2005, and is likely to be around 3% over the
coming two years; and
-- The key to the evolution of the sovereign rating is the
government's fiscal trajectory, especially the primary
budget surplus.
The rescheduling of defaulted debt in 2005 drastically cut the
public sector's debt burden toward 70% of GDP by the end of
2005, nearly half its level from two years earlier. That,
combined with high GDP growth, growing fiscal revenue, and
budget surpluses, has increased the government level of fiscal
flexibility. The improved fiscal performance, with primary
budget surpluses, could result in a lower sovereign debt burden
in the coming years.
Buoyant economic growth and better compliance have boosted tax
revenue, allowing the government to increase spending in late
2005 while still meeting its budget targets. The central
government primary surplus was around 3.7% in 2005, and the
overall fiscal surplus around 1.8% of GDP. The government raised
spending on pensions and salaries in late 2005, and precluded
running an even bigger surplus.
The fiscal picture will remain good in 2006, partly because of
the low levels of servicing due on the rescheduled debt. The
primary fiscal surplus could reach 4% of GDP (or lower,
depending on whether the government decides later in the year to
raise spending) and the overall surplus around 1%-2% of GDP.
The government sees the primary surplus of 3% of GDP as a
minimum level that is needed in order to retain policy
independence from external creditors, both private and official.
Hence, it is likely to make spending or revenue changes, if
necessary, to reach the minimum primary surplus targets for 2006
and 2007 (and not face intense public opposition).
Total tax revenue rose about 40% in nominal terms in 2005 (and
inflation was 12%), with VAT revenue alone rising 28% (and
income tax revenue more than doubling). Higher VAT and income
tax collections reflect both a booming economy and the return of
more firms and employees into the formal sector. Two other
taxes (on exports and on financial transactions) raise about 4%
of GDP, about equaling the primary surplus. These taxes are
likely to remain in place for the medium term, perhaps in a
modified form, sustaining the primary surplus. Many Latin
American countries have kept a financial transactions tax after
introducing it as an "emergency" measure. Moreover, while the
export tax could raise less revenue if the country's terms of
trade erode, the loss could be compensated by other sources.
The public debt/GDP ratio fell below 70% at year-end 2005 and is
likely to decline toward 56% during the year, thanks to good GDP
growth and a fiscal surplus. The government has been able to
issue in both Argentine pesos and U.S. dollars in the local
market, and foreign portfolio investors have returned to the
debt auctions. Domestic pension funds and banks provide ample
sources of funding for the government to roll over its maturing
Bodens in 2006 and 2007, or replace them with new instruments.
In early 2006, the government repaid about US$9.6 billion owed
to IMF, replacing it with peso- and dollar-denominated debt
issued to the central bank, the local market, and to the
government of Venezuela.
Fiscal relations between the federal and provincial governments
remain critical for long-term financial stability. Recent
bilateral accords between the federal and provincial governments
should contain provincial deficits in the coming year. However,
prospects for changing the current system of intergovernmental
finances, which gives little incentive and scope for the
provinces to raise more revenue and control their spending, are
poor. Progress is likely to be slow in creating an effective
and enforceable legal framework for sharing fiscal revenue with
the provinces or to control provincial debt.
The approximately US$20 billion (face value) of defaulted debt
that was not exchanged in 2005 represents a possible contingent
liability of the sovereign (about 10% of 2006 GDP). In
addition, the banking system could pose a slightly lesser
liability under a period of renewed stress. Other liabilities
could arise from compensating utilities suffering from
government-imposed price controls.
Monetary Policy: The Financial System Has Recovered-Slowly
-- Monetary policy is geared toward sustaining rapid economic
growth, aiming for a depreciated currency, and tolerating
negative real interest rates in 2006; and
-- Argentina's financial system has recovered in recent
years, thanks to good economic growth and growing
liquidity.
Monetary policy is based on using quantitative targets for money
supply to keep inflation within a band. The central bank, which
is not independent, will work with bands for the growth of
different categories of money supply due to uncertainty over GDP
growth and the demand for money. The bank has extended the
duration of its market instruments, and its use of Repo rates to
conduct policy, gradually setting the stage for a transition
toward a more supple monetary policy. The bank is not likely to
shift to using short-term interest rates to target inflation,
due in part to uncertainty in predicting the evolution of money
demand.
In practice, the central bank appears to be aiming at keeping
the exchange rate at near its current level in nominal terms
(avoiding an appreciation), and sterilizing capital inflows by
issuing its own debt (Lebacs and Nobacs). The government, and
the central bank, will implicitly accommodate a real
appreciation of the peso (through inflation) instead of allowing
for a nominal appreciation.
Inflation, which reached 12% in 2005 and is likely to be around
12% in 2006, has become a highly politicized issue, with the
government intervening with selected producers and others to
impose price caps on some items. Rising prices reflect 1) a
rapid increase in demand, 2) the lagged impact of an adjustment
in relative prices in the economy after the recent crisis
(during which inflation was never above 25% in the worst year),
and 3) monetary and exchange-rate policies that have not
constrained demand. The government's strategy of trying to
control inflation by entering into price capping agreements with
various producers and supermarkets does not address the problem
(but deals with the symptoms). The agreements, which the
central bank acknowledges does not resolve the problem, are
designed to contain inflationary expectations over the short-
term while the first two causes of inflation (see above) work
their way through the economy and inflation naturally declines.
The risk inherent in such an anti-inflation strategy is
constrained by Argentina's trade, current account, and fiscal
surpluses. The real risk is not of hyperinflation, but that
persistent inflation could force the government to give higher-
than-expected salary increases to the public sector and to
pensioners, thereby undercutting the fiscal surplus in coming
years when the economy decelerates.
The good performance of the real economy in since 2003 has
helped the banks slowly recover from the crisis, thanks, in
part, to much better liquidity. The government's policy of
regulatory forbearance gave time for the banks to restructure
and grow out of their problems as much as possible. The banking
system's net worth has improved. The level of nonperforming
loans for the private sector banks fell below 8% in 2005 from
over 40% at the end of 2003. The government has largely
compensated the banks for losses due to the conversion of their
dollar-denominated assets and liabilities into pesos at
different exchange rates, with different indexation indices
applied afterward to the value of the new assets and
liabilities. In one specific case, the Argentine Supreme Court
issued a ruling in favor of the legality of the currency
conversion. However, some depositors have received interim
orders from lower-level courts compelling the banks to return
their deposits to them under the terms and conditions prevailing
before devaluation and pesification.
Bank credit to the private sector grew more than 30% in 2005
after growing by 20% in 2004 (following a contraction of over
30% during the previous two years). The growth is in both
consumer and commercial lending, but is mainly short term.
Banks are gradually reducing their exposure to government debt
and many have repaid debt owed to the central bank from the
crisis. They continue to acquire more capital, including some
from foreign owners willing to recapitalize their Argentine
operations. The conclusion of the government's debt exchange in
early 2005 also helped the banks, raising the market price of
much of their claims on the government.
External Finances: Constrained By A High External Debt Burden
-- A high external debt burden will constrain external
flexibility for many years;
-- The current account surplus is likely to decline to 3% of
GDP in 2005 as imports pick up and export prices decline;
and
-- Argentina has successfully attained a level of external
stability with a modestly flexible exchange rate after the
recent crisis.
Debt rescheduling has led to a substantial improvement in
Argentina's external flexibility, but its external debt burden
remains high. Total external debt may fall below 60% of GDP in
2006, less than half its level in 2002 (but similar to the level
just prior to the end of convertibility). Total debt is likely
to reach 200% of CAR in 2006 from over 440% in 2003. The debt
service burden will be proportionately lower, given the below-
market interest rates and long maturities on the new debt issued
in exchange for defaulted debt in 2005. The current account
balance is likely to be a surplus of around 2% of GDP in 2006,
perhaps followed by smaller surplus in 2007.
The central bank will likely continue to buy foreign exchange in
the market in order to prevent an appreciation of the peso,
issuing more of its own debt to sterilize the impact on money
supply. The government appears, implicitly, to be willing to
accommodate a real exchange-rate appreciation (via inflation)
while avoiding a nominal exchange-rate appreciation (that would
help contain inflation). If inflation remains around 12% in
2006 and declines modestly in 2007-2008, this implicit exchange-
rate policy could still contain the level of peso appreciation
(in real terms) and not threaten the entire competitive
exchange-rate gain made in recent years. Success depends upon
other macroeconomic policies (including fiscal) that eventually
bring inflation down and avoid embedding expectations of rising
inflation on the part of the public.
Foreign exchange reserves rose to around US$27 billion at the
end of 2005, continuing their recovery from a low of about US$4
billion in late 2002 and reflecting both the reversal of capital
flight, recent current account surpluses, and a much lower
burden of external debt servicing. The government paid IMF its
US$9.6 billion in early 2006, issuing just over US$2 billion in
debt that was bought by Venezuela, a similar amount issued to
the central bank (whose reserves were used to repay IMF), and
the rest was issued in the local market.
Exports have been growing above 15% annually over the last three
years, contributing to a trade surplus of around US$12 billion
in 2005. Imports fell dramatically after the economic collapse
of 2002, but are now recovering at a 30% annual growth rate.
The current account was in surplus of around US$4 billion in
2005. Argentina is likely to enjoy a trade surplus and a
current account surplus of 7% and 2.5% of GDP, respectively, in
2006, similar to the levels in 2005. The trade and current
account trajectory, combined with a light debt service burden on
external debt, should create a comfortable balance of payments
for the next two years.
Export prospects are good over the medium term, thanks largely
to the weaker currency and to lower domestic costs (valued in
dollars). Export performance has become more diversified, with
a growing number of small and midsized enterprises engaged in
both agro-industry and manufacturing exports since 2003. Around
40% of the growth in exports over the last year has gone to
nontraditional markets beyond the European Union and the
Americas, indicating a structural change in trade performance.
The growth of new service exports that use Argentina's human
capital-such as software development, call centers, and related
sectors-also augurs well for growth. However, net exports are
likely to provide lower stimulus for GDP growth in the future
than they have in recent years. If there is a risk, it is from
some unexpected development that leads to capital flight, not
from the current account.
===============
B A R B A D O S
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INTERPOOL INC: Moody's Ups Corporate Family Rating to B1 from B2
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Moody's Investors Service upgraded Interpool Inc.'s Corporate
Family Rating to B1 from B2 and the rating on the company's
senior unsecured notes to B2 from B3. Additionally, the rating
on the capital trust securities issued by Interpool Capital
Trust was upgraded to Caa1 from Caa2. This rating action
results from the company's improved leverage profile and
expected improved stability in financial performance, and it
concludes Moody's ratings review that began on March 20, 2006.
The outlook for the ratings is stable.
Moody's said the upgrade of the Corporate Family Rating reflects
Interpool's reduced leverage following the sale of a portion of
its operating lease fleet to a third party with the proceeds
used to repay debt. Moody's expects that Interpool will manage
its leverage at lower levels going forward. Moody's noted that
Interpool has ample cash from its recent repatriation
transaction that should moderate its usage of debt to grow its
investment in its chassis and container businesses.
Moody's upgrade also recognizes Interpool's relatively stable
operating earnings through the economic cycle due to its focus
on long-term leases. Although Interpool has had volatile
bottom-line results due to various gains and charges (primarily
from the issuance of warrants in 2004), revenues in both the
container and chassis business have grown at a steady rate,
while total operating expenses, as a percentage of total revenue
has remained stable. This performance has been reflected in the
company's high utilization and robust average lease rates. The
current softness in container lease rates, due in-part to excess
supply, should be balanced by continued strength in the chassis
business. Interpool's revenue diversification is ratings
strength when compared to similarly rated lessors that are
predominantly monoline in nature.
The rating agency also recognizes that there have been some
improvements in Interpool's internal control structure. Although
material weaknesses remained in 2005, progress has been made by
investing in technology and increasing the accounting staff to
address the outstanding areas of concern. It is Moody's
expectation that there will be further improvement in this area,
and such improvement would be a prerequisite to Moody's
considering any further upgrades to the rating.
Interpool's ratings are constrained by the firm's governance and
controls (which have subjected the firm to event risk),
relatively high leverage, concentrated exposure to industries
that are cyclical in nature, and heavy competition in the
container leasing market. The recent container operating lease
sale improved leverage levels and also reduced the total company
risk in the event of an economic downturn.
Finally, during its review, Moody's performed an analysis of
Interpool's corporate governance. Moody's found Interpool's
governance structure akin to a private company due to the large
insider ownership base. The following issues are of concern in
regards to the balance of interests between bondholders and
shareholders -- the company has historically been involved in a
number of related party transactions, the percentage of
independent directors is below the average of Moody's analyzed
companies, and the structure of CEO compensation tends to favor
short-term benefits, rather than long-term growth. Moody's does
acknowledge the audit committee's diligence in overseeing the
internal control improvements as a positive. As mentioned in
previous credit opinions, Interpool's corporate governance is a
key driver for the rating.
Ratings could go up if Interpool demonstrates ongoing
sustainable improvement in leverage metrics. Continued
operating earnings stability coupled with a reduction in one-
time charges would also place positive pressure on the rating,
though corporate governance remains a rating constraint.
Ratings could go down if there is a material change in the
capital structure resulting in increased leverage. Moody's
expects total debt to equity to remain below 3.5x. An increase
in leverage or decrease in equity resulting in a higher D/E
ratio could put pressure on the rating. Also, sustaining
adequate interest coverage is imperative for the B1 CFR. A drop
in EBIT to interest expense below 1.5x could also place stress
on the rating. Finally, a transaction to purchase a controlling
interest in CAI could be viewed negatively for the rating.
These ratings were upgraded:
Interpool, Inc.
-- Corporate Family to B1 from B2; and
-- Senior Unsecured Notes to B2 from B3.
Interpool Capital Trust
-- Capital Trust Securities to Caa1 from Caa2.
Interpool, Inc., headquartered in Princeton, New Jersey,
reported approximately US$2.2 billion in total assets as of
March 31, 2006.
=============
B E R M U D A
=============
FOSTER WHEELER: Increases Cash Rewards to Non-Employee Directors
----------------------------------------------------------------
On June 14, 2006, the Board of Directors of Foster Wheeler Ltd.
approved the recommendations of the Compensation Committee of
the Board and authorized the Company to:
(a) increase the annual cash compensation paid to non-
employee directors of the Board from US$60,000 to
US$65,000;
(b) grant to each non-employee director of the Board,
effective June 16, 2006, under the Foster Wheeler Ltd.
Omnibus Incentive Plan an additional grant of:
(i) Restricted Stock Units, with a value equal to:
-- US$14,241, with the number of such Restricted
Stock Units to be determined based on the fair
Market value of the Company's common shares,
US$0.01 par value per share, which is equal to the
closing price of the Common Shares as of
June 15, 2006, for Eugene Atkinson, Diane C.
Creel, Stephanie Hanbury-Brown, Joseph J. Melone
and James D. Woods;
-- US$18,375, with the number of such Restricted
Stock Units to be determined based on the fair
market value of the Common Shares, for Ralph
Alexander; and
-- US$19,250, with the number of such Restricted
Stock Units to be determined based on the fair
Market value of the Company's Common Shares, for
Robert C. Flexon; and
(ii) Nonqualified Stock Options, with a value equal to:
-- US$1,817, with the number of such Nonqualified
Stock Options to be determined based on the fair
market value of the Common Shares, for Eugene
Atkinson, Diane C. Creel, Stephanie Hanbury-Brown,
Joseph J. Melone and James D. Woods;
-- US$7,875, with the number of such Nonqualified
Stock Options to be determined based on the fair
market value of the Common Shares, for Ralph
Alexander; and
-- US$8,250, with the number of such Nonqualified
Stock Options to be determined based on the fair
market value of the Common Shares, for Robert C.
Flexon.
Foster Wheeler's shareholders at the company's 2006 general
annual meeting of shareholders previously approved the plan.
The terms and conditions of each award that are material to the
company are:
(a) Transferability Restrictions. The options, units and
underlying shares may not be sold, assigned, transferred,
pledged or otherwise disposed of until the award, or
a portion vests.
(b) Vesting. Each award will vest as follows 100% on
Sept. 30, 2006, provided the non-employee director is in
service with the company as a director on such date.
Notwithstanding the foregoing, the award will fully vest
upon these events:
-- a change in control,
-- death or
-- disability,
each while serving as a non-employee director of the
Foster Wheeler. If the non-employee director's service
with the company ends for any other reason while the
award remains unvested, a proportional number of shares
covered by the unvested award will be immediately vested
based on a ratio of the total number of months in service
since May 1, 2006, over five.
(c) Forfeiture Upon Termination for Cause or Engaging in
Competitive Activity. If the non-employee director
engages in "competitive activity" or is terminated for
cause before the award vests , the award agreement will
immediately terminate. If the non-employee director
engages in competitive activity during the six month
period after ceasing to serve as a non-employee director
of Foster Wheeler, then the non-employee director will
immediately forfeit the award as well as any Common
Shares acquired through such award. If the non-employee
director has sold any of the Common Shares, then the non-
employee director must pay an amount equal to the
proceeds of such sale to the company.
About Foster Wheeler
Headquartered in Hamilton, Bermuda, Foster Wheeler Ltd.
-- http://www.fwc.com/-- is a global company offering, through
its subsidiaries, a broad range of engineering, procurement,
construction, manufacturing, project development and management,
research and plant operation services. Foster Wheeler serves
the refining, upstream oil and gas, LNG and gas-to-liquids,
petrochemical, chemicals, power, pharmaceuticals, biotechnology
and healthcare industries.
At Dec. 31, 2005, Foster Wheeler's balance sheet showed a
US$341,796,000 equity deficit compared to a US$525,565,000
equity deficit on Dec. 31, 2004.
* * *
As reported in the Troubled Company Reporter on May 25, 2006,
Standard & Poor's Ratings Services raised Foster Wheeler's
corporate credit rating to to B+ from B- and its senior secured
notes rating to B+ from CCC+. At the same time, Standard &
Poor's assigned its 'BB-' bank loan rating and '1' recovery
rating to the company's five-year, US$250 million credit
facility due 2010.
* * *
On May 26, 2006, Moody's Investors Service upgraded Foster
Wheeler's corporate family rating to B1 from B3 and assigned
a Ba3 rating to FWC's US$250 million senior secured bank
revolving credit facility. The rating outlook is changed to
Positive.
LORAL SPACE: Unit Successfully Launched Galaxy 16 Satellite
-----------------------------------------------------------
Galaxy 16, a high-power fixed satellite service spacecraft built
for PanAmSat Corporation by Space Systems/Loral (SS/L), was
successfully launched on June 18, 2006 at 12:50 a.m. The
satellite was delivered into a geosynchronous transfer orbit
aboard a Sea Launch Zenit-3SL rocket from the Odyssey Launch
Platform, positioned on the equator in the Pacific Ocean. Space
Systems/Loral is a subsidiary of Loral Space & Communications.
"Galaxy 16 illustrates SS/L's expertise in developing cost-
effective, high-utility FSS spacecraft for use by the world's
largest communications carriers," said Patrick DeWitt,
president, Space Systems/Loral. "With a cost-effective
integration of advanced satellite features and high performance,
space-proven technology, Galaxy 16 will provide PanAmSat with
the ability to deliver highly competitive and reliable services
to their customers."
Weighing in at 4,640 kg or 10,229 pounds, Galaxy 16 is designed
to provide over 10 kilowatts of power throughout its 15-year
mission life. The satellite's communications payload carries 24
high-power Ku-band and 24 C-band transponders. From its orbital
location at 99 degrees West longitude, Galaxy 16 will provide
coverage for data and video services, including high-definition
television broadcasts and IPTV, across the entire United States,
including Alaska, Hawaii and Puerto Rico, in addition to Canada
and Mexico.
The satellite is the fourth spacecraft built for PanAmSat by
SS/L. A fifth, Galaxy 18, is currently under construction at
SS/L's facility in Palo Alto, Calif., scheduled for delivery in
2007.
About PanAmSat
PanAmSat -- http://www.panamsat.com/-- through its owned and
operated fleet of 24 satellites, is a global provider of video,
broadcasting and network distribution and delivery services. It
transmits nearly 2,000 television channels worldwide and, as
such, is the leading carrier of standard and high-definition
signals. In total, the Company's in-orbit fleet is capable of
reaching over 98 percent of the world's population through cable
television systems, broadcast affiliates, direct-to-home
operators, Internet service providers and telecommunications
companies. In addition, PanAmSat supports the largest
concentration of satellite-based business networks in the U.S.,
as well as specialized communications services in remote areas
throughout the world.
About Space Systems/Loral
Space Systems/Loral is a premier designer, manufacturer, and
integrator of powerful satellites and satellite systems. SS/L
also provides a range of related services that include mission
control operations and procurement of launch services. Based in
Palo Alto, Calif., the company has an international base of
commercial and governmental customers whose applications include
broadband digital communications, direct-to-home broadcast,
defense communications, environmental monitoring, and air
traffic control. SS/L satellites have amassed more than 1,300
years of reliable on-orbit service. SS/L is ISO 9001:2000
certified.
About Loral Space
Loral Space & Communications -- http://www.loral.com/-- is a
satellite communications company. It owns and operates a fleet
of telecommunications satellites used to broadcast video
entertainment programming, distribute broadband data, and
provide access to Internet services and other value-added
communications services. Loral also is a world-class leader in
the design and manufacture of satellites and satellite systems
for commercial and government applications including direct-to-
home television, broadband communications, wireless telephony,
weather monitoring and air traffic management.
The Company and various affiliates filed for chapter 11
protection (Bankr. S.D.N.Y. Case No. 03-41710) on July 15, 2003.
Stephen Karotkin, Esq., and Lori R. Fife, Esq., at Weil, Gotshal
& Manges LLP, represented the Debtors in their successful
restructuring and prosecution of their Fourth Amended Joint Plan
of Reorganization to confirmation on Aug. 1, 2005. As of
Dec. 31, 2004, the Company listed assets totaling approximately
US$1.2 billion and liabilities totaling approximately US$2.3
billion.
=============
B O L I V I A
=============
* BOLIVIA: Lebanese Firm Plans to Revive Carlos Montenegro Plant
----------------------------------------------------------------
A spokesperson at Bolivia's hydrocarbons ministry told Business
News Americas that a firm in Lebanon is planning to revive the
Carlos Montenegro refinery in Chuquisaca with a US$10 million
investment.
The ministry officials of Bolivia will meet with the executives
of the Lebanese company to talk on matters like production
levels and the participation in the plant by state-owned YPFB
and Universidad Mayor de San Francisco Xavier, the owner of the
land where the refinery is located, BNamericas states, citing
the spokesperson.
The spokesperson, according to BNamericas, said that the
meetings will also determine if there would be an accord and
when it will be signed.
ABI news services relates that the refinery would start
producing about 3,500 barrels a day (b/d) of diesel. Eventually
it would increase its production to 10,000b/d. The diesel will
be for domestic consumption.
The name of the Lebanese firm was not disclosed.
* * *
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 BRADESCO: Deciding on Payment to Shareholders on June 30
--------------------------------------------------------------
Banco Bradesco will decide on the first half intermediary
interest payment for its shareholders in a meeting on June 30,
Business News Americas reports.
BNamericas relates that the company's executive officers
proposed an interest payment that was 10 times higher than the
monthly interest payments.
The payment, according to BNamericas, would benefit shareholders
on record as of June 30.
If approved, the payment could be distributed on July 20,
BNamericas states.
Headquartered in Sao Paulo, Brazil, Banco Bradesco S.A. Banco
-- http://www.bradesco.com.br/-- prides itself on serving
low-and medium-income individuals in Brazil since the 1960s.
Bradesco is Brazil's largest private bank, with more than 3,000
banking branches, and also a leader in insurance and private
pension management. Bradesco has branches throughout Brazil as
well as one in New York, two in the Bahamas, and four in the
Cayman Islands. Bradesco offers Internet banking, insurance,
pension plans, annuities, credit card services (including
football-club affinity cards for the soccer-mad population), and
Internet access for customers. The bank also provides personal
and commercial loans, along with leasing services.
* * *
As reported in the Troubled Company Reporter on Feb. 23, 2006,
Moody's Investors Service shifted Banco Bradesco S.A.'s 'C-'
bank financial strength rating to positive from stable.
BANCO NACIONAL: Provides BRL306 Mil. for Subway Expansion in Rio
----------------------------------------------------------------
Banco Nacional de Desenvolvimento Economico e Social aka BNDES
approved a financing for the expansion of Line 1 of the subway
in Rio de Janeiro that will extend until General Osorio Square,
in Ipanema.
The project will cost BRL478 million. BNDES will shoulder
BRL306 million, representing 64% of the project, and the State
of Rio will invest BRL172 million, equivalent to 36% of the
resources to be utilized. The total term of the financing will
be 15 years, with 42 months of grace period and payment in 138
monthly installments.
Project
Besides the construction of the General Osorio station, the work
included the accesses to Jangadeiros street in Ipanema and in
the Sa Ferreira street in Copacabana, the implantation of the
permanent road and operational services of energy and
auxiliaries, as well as its interconnections with the
Operational Control Center. The financing also embraces the
acquisition of 24 subway trains to operate the Line 1 with only
a 3-minute interval and obtains an increase of demand of 50
thousand passengers/day.
The project still contemplates the construction of the access of
Siqueira Campos street and the modernization of the signalizing
system and automatic control of trains throughout Line 2, also
enabling to operate it with a 3-minute interval.
The implantation of the project will embody an additional
station to the subway network, enabling the service to all the
population of Copacabana, with three stations -- Cardeal
Arcoverde, Siqueira Campos and Cantagalo, most important region
of Ipanema in the neighborhood of General Osorio Square.
The consultation letter for this new financing to the subway of
Rio was reported in BNDES on April 12, 2006. The project was
framed as priority on May 15 and approved in the board meeting
on June 8.
* * *
As reported in the Troubled Company Reporter on March 3, 2006,
Standard & Poor's Ratings Services raised its foreign currency
counterparty credit rating on Banco Nacional de Desenvolvimento
Economico e Social S.A. aka BNDES to 'BB' with a stable outlook
from 'BB-' with a positive outlook. The company's local
currency credit rating was also shifted to 'BB+' with a stable
outlook from 'BB' with a positive outlook.
===========================
C A Y M A N I S L A N D S
===========================
AMERADA HESS: Declares Voluntary Liquidation of Business
--------------------------------------------------------
Amerada Hess Holdings Limited's shareholders decided on
March 2006, to place the company in voluntary liquidation
under Section 135 of the Companies Law (2004 Revision) of the
Cayman Islands.
George C. Barry was appointed as liquidator to facilitate the
winding up of Amerada Hess' business.
The liquidator can be reached at:
George C. Barry
1185 Avenue of the Americas
New York, NY 10036
AMERADA HESS: Proofs of Claim Must be Filed by July 13
------------------------------------------------------
Amerada Hess Holdings Limited's creditors are required to submit
proofs of claim by July 13, 2006, to the company's liquidator:
George C. Barry
1185 Avenue of the Americas, New York
New York, NY 10036
Creditors who are not able to comply with the July 13 deadline
won't receive any distribution that the company will make.
Creditors are required to present proofs of claim personally or
through their solicitors.
Amerda Hess' shareholders agreed on March 20, 2006, for the
company's voluntary liquidation under Section 135 of the
Companies Law (2004 Revision) of the Cayman Islands.
AQUILA ALTERNATIVE: Proofs of Claim Filing Ends on July 13
----------------------------------------------------------
Aquila Alternative Investments Ltd.'s creditors are required to
submit proofs of claim by July 13, 2006, to the company's
liquidator:
Tammy W. Seymour
c/o dms Corporate Services Ltd.
Ansbacher House, P.O. Box 31910 SMB
Grand Cayman, Cayman Islands
Creditors who are not able to comply with the July 13 deadline
won't receive any distribution that the company will make.
Creditors are required to present proofs of claim personally or
through their solicitors.
Aquila Alternative's shareholders agreed on May 23, 2006, for
the company's voluntary liquidation under Section 135
of the Companies Law (2004 Revision) of the Cayman Islands.
Parties-in-interest may contact:
Angela Nightingale
dms Corporate Services Ltd.
Ansbacher House, P.O. Box 31910 SMB
Grand Cayman, Cayman Islands
Tel: (345) 946-7665
Fax: (345) 946-7666
BIBBY INTERNATIONAL: Holds Final Shareholders Meeting on June 25
----------------------------------------------------------------
Shareholders of Bibby International Services (Maritime) (Cayman
Islands) Limited will gather for a final meeting on June 25 at:
10 Mountain View, Ballaugh
Isle of Man, IM7 5EW
Accounts on the company's liquidation process will be presented
during the meeting.
Parties-in-interest may contact the liquidator at:
Martyn Howard
10 Mountain View, Ballaugh
Isle of Man, IM7 5EW
BLUE METAL: Last Day for Filing Proofs of Claim Is on July 13
-------------------------------------------------------------
Blue Metal Limited's creditors are required to submit proofs of
claim by July 13, 2006, to the company's liquidators:
John Cullinane
Derrie Boggess
c/o Walkers SPV Limited
P.O. Box 908, George Town
Grand Cayman, Cayman Islands
Tel: (345) 914-6305
Creditors who are not able to comply with the July 13 deadline
won't receive any distribution that the company will make.
Creditors are required to present proofs of claim personally or
through their solicitors.
Blue Metal's shareholders decided on May 16, 2006, for the
company's voluntary liquidation under Section 135 of the
Companies Law (2004 revision) of the Cayman Islands.
C1ME LIMITED: Shareholders Declare Company's Liquidation
--------------------------------------------------------
C1ME Limited's shareholders decided on Aug. 11, 2004, to place
the company in voluntary liquidation under the Section 135 of
the Companies Law (2004 Revision) of the Cayman Islands.
Christopher Drew Dixon was appointed as liquidator to facilitate
the winding up of C1ME Limited's business.
The liquidator can be reached at:
Christopher Drew Dixon
c/o Key & Dixon
P.O. Box 33675
Dubai, U.A.E.
CANE FUND: Creditors Have Until July 5 to File Proofs of Claim
--------------------------------------------------------------
Cane Fund Limited's creditors are required to submit proofs of
claim by July 5, 2006, to the company's liquidators:
David A.K. Walker
Lawrence Edwards
PricewaterhouseCoopers
Strathvale House, George Town
Grand Cayman, Cayman Islands
Creditors who are not able to comply with the July 5 deadline
won't receive any distribution that the company will make.
Creditors are required to present proofs of claim personally or
through their solicitors.
Cane Fund's shareholders agreed on April 12, 2006, for the
company's voluntary liquidation under Section 135 of the
Companies Law (2004 Revision) of the Cayman Islands.
Parties-in-interest may contact:
Jodi Jones
P.O. Box 219, George Town
Grand Cayman, Cayman Islands
Tel: (345) 914-8694
Fax: (345) 949-4590
HOURGLASS MASTER: Proofs of Claim Filing Will End on July 13
------------------------------------------------------------
Hourglass Master Fund, Ltd.'s creditors are required to
submit proofs of claim by July 13, 2006, to the company's
liquidator:
Q&H Nominees Ltd.
P.O. Box 1348, George Town
Grand Cayman, Cayman Islands
Creditors who are not able to comply with the July 13 deadline
won't receive any distribution that the company will make.
Creditors are required to present proofs of claim personally or
through their solicitors.
Hourglass Master's shareholders agreed on April 3, 2006, for the
company's voluntary liquidation under Section 135 of the
Companies Law (2004 revision) of the Cayman Islands.
Parties-in-interest may contact:
Greg Link
P.O. Box 1348, George Town
Grand Cayman, Cayman Islands
Tel: (345) 949-4123
Fax: (345) 949-4647
MW POST: Sets July 13 Deadline for Filing of Proofs of Claim
------------------------------------------------------------
MW Post High Yield Maestro Fund Limited's creditors are required
to present proofs of claim by July 13, 2006, to the company's
liquidators:
John Cullinane
Derrie Boggess
c/o Walkers SPV Limited
P.O. Box 908, George Town
Grand Cayman, Cayman Islands
Tel: (345) 914-6305
Creditors who are not able to comply with the July 13 deadline
won't receive any distribution that the company will make.
Creditors are required to present proofs of claim personally or
through their solicitors.
MW Post's shareholders agreed on May 2, 2006, for the company's
voluntary liquidation under Section 135 of the Companies Law
(2004 Revision) of the Cayman Islands.
RIMINI LIMITED: Liquidator Presents Wind Up Accounts on July 3
--------------------------------------------------------------
The shareholders of Rimini Limited will meet for a final meeting
on July 3, 2006, at the company's registered office.
Accounts on the company's liquidation process will be presented
during the meeting.
The liquidator can be reached at:
Manex Limited, Bahamas
c/o Maples and Calder, Attorneys-at-law
P.O. Box 309GT, Ugland House
South Church Street, George Town
Grand Cayman, Cayman Islands
TAKASAGODEN CORP: Proofs of Claim Filing Deadline Is on July 17
---------------------------------------------------------------
Takasagoden Corp.'s creditors are required to file proofs of
claim by July 17, 2006, to the company's liquidators:
Jamal Young
Janet Crawshaw
P.O. Box 1109, George Town
Grand Cayman, Cayman Islands
Creditors who are not able to comply with the July 17 deadline
won't receive any distribution that the company will make.
Creditors are required to present proofs of claim personally or
through their solicitors.
Takasagoden Corp.'s shareholders agreed on May 31, 2006, for the
company's voluntary liquidation under Section 135 of the
Companies Law (2004 Revision) of the Cayman Islands.
Parties-in-interest may contact:
Marguerite Britton
P.O. Box 1109, George Town
Grand Cayman, Cayman Islands
Tel: (345) 949-7755
Fax: (345) 949-7634
=========
C H I L E
=========
AES GENER: Fitch Ups Issuer Default Ratings to BB+ from BB
----------------------------------------------------------
Fitch Ratings has upgraded the local and foreign currency Issuer
Default Ratings of AES Gener S.A. to 'BB+' from 'BB'. Fitch has
also upgraded Gener's senior unsecured debt rating, which
consists of US$400 million senior notes due 2014, to 'BB+'.
Moreover, Fitch has revised Gener's Rating Outlook to Positive
from Stable.
The upgrade of Gener reflects the company's improved financial
profile as well as continued solid financial and operating
performance. Successful implementation of the company's
financial strategy over the last couple of years has resulted
in:
-- stronger credit protection measures,
-- lower leverage, and
-- a more manageable amortization schedule.
Fitch expects that the company will continue to benefit from the
increase in regulated energy prices, which should limit the
financial impact of potentially higher energy and fuel costs
associated with possible natural gas shortages.
The ratings continue to be supported by Gener's position as the
largest thermal generator in Chile, its diversified operations,
a constructive regulatory system, and experienced management.
Although Gener benefits from its project-like structural
characteristics, including long-dated power purchase agreements
with financially strong customers, its high contracted position
increases business risk. Ongoing credit risks include the
exposure to natural gas supply availability from Argentina,
variations in hydrology, and commodity fuel price risks.
The Positive Outlook incorporates the expectation of continued
improvement in credit fundamentals, as the company increases
investment in generation capacity, which should improve
operating results, reduce energy supply risk, and may further
delever Gener over the medium term. Gener is planning to build a
250 MW coal-fired power plant at the existing Ventanas site.
While Gener has not yet laid out its financing plans, Fitch
expects that the company will utilize a balanced mix of debt and
equity funding to support credit quality. Further progress with
respect to Gener's development plans as well as greater clarity
in the electricity sector in general, including higher natural
gas and hydrology risks until the proposed liquefied natural gas
terminal is completed or other new plants are put into service
in 2009, could have positive credit implications for the
company.
Gener has strengthened its financial profile over the past
several years by reducing total debt levels, extending average
maturities and lowering interest rates. Gener's liquidity has
also improved with the execution of its financial plan. Total
consolidated debt declined to US$880 million at March 31, 2006
from US$943 million at December 2004 and US$1.256 billion at
December 2003. In October 2005, Gener issued a syndicated
credit loan for US$130 million, which was partially utilized to
prepay an existing syndicated loan for US$73 million of
TermoAndes debt and fund a US$54.8 million amortization payment
of the Yankee bond in January 2006. In addition, Gener's
Colombian subsidiary, Chivor, refinanced a US$70 million local
bank debt in December 2005 at a lower interest rate. Gener's
Chilean operations will have an amortization schedule of
approximately US$18 million for the next couple of years,
increasing to US$32 million in 2008 and US$46 million in 2009,
which is expected to be covered with cash flows from operations.
As of March 2006, the company had US$217 million in cash
available, which is expected to be used to pay dividends and
partially finance the new generation projects.
Consolidated operating income continues to grow reflecting
higher regulated prices related to the new electricity law
approved in May 2005, strong demand growth in both the Chilean
and Colombian operations and higher volume sales in the North
Interconnected System due to natural gas restrictions from
Argentina to third party generators in the region. Chilean
operational results have been positively affected by the
increase in energy prices. Energy pricing is expected to be
supported in the next few years due to the uncertainty over
Argentine natural gas, higher cost of alternative fuels and as a
result of new legislation. The energy node price in Chile's
Central Interconnected System increased 53% from US$33.85/MWh in
April 2005 to approximately US$51.05/MWh in March 2006. The
increase in node prices had a positive effect on Gener's
financials, as approximately 87% of its sales in the SIC are to
regulated customers at node prices (Gener's sales in the SIC
represent approximately 50% of total sales).
As of March 2006 credit protection measures continued to improve
with debt to EBITDA declining to 2.5x compared with 3.9x in the
same period for the previous year, and EBITDA to interest
increasing to 5.0x from 3.0x in the comparable periods. EBITDA
margin was 41% through the first quarter of 2006 compared to 30%
in the same period 2005, primarily reflecting higher node prices
(increasing revenues) and lower spot prices (decreasing cost of
energy purchases). Spot prices decreased as a result of better
hydrological conditions and lower natural gas restrictions than
last year. Gener is a net purchaser in the spot market.
Financial performance for rest of 2006 likely to fluctuate
depending on hydrological conditions and the severity of cold
weather in both Argentina and Chile, which would affect both
demand for electricity and availability of natural gas from
Argentina. Fitch expects Gener to report debt-to-EBITDA in the
low 3.0x over the next several years.
In addition to the aforementioned projects, Gener is working on
another smaller, more immediate project -- a 125MW diesel-fired
gas turbine, which is expected to be in service in the second
half of 2006. The project has an estimated investment of
approximately US$37 million. The project is expected to:
-- increase Gener's available capacity to meet contractual
commitments,
-- reduce production costs, assuming continued Argentine
gas curtailments, and
-- increase long-term capacity payments to the company.
Gener is the second-largest electricity generation group in
Chile in terms of generating capacity (20% market share) with an
installed capacity of 2,428 MW. Gener serves both the Central
Interconnected System or SIC and the Northern Interconnected
System or SING through various subsidiaries and related
companies, including affiliate Guacolda and the TermoAndes
subsidiary. TermoAndes has a generation capacity of 642.8 MW,
which while located in Argentina serves Chile?s SING via
InterAndes transmission line. Gener also participates in
electricity generation in Colombia through Chivor hydroelectric
plant of 1,000 MW, and a 25% participation in Itabo's facilities
in the Dominican Republic (432.5 MW). Gener is 91.2% owned by
AES (IDR rated 'B+' by Fitch).
===============
C O L O M B I A
===============
* PETROLEOS DE VENEZUELA: Pequiven Increasing Market in Colombia
----------------------------------------------------------------
Saul Ameliach -- Petroquimicas de Venezuela aka Pequiven's head
-- told Business News Americas that his company wants to
increase its share in the fertilizer market of Colombia to 80%
from 61%.
"We can export something like 70% of the urea [fertilizer] we
produce and still have plenty for the domestic market," Mr.
Ameliach told BNamericas.
Pequiven, which controls Colombia-based fertilizer firm
Monomeros Colombo-Venezolanos, makes about 2 million tonnes (Mt)
of urea fertilizer yearly, about 1.5Mt of which is produced
through Fertinitro -- a joint venture with Koch, a US chemical
firm. About 300,000t come from Pequiven's El Tablazo plant and
another 200,000t from its Moron plant in Carabobo state.
When it comes to urea fertilizer, farmers in Colombia won't have
similar price advantage as those in Venezuela, BNamericas
reports, citing Mr. Ameliach. The Pequiven head said fertilizer
is about three times cheaper in Venezuela than in Colombia. A
50kg sack of urea fertilizer costs VEB19,000 in Venezuela, while
in Colombia, its costs VEB50,000.
About Pequiven
Petroquimicas de Venezuela aka Pequiven, a subsidiary of
Petroleos de Venezuela, was established in 1977. It manages all
direct and indirect operations in the area of petrochemicals.
About Petroleos de Venezuela
Petroleos de Venezuela SA 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. Fitch said the Rating Outlook
is Stable. Both rating actions followed Fitch's November 2005
upgrade of Venezuela's sovereign rating.
===================
C O S T A R I C A
===================
* COSTA RICA: Dollar Reserves Drop to US$2.53 Bil. in Two Months
----------------------------------------------------------------
Costa Rica's hard currency reserves total US$2.53 billion,
decreasing about US$227 million in the last two months, the
country's Central Bank told Inside Costa Rica.
In spite of the decrease, the income from exports, tourism and
in-coming capitals account for the high reserves, Jose Luis
Arce, an economist, told Inside Costa Rica.
The amount of dollar reserves remain high, Inside Costa Rica
says.
* * *
Costa Rica is rated by Moody's:
-- CC LT Foreign Bank Depst Ba2
-- CC LT Foreign Curr Debt Ba1
-- CC ST Foreign Bank Depst NP
-- CC ST Foreign Curr Debt NP
-- Foreign Currency LT Debt Ba1
-- Local Currency LT Debt Ba1
Fitch assigned these ratings to Costa Rica:
-- Foreign currency long-term debt, BB
-- Local currency long-term debt, BB
-- Foreign currency short-term debt, B
Costa Rica carries these ratings from Standard & Poor's:
-- Foreign Currency LT Debt BB
-- Local Currency LT Debt BB+
-- Foreign Currency ST Debt B
-- Local Currency ST Debt B
* COSTA RICA: Ornamental Plant Exports Increase to US$35 Mil.
-------------------------------------------------------------
Costa Rica posted US$35 million worth of exports on flowers and
decoration plants in 2005, rising from the US$23 million
recorded in 2001, Inside Costa Rica reports, citing the Costa
Rican Flower Growers Association.
Sources told Inside Costa Rica that the sector's yearly exports
are now close to 11,000 tons of flowers and 50,000 tons of
decoration plants.
Inside Costa Rica relates that the sources say the leading
markets are:
-- United States,
-- Canada, and
-- Holland.
As a result of the boost in the exports, employment in rural
areas is expected to grow, the Flower Growers Association told
Inside Costa Rica.
* * *
Costa Rica is rated by Moody's:
-- CC LT Foreign Bank Depst Ba2
-- CC LT Foreign Curr Debt Ba1
-- CC ST Foreign Bank Depst NP
-- CC ST Foreign Curr Debt NP
-- Foreign Currency LT Debt Ba1
-- Local Currency LT Debt Ba1
Fitch assigned these ratings to Costa Rica:
-- Foreign currency long-term debt, BB
-- Local currency long-term debt, BB
-- Foreign currency short-term debt, B
Costa Rica carries these ratings from Standard & Poor's:
-- Foreign Currency LT Debt BB
-- Local Currency LT Debt BB+
-- Foreign Currency ST Debt B
-- Local Currency ST Debt B
=======
C U B A
=======
* CUBA: US Allows Farmers to Sell Agricultural Products
-------------------------------------------------------
The U.S. House of Representatives approved an amendment on the
food trade ban allowing the country's farmers to sell their
agricultural products to Cuba, The Independent reports.
According to The Independent, Representative Jerry Moran, R-Kan.
proposed the amendment to the 2007 Transportation-Treasury-
Housing appropriations bill, with the support of the National
Farmers Union or NFU.
Representative Moran's amendment to stop the Treasury
Department's policy of imposing cash advance payments for food
sales to Cuba from being implemented passed unanimously, The
Independent states, citing Tom Buis, the president of NFU.
Mr. Buis told The Independent, "It is high time that the United
States starts walking the walk on trade instead of just talking
the talk. It makes zero sense to restrict U.S. farmers and
ranchers from engaging in trade with a willing buyer just 90
miles off our coast. U.S. farmers and ranchers will be looking
to the administration to end the double talk on trade and
support the Moran provision. The trade embargo is ineffective
policy and only penalizes U.S. food producers."
Nebraska officials have conducted three trade missions to Cuba
during the last two years. Nebraska was able to earn more than
US$27 million from selling its agricultural products to Cuba,
while no other U.S. state has obtained an MOU greater than US$20
million, The Independent relates.
* * *
Moody's assigned these ratings on Cuba:
-- CC LT Foreign Bank Depst, Caa2
-- CC LT Foreign Curr Debt, Caa1
-- CC ST Foreign Bank Depst, NP
-- CC ST Foreign Curr Debt, NP
-- Issuer Rating, Caa1
===================================
D O M I N I C A N R E P U B L I C
===================================
DELTA AIR: Dominican Republic Unit Reports Credit Card Scam
-----------------------------------------------------------
Dorian Martinez, the manager of Delta Air Lines' unit in the
Dominican Republic, confirmed to Dominican Today that there have
been customers illegally purchasing airline tickets using credit
card duplicates.
Ms. Martinez told Dominican Today that there have been
irregularities from ticket purchases with local and foreign bank
charge cards.
Dominican Today relates that when Ms. Martinez asked for a
balance of her credit card account in the bank, she found out
she was tricked by some of her own employees allegedly involved
in an international ring that duplicate credit cards to be used
in making purchases abroad in millions.
According to Dominican Today, the credit cards are being cloned
through a decoding device.
Dominican Today states that the authorities were holding some of
the swindlers, two of them are Delta workers.
The personnel that work for a private company offering
ticketing, security and luggage inspection services for Delta
are involved in the scam, Ms. Martinez told Dominican Today.
Dominican Today says that the Dominican National Investigations
Department has worked with the United States Federal Bureau of
Investigation in conducting investigations in the Las Americas
International Airport.
Delta Airlines, other affected airlines and the firm Swissport
-- employer of the accused -- has been cooperating in the
investigation, Dominican Today reports, citing Ms. Martinez.
Headquartered in Atlanta, Georgia, Delta Air Lines --
http://www.delta.com/-- is the world's second-largest airline
in terms of passengers carried and the leading U.S. carrier
across the Atlantic, offering daily flights to 502 destinations
in 88 countries on Delta, Song, Delta Shuttle, the Delta
Connection carriers and its worldwide partners. The Company and
18 affiliates filed for chapter 11 protection on Sept. 14, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner,
Esq., at Davis Polk & Wardwell, represents the Debtors in their
restructuring efforts. Timothy R. Coleman at The Blackstone
Group L.P. provides the Debtors with financial advice. Daniel
H. Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump
Strauss Hauer & Feld LLP, provide the Official Committee of
Unsecured Creditors with legal advice. John McKenna, Jr., at
Houlihan Lokey Howard & Zukin Capital and James S. Feltman at
Mesirow Financial Consulting, LLC, serve as the Committee's
financial advisors. As of June 30, 2005, the company's balance
sheet showed US$21.5 billion in assets and US$28.5 billion in
liabilities.
* DOMINICAN REPUBLIC: Pres. Visits South Korea for Econ. Talks
--------------------------------------------------------------
Dominican Republic's Pres. Leonel Fernandez will hold talks with
his counterpart Pres. Roh Moo-hyun in Seoul, Korea on June 30,
for the improvement of practical cooperation in the economic,
trade and technology fields, presidential spokesman Jung Tae-ho
told the Korea Times.
According to Joongang Daily, the talks would also include
creating assistance for South Korea's information technology.
Pres. Fernandez' visit will be from June 29 to July 1. He would
be the first president of the Dominican Republic to visit Seoul
since the bilateral diplomatic relations between the two
countries have been established in 1962, the Korea Times
relates.
According to the Korea Times, during Pres. Fernandez' visit, his
itinerary includes:
-- visiting Taedok Science Town in Taejon, a Samsung
Electronics plant in Suwon and Kyobo Book Store in
downtown Seoul;
-- receiving an honorary doctorate from the Hankuk University
of Foreign Studies;
-- signing a number of documents that include a memorandum of
understanding, which assures bilateral investment with
South Korea.
* * *
The Troubled Company Reporter-Latin America reported on
May 9, 2006, that Fitch Ratings upgraded these debt and issuer
Default Ratings of the Dominican Republic:
-- Long-term foreign currency Issuer Default Rating
to B from B-;
-- Country ceiling upgraded to B+ from B-;
-- Foreign currency bonds due 2006 to B-/RR4 from CCC+/RR4;
-- Foreign currency Brady bonds due 2009 to B/RR4
from B-/RR4;
-- Foreign currency bonds due 2011 to B/RR4 from B-/RR4;
-- Foreign currency bonds due 2013 to B-/RR4 from CCC+/RR4;
-- Foreign currency bonds due 2018 to B/RR4 from B-/RR4; and
-- Foreign currency collateralized Brady bonds due 2024
to B+/RR3 from B/RR3.
Fitch also affirmed these ratings:
-- Long-term local currency Issuer Default Rating: B; and
-- Short-term Issuer Default Rating: B.
Additionally, Fitch assigned a debt and Recovery Rating to this
issue:
-- Foreign currency bonds due 2027: B/RR4.
Fitch said the rating outlook for the long-term foreign and
local currency IDRs is Stable.
=============
E C U A D O R
=============
* ECUADOR: Court Imposes US$31.3 Million Fine to Andinatel
----------------------------------------------------------
A court in Ecuador has fined Andinatel US$31.3 million, the
state-owned fixed line operator, for not paying interconnection
services to Otecel, the local mobile operator, according to
newspaper El Comercio.
El Comercio relates that Andinatel must pay Otecel US$31.3
million, which included US$29.7 million national and
international interconnection fees and US$1.5 million in fines
for the delay in making payment.
The fine, says Business News Americas, corresponds to two
periods when there was interconnection but with no pre-agreed
rates. These were the periods:
-- April 30-December 31, 2004, and
-- January 1 July 15, 2005.
Business News Americas states that the court's ruling meant a
partial acceptance of Otecel's appeal.
Andinatel said that the court's decision did not correspond to
the firm's current administration and had been inherited from
its previous management. Juan Esteban Arellano now heads
Andinatel, BNamericas says.
Andinatel told BNamericas that it was taking all the necessary
measures to defend itself.
Andinatel has not said whether it would make the payment or make
an appeal of the ruling, BNamericas reports.
* * *
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
* ECUADOR: Discards Latin American Alliance to Run Oxy Fields
-------------------------------------------------------------
"Despite initially thinking of an alliance with a state company
to operate Occidental's former fields, that possibility has been
discarded because the president believes that in Ecuador there
are sufficient managerial and operational capabilities to
maintain production without any problems," Ivan Rodriguez, the
energy minister of Ecuador, told Dow Jones Newswires.
As reported in the Troubled Company Reporter on June 12, 2006,
the Ecuadorian government revoked Occidental's contract in May
for transferring assets without informing the proper authorities
and for being involved in directional drilling. Occidental's
operations had been taken over by Petroproduccion,
Petroecuador's subsidiary.
Dow Jones states that the idea of a Latin American alliance came
out because the government was hesitant to let its own state-run
firm Petroecuador to hand the three oil fields confiscated from
Occidental due to concerns about efficiency.
However, local authorities and social groups in the Amazon
region had started holding demonstrations, airing out their
protest against any foreign participation in the fields,
according to Dow Jones.
Ecuador may hire experts from one of the Latin American state-
owned companies as advisors, Minister Rodriguez told Dow Jones.
Colombia's Ecopetrol and Chile's Enap were both willing.
Dow Jones relates that the government will appoint this month
someone to manage the three oil fields confiscated from
Occidental.
* * *
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
=================
G U A T E M A L A
=================
* GUATEMALA: Lauching Feasibility Studies on 11 Hydro Projects
--------------------------------------------------------------
The Guatemalan government told Business News Americas that the
agriculture ministry will launch feasibility studies in July on
the construction of 11 small-scale hydro projects that would
need US$20 million in investment.
BNamericas reports that capacities would range from 200kW-3MW,
as requested by different municipalities.
If the studies' result would be favorable to the projects,
construction could begin in 2007, BNamericas says.
The government said in a statement that municipal governments,
the private sector or a public-private enterprise could run the
projects.
The government of Guatemala expects that the projects, which
fall under an accord signed between state power firm Inde and
the energy ministry, will help stabilize energy prices in the
medium term, BNamericas states.
* * *
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 US$150,000,000 8.5% BB+
Nov. 8, 2011 US$325,000,000 10.25% BB+
Aug. 1, 2013 US$300,000,000 9.25% BB+
Oct. 6, 2034 US$330,000,000 8.125% BB+
=========
H A I T I
=========
* HAITI: IMF Holds Talks With Country on New Economic Program
-------------------------------------------------------------
Anoop Singh, Director of the Western Hemisphere Department of
the International Monetary Fund, said that a staff team, led by
Przemek Gajdeczka will start discussions this week with the
government on a medium-term economic program that the IMF hopes
to support under the its Poverty Reduction and Growth Facility
or PRGF.
Mr. Singh said, "President Preval has emphasized to me his
government's commitment to economic reforms that would ensure
rising prosperity for all Haitians, building on the political
opening afforded by the recent election process. I
congratulated the president on the smooth transition to a newly
elected government with broad participation from the political
spectrum. Haiti faces a unique historical opportunity to fully
normalize its political and economic situation and I conveyed
the IMF's determination to assist in the process to the fullest
extent feasible under our mandate."
He said that the economic team has already developed a vision
for the medium-term economic program. They intend to firmly
maintain, and entrench, the macroeconomic stability that has
been painstakingly built over the recent period under the IMF's
Emergency Post-Conflict Assistance. Structural reforms,
including:
-- raising and better targeting social spending,
-- strengthening economic governance, and
-- improving the investment environment,
will aim at creating conditions for a higher rate of economic
growth and reducing Haiti's high poverty-that will be a
particular focus of the program.
A PRGF would also be a key step for Haiti in qualifying for debt
forgiveness under the Heavily Indebted Poor Countries Initiative
and, more generally, catalyzing economic support from the wider
international community. IMF hopes that the PRGF program could
be finalized this year.
Mr. Singh adds, "Haiti's performance under the IMF's Emergency
Post-Conflict Assistance, approved in October 2005 has been
broadly satisfactory. Macroeconomic indicators have
strengthened and progress has been made in implementing key
structural reforms. Net international reserves have increased
substantially and the gourde has been broadly stable."
* * *
Haiti is currently seeking international help to spur economic
development in the country. President Rene Preval submitted
that the country's poverty, widespread unemployment and the
dilapidated state of infrastructures will be alleviated with
increased international assistance.
=============
J A M A I C A
=============
KAISER ALUMINUM: Court Approves Amended Claims Sale Protocols
-------------------------------------------------------------
Kaiser Aluminum Corporation and its debtor-affiliates, the
Pension Benefit Guaranty Corp., and the voluntary employees'
beneficiary association trusts agree to certain modifications of
the Protocol for Pre-Effective Date Sales.
The Protocol permits the PBGC and the VEBA trusts to sell or
dispose of their claims against, or interests in, the
Reorganizing Debtors prior to the effective date of the Plan of
Reorganization.
Judge Fitzgerald approves the Amended Protocol, which provides,
among other things, that:
(a) The Union VEBA may consummate one or more sales that
aggregate not more than the portion of interest entitled
to receive 3,774,167 shares to be issued by Reorganized
Kaiser Aluminum Corporation on the Effective Date; and
(b) The Salaried Retiree VEBA may consummate one or more
sales that aggregate not more than the portion of
interest entitled to receive 940,233 shares to be issued
by Reorganized KAC on the Effective Date.
Conditions on Sales by the PBGC remain the same.
On the Effective Date, the Registration Rights Agreement will
include as party thereto any pre-Effective Date purchaser of the
Union VEBA Interest whose purchase entitles it to at least
200,000 shares of Reorganized KAC common stock that otherwise
would be issued to the Union VEBA on the Effective Date.
A full-text copy of the Amended Protocol is available free of
charge at http://researcharchives.com/t/s?b8e
The Amended Protocol supersedes the Original Protocol in its
entirety.
Judge Fitzgerald will have continuing jurisdiction to resolve
any disputes regarding the Amended Protocol and enforce its
terms.
As reported in the Troubled Company Reporter on Mar. 31, 2006,
Kaiser Aluminum Corporation its debtor-affiliates, the PBGC and
the Union VEBA Trust will, on the Effective Date of the Plan,
entered into the Stock Transfer Restriction Agreement and the
Registration Rights Agreement.
The Stock Transfer Restriction Agreement prevents the PBGC and
the Union VEBA Trust from transferring or otherwise disposing of
more than 15% of the total number of shares of the stock issued
to each under the Plan in any 12-month period without prior
written approval of Reorganized KAC's board of directors in
accordance with Reorganized KAC's Certificate of Incorporation.
About Kaiser Aluminum
Headquartered in Foothill Ranch, California, Kaiser Aluminum
Corporation -- http://www.kaiseraluminum.com/-- is a leading
producer of fabricated aluminum products for aerospace and high-
strength, general engineering, automotive, and custom industrial
applications. The Company filed for chapter 11 protection on
Feb. 12, 2002 (Bankr. Del. Case No. 02-10429), and has sold off
a number of its commodity businesses during course of its cases.
Corinne Ball, Esq., at Jones Day, represents the Debtors in
their restructuring efforts. Lazard Freres & Co. serves as the
Debtors' financial advisor. Lisa G. Beckerman, Esq., H. Rey
Stroube, III, Esq., and Henry J. Kaim, Esq., at Akin, Gump,
Strauss, Hauer & Feld, LLP, and William P. Bowden, Esq., at
Ashby & Geddes represent the Debtors' Official Committee of
Unsecured Creditors. On June 30, 2004, the Debtors listed
US$1.619 billion in assets and US$3.396 billion in debts.
(Kaiser Bankruptcy News, Issue No. 98; Bankruptcy Creditors'
Service, Inc., 609/392-0900)
KAISER ALUMINUM: Creditors Balk at ACE Insurers Settlement Pact
---------------------------------------------------------------
As reported in the Troubled Company Reporter on June 5, 2006,
Kaiser Aluminum & Chemical Corporation asked the U.S. Bankruptcy
Court for the District of Delaware to:
(i) approve the ACE Insurers Settlement Agreement;
(ii) authorize the sale of the Subject Policies to the ACE
Related Companies, free and clear of liens, claims,
interests and other encumbrances; and
(iii) enjoin all Claims against the ACE Parties relating to
or attributable in any way to the Subject Policies,
including, but not limited to, any Claims in the
nature of, or sounding in, tort, contract, warranty,
or any other theory of law, equity or admiralty.
Some of the Kaiser Aluminum Corporation and its debtor-
affiliates' insurance policies was currently the subject of two
coverage actions pending in the Superior Court of California for
the County of San Francisco.
Cantrall Creditors Object
Creditors Lance Olson, as administrator of the estate of
Savannah Olson, and Daniel Freeman are plaintiffs in civil
actions filed before the Circuit Court for the Seventh Judicial
Circuit in Springfield, Illinois.
The civil actions assert claims of wrongful death and personal
injuries as a result of alleged soil and groundwater pollution
by Kaiser Aluminum Chemical Corp., and Kaiser Agricultural
Chemicals Inc. in Cantrall, Illinois.
The Debtors owned and operated agricultural chemical, fertilizer
and herbicide retail distribution and storage facility in
Cantrall from about 1964 until the mid-1980's, Jack D. Davis,
Esq., at The Law Offices of Frederic W. Nessler, in Springfield,
Illinois, relates.
According to Mr. Davis, the Debtors knew that Messrs. Olson and
Daniel, and other Cantrall residents were potential creditors
due to the proceedings before the Illinois Environmental
Protection Agency.
In 1987, citizens of Cantrall complained to the IEPA about the
acts of contamination at the Debtors' Cantrall facility. The
IEPA investigation concluded that Kaiser was in violation of
Illinois Administrative Code and the Illinois Environmental
Protection Act.
The Cantrall Creditors were not informed of the Debtors' Chapter
11 filing, Mr. Davis relates. They were not served with the
Debtors' notice of filing for relief nor notified by any other
written media. Accordingly, they were unable to file proofs of
claim prior to the claims bar date.
The Cantrall Creditors object to the Debtors' insurance buy-back
agreement with the ACE Related Companies. The Cantrall
Creditors believe that certain insurance policies -- including
policies issued by the ACE Related Companies -- that would
indemnify the Debtors for the claims alleged in the Civil
Actions may exist.
The Cantrall Creditors ask the Court to:
(1) order the Debtors to disclose the existence of any and
all insurance policies that would indemnify their
employees, agents or servants for alleged negligence
committed at the Cantrall facility; and
(2) hold approval of the Settlement Agreement in abeyance
until it is determined whether insurance exists to
indemnify the Debtors and their employees.
Settling Parties Respond
(a) Debtors
The Debtors inform the Court that their counsel sent a letter
dated April 27, 2006 to the Objectors notifying them that the
filing of the civil actions violated the automatic stay.
As of June 9, 2006, the Objectors' counsel has refused to
withdraw the complaints, which constitute willful stay
violations, Kimberly D. Newmarch, Esq., at Richards, Layton &
Finger, in Wilmington, Delaware, asserts.
The Debtors also deny allegations that they did not publish
notices of their bankruptcy filing. The Debtors, according to
Ms. Newmarch, published notices of the bar date for filing
claims and the confirmation hearing in several publications
serving the Cantrall area.
Ms. Newmarch also tells the Court that the insurance policies
included in the settlement, with the possible limited exception
of one policy period, do not potentially cover the Objectors'
claims.
The Subject Policies generally cover periods from 1963 to 1973
and 1977 to 1986 and provide coverage only for injuries that
occurred during those policy periods.
Savannah Olson was not born until 1997 -- over a decade after
coverage under the Subject Policies ceased and her injuries
could not possibly be covered under any of the Subject Policies,
Ms. Newmarch explains.
With respect to Mr. Freeman, who claims exposure commencing in
December 1977, with the limited exception of the policy period
from 1982 to 1985, the Subject Policies contain exclusions that
would preclude coverage from pollution incidents unless the
damages result from "sudden and accidental" pollution incidents,
Ms. Newmarch notes. She asserts that Mr. Freeman's complaint
describes polluting events that are neither "sudden" nor
"accidental" within the meaning of the exclusion under
California law.
The Objection seeks to garner some portion of the insurance
coverage that is to be allocated to other tort claims pursuant
to the Plan. However, with respect to Mr. Freeman's claim, it
is nearly impossible to determine the allocation of the coverage
for that one policy period to tort claims in accordance with the
Plan, Ms. Newmarch contends.
Furthermore, it is too late for the Objectors to assert that
they are entitled to some portion of the Settlement Amount or
any other proceeds in respect of Included Personal Injury Trust
Insurance Policies, Ms. Newmarch argues.
Citing the "highly questionable merit" of the Objectors' claims
and their failure to raise issues with the Plan's utilization of
the insurance assets earlier, the Debtors ask the Court to
overrule the Objection.
(b) ACE Related Companies
The Estate of Savannah Olson and Daniel Freeman are nothing more
than officious intermeddlers attempting to hold the Settlement
Agreement hostage with their dubious, late-filed claims, Thomas
G. Whalers, Jr., Esq., at Stevens & Lee, P.C., in Wilmington,
Delaware, asserts.
The Objection, according to Mr. Whalers, is inexcusably late and
should be stricken and entirely disregarded. The Objection was
filed June 6, 2006 -- four days after the extended deadline.
Mr. Whalers also asserts that the Objectors lack any standing to
object to the Settlement Agreement, in that:
(a) they do not hold legally cognizable claims as their
proofs of claim are, admittedly, untimely, and they have
not obtained approval from the Court to excuse their
untimely filing;
(b) they have no legally cognizable rights or interests in
and to the proceeds of the Subject Policies which could
conceivably support the relief requested; and
(c) they are otherwise bound by the terms of the Plan for
which they have never objected despite having been
provided constructive notice by publication.
Without making any effort to establish that their own putative
claims are legally cognizable in the first instance, the
Objectors seek to condition the approval of the Reorganizing
Debtors' request on a final determination of the very same
intractable insurance coverage dispute that is finally being
resolved by the Settlement Agreement. This request is
impractical, Mr. Whalers asserts.
The Ace Parties ask the Court to dismiss the Objection.
About Kaiser Aluminum
Headquartered in Foothill Ranch, California, Kaiser Aluminum
Corporation -- http://www.kaiseraluminum.com/-- is a leading
producer of fabricated aluminum products for aerospace and high-
strength, general engineering, automotive, and custom industrial
applications. The Company filed for chapter 11 protection on
Feb. 12, 2002 (Bankr. Del. Case No. 02-10429), and has sold off
a number of its commodity businesses during course of its cases.
Corinne Ball, Esq., at Jones Day, represents the Debtors in
their restructuring efforts. Lazard Freres & Co. serves as the
Debtors' financial advisor. Lisa G. Beckerman, Esq., H. Rey
Stroube, III, Esq., and Henry J. Kaim, Esq., at Akin, Gump,
Strauss, Hauer & Feld, LLP, and William P. Bowden, Esq., at
Ashby & Geddes represent the Debtors' Official Committee of
Unsecured Creditors. On June 30, 2004, the Debtors listed
US$1.619 billion in assets and US$3.396 billion in debts.
(Kaiser Bankruptcy News, Issue No. 98; Bankruptcy Creditors'
Service, Inc., 609/392-0900)
===========
M E X I C O
===========
BALLY TOTAL: Will File Financials Before July 10 Waiver Deadline
----------------------------------------------------------------
The Board of Directors of Bally Total Fitness Holding
Corporation (NYSE: BFT) determined not to submit the Company's
Stockholder Rights Plan to a stockholder vote. Accordingly, the
Plan will expire pursuant to its terms on July 15, 2006.
Additionally, the Company remains on track to file its 2005 10-K
report and quarterly report for the three months ended
March 31, 2006, before the July 10 expiration of the waiver
period obtained from the Company's senior bank lenders and
bondholders.
Separately, the Company confirmed that its strategic
alternatives process is proceeding.
About Bally Total
Bally Total Fitness -- http://www.ballyfitness.com/-- is the
largest and only U.S. commercial operator of fitness centers,
with approximately four million members and 390 facilities
located in 29 states, Mexico, Canada, Korea, China and the
Caribbean under the Bally Total Fitness(R), Crunch Fitness(SM),
Gorilla Sports(SM), Pinnacle Fitness(R), Bally Sports Clubs(R)
and Sports Clubs of Canada(R) brands.
* * *
As reported in the Troubled Company Reporter on March 17, 2006,
Standard & Poor's Ratings Services held its ratings on Bally
Total Fitness Holding Corp., including the 'CCC' corporate
credit rating, on CreditWatch with developing implications,
where they were placed on Dec. 2, 2005. The CreditWatch update
followed Bally's announcement that it will not meet the
March 16, 2006, deadline for filing its annual report on SEC
Form 10-K for the year ending Dec. 31, 2005.
FORD MOTOR: Confirms Reports of Investing in Mexican Facilities
---------------------------------------------------------------
Ford Motor Company confirmed intent to invest in and strengthen
its 81-year-old manufacturing presence in Mexico as part of the
company's North American Way Forward plan.
The plan includes upgrades of Ford of Mexico's two existing
assembly plants -- located in the cities of Cuautitlan and
Hermosillo -- and its engine plant in Chihuahua. Details of the
upgrades will be announced during the next several years, as the
improvements take place.
"Ford has been doing business in Mexico since 1925, and we were
the first automaker ever in the country. We are proud of our
manufacturing capability in Mexico today, and we plan to upgrade
our facilities for the future, just as we have been modernizing
many of our facilities in the U.S. and Canada," explains Mark
Fields, Ford's President of the Americas.
The investment does not include Ford's plan to build a new low-
cost manufacturing facility in North America. The intention to
build such a facility was announced in January as part of the
company's Way Forward plan.
"We remain committed to a new low-cost manufacturing facility.
But we have made no decisions on where it will be located," Mr.
Fields explains. "The key to success will be high quality and
low cost, and that certainly can be in the U.S., Canada or
Mexico."
Ford inaugurated its first plant in Mexico City to build the
Model T. Today, Ford builds the F-Series pickup and Ikon small
car in Cuautitlan. Engines for several vehicles sold globally
are made in Chihuahua. The Ford Fusion, Mercury Milan and
Lincoln Zephyr are built in Hermosillo.
"For more than eight decades, we have worked hand-in-hand with
Mexico, its people and its government," says Louise Goeser, Ford
of Mexico President and CEO. "Mexico remains an excellent
business environment for Ford, and it will remain a key
manufacturing location for our global automotive operations as a
result of these investments."
* * *
On May 30, 2006, Standard & Poor's Ratings Services placed its
ratings on nine U.S. single-issue synthetic ABS transactions
related to Ford Motor Co. (Ford; BB-/Watch Neg/B-2) and Ford
Motor Credit Co. (Ford Credit; BB-/Watch Neg/B-2) on CreditWatch
with negative implications.
The May 25, 2006, placement of the ratings on Ford, Ford Credit,
and all related entities on CreditWatch with negative
implications does not have any immediate rating impact on the
Ford-related ABS supported by collateral pools of consumer auto
loans or auto wholesale loans.
Ford Motor has two assembly plants and an engine plant in
Mexico.
GRUPO MEXICO: Sonora Governor Mediates Talks with Workers
---------------------------------------------------------
A state official told Business News Americas that Eduardo Bours
-- the governor of Sonora, Mexico -- has begun interceding the
negotiations between Grupo Mexico SA de C.V. and the
Metalurgicos y Similares de la Republica Mexicana, the national
mining-metalworkers union heading strikes against the firm.
Gov. Bours said in a statement, "We are going to give it our all
so that ... the company and workers agree on minimal points that
can open up the way to a return to work."
As reported in the Troubled Company Reporter-Latin America on
June 19, 2006, Grupo Mexico said that the strikes at its copper
mines might be put to an end through government intervention in
talks the company has been holding with its employees. The firm
was going to pursue with shutting down the La Caridad mine but
was waiting to see if the government could help end the strikes.
Metalurgicos y Similares, which ratified Napoleon Gomez Urrutia
as its leader, has been in conflict with the government, who
recognizes Elias Morales as the union's leader. Mr. Urrutia is
being investigated for allegedly misusing US$55 million in funds
that Grupo Mexico handed for distribution among workers in 2004
as part of the 1990 privatization of Cananea and La Caridad.
Grupo Mexico SA de C.V. -- http://www.grupomexico.com/--
through its ownership of Asarco and the Southern Peru Copper
Company, Grupo Mexico is the world's third largest copper
producer, fourth largest silver producer and fifth largest
producer of zinc and molybdenum.
* * *
Fitch Ratings assigned these ratings to Grupo Mexico SA de C.V.:
-- foreign currency long-term debt, BB; and
-- local currency long-term debt, BB.
KANSAS CITY SOUTHERN: Investing US$110MM on Infrastructure Works
----------------------------------------------------------------
Kansas City Southern Railway will invest US$110 million in 2006
to improve its infrastructure in Mexico, according to newspaper
Milenio.
Milenio relates that the company decided to pursue with the plan
in spite of a strike at steelmaker Lazaro Cardenas (Sicartsa).
Business News Americas states that strikes by Metalurgicos y
Similares de la Republica Mexicana or STMMRM -- Mexico's mining-
metals union -- began in early April in support of ousted union
leader, Napoleon Gomez Urrutia.
Though the protests have affected activities at the railroad
serving Sicartsa, they have not brought any serious problems to
Kansa City Southern, Milenio reports.
Sicartsa is an important client and that the latter's condition
worries the company, Eaton Keener, Kansas City Southern's
relations director, told Milenio.
Headquartered in Kansas City, Missouri, Kansas City Southern
(NYSE: KSU) - http://www.kcsi.com/-- is a transportation
holding company that has railroad investments in the U.S.,
Mexico and Panama. Its primary U.S. holding is The Kansas City
Southern Railway Company, serving the central and south central
U.S. Its international holdings include KCSM, serving
northeastern and central Mexico and the port cities of L zaro
Cardenas, Tampico and Veracruz, and a 50 percent interest in
Panama Canal Railway Company, providing ocean-to-ocean freight
and passenger service along the Panama Canal. KCS' North
American rail holdings and strategic alliances are primary
components of a NAFTA Railway system, linking the commercial and
industrial centers of the U.S., Canada and Mexico.
* * *
As reported in the Troubled Company Reporter on May 22, 2006,
Standard & Poor's Ratings Services lowered its preferred stock
ratings on Kansas City Southern to 'D' from 'C' and removed the
ratings from CreditWatch where they were initially placed on
March 23, 2006; ratings were previously lowered on April 4 and
May 1 and maintained on CreditWatch with negative implications.
Standard & Poor's other ratings on Kansas City Southern,
including its 'B' corporate credit rating, remain on CreditWatch
with negative implications, where they were initially placed
April 4, 2006. Ratings were lowered on April 10 and maintained
on CreditWatch.
LIBBEY INC: To Use Offering Proceeds to Close Crisa Acquisition
---------------------------------------------------------------
Libbey Inc. (NYSE: LBY) reported that its wholly owned
subsidiary Libbey Glass Inc. and its subsidiaries closed a
private offering of US$306 million aggregate principal amount of
floating rate senior secured notes due 2011 and a private
offering of units consisting of US$102 million aggregate
principal amount 16% senior subordinated secured pay-in-kind
notes due 2011 and detachable warrants to purchase a number of
shares equal to an aggregate of three percent of Libbey's
currently outstanding common stock, on a fully diluted basis, at
an exercise price of US$11.248 per share. Concurrently, Libbey
Glass entered into a new US$150 million senior secured credit
facility.
Libbey used proceeds from these financings to close the
acquisition from Vitro, S.A. de C.V. of its 51% equity interest
in Libbey's Mexican joint venture, bringing Libbey's ownership
of Crisa to 100%, and to repay substantially all of Libbey's
existing indebtedness, to repay existing indebtedness of Crisa
and to pay related fees, expenses and redemption premiums.
About Libbey Inc.
Based in Toledo, Ohio, Libbey Inc. -- http://www.libbey.com/--
operates glass tableware manufacturing plants in the United
States in Louisiana and Ohio, as well as in Mexico, Portugal and
the Netherlands. Its Crisa subsidiary, located in Monterrey,
Mexico, is the leading producer of glass tableware in Mexico and
Latin America. Its Royal Leerdam subsidiary, located in
Leerdam, Netherlands, is among the world leaders in producing
and selling glass stemware to retail, foodservice and industrial
clients. Its Crisal subsidiary, located in Portugal, provides an
expanded presence in Europe. Its Syracuse China subsidiary
designs, manufactures and distributes an extensive line of high-
quality ceramic dinnerware, principally for foodservice
establishments in the United States. Its World Tableware
subsidiary imports and sells a full-line of metal flatware and
hollowware and an assortment of ceramic dinnerware and other
tabletop items principally for foodservice establishments in the
United States. Its Traex subsidiary, located in Wisconsin,
designs, manufactures and distributes an extensive line of
plastic items for the foodservice industry. In 2005, Libbey
Inc.'s net sales totaled US$568.1 million.
MERIDIAN AUTOMOTIVE: U.S. Trustee Objects to Watson Wyatt's Fees
----------------------------------------------------------------
Kelly Beaudin Stapleton, the United States Trustee for Region 3,
asks the U.S. Bankruptcy Court for the District of Delaware to
deny the Watson Wyatt Application or grant relief consistent
with her objection.
The U.S. Trustee complains that Meridian Automotive Systems,
Inc., and its debtor-affiliates' application to employ Watson
Wyatt & Company:
-- did not disclose the calculation of Watson Wyatt's
technical and administrative fees;
-- is unclear on what services the fees and charges
encompass;
-- does not provide for the Court's jurisdiction over core
matters;
-- is inappropriate in light of Watson Wyatt's role in the
Debtors' Chapter 11 cases; and
-- inconsistent with general notions of bankruptcy
professionalism.
The Watson Wyatt Application also provides that "[a] late
payment charge is payable on balances outstanding more than 30
days." The U.S. Trustee assumes that Watson Wyatt is
voluntarily submitting itself to the normal delays attendant to
compliance with the compensation provisions of the Bankruptcy
Code and that the late payment charge will not be charged for
the delays.
The U.S. Trustee asserts that Indemnification should be
qualified to provide that while the Debtors' Chapter 11 cases
are open, Watson Wyatt must apply to the Bankruptcy Court for
allowance of any indemnity claim and that the rights of parties-
in-interest to object to any application are reserved.
Headquartered in Dearborn, Mich., Meridian Automotive Systems,
Inc. -- http://www.meridianautosystems.com/-- supplies
technologically advanced front and rear end modules, lighting,
exterior composites, console modules, instrument panels and
other interior systems to automobile and truck manufacturers.
Meridian operates 22 plants in the United States, Canada and
Mexico, supplying Original Equipment Manufacturers and major
Tier One parts suppliers. The Company and its debtor-affiliates
filed for 0chapter 11 protection on April 26, 2005 (Bankr. D.
Del. Case Nos. 05-11168 through 05-11176). James F. Conlan,
Esq., Larry J. Nyhan, Esq., Paul S. Caruso, Esq., and Bojan
Guzina, Esq., at Sidley Austin Brown & Wood LLP, and Robert S.
Brady, Esq., Edmon L. Morton, Esq., Edward J. Kosmowski, Esq.,
and Ian S. Fredericks, Esq., at Young Conaway Stargatt & Taylor,
LLP, represent the Debtors in their restructuring efforts. Eric
E. Sagerman, Esq., at Winston & Strawn LLP represents the
Official Committee of Unsecured Creditors. The Committee also
hired Ian Connor Bifferato, Esq., at Bifferato, Gentilotti,
Biden & Balick, P.A., to prosecute an adversary proceeding
against Meridian's First Lien Lenders and Second Lien Lenders to
invalidate their liens. When the Debtors filed for protection
from their creditors, they listed US$530 million in total assets
and approximately US$815 million in total liabilities.
(Meridian Bankruptcy News, Issue No. 30; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
MERIDIAN AUTOMOTIVE: Wants Ionia GenCorp Benefits Pact Approved
---------------------------------------------------------------
Meridian Automotive Systems, Inc., and its debtor-affiliates ask
the U.S. Bankruptcy Court for the District of Delaware to
approve their Agreement with the International Union of
Electronic, Electrical, Salaried, Machine and Furniture Workers,
the Industrial Division of the Communications Workers of
America, AFL-CIO, CLC, to modify the Ionia GenCorp Retiree
Benefits.
The Union is the authorized representative of the eligible
retirees, spouses, surviving spouses, and beneficiaries of the
Debtors' former GenCorp facility in Ionia, Michigan, which
closed in 1996.
Robert S. Brady, Esq., at Young Conaway Stargatt & Taylor, LLP,
Wilmington, Delaware, relates that the Debtors acquired their
obligations for the Ionia Gencorp Retirees from Cambridge
Industries in July 2000. Cambridge, in turn, had acquired and
closed the operations in 1996. As part of the acquisition from
Cambridge, the Debtors assumed retiree benefits negotiated by
Cambridge with the IUE-CWA Local 420 prior to the 2000 Cambridge
acquisition.
Approximately 31 GenCorp Retirees continue to draw health and
life insurance benefits under a retiree benefits welfare plan,
formally known as the Meridian Automotive Systems, Inc., Welfare
Benefits Plan for Ionia GenCorp Bargaining Unit Retired
Associates.
Under the current Ionia GenCorp Plan, effective as of
June 1, 2004, approximately 31 eligible retirees and their
surviving spouses receive:
(a) for those not eligible for Medicare, group health
coverage, including medical, prescription drugs, dental,
hearing and life insurance benefits; and
(b) for those eligible for Medicare, the Debtors provide
reimbursement of monthly Medicare Part B premiums and
life insurance coverage.
Under the current Ionia GenCorp Plan, non-Medicare eligible
participants have a choice of Preferred Provider Organization
options and only pay premiums if they choose coverage under the
"High PPO."
As part of their efforts to develop a Plan of Reorganization,
the Debtors presented the Union with a proposal to modify
retiree benefits, Mr. Brady states. After extensive good faith
negotiations, the parties have agreed to modify the Ionia
GenCorp retiree benefits going forward.
The Agreement
Under the parties' Agreement, non-Medicare eligible Retirees
will be enrolled in a single PPO medical plan with generally
higher annual deductibles, coinsurance percentages, annual
coinsurance out-of-pocket maximums, and co-pays for office
visits, emergency room visits and for prescription drugs.
The existing Dental Plan design will remain unchanged.
Existing Hearing coverage will be replaced with Optional Hearing
benefits, with the Retiree paying monthly premiums to cover the
full cost of coverage.
Optional Vision coverage will be added, with the retiree paying
monthly premiums to cover the full cost of coverage.
New monthly premiums have been calculated. For the basic
medical, prescription drug and dental coverages, the Debtors
will pay 80% of the cost and the Retiree will pay the remaining
20%.
Under the Agreement, Medicare eligible Retirees will continue to
have Company reimbursement of monthly Medicare Part B premiums
and existing life insurance coverage.
In exchange, the parties agree that the Part B reimbursement
for the majority of the retirees -- those who retired prior to
July 1, 1996 -- for which the 2006 premium is US$88.50 per
month, will not exceed US$175 per month in the future. While
this change does not reduce the Company's current cost, it does
provide some future cost certainty with a maximum expense
limitation, Mr. Brady asserts.
Mr. Brady asserts that under the Agreement:
(i) the Debtors will save on an annual basis approximately
US$11,000;
(ii) the Retirees will gain added security for their future
benefits; and
(iii) the need for the Debtors to pursue further relief with
respect to Ionia GenCorp pursuant to Section 1114 will be
eliminated.
A full-text copy of the Ionia Gencorp MOA is available for free
at http://ResearchArchives.com/t/s?b6e
The Agreement strikes a fair balance between the Debtors' need
to reduce their expenses and the Retirees' need for continued
benefits, Mr. Brady contends.
Headquartered in Dearborn, Mich., Meridian Automotive Systems,
Inc. -- http://www.meridianautosystems.com/-- supplies
technologically advanced front and rear end modules, lighting,
exterior composites, console modules, instrument panels and
other interior systems to automobile and truck manufacturers.
Meridian operates 22 plants in the United States, Canada and
Mexico, supplying Original Equipment Manufacturers and major
Tier One parts suppliers. The Company and its debtor-affiliates
filed for chapter 11 protection on April 26, 2005 (Bankr. D.
Del. Case Nos. 05-11168 through 05-11176). James F. Conlan,
Esq., Larry J. Nyhan, Esq., Paul S. Caruso, Esq., and Bojan
Guzina, Esq., at Sidley Austin Brown & Wood LLP, and Robert S.
Brady, Esq., Edmon L. Morton, Esq., Edward J. Kosmowski, Esq.,
and Ian S. Fredericks, Esq., at Young Conaway Stargatt & Taylor,
LLP, represent the Debtors in their restructuring efforts. Eric
E. Sagerman, Esq., at Winston & Strawn LLP represents the
Official Committee of Unsecured Creditors. The Committee also
hired Ian Connor Bifferato, Esq., at Bifferato, Gentilotti,
Biden & Balick, P.A., to prosecute an adversary proceeding
against Meridian's First Lien Lenders and Second Lien Lenders to
invalidate their liens. When the Debtors filed for protection
from their creditors, they listed US$530 million in total assets
and approximately US$815 million in total liabilities.
(Meridian Bankruptcy News, Issue No. 30; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
VITRO SA: Libbey Buys Out Remaining Crisa Stake
-----------------------------------------------
Libbey Inc. using proceeds from Libbey Glass Inc.'s private
offerings bought out Vitro S.A. de C.V.'s remaining stake in
Crisa.
Libbey Glass offered US$306 million aggregate principal amount
of floating rate senior secured notes due 2011 and units
consisting of US$102 million aggregate principal amount 16%
senior subordinated secured pay-in-kind notes due 2011 and
detachable warrants to purchase a number of shares equal to an
aggregate of three percent of Libbey's currently outstanding
common stock, on a fully diluted basis, at an exercise price of
US$11.248 per share. Libbey Glass also entered into a new
US$150 million senior secured credit facility.
Libbey used proceeds from these financings to close the
acquisition from Vitro, which has a 51% equity interest in
Crisa, bringing Libbey's ownership of Crisa to 100%, and to
repay substantially all of Libbey's existing indebtedness, to
repay existing indebtedness of Crisa and to pay related fees,
expenses and redemption premiums.
About Libbey Inc.
Based in Toledo, Ohio, Libbey Inc. operates glass tableware
manufacturing plants in the United States in Louisiana, and
Ohio, in Portugal and in the Netherlands. Its Crisal
subsidiary, located in Portugal, provides an expanded presence
in Europe. In addition, Libbey is a joint venture partner in
the largest glass tableware company in Mexico. In 2005, Libbey
Inc.'s net sales totaled US$568.1 million.
About Vitro S.A. de C.V.
Headquartered in Nuevo Leon, Mexico, Vitro, S.A. de C.V. --
http://www.vitro.com/-- (NYSE: VTO; BMV: VITROA), through its
subsidiary companies, is one of the world's leading glass
producers. Vitro is a major participant in three principal
businesses: flat glass, glass containers and glassware. Its
subsidiaries serve multiple product markets, including
construction and automotive glass; food and beverage, wine,
liquor, cosmetics and pharmaceutical glass containers; glassware
for commercial, industrial and retail uses. Vitro also produces
raw materials and equipment and capital goods for industrial
use, which are vertically integrated in the Glass Containers
business unit.
Founded in 1909 in Monterrey, Mexico-based Vitro has joint
ventures with major world-class partners and industry leaders
that provide its subsidiaries with access to international
markets, distribution channels and state-of-the-art technology.
Vitro's subsidiaries have facilities and distribution centers in
eight countries, located in North, Central and South America,
and Europe, and export to more than 70 countries worldwide.
* * *
As reported in the Troubled Company Reporter on Mar. 27, 2006,
Standard & Poor's Ratings Services lowered its long-term local
and foreign currency corporate credit ratings assigned to glass
manufacturer Vitro S.A. de C.V. and its glass containers
subsidiary Vitro Envases Norteamerica S.A. de C.V. (Vena) to
'B-' from 'B'.
Standard & Poor's also lowered the long-term national scale
corporate credit rating assigned to Vitro to 'mxBB+' from
'mxBBB-' with negative outlook.
Standard & Poor's also lowered the rating assigned to Vitro's
notes due 2013 and Servicios y Operaciones Financieras Vitro
S.A. de C.V. notes due 2007 (which are guaranteed by Vitro) to
'CCC' from 'CCC+'. Standard & Poor's also lowered the rating
assigned to Vena's notes due 2011 to 'B-' from 'B'.
===========
P A N A M A
===========
* PANAMA: Posts 7.9% Boost in Economy in First Quarter 2006
-----------------------------------------------------------
The government of Panama told Reuters that the country's gross
domestic product or GDP increased 7.9% in the first quarter of
2006, compared with the same period in 2005.
Reuters relates that Panama's GDP increased US$264.3 million to
US$3.59 billion between January and March.
The Comptroller General's offices said in a report that the
growth spurt was due to expansion in:
-- transport,
-- construction,
-- telecommunications,
-- exports, and
-- trade.
According to Reuters, Panama's economy increased 6.4% in the
same period last year. The country predicted 6% boost for this
year while the International Monetary Fund forecasted that
economic growth would slow to 4.5%.
Panama's economy benefited on China's export growth as the
latter ships its products through the Panama Canal, Reuters
states.
* * *
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: Posts US$1.16 Billion in Exports for Mining Sector
----------------------------------------------------------
Figures from Sociedad Nacional de Mineria Petroleo y Energia or
SNMPE -- Peru's private sector national society of mining, oil
and energy -- show that the mining sector has US$1.16 billion
worth of exports in April, about 60.9% higher compared with the
same month last year.
SNMPE said in a statement that mining exports have sustained
growth over the past 37 months. The mining sector contributed
more than 66% of Peru's total exports in April.
Business News Americas relates that copper exports during April
totaled US$436 million, rising 63% year-on-year. The boost is
due to increased global copper prices. Red metal exports rose
42% to US$1.36 billion in the first four months of 2006.
SNMPE stated in its June bulletin that Peru's monthly exports in
gold increased almost 67% over April 2005 to US$330 million, due
to higher prices in the international market. Exports during
the January-April period increased 49% to US$1.25 billion.
BNamericas reports these increased in the January-April period:
-- iron ore: 107% to US$86 million,
-- silver: 54% to US$142 million,
-- zinc: 53% to US$398 million, and
-- lead: 29% to US$192 million.
BNamericas says that other than higher international prices for
metals, bigger export volumes also increased the values of
exports in lead, silver and iron ore.
However, tin exports dropped 7% to US$95 million while those of
molybdenum decreased 31% to US$275 million during the January-
April period, BNamericas states.
* * *
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
=====================
P U E R T O R I C O
=====================
ADELPHIA COMMS: Plan Voting Deadline Extended Until July 26
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
extended, until 4:00 p.m. on July 26, 2006, the deadline for the
submission of ballots and master ballots to accept or reject the
Modified Fourth Amended Joint Plan of Reorganization, dated
April 28, 2006, of Adelphia Communications Corporation and its
debtor-affiliates.
In the case of securities held through an intermediary, the
deadline for instructions to be received by the intermediary has
been extended to 4:00 p.m. on July 21, 2006, or such other date
as specified by the applicable intermediary, so that master
ballots can be prepared and received by the Voting Deadline.
Pursuant to the Extension Order, the Voting Deadline to accept
or reject the Second Modified Fourth Amended Joint Plan of
Reorganization of Parnassos Communications, L.P. and Century-TCI
California Communications, L.P., the joint ventures the Debtors
hold with Comcast Corporation, is 4:00 p.m. on June 21, 2006.
About Adelphia
Based in Coudersport, Pa., Adelphia Communications Corporation
(OTC: ADELQ) -- http://www.adelphia.com/-- is the fifth-largest
cable television company in the country. Adelphia serves
customers in 30 states and Puerto Rico, and offers analog and
digital video services, high-speed Internet access and other
advanced services over its broadband networks. The Company and
its more than 200 affiliates filed for Chapter 11 protection in
the Southern District of New York on June 25, 2002. Those cases
are jointly administered under case number 02-41729. Willkie
Farr & Gallagher represents the ACOM Debtors.
PricewaterhouseCoopers serves as the Debtors' financial advisor.
Kasowitz, Benson, Torres & Friedman, LLP, and Klee, Tuchin,
Bogdanoff & Stern LLP represent the Official Committee of
Unsecured Creditors.
KMART CORPORATION: Reports 13-Week Sales Revenue Ended April 29
---------------------------------------------------------------
In a Form 10-Q filed with the Securities and Exchange
Commission, Sears Holdings Corporation discloses Kmart
Corporation's sales for 13 weeks ended April 29, 2006.
William K. Phelan, vice president and controller of Sears
Holdings Corporation, relates that for purposes of reviewing
operating performance and making asset-allocation decisions,
Sears Holdings' senior management has continued to utilize
principally the reporting structures that existed independently
for Kmart and Sears Roebuck prior to the merger.
Kmart's Results and Key Statistics
(In US$ millions, except number of stores)
13 Weeks Ended
-------------------
04/29/06 04/30/05
-------- --------
Merchandise sales and services $4,254 $4,522
Cost of sales, buying and occupancy 3,241 3,462
Gross margin rate 23.8% 23.4%
Selling and administrative 855 944
Selling and administrative expenses
as a percentage of total revenues 20.1% 20.9%
Depreciation and amortization 15 10
Gain on sales of assets (17) (6)
Restructuring charges 4 3
------- -------
Total costs and expenses 4,098 4, 413
------- -------
Operating income $156 $109
======= ========
Number of stores 1,400 1,479
According to Mr. Phelan, comparable store sales and total sales
decreased by 0.2% for the 13-weeks ended April 29, 2006, as
compared to 5.9% of the 13-weeks ended April 30, 2005. Mr.
Phelan explains that the decline in same-store and total sales
is due to:
-- the impact of increased competition; and
-- lower transaction volumes within home goods partially
offset by increased sales in apparel and within food and
other consumable goods categories.
Total sales were negatively impacted by a reduction in the total
number of Kmart stores in operation, as well as the prior year
period having benefited from US$153,000,000 of additional sales
recorded during the first quarter of 2005, as three additional
days were included in the fiscal 2005 period given the Company's
change from a Wednesday to a Saturday month end.
Mr. Phelan explains that the increase in gross margin rate
reflects improved gross margin management across various
businesses, most notably within hardlines and the health and
beauty care business, partially offset by lower expense leverage
relative to occupancy costs due to lower sales levels and higher
utilities costs during the first quarter of fiscal 2006.
The improvement in selling and administrative expenses rates
reflects lower costs across several expense categories,
including store payroll and benefit costs, as well as reduced
advertising, advertising.
The increase in Kmart's operating income for the 13-weeks ended
April 29, 2006, as compared to the 13-weeks ended
April 30, 2005, is primarily attributable to improved expense
management, which resulted in lower selling and administrative
expenses, partially offset by reduced gross margin dollars as a
result of lower sales levels.
About Kmart Corp.
Headquartered in Troy, Michigan, Kmart Corporation (n/k/a KMART
Holding Corporation) -- http://www.bluelight.com/-- operates
approximately 2,114 stores, primarily under the Big Kmart or
Kmart Supercenter format, in all 50 United States, Puerto Rico,
the U.S. Virgin Islands and Guam. The Company filed for chapter
11 protection on January 22, 2002 (Bankr. N.D. Ill. Case No.
02-02474). Kmart emerged from chapter 11 protection on May 6,
2003. John Wm. "Jack" Butler, Jr., Esq., at Skadden, Arps,
Slate, Meagher & Flom, LLP, represented the retailer in its
restructuring efforts. The Company's balance sheet showed
US$16,287,000,000 in assets and US$10,348,000,000 in debts when
it sought chapter 11 protection. Kmart bought Sears, Roebuck &
Co., for $11 billion to create the third-largest U.S. retailer,
behind Wal-Mart and Target, and generate US$55 billion in annual
revenues. The waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act expired on Jan. 27, without complaint
by the Department of Justice. (Kmart Bankruptcy News, Issue No.
112; Bankruptcy Creditors' Service, Inc., 215/945-7000)
KOOSHAREM CORP: S&P Assigns B- Corporate Credit Rating
------------------------------------------------------
Standard & Poor's Ratings Services assigned a 'B-' corporate
credit rating and stable outlook to staffing agency Koosharem
Corp. At the same time, the rating agency assigned a bank loan
rating of 'B-' and a recovery rating of '3' to Koosharem's
US$300 million bank loan facilities, indicating an expectation
of meaningful (50%-80%) recovery of principal in a default
scenario. The facilities consist of an US$85 million revolving
credit facility due 2011 and a US$215 million term loan B due
2012.
Proceeds will be used to fund the acquisition of competitor
RemedyTemp Inc. Pro forma total debt is US$238.7 million.
"The ratings reflect significant integration risk associated
with acquiring underperforming RemedyTemp, and Koosharem's small
earnings base, high leverage, and limited geographic diversity,"
said Standard & Poor's credit analyst Tulip Lim. "Also, the
company has a niche position in the highly competitive and
cyclical temporary staffing industry."
Partially offsetting these concerns are Koosharem's
-- potential to achieve cost-saving synergies through the
acquisition,
-- possible receipt of additional liquidity from its workers'
compensation insurance carrier loosening the company's
collateral commitments, and
-- position in California, the largest staffing market in the
U.S.
=================================
T R I N I D A D & T O B A G O
=================================
MIRANT CORP: Asks Court to Okay NY Independent System Settlement
----------------------------------------------------------------
Jason D. Schauer, Esq., at White & Case LLP, in Miami, Florida,
relates that the New York Independent System Operator, Inc., and
Mirant Americas Energy Marketing, LP, now known as Mirant Energy
Trading LLC, entered into various agreements for the purchase of
transmission service, and the purchase and sale of energy and
ancillary services.
The NYISO administers a wholesale market for electricity in the
State of New York. It operates a bid-based commodity market in
which power is purchased and sold on the basis of competitive
bidding to balance supply and demand. MAEM is one of NYISO's
market participants.
The Contracts are governed by the NYISO's transmission tariffs.
The NYISO settles transactions with Market Participants on a
monthly basis, collecting net amounts owed and distributing
those amounts to net creditors in the Market after deducting
applicable fees and charges.
Adjustment Holdback
After Mirant Corporation and its debtor-affiliates' bankruptcy
filing, the NYISO asserted that MAEM owes it certain amounts for
prepetition obligations under the Contracts. As a result, the
NYISO held back US$2,955,091, which amount represents an
estimate of the net amounts that MAEM would owe the NYISO for
the prepetition obligations.
In September 2003, Mirant asked the Court to enforce the
automatic stay to prohibit the NYISO and other parties from
executing setoffs against amounts owed to MAEM for certain
prepetition energy transactions.
To resolve the issue on setoffs, MAEM and the NYISO entered into
a Stipulated Order, which provides the NYISO with a lien on
future amounts owed to MAEM as adequate protection for its
unliquidated right of offset with respect to the adjustment
claims.
In exchange, the NYISO returned to MAEM the US$2,955,091
Adjustment Holdback.
The NYISO Claims
On December 16, 2003, the NYISO filed Claim No. 7110 against
MAEM and Claim No. 7111 against Mirant.
The MAEM Claim included secured claims in an unliquidated amount
allegedly arising from "true-ups" for prepetition transactions
under the NYISO Tariffs and Contracts. The Mirant Claim, on the
other hand, is duplicative of the MAEM Claim.
The New Mirant Entities dispute the NYISO Claims. New Mirant
believes that it has counterclaims against the NYISO.
Lovett Metering Dispute
The NYISO alleges it overpaid MAEM for energy generated at
the generating facility in Lovett, New York, for the period
prior to April 2001, Mr. Schauer relates. The NYISO retained
cash and certain collateral to secure the overpayment.
Mr. Schauer contends that New Mirant possesses claims against
the NYISO arising from that improper retention.
Assumption and Assignment of Contracts
Pursuant to Mirant's Plan of Reorganization, the Contracts were
listed on a schedule of executory contracts to be assumed by
MAEM and assigned to MET under Section 365 of the Bankruptcy
Code.
The NYISO objected to the scheduled cure amount, and to
assumption and assignment of the Contracts, asserting disputes
regarding:
(i) the cure amount with respect to the Contracts; and
(ii) adequate assurance of future performance of the
Contracts upon assignment to MET.
On February 23, 2006, the NYISO and MET entered into a Transfer
Agreement. The NYISO consented to the transfer to MET of MAEM's
rights and obligations under the Contracts effective as of
February 1, 2006. MET agreed to pay the NYISO all unpaid
amounts on account of MAEM's performance under the Contracts
prior to February 1, 2006.
Settlement Agreement
To resolve the issues relating to the NYISO Claims, the
Assignment Objection and the Lovett Metering Dispute, New Mirant
asks the Court to:
(i) authorize it and MET to enter into a settlement
agreement with the NYISO pursuant to Rule 9019(a) of
the Federal Rules of Bankruptcy Procedure; and
(ii) approve the assumption and assignment of the Contracts
pursuant to Section 365 of the Bankruptcy Code.
The principal terms of the Settlement Agreement are:
(a) The NYISO will pay to New Mirant US$999,000, without
setoff, recoupment or reduction. The NYISO agrees not
to charge New Mirant of any fees, rates or any other
obligation, associated with the settlement amount;
(b) Late payment of the settlement amount will bear interest
at a rate set by the Federal Energy Regulatory
Commission;
(c) The NYISO will take all necessary steps to withdraw and
dismiss, with prejudice, the NYISO Claims and the
Assignment Objection;
(d) As of the effective date of the Settlement Agreement,
the Contracts will be deemed assumed and assigned to MET
pursuant to Section 365, and there are no defaults which
must be cured, or other amounts which must be paid to
NYISO, as a condition to the assumption and assignment
of the Contracts;
(e) The NYISO waives all arguments and objections to the
assumption and assignment of the Contracts;
(f) The parties executed mutual releases on behalf of
themselves and certain related entities in connection
with the Settlement Issues; and
(g) The NYISO acknowledges and reaffirms its agreement and
obligations under a stipulation which tolls the
limitations period of certain claims, including those
pertaining to the NYISO Claims, the Assignment Objection
and the Lovett Metering Dispute, through and including
the date that the Bankruptcy Court approves or
disapproves the Settlement Agreement.
Headquartered in Atlanta, Georgia, Mirant Corporation (NYSE:
MIR) -- http://www.mirant.com/-- is a competitive energy
company that produces and sells electricity in North America,
the Caribbean, and the Philippines. Mirant owns or leases more
than 18,000 megawatts of electric generating capacity globally.
Mirant Corporation filed for chapter 11 protection on July 14,
2003 (Bankr. N.D. Tex. 03-46590), and emerged under the terms of
a confirmed Second Amended Plan on January 3, 2006. Thomas E.
Lauria, Esq., at White & Case LLP, represented the Debtors in
their successful restructuring. Shearman & Sterling LLP
represents the Official Committee of Unsecured Creditors. When
the Debtors filed for protection from their creditors, they
listed US$20,574,000,000 in assets and US$11,401,000,000 in
debts. (Mirant Bankruptcy News, Issue No. 98; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
* * *
As reported in the Troubled Company Reporter on Dec. 8, 2005,
Standard & Poor's Ratings Services placed a 'B+' corporate
credit rating on Mirant Corporation and said the outlook is
stable.
MIRANT CORP: Examiner, et al. Ask Court for Fee Adjustment
----------------------------------------------------------
William K. Snyder, the examiner appointed in the chapter 11
cases of Mirant Corporation and its debtor-affiliates, Gardere
Wynne Sewell, LLP, and Corporate Revitalization Partners, LLC,
ask Judge Lynn for an upward adjustment to the calculation of
their fees.
Mr. Snyder retained and utilized the services of Corporate
Revitalization Partners and Gardere Wynne Sewell to assist him
in the performance of his duties.
Mr. Snyder and CPR have filed an application with the Court
seeking payment for US$1,212,910 in fees and expenses. Gardere
also filed an application seeking payment for US$3,253,075 in
fees and expenses.
Mr. Snyder says what is often called a "fee enhancement" is more
accurately considered not as a bonus amount to be added to the
lodestar, but as an upward adjustment to the lodestar calculus
itself to "make the lodestar reasonable" in light of the rare
and exceptional circumstances in a bankruptcy case, the superior
quality of work and the results achieved.
According to Mr. Snyder, the rates that he and his team charged
are among the lowest in the entire Mirant case.
Over the course of their engagement, Mr. Snyder and his team's
overall budget was US$5,766,667. Through careful management of
their time and by focusing their efforts efficiently, the
Examiner kept his team's actual fees and expenses down to
US$4,458,719 -- more than US$1,300,000 under budget.
Thus, Mr. Snyder, CRP, and Gardere ask Judge Lynn for a fee
enhancement in an amount as the Court deems proper in light of
the rates charged and the hours expended by the Examiner and his
team in achieving those results.
Headquartered in Atlanta, Georgia, Mirant Corporation (NYSE:
MIR) -- http://www.mirant.com/-- is a competitive energy
company that produces and sells electricity in North America,
the Caribbean, and the Philippines. Mirant owns or leases more
than 18,000 megawatts of electric generating capacity globally.
Mirant Corporation filed for chapter 11 protection on July 14,
2003 (Bankr. N.D. Tex. 03-46590), and emerged under the terms of
a confirmed Second Amended Plan on January 3, 2006. Thomas E.
Lauria, Esq., at White & Case LLP, represented the Debtors in
their successful restructuring. Shearman & Sterling LLP
represents the Official Committee of Unsecured Creditors. When
the Debtors filed for protection from their creditors, they
listed US$20,574,000,000 in assets and US$11,401,000,000 in
debts. (Mirant Bankruptcy News, Issue No. 99; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
* * *
As reported in the Troubled Company Reporter on Dec. 8, 2005,
Standard & Poor's Ratings Services placed a 'B+' corporate
credit rating on Mirant Corporation and said the outlook is
stable.
=============
U R U G U A Y
=============
NUEVO BANCO: Inks Accord to Issue American Express Credit Cards
---------------------------------------------------------------
Uruguay's Nuevo Banco Comercial has entered into an accord with
American Express aka Amex for credit card issuance, local press
reports.
Nuevo Banco will be the first bank in Uruguay to issue Amex
credit cards, Business News Americas says.
According to BNamericas, Nuevo Banco is the leading credit card
issuer in the country with a 35% market shares and about 108,000
active accounts.
Nuevo Banco, Uruguay's largest private sector bank in terms of
loans, posted a market share of 16% at the end May, or UYU18.4
billion, BNamericas reports.
* * *
As reported in the Troubled Company Reporter on May 4, 2006,
Fitch Ratings assigned a long-term local currency issuer
default rating of 'BB-' to Nuevo Banco Comercial. At the same
time, Fitch affirmed these ratings:
-- Foreign currency long-term IDR at 'B+';
-- Support '4'; and
-- National Long-term rating at 'AA-(uy)'.
=================
V E N E Z U E L A
=================
BRASKEM: Inks Accord with Pequiven to Build Olefins Refinery
------------------------------------------------------------
Braskem SA will sign an agreement with Petroquimicas de
Venezuela aka Pequiven to construct an olefins plant in
Anzoategui, Venezuela, Saul Ameliach -- Pequiven's president --
told Business News Americas.
Mr. Ameliach told BNamericas that Braskem and Pequiven agreed on
a 50% participation each in the olefins project.
Braskem said earlier this year that the olefins plan required
around US$2.5 billion worth of investments, BNamericas states.
About Pequiven
Petroquimicas de Venezuela aka Pequiven, a subsidiary of
Petroleos de Venezuela, was established in 1977. It manages all
direct and indirect operations in the area of petrochemicals.
About Braskem
Braskem -- http://www.braskem.com.br/-- is a thermoplastic
resins producer in Latin American, and is among the three
largest Brazilian-owned private industrial companies. The
company operates 13 manufacturing plants located throughout
Brazil, and has an annual production capacity of 5.8 million
tons of resins and other petrochemical products.
* * *
As reported in the Troubled Company Reporter on April 10, 2006,
Fitch Ratings and Standard& Poor's Ratings Services assigned
these ratings to Braskem S.A.:
Fitch Ratings Services:
-- BB- on the proposed offering of US$200 million senior
unsecured perpetual bonds to be issued.
Standard & Poor's Ratings Services:
-- BB on local- and foreign-currency corporate credit
ratings; and
-- BB on forthcoming US$200 million perpetual bonds.
BRASKEM: Working with Petroquimicas on El Tablazo Plan
------------------------------------------------------
Braskem SA will collaborate with Petroleos de Venezuela's unit,
Petroquimicas de Venezuela aka Pequiven, to build a propylene
and polypropylene plant in El Tablazo, Saul Ameliach -- the head
of Pequiven -- told Business News Americas.
El Tablazo is a Pequiven industrial park in Zulia state.
BNamericas states that Braskem said earlier this year that the
El Tablazo project was going to cost about US$300 billion.
Works on the propylene and polypropylene project will start in
2007, BNamericas relates.
The project will also be participated by Japan's Mitsui and
Venezuela's Grupo Zuliano as minority partners, BNamericas
relates, citing Mr. Ameliach.
About Pequiven
Petroquimicas de Venezuela aka Pequiven, a subsidiary of
Petroleos de Venezuela, was established in 1977. It manages all
direct and indirect operations in the area of petrochemicals.
About Braskem
Braskem -- http://www.braskem.com.br/-- is a thermoplastic
resins producer in Latin American, and is among the three
largest Brazilian-owned private industrial companies. The
company operates 13 manufacturing plants located throughout
Brazil, and has an annual production capacity of 5.8 million
tons of resins and other petrochemical products.
* * *
As reported in the Troubled Company Reporter on April 10, 2006,
Fitch Ratings and Standard& Poor's Ratings Services assigned
these ratings to Braskem S.A.:
Fitch Ratings Services:
-- BB- on the proposed offering of US$200 million senior
unsecured perpetual bonds to be issued.
Standard & Poor's Ratings Services:
-- BB on local- and foreign-currency corporate credit
ratings; and
-- BB on forthcoming US$200 million perpetual bonds.
PETROLEOS DE VENEZUELA: Unit to Build Olefins Plant with Braskem
----------------------------------------------------------------
Saul Ameliach -- the head of Petroquimicas de Venezuela aka
Pequiven, a unit of Petroleos de Venezuela -- told Business News
Americas that the firm will sign an accord with Braskem SA to
construct an olefins plant in Anzoategui, Venezuela.
Mr. Ameliach told BNamericas that Braskem and Pequiven agreed on
a 50% participation each in the olefins project.
Braskem said earlier this year that the olefins plan required
around US$2.5 billion worth of investments, BNamericas states.
About Braskem
Braskem -- http://www.braskem.com.br/-- is a thermoplastic
resins producer in Latin American, and is among the three
largest Brazilian-owned private industrial companies. The
company operates 13 manufacturing plants located throughout
Brazil, and has an annual production capacity of 5.8 million
tons of resins and other petrochemical products.
About Pequiven
Petroquimicas de Venezuela aka Pequiven, a subsidiary of
Petroleos de Venezuela, was established in 1977. It manages all
direct and indirect operations in the area of petrochemicals.
About Petroleos de Venezuela
Petroleos de Venezuela SA 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. 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. Fitch said the Rating Outlook is Stable.
Both rating actions followed Fitch's November 2005 upgrade of
Venezuela's sovereign rating.
PETROLEOS DE VENEZUELA: Working with Braskem on El Tablazo Plan
---------------------------------------------------------------
Saul Ameliach -- the head of Petroleos de Venezuela's unit,
Petroquimicas de Venezuela aka Pequiven -- told Business News
Americas that the firm will build with Braskem SA a propylene
and polypropylene plant in El Tablazo.
El Tablazo is a Pequiven industrial park in Zulia state.
BNamericas states that Braskem said earlier this year that the
El Tablazo project was going to cost about US$300 billion.
Works on the propylene and polypropylene project will start in
2007, BNamericas relates.
The project will also be participated by Japan's Mitsui and
Venezuela's Grupo Zuliano as minority partners, BNamericas
relates, citing Mr. Ameliach.
About Braskem
Braskem -- http://www.braskem.com.br/-- is a thermoplastic
resins producer in Latin American, and is among the three
largest Brazilian-owned private industrial companies. The
company operates 13 manufacturing plants located throughout
Brazil, and has an annual production capacity of 5.8 million
tons of resins and other petrochemical products.
About Pequiven
Petroquimicas de Venezuela aka Pequiven, a subsidiary of
Petroleos de Venezuela, was established in 1977. It manages all
direct and indirect operations in the area of petrochemicals.
About Petroleos de Venezuela
Petroleos de Venezuela SA 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. 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. Fitch said the Rating Outlook is Stable.
Both rating actions followed Fitch's November 2005 upgrade of
Venezuela's sovereign rating.
***********
S U B S C R I P T I O N I N F O R M A T I O N
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co-published by Bankruptcy Creditors' Service, Inc., Fairless
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Maryland USA. Marjorie C. Sabijon, Sheryl Joy P. Olano, and
Stella Mae Hechanova, Editors.
Copyright 2006. All rights reserved. ISSN 1529-2746.
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