TCRLA_Public/060713.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

                Thursday, July 13, 2006, Vol. 7, Issue 138

                                    Headlines

A R G E N T I N A

ACROMETALICA SA: Claims Verification Deadline Is Set for Sept. 4
AES CORP: Agrees to Link Power Generator to Argentina Power Grid
AMERICAN FALCON: Reorganization Proceeds to Bankruptcy
BANDEJAS MAGAR: Reorganization Proceeding Concluded
CHAMICAL SERVICIOS: Claims Verification Deadline Is on Oct. 3

MAD COMPANY: Trustee Will Verify Proofs of Claim Until Sept. 22
MARGIA SA: Deadline for Verification of Claims Is on Sept. 19
SANATORIO BERNAL: Verification of Claims Is Until Oct. 20
SIGMAFI SAIC: Trustee Has Until Aug. 18 to Verify Claims
SUCESION DE MARGARITA: Trustee Verifies Claims Until Sept. 7

TARAI SA: Last Day for Verification of Claims Is on Aug. 23

B A H A M A S

WINN-DIXIE: Hires Deloitte Tax to Provide Tax-Related Services
WINN-DIXIE: Landlords Balk at Proposed Cure Amounts for Leases

B E R M U D A

ALEA GROUP: BACP Europe's Stake Below 3% After Sale of Shares
REFCO INC: Chapter 11 Trustee Wants Court Nod on Settlement Pact
SPHINX MANAGED: US Court Says Co. Need Not Comply with Subpoenas
SVP HOLDING: Moody's Rates US$315MM First-Lien Bank Loan at B1

B O L I V I A

INT'L PAPER: Declares US$0.25 Per Share Quarterly Dividend

B R A Z I L

BANCO PANAMERICANO: Moody's Rates US$50MM Debt Due 2016 at B2
CENTRAIS ELETRICAS: S&P Affirms B- Corporate Credit Rating
COMPANHIA SIDERURGICA: S&P Says BB Rating Reflects High Leverage

C A Y M A N   I S L A N D S

CORBEL INVESTMENTS: Final Shareholders Meeting Is on Aug. 28
INVESTCORP SKS: Will Hold Final Shareholders Meeting on Aug. 22
MIDWAY INVESTMENT: Creditors Have Until Sept. 13 to File Claims
PULSAR PROPERTIES: Proofs of Claim Filing Is Until Sept. 13

C H I L E

METROGAS: May Raise Residential Rates Due to Argentine Gas Hike

C O L O M B I A

BANCOLOMBIA: Merrill Lynch Expects Bank's Strong 2007 Recovery
IMPSAT SA: Colombian Unit Sees 15% Increase in 2006 Revenues

C U B A

* CUBA: Extends Food Import Accord with Texas Port

D O M I N I C A N   R E P U B L I C

BANCO INTERCONTINENTAL: Court Rejects Defense's Plea to Postpone
BANCO INTERCONTINENETAL: Lois Malkun Files for Inadmissibility
FALCONBRIDGE: Xstrata Raises All-Cash Offer to CDN$59 Per Share

E C U A D O R

PETROLEO BRASILEIRO: Will Invest US$500 Million in Ecuador

* ECUADOR: Metal-Mechanics Firms Worry Over Free Trade Delay

J A M A I C A

DIGICEL LTD: Launches New Mobile Services in Turks & Caicos
KAISER ALUMINUM: Asks for Royal Settlement Agreement Approval
KAISER ALUMINUM: Deregisters Outstanding Securities with US SEC
NATIONAL WATER: St. Elizabeth Parliament Member Criticizes Firm

M E X I C O

ALERIS INT'L: Moody's Rates US$650MM Proposed Term Loan at Ba3
GRUPO MEXICO: Expects La Caridad Mine Closure Approval Next Week
INDUSTRIAS UNIDAS: S&P Affirms B Long-Term Corp. Credit Rating
KERR-MCGEE: Declares Quarterly Dividend of US$0.3125 Per Share

* MUNICIPALITY OF SOLIDARIDAD: Moody's Withdraws B1 Rating

* Thacher Proffitt's Names Two New Counsel in Mexico City Office

P A R A G U A Y

* PARAGUAY: Posts PYG217 Billion Profits in January-May Period

P U E R T O   R I C O

G+G RETAIL: Wants Until Oct. 23 to Remove State Court Actions

T R I N I D A D   &   T O B A G O

MIRANT CORP: To Repurchase Common Stock & Sell Int'l Businesses
MIRANT CORP: Buy Back Plan Cues Fitch to Put Ratings on NegWatch
MIRANT CORP: Buy Back Plan Cues S&P to Put B+ Rating on NegWatch

U R U G U A Y

* URUGUAY: State Power Company Launches Energy Auction

V E N E Z U E L A

BANESCO BANCO: Fitch Lowers Individual Rating to D/E from D
BANCO DE VENEZUELA: Fitch Lowers Individual Rating to D from C/D
BANCO EXTERIOR: Fitch Downgrades Individual Rating to D from C/D
BANCO MERCANTIL: Fitch Lowers Individual Rating to D from C/D
BANCO PROVINCIAL: Fitch Lowers Individual Rating to D from C/D

CITGO PETROLEUM: Cutting Gasoline Sale in 14 States in US
CITGO PETROLEUM: Decides to Realign National Gasoline Network
CITGO PETROLEUM: Delivers US$280M Dividend to Parent Company
ELECTRICIDAD DE CARACAS: Will Begin Trading Shares in Latibex

* Large Companies with Insolvent Balance Sheets

* Matthew Berk Joins A&M as Senior Director in Charlotte


                         - - - - -    


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



ACROMETALICA SA: Claims Verification Deadline Is Set for Sept. 4
----------------------------------------------------------------
Court-appointed trustee Nestor Rodolfo del Potro will verify
creditors' proofs of claim against bankrupt company Acrometalica
S.A. until Sept. 4, 2006.  Creditors who fail to present their
proofs of claims won't receive any post-liquidation distribution
that Mr. Del Potro will make.

The verified claims will be submitted in court as individual
reports on Oct. 17, 2006.  A general report that contains an
audit of Acrometalica's accounting and banking records will
follow on Nov. 28, 2006.

Acrometalica's creditors did not accept the settlement plan that
the company presented on April 5, 2006, prompting Court No. 17
in Buenos Aires to convert the company's insolvency case into a
bankruptcy proceeding.  

Clerk No. 33 assists the court in this case.

The debtor can be reached at:

    Acrometalica S.A.
    3 de Febrero 1350
    Buenos Aires, Argentina

The trustee can be reached at:

    Nestor Rodolfo del Potro
    Avenida Corrientes 1291
    Buenos Aires, Argentina


AES CORP: Agrees to Link Power Generator to Argentina Power Grid
----------------------------------------------------------------
A spokesperson of AES Corp. told Dow Jones Newswires that the
company has tentatively agreed to connect its 650-megawatt
Termoandes power generator to the power grid of Argentina.

The Termoandes plant is located in the northwester Argentine
province of Salta.  It burns Argentine gas to produce
electricity for export to Chile.

Termoandes, however, has been unable to run at full capacity due
to irregular government-caused gas supply reduction to power
generators during peak winter usage periods, Dow Jones says,
citing the spokesperson.

But due to sporadic government-directed gas supply cuts to power
generators during peak winter usage periods, Termoandes has been
unable to run at full capacity, the Buenos Aires-based company
spokesman said.

Dow Jones emphasizes that the government of Argentina is looking
for electricity to be added to the national power grid.  The
demand for electricity has been growing amid Argentina's
extended economic recovery from its two-year economic crisis
that ended in 2002.

The spokesperson, according to Dow Jones, said that the plan is
to have the generator connected to the national power grid by
June and end on September 2007.

Dow Jones relates that the plan relies on these two key factors
being developed by energy planners in Argentina:

     -- extension of high tension grid power lines into
        northwest Argentina, and

     -- connection to a higher capacity gas pipeline.

Increased generation through the plan, however, is unlikely to
result in a boost of electricity exports to Chile, as Argentine
officials would first focus on satisfying domestic demand.

AES Corp. (NYSE:AES) -- http://www.aes.com/-- is a global    
power company.  The Company operates in South America, Europe,
Africa, Asia and the Caribbean countries.  Generating 44,000
megawatts of electricity through 124 power facilities, the
Company delivers electricity through 15 distribution companies.

AES's Latin America business group is comprised of generation
plants and electric utilities in Argentina, Brazil, Chile,
Colombia, Dominican Republic, El Salvador, Panama and Venezuela.
Fuels include biomass, diesel, coal, gas and hydro.  The group
also pursues business development activities in the region.  AES
has been in the region since May 1993, when it acquired the CTSN
power plant in Argentina.

                        *    *    *

As reported in the Troubled Company Reporter on May 25, 2006,
Fitch affirmed The AES Corporation's Issuer Default Rating at
'B+'.  Fitch also affirmed and withdrew the ratings for the
company's junior convertible debt.  Fitch said the Rating
Outlook for all remaining instruments is Stable.

As reported in the Troubled Company Reporter on March 31, 2006,
Standard & Poor's Ratings Services raised its corporate credit
rating on energy company The AES Corp. to 'BB-' from 'B+'.  S&P
said the outlook is stable.

As reported in the Troubled Company Reporter on Jan. 11, 2006,
Moody's affirmed the ratings of The AES Corporation, including
its Ba3 Corporate Family Rating and the B1 rating on its senior
unsecured debt.  Moody's said the rating outlook remains stable.


AMERICAN FALCON: Reorganization Proceeds to Bankruptcy
------------------------------------------------------
American Falcon S.A.'s creditors did not accept the settlement
plan that the company presented on June 13, 2006, prompting
Court No. 18 in Buenos Aires to convert the company's insolvency
case into a bankruptcy proceeding.  Consequently, all of the
debtor's assets will be liquidated and proceeds distributed to
creditors.

Estudio Fizzani y Asociados Contadores Publicos continues to be
the trustee for the case.   

It was reported in the Troubled Company Reporter-Latin America
on June 28, 2005, that Fayez Chehab, owner of local airline
American Falcon, was in talks with Martin Varsavsky to sell the
airline.  Mr. Chehab was also involved in talks with potential
European buyers.

American Falcon filed a Concurso petition, or the Argentine
equivalent of a Chapter 11 Reorganization on May 20, 2005, in an
attempt to restructure US$3 million in debt.   On May 30, 2005,
the company asked for bankruptcy protection, declaring ARS29
million in liabilities and ARS45 million in assets.  

Falcon America ceased operations on July 2005, after its
insurance was cancelled for non-payment.

The debtor can be reached at:

   American Falcon S.A.
   Av. Santa Fe 1713
   Buenos Aires, Argentina
   Tel: (5411) 4811-0215/0576/0478/9078
   E-mail: american@americanfalcon.com.ar

The trustee can be reached at:

   Estudio Fizzani y Asociados Contadores Publicos
   Tte Gral Juan D. Peron 1509
   Buenos Aires, Argentina


BANDEJAS MAGAR: Reorganization Proceeding Concluded
---------------------------------------------------
Bandejas Magar S.A.'s reorganization proceeding has ended.  Data
published by Infobae on its Web site indicated that the process
was concluded after a court in Buenos Aires approved the debt
agreement signed between the company and its creditors.


CHAMICAL SERVICIOS: Claims Verification Deadline Is on Oct. 3
-------------------------------------------------------------
Manuel Cibeira, the court-appointed trustee for Chamical
Servicios S.R.L.'s bankruptcy case, will verify creditors'
proofs of claim until Oct. 3, 2006.

Creditors who fail to present their proofs of claim won't
receive any post-liquidation distribution that Mr. Cibeira will
make.

La Nacion relates that Court No. 16 in Buenos Aires declared
Chamical Servicios bankrupt at the behest of Luis Cejas, the
company's creditor.

Clerk No. 32 assists the court in the proceeding.

The debtor can be reached at:

         Chamical Servicios S.R.L.
         Condarco 5164
         Buenos Aires, Argentina

The trustee can be reached at:

         Manuel Cibeira
         Cordoba 1247
         Buenos Aires, Argentina    


MAD COMPANY: Trustee Will Verify Proofs of Claim Until Sept. 22
---------------------------------------------------------------
Roberto Leonardo Sapolnik, the court-appointed trustee for Mad
Company Argentina S.A.'s bankruptcy proceeding will verify
creditors' proofs of claim until Sept. 22, 2006.

Creditors who fail to submit their proofs of claims won't
receive any post liquidation distribution that Mr. Sapolnik will
make.

The verified claims will be submitted in court as individual
reports on Nov. 6, 2006.  A general report that contains an
audit of Mad Company's accounting and banking records will
follow on Dec. 19, 2006.

Court No. 20 declared Mad Company bankrupt at the request of
Pronto Red S.R.L., which it owes US$12,840.55.

Clerk No. 40 assists the court in this case.

The debtor can be reached at:

    Mad Company Argentina S.A.
    Belgrano 845
    Buenos Aires, Argentina

The trustee can be reached at:

    Roberto Leonardo Sapolnik
    Parana 851
    Buenos Aires, Argentina    


MARGIA SA: Deadline for Verification of Claims Is on Sept. 19
-------------------------------------------------------------
Court-appointed trustee Jorge Fernando Podhorzer will verify
creditors' proofs of claim against Margia S.A. until
Sept. 19, 2006.  

Creditors who fail to present their proofs of claim won't
receive any post-liquidation distribution that Mr. Podhorzer
will make.

The verified claims will be presented in court as individual
reports on Oct. 31, 2006.  A general report that contains an
audit of Margia S.A.'s accounting and banking records will
follow on Dec. 13, 2006.

The trustee can be reached at:

    Jorge Fernando Podhorzer
    Pasaje del Carmen 716
    Buenos Aires, Argentina   


SANATORIO BERNAL: Verification of Claims Is Until Oct. 20
---------------------------------------------------------
Hugo Daniel Yaben, Norma Isabel Difina and Jorge Horacio Pardal,
the court-appointed trustees for Sanatorio Bernal S.R.L.'s
reorganization proceeding, will verify creditors' proofs of
claim until Oct. 20, 2006.

The verified claims will be submitted in court as individual
reports on Dec. 4, 2006.  A general report that contains an
audit of Sanatorio Bernal's accounting and banking records will
follow on Feb. 20, 2007.

On Sept. 4, 2007, the creditors will vote on a settlement plan
that Sanatorio Bernal will lay on the table.

The trustees can be reached at:

    Hugo Daniel Yaben
    Norma Isabel Difina
    Jorge Horacio Pardal         
    Alvear 498, Quilmes
    Buenos Aires, Argentina


SIGMAFI SAIC: Trustee Has Until Aug. 18 to Verify Claims
--------------------------------------------------------
Sergio Leonardo Novick, the court-appointed trustee for Sigmafi
S.A.I.C.'s bankruptcy case, will verify creditors' proofs of
claim until Aug. 18, 2006.

Creditors who fail to present their proofs of claim won't
receive any post-liquidation distribution that Mr. NOvick will
make.

Court No. 6 in Buenos Aires declared Sigmafi bankrupt at the
behest of Ernesto Luis Bogarin, the company's creditor.

Clerk No. 12 assists the court in the case.

The debtor can be reached at:

    Sigmafi S.A.I.C.
    Reconquista 657
    Buenos Aires, Argentina

The trustee can be reached at:

    Sergio Leonardo Novick
    Libertad 359
    Buenos Aires, Argentina    


SUCESION DE MARGARITA: Trustee Verifies Claims Until Sept. 7
------------------------------------------------------------
Jose Angel Sallon, the court-appointed trustee for Sucesion de
Margarita Nelida Campi's bankruptcy proceeding, will verify
creditors' proofs of claim until Sept. 7, 2006.

Creditors who fail to present their proofs of claim won't
receive any post-liquidation distribution that Mr. Sallon will
make.

Court No. 15 in Buenos Aires declared Sucesion de Margarita
bankrupt after defaulting on its obligations.

Clerk No. 29 assists the court in the case.

The debtor can be reached at:

    Sucesion de Margarita Nelida Campi
    Sanchez de Loria 651
    Buenos Aires, Argentina

The trustee can be reached at:

    Jose Angel Sallon
    Libertad 860
    Buenos Aires, Argentina    


TARAI SA: Last Day for Verification of Claims Is on Aug. 23
-----------------------------------------------------------
Ana Maria Lopez, the court-appointed trustee for Tarai S.A.'s
reorganization proceeding, will verify creditors' proofs of
claim until Aug. 23, 2006.

The verified claims will be submitted in court as individual
reports on Oct. 5, 2006.  A general report that contains an
audit of Tarai S.A.'s accounting and banking records will follow
on Nov. 17, 2006.

On Apr. 20, 2007, the creditors will vote on a settlement plan
that Tarai S.A. will lay on the table.

The trustee can be reached at:

    Ana Maria Lopez
    San Martin 662
    Buenos Aires, Argentina




=============
B A H A M A S
=============


WINN-DIXIE: Hires Deloitte Tax to Provide Tax-Related Services
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida
authorized Winn-Dixie Stores, Inc., and its debtor-affiliates to
employ Deloitte Tax LLP, nunc pro tunc to May 9, 2006, to
provide tax services related to the Debtors' plan of
reorganization and emergence from Chapter 11.

As reported in the Troubled Company Reporter on June 27, 2006,
as a result of a loss of key personnel in their tax department,
the Debtors lack the internal expertise to address the many plan
and emergence tax-related issues they will face without the
advice of outside professionals.

Deloitte Tax will:

    (1) assist the Debtors' tax department with its overall
        coordination and management of the bankruptcy emergence
        process including tax bankruptcy work plan evaluation,
        management and execution;

    (2) provide tax consulting on settlement of prepetition
        claims, treatment of inter-company balances, asset
        dispositions, damages relating to rejected leases or
        other contracts, pending litigation or disputed claims,
        reduction in tax attributes and resulting deferred
        taxes, and determination of the availability,
        limitations, and preservation of tax attributes;

    (3) assist the Debtors in determining:

        (a) the likely amount of cancellation of indebtedness
            income;

        (b) the effect of tax attribute reduction for federal
            and state purposes;

        (c) whether an ownership change will occur as a result
            of the proposed Plan;

        (d) whether the Debtors would potentially qualify for
            and benefit from the special bankruptcy exceptions
            contained in Section 382(1)(5) and (1)(6) and
            applicable state tax laws;

    (4) assist the Debtors in evaluating the tax basis
        subsidiary stock under applicable consolidated return
        regulations and, if there is an excess loss of account
        with respect to the stock of any subsidiary, providing
        tax consulting to the Debtors regarding methods it may
        employ to minimize the income recognition related to it;

    (5) advise the Debtors in their efforts to determine the tax
        treatment of postpetition interest and reorganization
        costs; and

    (6) document, as appropriate, the tax analysis, opinions,
        recommendations, conclusions, and correspondence for any
        tax issue or other tax matters.

The Debtors will pay Deloitte Tax according to these hourly
rates:

        Partners              US$485 to US$600
        Senior Managers       US$425 to US$500
        Managers              US$325 to US$425
        Senior Staff          US$230 to US$325
        Staff                 US$190 to US$230
        Paraprofessionals      US$80 to US$125

The Debtors will also reimburse Deloitte Tax for reasonable
expenses, including, without limitation, travel and delivery
services.

Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc.
-- http://www.winn-dixie.com/-- is one of the nation's largest
food retailers.  The Company operates stores across the
Southeastern United States and in the Bahamas and employs
approximately 90,000 people.  The Company, along with 23 of its
U.S. subsidiaries, filed for chapter 11 protection on Feb. 21,
2005 (Bankr. S.D.N.Y. Case No. 05-11063, transferred Apr. 14,
2005, to Bankr. M.D. Fla. Case Nos. 05-03817 through 05-03840).
D.J. Baker, Esq., at Skadden Arps Slate Meagher & Flom LLP, and
Sarah Robinson Borders, Esq., and Brian C. Walsh, Esq., at King
& Spalding LLP, represent the Debtors in their restructuring
efforts.  Paul P. Huffard at The Blackstone Group, LP, gives
financial advisory services to the Debtors.  Dennis F. Dunne,
Esq., at Milbank, Tweed, Hadley & McCloy, LLP, and John B.
Macdonald, Esq., at Akerman Senterfitt give legal advice to the
Official Committee of Unsecured Creditors.  Houlihan Lokey &
Zukin Capital gives financial advisory services to the
Committee.  When the Debtors filed for protection from their
creditors, they listed US$2,235,557,000 in total assets and
US$1,870,785,000 in total debts.  (Winn-Dixie Bankruptcy News,
Issue No. 42; Bankruptcy Creditors' Service, Inc., 215/945-
7000).


WINN-DIXIE: Landlords Balk at Proposed Cure Amounts for Leases
--------------------------------------------------------------
Winn-Dixie Stores, Inc., and its debtor-affiliates sought
authority from the U.S. Bankruptcy Court for the Middle District
of Florida to assume 75 store leases as of the effective date of
their plan of reorganization.

To the extent any default exists under any of the Leases, the
Debtors assure the Court that they will satisfy Section 365(b)
of the Bankruptcy Code by paying their landlords the necessary
cure amounts, if any, promptly after the Effective Date.

                      Landlords Object

Five landlords filed limited objections to the Debtors' proposed
assumption of the store leases:

                                Store                   Proposed
    Landlord                     No.    Location          Cure
    --------                    -----   --------        --------
  E&A Acquisitions Two, LLP   2213    Ocala, FL        US$84,435

  E&A Investments, LP          736    Port
                                      Charlotte, FL          -

  E&A Southeast, LP            599    Fairhope, AL      24,022
  E&A Financing II, LP          84    Fernandina

                                      Beach, FL         81,591
                              2333    Clearwater, FL    69,509
                              2230    Palm Bay, FL      21,996

  GLA, LLC                    1852    Alpharetta, GA         -

The Landlords' counsel, Adam N. Frisch, Esq., at Held & Israel,
in Jacksonville, Florida, asserts that the Debtors' calculations
of the cure amounts for E&A Acquisitions and E&A Financing are
incorrect.  He also disputes the Debtors' calculations that
there are no cure amounts due to E&A Investments & GLA.

According to Mr. Frisch, the total cure amounts, excluding
interests, were US$98,736 for E&A Acquisitions, US$64,406 for
E&A Investments, and US$63,391 for GLA as of June 30, 2006.

The past due amounts under the E&A Financing leases are
US$122,914 for Store No. 84, US$114,552 for Store No. 2333, and
US$24,928 for Store No. 2230 as of July 1, 2006.

Mr. Frisch points out that the Debtors subleased Store No. 1852
to Daker Enterprises, Inc., and any cure amount paid by the
Debtors will be passed to Daker.  Hence, payment of the cure
amount will not affect the Debtors' financial condition, he
asserts.

The Landlords also accuse the Debtors of attempting to avoid
compliance with their agreement to the assumption or rejection
of the Leases by May 19, 2006.  According to Mr. Frisch, the
Debtors purport to assume the Leases by May 19 but delay the
effective date of the effective date of the Debtors'
reorganization plan.

"There is no reason to delay the effective date of the
assumption or the date for curing defaults," he argues.

The Landlords condition their consent to the Debtors' request,
among others, on these terms:

    (a) the assumption of the Leases is effective on the date
        the Court approves the assumption; and

    (b) with respect to any portion of the requested cure
        payments are disputed, the Debtors will file a pleading
        by July 7, 2006, stating not only the amounts at issue
        but also the reasons for disputing the asserted cure
        amounts.

In addition, E&A Acquisitions, E&A Investments and E&A Financing
ask the Court to direct the Debtors to pay the undisputed
portion of their cure amounts, plus interest at 7% per annum for
2005 and 9% per annum for 2006, on or before July 7, 2006.

GLA also asks the Court to direct the Debtors to pay the
undisputed portion of its requested cure amount, plus interest
at 18% per annum, by July 7, 2006.

E&A Southeast agrees with the Debtors' proposed cure amount and
asks the Court to direct the Debtors to pay it on or before
July 7, 2006.

The Landlords further asks that the Court, upon request, set an
expedited hearing to resolve any dispute over the cure amounts.

                      More Objections

(a) Terranova Landlords

Landlords Westfork Tower LLC, Concord-Fund IV Retail LP, TA
Cresthaven LLC, Flagler Retail Associates Ltd., and
Elston/Leetsdale, through their property manager, Terranova
Corp., assert that the Leases should be deemed terminated due to
the Debtors' failure to assume them within the time allotted by
Section 365(d)(4) of the Bankruptcy Code.

Karen K. Specie, Esq., at Scruggs & Carmichael, P.A., in
Gainesville, Florida, notes that the lease agreement with
Concord-Fund for Store No. 254 has been terminated, and thus
cannot be assumed.  She says that the lease was terminated due
to the Debtors' material breach of the lease resulting in code
violations and failure to adequately upgrade the lighting in the
store's parking lot under the County Code requirements.

After obtaining relief from the automatic stay, Concord-Fund
filed an eviction action against the Debtors before the Miami-
Dade County Court seeking to recover possession of Store No.
254.  Concord-Fund provided the Debtors with timely notice of
the default and an opportunity to cure the default, and the
Debtors have failed to do so, Ms. Specie relates.

If the Court determines that the Store 254 Lease may be assumed,
Concord-Fund demands that the Debtors place sufficient funds in
escrow to:

    (a) upgrade the outdoor lighting of the store's parking lot
        so that it complies with the South Florida Building
        Code;

    (b) obtain cancellation of all outstanding notices of
        violation issued by Miami-Dade County concerning the
        property and parking lot;

    (c) obtain all required permits and pass all required
        inspections from local governments that are necessary to
        perform the lighting upgrade of the parking lot; and

    (d) pay fines issued by Miami-Dade County for Debtors'
        violations on the property and its parking lot.

The Terranova Landlords also assert that the proposed cure
amounts are insufficient to cover the cure costs required
pursuant to the terms of the Leases.  According to Ms. Specie,
the total cure amounts for the leases, excluding interest on
unpaid rent, are:

      Landlord           Store No.       Total Cure Amount
      --------           ---------       -----------------
      Westfork Tower        278              US$148,673
      Concord-Fund          254               166,571
      TA Cresthaven         221                31,508
      Flagler Retail        353                40,362
      Elston/Leetsdale      209                45,517

In addition, the Landlords are entitled to receive payment from
the Debtors for the attorneys' fees and costs incurred in
objecting to the Debtors' request and in enforcing their
contractual rights to payment of rent, real estate taxes and
indemnification under the Leases, Ms. Specie says.

(b) 14 Landlords

Fourteen landlords object to the Debtors' proposed cure amounts:

                                           Debtors'    
Landlord's
                                           Proposed     Asserted
Landlord                    Store No.    Cure Amt     Cure Amt
--------                    ---------    --------    ----------
WD Green Cove Trust             138             -       US$6,268

WD Pasco Trust                  672        US$9,098        9,110

WD Jacksonville Trust           176             -        9,926

MCW-RC FL-Shoppes at 104        287        29,933       37,202

Gehr Florida Development        348        39,729       52,006

Southland Birmingham WD
   Delaware Business Trust       517        12,774       39,751

Southland-River Ridge WD
   Delaware Business Trust      1404             -       15,625

Southland-Amite WD
   Delaware Business Trust      1449         4,291       12,136

Southland-Crystal River WD
   Delaware Business Trust      2217         6,914       12,479

Southland-Poinciana WD
   Delaware Business Trust      2265         8,987       13,681

Land Dade, Inc.                 607             -       13,500

Skinners of Point Meadows         6        93,213      107,846

London Associates, Ltd.         279             -       16,219
                                 290             -      167,660

Regency Centers LP              256             -       31,513
                                 265        14,738       15,915

WD Green Cove, WD Pasco, and WD Jacksonville assert that the
proposed cure amounts failed to account for the prepetition
portion of the 2005 ad valorem taxes, which the Debtors have not
paid.

Regency Centers also asserts that the cure amount for Store No.
265 failed to include the prepetition portion of the 2005 real
estate taxes, which the Debtors have not yet paid.

Subsequent to the Debtors' Petition Date, Regency Centers sold
the lease for Store No. 265 to a third party.  Even so, Regency
Centers insists that it is entitled to the asserted cure amount
because it was the landlord during that time.

Shoppes at 104's asserts additional cure amounts to account for
the Debtors' unpaid 2004 and 2005 real estate taxes
reconciliation.

Gehr Florida's cure amount consists of US$39,729 for the 2004
real estate taxes, and US$12,277 for various operating expenses.

The Southland Parties' cure amounts reflect the Debtors' unpaid
real estate taxes, interests due pursuant to certain leases, and
related legal fees, plus per diem interests from July 1, 2006,
until the cure amounts are paid.

Land Dade asserts a US$13,500 cure amount for the Debtors'
unpaid insurance reimbursements.

Betsy C. Cox, Esq., counsel for Skinners, relates that the
Debtors' proposed cure amount is comprised of the tenant's pro
rata share of real estate taxes and shopping center insurance
for 2004.  She says that the Debtors failed to include:

     -- US$11,645 due for the tenant's pro rata share of real
        estate taxes for Jan. 1, 2005, to Feb. 21, 2005;

     -- US$2,988 of attorneys' fees and costs relating to the
        uncured defaults under the lease; and

     -- interests for unpaid real estate taxes and insurance for
        2004 that has accrued from March 15, 2005, and unpaid
        real estate taxes for 2005 that has accrued from
        Feb. 9, 2006, pursuant to the lease.

Jimmy D. Parish, Esq., counsel for London, notes that the cure
amounts asserted by London excludes lease charges for July and
common area maintenance reconciliation.

(c) Florida Dickens, et al.

Florida Dickens Associates, Ltd., and other landlords contend
that there is no reason to delay the effective date of the
assumption of the leases.  The Landlords ask the Court to
approve the assumption of the leases effective upon the date the
Court approves the assumption.

(d) Benderson

Benderson Development Company asserts that the correct principal
cure amounts, excluding interests, with respect to four stores,
are:

      Store No.        Location           Principal Cure Amount
      ---------        --------           ---------------------
        637            Tampa, FL                US$45,377
        656            Bradenton, FL               19,270
        660            Bradenton, FL              214,809
        737            Port Charlotte, FL         227,958

Benderson objects to the Debtors' proposed cure amount for Store
No. 651 to the extent that it does not include interest.

Joey S. Schlosberg, Esq., asserts that the Landlord is entitled
to an 18% interest rate for Store No. 660 and statutory interest
rates for the other leases with respect to unpaid amounts.

Benderson asks the Court not to grant the Debtors a further
extension of their deadline to assume the leases and to direct
the Debtors to provide a detailed statement specifying the basis
for disputing the unpaid cure amounts.

(e) Prudential Insurance Company

Prudential Insurance Company of America asks the Court to:

    (1) require the Debtors to provide adequate assurance of
        future performance information as required by Section
        365 of the Bankruptcy Code;

    (2) limit any extension of time to assume or reject
        unexpired leases to 60 days without an additional
        demonstration of cause;

    (3) deny any request to extend the time to assume, assume
        and assign, or reject the leases beyond the confirmation
        date of the Debtors' Plan;

    (4) require the timely payment of all postpetition charges
        under the leases during any period of extension; and

    (5) establish its cure amounts, including interest and
        attorneys' fees:

        Shopping                 Debtors'         Prudential's
         Center                Cure Amount         Cure Amount
        --------               -----------        ------------
        St. John's Commons       US$21,807             US$31,903
        Park View Square               -              32,256
        Lake City Shopping
           Center                      -              18,257

(f) Developers Diversified, et al.

Developers Diversified Realty Corporation, WRI/TEXLA LLC,
Weingarten Realty Investors, RMC Property Group, Four Florida
Shopping Centers, Curry Ford LP, and Palm Springs Mile
Associates, Ltd., assert that the actual amounts due and owed by
the Debtors under their leases are:

                             Store       Debtors'     Landlord's
  Landlord                   No.      Cure Amount    Cure Amount
  --------                  -----     -----------    -----------
  Developers Diversified     167              -        US$55,299
                             631        US$16,110         31,241
                            1766              -         31,869
  Weingarten Realty          218         57,383         88,596
                             222         71,770        132,564
                             359              -        273,111
  WRI/TEXLA                 1537         46,526        107,071
  RMC Property Group         777            900          3,900
  Four Florida Shopping      375         14,839         19,339
                            2211         13,409         30,496
  Curry Ford LP             2267          5,442         15,331
  Palm Springs Mile          243          1,500          4,500

The Landlords ask the Court to:

    (1) approve the assumption of the Leases no later than
        Aug. 1, 2006;

    (2) require the Debtors to pay the Landlords' asserted cure
        amounts, plus interest and any additional pecuniary
        losses without further delay;

    (3) require the Debtors to continue to comply with their
        lease obligations, including the accrued but not yet
        billed year-end adjustments in the regular course of
        business; and

    (4) deny any extension of the Debtors' time to assume or
        reject the Leases.

Developers Diversified Realty further asks the Court to deny the
Debtors' request to assume the lease for Store No. 2289 because
the Debtors have no interest in the lease to assume.

Robert LeHane, Esq., Kelley Drye & Warren LLP, in New York,
explains that the Store 2289 Lease expired in November 2004
after the Debtors vacated the leased premises in June 2004.  The
Debtors have no legal right to assume the lease, Mr. LeHane
asserts.

(g) New Plan and Aronov

New Plan Excel Realty Trust and Aronov Realty Management assert
that the Debtors owe them amounts for store rentals, exclusive
of any sums which have become due or been paid after June 29,
2006:

             Store   Debtor's   Landlord's Cure  Landlord's Cure
  Landlord    No.    Cure Amt    Prepetition      Postpetition
  --------   -----   ---------  ---------------  ---------------
  Aronov      556        -        US$14,136         
              460        -           16,667           2,271
              454   US$20,451        23,309           6,768
              426      15,166        17,396           5,360

  New Plan   2258       8,629         2,629          39,098
              281     132,097        <7,733>         40,404
             1440        -            7,737         262,224
              231     140,478       189,320          47,440
              153        -            5,469          63,531
             2311      95,391       101,143          27,386
              698      16,834        30,560          33,515
             2348        -              199          23,509
             2301      13,869        19,084          11,395

New Plan's postpetition cure amounts include rent for July 2006
while Aronov's postpetition claims excludes July 2006 rentals
due.

New Plan and Aronov ask the Court to:

     -- require the Debtors to pay the undisputed portion of
        their cure claims within 10 days following the
        assumption of the leases;

     -- require the Debtors to pay attorneys' fees with regard
        to each lease; and

     -- require the Debtors to promptly assume the leases by
        early August 2006.

Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc.
-- http://www.winn-dixie.com/-- is one of the nation's largest
food retailers.  The Company operates stores across the
Southeastern United States and in the Bahamas and employs
approximately 90,000 people.  The Company, along with 23 of its
U.S. subsidiaries, filed for chapter 11 protection on Feb. 21,
2005 (Bankr. S.D.N.Y. Case No. 05-11063, transferred Apr. 14,
2005, to Bankr. M.D. Fla. Case Nos. 05-03817 through 05-03840).
D.J. Baker, Esq., at Skadden Arps Slate Meagher & Flom LLP, and
Sarah Robinson Borders, Esq., and Brian C. Walsh, Esq., at King
& Spalding LLP, represent the Debtors in their restructuring
efforts.  Paul P. Huffard at The Blackstone Group, LP, gives
financial advisory services to the Debtors.  Dennis F. Dunne,
Esq., at Milbank, Tweed, Hadley & McCloy, LLP, and John B.
Macdonald, Esq., at Akerman Senterfitt give legal advice to the
Official Committee of Unsecured Creditors.  Houlihan Lokey &
Zukin Capital gives financial advisory services to the
Committee.  When the Debtors filed for protection from their
creditors, they listed US$2,235,557,000 in total assets and
US$1,870,785,000 in total debts.  (Winn-Dixie Bankruptcy News,
Issue No. 43; Bankruptcy Creditors' Service, Inc., 215/945-
7000).




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


ALEA GROUP: BACP Europe's Stake Below 3% After Sale of Shares
-------------------------------------------------------------
Alea Group Holdings (Bermuda) Ltd. disclosed that BACP Europe
Fund II, L.P.'s ownership declined below 3% of shares
outstanding by the sale of 1,050,000 of Alea's common shares on
July 10, 2006.  

BACP has now a remaining interest of 4,182,661 common shares,
which represents 2.41% of the issued common share capital by
Alea.  Alea has currently 173,710,665 common shares outstanding
and no treasury shares.

                        *    *    *

On Feb. 1, 2006, A.M. Best Co. downgraded the financial strength
rating to B from B++ and the issuer credit rating to "bb" from
"bbb" of the insurance and reinsurance operating subsidiaries of
Alea Group Holdings (Bermuda) Ltd. (collectively referred to as
Alea Group or Alea).

Subsequently, A.M. Best withdrew all ratings and assigned an
NR-4 (Company Request) to the Alea Group companies.

The downgrade followed significant deterioration in the
company's consolidated risk-adjusted capitalization as a result
of worse than anticipated performance in 2005 due to run-off
charges, catastrophe losses and further adverse reserve
development.  A.M. Best believed that the company is likely to
continue to be affected by high expenses related to the
transition of Alea Group into run off and the continuing
possibility of adverse reserve development.


REFCO INC: Chapter 11 Trustee Wants Court Nod on Settlement Pact
----------------------------------------------------------------
Marc Kirschner, the Chapter 11 trustee overseeing Refco Capital
Markets, Ltd.'s estate, asks the U.S. Bankruptcy Court for the
Southern District of New York to approve a settlement agreement
with certain securities customers and foreign exchange and
metals customers of RCM.

The Settlement Agreement resolves "litigation and creditor
disputes at the RCM level that might otherwise have resulted in
the freefall conversion of RCM's Chapter 11 case to a case under
Subchapter III of Chapter 7," according to Mark W. Deveno, Esq.,
at Bingham McCutchen LLP, in New York.

The Settlement Agreement achieves three primary goals:

   (a) Resolve a dispute regarding allocation of assets of the
       RCM estate and establish an agreed mechanism among the
       Settling Parties, whether as part of a global plan of
       reorganization for the Debtors or, if that plan is
       infeasible, as part of either a stand-alone plan
       applicable to RCM or a Chapter 7 distribution process;

   (b) Defer attempts to convert the RCM Chapter 11 case to a
       case in Chapter 7, and, if efforts to consummate the
       settlement in the RCM Chapter 11 case fail, cause the
       parties to convert to Chapter 7 on a more-efficient,
       significantly pre-planned basis; and

   (c) Implement a request for a continued stay of costly and
       time-consuming estate property litigation and to dismiss
       litigation in the event that the settlement becomes fully
       effective.

Counterparties to the Agreement comprise three creditor groups:

   (i) parties purporting to hold a primary pool of securities
       customer claims against RCM;

  (ii) parties purporting to be foreign exchange customers of
       RCM; and

(iii) Leuthold Funds, Inc., and Leuthold Industrial Metals
       Fund, L.P.

              Distribution to RCM Creditors

Under the Agreement, substantially all existing assets of RCM
other than potential intercompany and third-party recoveries are
divided under an agreed formula among holders of Securities
Customer Claims, FX/Unsecured Claims and Leuthold.

The Agreement establishes two primary sources of recovery:

   1.  Assets in Place -- Assets of RCM identified as of
       March 6, 2006, by Houlihan, Lokey, Howard and Zukin,
       financial advisor to the Official Committee of Unsecured
       Creditors, including proceeds of the SPhinX Settlement
       Agreement; and

   2.  Additional Property -- All other assets of RCM consisting
       mainly of claims against other Refco Debtors and third
       parties.

As of May 31, 2006, Assets in Place total US$2,361,000,000.

The RCM Trustee will reserve the first US$60,000,000 of Assets
in Place for administrative and priority claims against the RCM
estate.  A US$221,000,000 initial distribution will be made from
Assets in Place to the FX/Unsecured Claimholders.

A principal amount of US$79,500,000 will be reserved or paid to
JPMorgan Chase Bank, N.A. in respect of its secured claim
against RCM.  The balance of the Assets in Place will be
distributed to the Securities Customer Claim Holders.

The Agreement provides for the formation of advisory committees
and professionals who will assist the RCM Trustee with managing
and distributing the Assets in Place.

Assuming that (i) the securities held by RCM are valued as of
March 6, 2006, (ii) the allowed Securities Customer Claims total
US$2,700,000,000 and (iii) the allowed FX/Unsecured Claims total
US$890,000,000, distributions under the Agreement would pay to
the Securities Customer Claim Holders in excess of 70% of their
claims, and to general unsecured claim holders in excess of 26%
of their claims.

RCM creditors will share recoveries on intercompany and third
party claims in accordance with procedures under the Agreement.  
The sharing mechanism may be adjusted according to actual values
of the securities portfolio at the time of initial distribution,
and the actual amounts of allowed claims from time to time.

                      Leuthold Dispute

Leuthold commenced an adversary proceeding seeking return of
certain quantities of silver and palladium in possession of
RCM's agents.

Court approval of the Agreement will constitute permission for
the RCM Trustee to sell the Leuthold Metals, if requested by
Leuthold, through a recognized market.  Leuthold will receive
its metals or the proceeds of sale and share in distributions as
a holder of FX/Unsecured Claims.

                    Rogers Funds Dispute

The Agreement is contingent on the settlement of a dispute with
the holders of the claims of Rogers Raw Materials Fund, L.P. and
Rogers International Raw Material Fund.  The Rogers Funds have
commenced an Estate Property Action involving property worth
US$362,000,000.

The Agreement provides a mechanism agreed to by the Settling
Parties for reaching a settlement in respect of the Rogers Funds
claims.  The Agreement allows for the Rogers Funds to agree to
their claims being treated as Securities Customer Claims or
FX/Unsecured Claims.

If settlement with the Rogers Funds is not reached by July 14,
2006, the RCM Trustee will seek conversion of RCM's Chapter 11
case to a Chapter 7 case, wherein the Settling Parties will
attempt to implement the terms of the Settlement Agreement.

However, if agreement with the Rogers Funds is not reached by
October 15, 2006, even in a Chapter 7 case, then the Agreement
will not become fully effective.

If agreement is reached with the Rogers Funds for their claims
to be characterized as either Securities Customer Claims or
FX/Unsecured Claims, the Agreement provides for the claims to be
allowed claims.

                  Initial Effective Date

The Agreement terminates unless the Initial Effective Date
occurs before August 31, 2006.

The Initial Effective Date takes place on the last to occur of:

   (i) the Agreement being fully executed by the holders of
       requisite amounts of FX/Unsecured Claims and Securities
       Customer Claims;

  (ii) the RCM Trustee having completed his investigation of
       claims characterization as being Securities Customer
       Claims, and determined not to contest that
       characterization for more than US$100,000,000 in the
       aggregate sum of those claims;

(iii) the RCM Trustee having determined that the requests for
       reimbursement of attorneys' fees and expenses are
       reasonable and should be paid as "substantial
       contribution" administrative claims of the RCM estate;
       and

  (iv) the Bankruptcy Court entering an order approving the
       Agreement in its entirety.

                   Pre-Packaged Chapter 7

The RCM Trustee will seek conversion of the case to Chapter 7
if:

   1.  the Agreement is not approved by August 31, 2006;

   2.  the parties are not able to reach appropriate amendments
       to the Agreement within a 10-day period after the
       Bankruptcy Court advises the parties that it will not
       approve the Agreement by August 31, 2006; or

   3.  certain milestones indicating progress toward
       implementing a plan of reorganization are not met,
       including:

       -- the filing of a plan by August 31,
       -- the approval of a disclosure statement by October 15,
       -- the confirmation of a plan by November 15, and
       -- the plan's effectiveness by December 31, 2006.

In light of the RCM Trustee's investment of time and diligence
in the Refco matters and the cost that would be expended in
educating another trustee as to the issues involved, the
Settling Parties have agreed to elect Mr. Kirschner as Chapter 7
trustee if the case is converted to Chapter 7.  The Agreement
serves as a pre-conversion ballot in favor of his election.

However, neither the Agreement nor the Motion will in any way
bind the U.S. Trustee, or constitute a judicial ruling that
would limit the U.S. Trustee's discretion as to the appointment
of an interim Chapter 7 trustee.

Upon conversion to Chapter 7, the Chapter 7 trustee will, among
other things, submit an interim or final report that attempts to
implement the terms of the Agreement including its conditions to
full effectiveness.  The Chapter 7 trustee retains the right to
seek to bind creditors not party to the Agreement by appropriate
adversary or other actions.

The Agreement's provisions related to allocation of estate
assets among RCM creditors become effective if and only if the
"Subsequent Effective Date" occurs on or before Jan. 15, 2007.

The conditions for the occurrence of the Subsequent Effective
Date are:

   (a) resolution of the Rogers Funds Claims as either
       Securities Customer Claims or FX/Unsecured Claims as
       determined by the Bankruptcy Court or in a manner
       acceptable to the RCM Trustee and the super majority no
       later than October 15, 2006;

   (b) confirmation and effectiveness of a plan of
       reorganization or conversion of the RCM Case to
       Chapter 7, in each case by January 15, 2007; and

   (c) determination by the RCM Trustee that there are
       sufficient funds available to pay administrative and
       priority claims.

                   Plan Support Agreement

Mr. Deveno tells Judge Drain that the Agreement is in many
respects similar to a plan support agreement among the RCM
Trustee and the Settling Parties.

However, Mr. Deveno clarifies, the RCM Trustee and the Settling
Parties do not seek to deprive other RCM parties-in-interest of
the chance to participate in the development of plan terms or
similar distribution mechanics.  He also notes that the key
financial terms of the Agreement become effective only upon
their incorporation into a confirmed and effective plan of
reorganization after proper disclosure or, in the event of an
RCM Chapter 7, in compliance with Chapter 7's procedures.

The parties to 13 of the 28 pending Estate Property Actions have
signed or are anticipated to sign the Agreement, Mr. Deveno
reports.  The claims of the 13 signatory parties total roughly
75% of the total claims at issue in the 28 existing Estate
Property Actions.

If the Agreement is approved by those parties whose counsel have
indicated that they are recommending execution, Mr. Deveno
relates that the Agreement will enjoy the support of Leuthold,
and holders of 60% of the total Securities Customer Claims and
32% of the total FX/Unsecured Claims existing against RCM.

A full-text copy of the Agreement is available at no charge at:

             http://ResearchArchives.com/t/s?d62

                      About Refco Inc.

Based in New York, Refco Inc. -- http://www.refco.com/-- is a   
diversified financial services organization with operations in
14 countries and an extensive global institutional and retail
client base.  Refco's worldwide subsidiaries are members of
principal U.S. and international exchanges, and are among the
most active members of futures exchanges in Chicago, New York,
London and Singapore.  In addition to its futures brokerage
activities, Refco is a major broker of cash market products,
including foreign exchange, foreign exchange options, government
securities, domestic and international equities, emerging market
debt, and OTC financial and commodity products.  Refco is one of
the largest global clearing firms for derivatives.

The Company and 23 of its affiliates filed for chapter 11
protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006).
J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, represent the Debtors in their restructuring efforts.  Luc
A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP,
represents the Official Committee of Unsecured Creditors.  Refco
reported US$16.5 billion in assets and US$16.8 billion in debts
to the Bankruptcy Court on the first day of its chapter 11
cases.

Refco LLC, an affiliate, filed for chapter 7 protection on
Nov. 25, 2005 (Bankr. S.D.N.Y. Case No. 05-60134).  Refco, LLC,
is a regulated commodity futures company that has businesses in
the United States, London, Asia and Canada.  Refco, LLC, filed
for bankruptcy protection in order to consummate the sale of
substantially all of its assets to Man Financial Inc., a wholly
owned subsidiary of Man Group plc.  Togut, Segal & Segal LLP,
represents Albert Togut, the chapter 7 trustee.

On April 13, 2006, the Court appointed Marc S. Kirschner as
Refco Capital Markets Ltd.'s chapter 11 trustee.  Bingham
McCutchen LLP represents Mr. Kirschner.  RCM is Refco's
operating subsidiary based in Bermuda.

Three more affiliates of Refco, Westminster-Refco Management
LLC, Refco Managed Futures LLC, and Lind-Waldock Securities LLC,
filed for chapter 11 protection on June 6, 2006 (Bankr. S.D.N.Y.
Case Nos. 06-11260 through 06-11262).  (Refco Bankruptcy News,
Issue No. 34; Bankruptcy Creditors' Service, Inc., 215/945-
7000).


SPHINX MANAGED: US Court Says Co. Need Not Comply with Subpoenas
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
denied the request of Merrill Lynch International, SPhinX Access
LLC, SPhinX Access Ltd., Raymond James & Associates, Raymond
James Financial Services, Rydex Capital Partners LLC and Rydex
Capital Partners SPhinX Fund to compel SPhinX Managed Futures
Funds SPC's compliance with subpoenas and deposition notices, on
the grounds that:

   (i) The Subpoenas seeking discovery from SPhinX and its
       board of directors and outside counsel call for
       information irrelevant to the issues on the approval of
       the proposed settlement of an Adversary Proceeding
       between SPhinX and the Official Committee of Unsecured
       Creditors.

  (ii) Compliance with the Subpoenas would be unduly burdensome.

(iii) The Investors lack standing to object to the SPhinX
       Settlement Motion.

                      Investors Request

The Investors had sought information related to an agreement
between SPhinX and the Official Committee of Unsecured Creditors
appointed in Refco Inc., and its debtor-affiliates' cases, to
settle a preferential action the Committee filed against SPhinX.

Pursuant to the settlement, SPhinX agreed to return
US$263,000,000 of the US$312,046,266 it received from Refco
Capital Markets, Ltd., days before the bankruptcy filing, and
waive and release certain claims against the Debtors.

The Investors objected to the settlement, arguing that it was
not fair and equitable, and is not in the public interest.  The
Investors said they stand to lose millions of dollars as a
result of the settlement.

The Investors served a series of discovery requests on persons
and entities with knowledge of the facts pertinent to the
settlement agreement to ascertain the facts that played into
SPhinX's capitulation, and to test the settling parties'
assertions of fairness, equity, lack of collusion and adequate
representation.

The Investors, however, have been stonewalled in their effort.

SPhinX, RAI and Mr. Butt have asked the Court to quash the
Investors' subpoenas because the Investors have no right to be
heard in connection with the proposed settlement, and hence no
right to information about it.  RAI said the Investors are not
creditors or equity holders of the Debtors and, therefore, do
not have standing.

SPhinX has refused to produce its two directors -- the
individuals who approved the settlement on SPhinX's behalf -- in
response to deposition notices.

PlusFunds served the Investors with a one-sentence "objection"
the day before the subpoena's return date and refused to produce
a witness.

Marc T.G. Dworsky, Esq., at Munger, Tolles & Olson LLP, in Los
Angeles, California, asserts that the Investors have a right to
be heard under the "party in interest" provisions in Section
1109(b) of the Bankruptcy Code.  The Investors are the ones
paying the price of the proposed settlement.  Being an
investment vehicle, SPhinX is not parting with a cent of its own
money to fund the settlement.

Mr. Dworsky also tells the Court that, although SPhinX is duty-
bound to represent the Investors' interests, it instead seeks to
sacrifice those interests in the service of the "utterly
illegitimate interests" of the SPhinX board of directors and
their allies at Refco.

After repeatedly reassuring the Investors that it would
vigorously protect their interests in the preference action, Mr.
Dworsky relates that SPhinX unceremoniously ditched all of its
pleaded defenses on the eve of a summary judgment hearing in the
preference action.  Instead of simply conceding defeat in that
action, SPhinX also abandoned its claim under Section 502(h) of
the Bankruptcy Code for about half its value.

The Investors have learned that while SPhinX was run entirely by
PlusFunds, over the course of the preference action, Refco came
to own PlusFunds as a result of Christopher Sugrue's defaulting
on over US$200,000,000 of never disclosed loans to him by Refco
that were secured by all of PlusFunds' stock.  Mr. Sugrue is a
director at SPhinX and chairman and co-founder of PlusFunds.

These developments naturally raised many very red flags, Mr.
Dworsky states.

Various Merrill Lynch entities including (i) SPhinX Access LLC
and SPhinX Access Ltd., two feeder funds sponsored by Merrill
Lynch Alternative Investments LLC, which, through their
investments in SPhinX On-Shore Investment Fund LLC and SPhinX
Ltd., respectively, have approximately US$17,000,000 in exposure
to SPhinX; and (ii) Merrill Lynch International has
approximately US$8,000,000 in exposure to SPhinX, through direct
investments in SPhinX Ltd.

Customers of Raymond James, through their investments in the
SPhinX Investment Fund, LP, SPhinX, Ltd., and the S&P Managed
Futures Index Fund, LP, have almost US$16,000,000 in exposure to
SPhinX.

The Rydex entities, through their investments, have between
US$18,000,000 to US$22,000,000 in exposure to SPhinX.

Masonic Hall & Asylum Fund supports Merrill Lynch, et al.'s
request.

                  SphinX & RAI Objections

(1) SPhinX

On behalf of SPhinX Managed Futures Fund SPC, David A. Crichlow,
Esq., at Pillsbury Winthrop Shaw Pittman LLP, in New York, tells
the Court that the Investors are trying to pursue a sweeping
fishing expedition to explore each of their theories about how
SPhinX supposedly acted in bad faith in connection with the
settlement.

Mr. Crichlow notes that the Creditors Committee has voluntarily
provided the Investors with all discovery taken in the
preference action, and the Investors already have access to the
court papers on the docket.  He contends that access to the full
litigation record is sufficient for the Investors to evaluate
the proposed settlement -- to the extent they have any standing
to even do so.

The Investors may be displeased with the terms of the
settlement, but their displeasure flows from the perceived
injury to their indirect equity interests in SPhinX flowing
therefrom, according to Mr. Crichlow.  The Investors are not
being forced to "fund" the settlement; rather, they made the
decision long ago to "fund" SPhinX, Mr. Crichlow says.

(2) RAI

Refco Alternative Investments, LLC, and its president, Richard
Butt, insist that the subpoenas should be quashed because the
SPhinX Investors do not have standing.  

Eric M. Davis, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, in Wilmington, Delaware, points out that any breach of
fiduciary duty that the Investors may wish to have addressed is
a breach of fiduciary duty by SPhinX, not the Debtors.  Any
remedies for that breach should be sought from SPhinX, not from
the Debtors, and not in the Bankruptcy Court.

                      About Refco Inc.

Based in New York, Refco Inc. -- http://www.refco.com/-- is a     
diversified financial services organization with operations in
14 countries and an extensive global institutional and retail
client base.  Refco's worldwide subsidiaries are members of
principal U.S. and international exchanges, and are among the
most active members of futures exchanges in Chicago, New York,
London and Singapore.  In addition to its futures brokerage
activities, Refco is a major broker of cash market products,
including foreign exchange, foreign exchange options, government
securities, domestic and international equities, emerging market
debt, and OTC financial and commodity products.  Refco is one of
the largest global clearing firms for derivatives.

The Company and 23 of its affiliates filed for chapter 11
protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006).
J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, represent the Debtors in their restructuring efforts.  Luc
A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP,
represents the Official Committee of Unsecured Creditors.  Refco
reported US$16.5 billion in assets and US$16.8 billion in debts
to the Bankruptcy Court on the first day of its chapter 11
cases.

Refco LLC, an affiliate, filed for chapter 7 protection on
Nov. 25, 2005 (Bankr. S.D.N.Y. Case No. 05-60134).  Refco, LLC,
is a regulated commodity futures company that has businesses in
the United States, London, Asia and Canada.  Refco, LLC, filed
for bankruptcy protection in order to consummate the sale of
substantially all of its assets to Man Financial Inc., a wholly
owned subsidiary of Man Group plc.  Albert Togut, the chapter 7
trustee, is represented by Togut, Segal & Segal LLP.

On April 13, 2006, the Court appointed Marc S. Kirschner as
Refco Capital Markets Ltd.'s chapter 11 trustee.  Mr. Kirschner
is represented by Bingham McCutchen LLP.  RCM is Refco's
operating subsidiary based in Bermuda.

Three more affiliates of Refco, Westminster-Refco Management
LLC, Refco Managed Futures LLC, and Lind-Waldock Securities LLC,
filed for chapter 11 protection on June 6, 2006 (Bankr. S.D.N.Y.
Case Nos. 06-11260 through 06-11262).  (Refco Bankruptcy News,
Issue No. 33; Bankruptcy Creditors' Service, Inc., 215/945-
7000).


SVP HOLDING: Moody's Rates US$315MM First-Lien Bank Loan at B1
--------------------------------------------------------------
Moody's Investors Service assigned first-time ratings to SVP
Holdings Ltd., with B1 ratings assigned to the corporate family
and to its proposed US$315 million first-lien bank facility. The
ratings outlook is stable.  The bank facility rating is
predicated on there being no material changes to the terms and
conditions of the facility as presented to Moody's.  Proceeds
from the proposed bank facility will be used to refinance
existing debt incurred in connection with the original
acquisition of Singer by affiliates of Kohlberg & Co in
September 2004 and debt raised in connection with the
acquisition of VSM in March 2006.

The ratings of SVP reflect the company's leading market position
in the global consumer sewing machine market, geographic
diversity and breadth of distribution.  The acquisition of VSM
expanded the company's position in the middle and higher
segments of the market that complements the company's position
in the entry level primarily through the Singer brand.  SVP's
ratings are constrained by its high financial leverage, which is
at levels consistent with the rating category, the associated
integration risks the company will need to manage in the
acquisition of VSM, a company of comparable size as the heritage
Singer business, as well as the challenges of implementing the
expected supply chain efficiencies.

The rating outlook reflects Moody's expectation that the company
will maintain financial metrics appropriate for the rating
category and that the company will achieve cost savings in this
merger through reduction of duplicate administrative functions
as well as supply chain realignment.  The rating outlook also
incorporates expectations that the company's revenues will
remain stable, consistent with category growth since the late
1990's (though the category had been in decline prior to that
time).  There is limited upward rating pressure at this time,
however if the company demonstrates consistent cash flow
generation which is used to de-lever the balance sheet the
rating outlook could be lifted to positive.  Downward rating
pressure could result from the failure to achieve a seamless
integration of VSM, a decline in sales due to competition or
falling consumer demand, or adoption of credit negative
shareholder initiatives.

The proposed first lien bank facility will be secured by liens
on substantially all assets in the US, and pledges of shares of
various overseas operating companies and intermediate holding
companies as well as a guarantee from SVP Holdings Ltd., the
ultimate parent company.  As the first lien bank facility will
comprise substantially all debt of the company, the facility
carries the same rating as the Corporate Family Rating.

These ratings were assigned:

   -- Corporate Family Rating: B1,

   -- US$75 million First lien bank Revolving Credit
      Facility: B1, and

   -- US$240 million First-lien bank term loan: B1.

Headquartered in Hamilton, Bermuda, SVP Holdings Ltd. is the
world's largest manufacturer, marketer and distributor of
consumer sewing machines.  Products are sold under the "Singer,"
"Husqvarna," "Viking," and "Pfaff" brands in 188 countries.




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


INT'L PAPER: Declares US$0.25 Per Share Quarterly Dividend
----------------------------------------------------------
International Paper declared a US$0.25 per share regular
quarterly dividend on its common stock for the period of
July 1, 2006, to Sept. 30, 2006, inclusive.  The dividend is
payable on Sept. 15, 2006, to holders of record at the close of
business on Aug. 18, 2006.

International Company also declared a regular quarterly dividend
of US$1 per share for the period of July 1, 2006, to Sept. 30,
2006, inclusive, on the preferred stock of the company, payable
on Sept. 15, 2006, to holders of record at the close of business
on Aug. 18, 2006.

Based in Stamford, Connecticut, International Paper Company --
http://www.internationalpaper.com/-- is a leader in the forest
products industry for more than 100 years.  The company is
currently transforming its operations to focus on its global
uncoated papers and packaging businesses, which operate and
serve customers in the U.S., Europe, South America and Asia.
Its South American operations include, among others, facilities
in Argentina, Brazil, Bolivia, and Venezuela.  These businesses
are complemented by an extensive North American merchant
distribution system.  International Paper is committed to
environmental, economic and social sustainability, and has a
long-standing policy of using no wood from endangered forests.

                        *    *    *

Moody's Investors Service assigned a Ba1 senior subordinate
rating and Ba2 Preferred Stock rating on International Paper
Company in Dec. 5, 2005.




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


BANCO PANAMERICANO: Moody's Rates US$50MM Debt Due 2016 at B2
-------------------------------------------------------------
Moody's Investors Service assigned a B2 long-term foreign
currency debt rating to Banco PanAmericano S.A.'s US$50 million
Step-Up subordinated notes due 2016.  The outlook on the rating
is stable.

The rating agency noted that the subordination of the notes was
taken into consideration and applied to Banco PanAmericano's Ba3
global local currency deposit rating.  At this rating level,
Moody's notching guidelines determine a two-notch differential
from the base rating.

Moody's assigns a D- bank financial strength rating and a Ba3
global local currency rating to PanAmericano.  The ratings
reflect the bank's focused operation as a consumer lender,
catering to a diversified customer and product base, both of
which ensure high profitability and core earnings.  The bank's
core earnings, measured as pre-provision profits as a percentage
of average total assets, at levels of nearly 10% for the past 3
years, reflect PanAmericano's high-yielding loan book, despite a
higher than peers' operating costs.  However, Moody's notes,
high cost of credit and a limited capital base constrain the
ratings for PanAmericano, and results in asset quality
indicators that compare poorly to that of its peers'.

Banco PanAmericano is headquartered in Sao Paulo, Brazil and had
total assets of BRL2.6 billion and equity of BRL410 million in
December 2005.

This rating was assigned:

   -- US$50 million Step Up Subordinated Notes: B2 long-term
      foreign currency debt rating.


CENTRAIS ELETRICAS: S&P Affirms B- Corporate Credit Rating
----------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B-' corporate
credit ratings and issuer ratings on Brazilian electric utility
Centrais Eletricas Matrogrossenses S.A. aka Cemat.  At the same
time, Standard & Poor's revised its outlook on Cemat to positive
from stable.
     
The outlook revision to positive reflects improvement in the
company's financial flexibility deriving from the sale of
Cemat's generation assets for BRL175 million--resources that
will be used to pay down debt--and the disbursement of a credit
facility by the International Development Bank and private banks
in the amount of US$114 million to fund investments.
      
"With this additional funding, we expect that Cemat will have
better flexibility to manage its debt maturities and high volume
of investments in its concession area; a better debt profile;
and capacity to improve its cash flow protection measures," said
Standard & Poor's credit analyst Juliana Gallo.
     
The affirmation of the 'B-' ratings on Cemat reflects the still-
significant financial risks that the company faces due to its
limited capacity to reduce debt with internal cash flow, added
to the challenge of rolling over its future maturities.  In
addition, Cemat has an aggressive capital expenditure program
for the next five years (more than BRL1.5 billion).  The company
is exposed to an evolving regulatory environment, even though we
see the new framework for the sector as a positive development
in reducing industry risks.
     
These weaknesses are partially mitigated by Cemat's lack of
competition in its service area due to its exclusive right to
distribute energy in its concession area, with a customer
profile largely based on residential and commercial segments
(which together represent 62% of the total revenues and 59% of
the total volume sold).
     
Its concession area also has strong demand growth, averaging 6%
per year, which is higher than that in other regions in Brazil
due to significant demographic and economic expansion in the
state of Mato Grosso.  The strong demand growth contributes to
revenue improvement.
     
The positive outlook reflects Standard & Poor's expectations
that the ratings could be upgraded if the debt reduction and
further debt renegotiation with favorable terms and conditions
result in a meaningful improvement of Cemat's cash flow
protection measures, with FFO to total debt above 22% and FFO to
interest at 2.5x.
     
The Cemat ratings could be lowered if its efforts to refinance
in favorable conditions and/or pay down future debts prove to be
more difficult, resulting in a heavier interest and debt payment
burden as well as deterioration in FFO interest coverage and FFO
to debt.


COMPANHIA SIDERURGICA: S&P Says BB Rating Reflects High Leverage
----------------------------------------------------------------
The 'BB' corporate credit rating on Brazilian flat carbon
steelmaker Companhia Siderurgica Nacional aka CSN reflects the
company's

   -- significant gross debt leverage (although currently
      mitigated by a large cash position),

   -- aggressive capital expenditures in steel and iron ore
      expansion,

   -- exposure to volatile demand and price cycles, and

   -- increasing competition in its home and predominant market
      of Brazil.

These risks are partly offset by CSN's privileged cost position
and sound operating profile, favorable market position in
Brazil, strong export capabilities to offset occasional domestic
demand slowdowns, and increasing business diversification.

CSN is one of the lowest-cost steel producers in the world.  The
company reported net sales of US$3.94 billion and EBITDA of
US$1.67 billion in the 12 months ended March 31, 2006.  Total
debt amounted to US$4.75 billion as of March 2006 (including
pension fund liabilities and perpetual notes at the parent
level).

CSN's results in first-quarter 2006 were affected by the
accident at its blast furnace no. 3 (BF#3), which accounts for
approximately 70% of the company's crude steel production.  
Volume sales declined by 17% compared with the same period of
2005 and by 26% compared with fourth-quarter 2005, with impact
on revenues, profitability, and cash generation.  While the
accident has not structurally damaged the furnace itself
(affecting accessory equipment only), full remediation and
production restart occurred only in July 2006.  During the first
half of the year, the company fed its rolling facilities with
imported and locally sourced slabs, at a higher cost than its
own cash slab production cost.  A comprehensive insurance policy
that also covers business interruption is expected to mitigate
medium-term cash impacts on CSN's performance due to the
accident.

The combined effect of lower production, relatively weak
domestic demand, and higher slab cost has hit CSN's EBITDA
margin (as calculated by Standard & Poor's) in 2006, which stood
at 38% in first-quarter 2006 compared with 48% in the same
period of 2005, but remains above that of international peers.  
Standard & Poor's continues to expect the lower profitability in
the next couple of quarters not to permanently damage CSN's
credit profile.  The company's credit measures as of March 31,
2006, remained adequate:

   -- total debt-to-EBITDA ratio at 2.9x,
   -- funds from operations-to-total debt ratio at 18.9x, and
   -- EBITDA interest coverage ratio at 3.3x,

but will remain low in the historic comparison through the next
couple of quarters.  Standard & Poor's expects them to recover
by year end when the negative effect of the BF#3 accident is
dissipated and market conditions, especially in Brazil,
strengthen from soft levels.

CSN's strategy to increase iron ore production at its
proprietary Casa de Pedra mine to 53 million tons per year by
2011 should benefit both business and financial profiles in the
longer term.  Iron ore fundamentals remain favorable globally
and are structurally much more stable than those for the steel
industry.  CSN announced in April 2006 that it will also build a
greenfield, three-million tpy slab steel mill in Itaguai.  While
the rating agency believes that the company's strong cash flows
and reasonably spread-out debt payment schedule should help it
adequately fund both projects, it sees incremental project,
construction, sourcing, and market risks negatively affecting
the company's credit quality until the projects are fully
developed.  In particular, uncertainties about adequate
financing resources and securing long-term supply contracts for
the additional slab capacity are relevant risks still to be
addressed.

Liquidity

CSN's liquidity has been an important short-term mitigating
factor to its increasing gross-debt position.  Cash reserves
amounted to US$1.7 billion at March 31, 2006, and remain very
high (having averaged about US$1.5 billion in the past three
years).  Cash liquidity is more than enough to cover short-term
debt maturities of US$896 million within the next 12 months
through March 2007.  While commitment to dividend distribution
has moderated because amortizing debentures have been replaced
by perpetual notes at the parent level, Standard & Poor's still
expects CSN to sustain high dividend distribution in the future
as a reflection of its financial policy and strong free
operating cash flow.

As it has actively accessed both the local and international
capital markets, CSN has not managed to reduce gross debt levels
in past years, although duration improved with reducing short-
term debt exposure and the prepayment of some more expensive
short-term loans.  As a result, high gross debt balances should
continue to translate into a high interest burden; currency
volatility should also continue to have a relevant effect on the
company's overall financial performance. Refinancing risk is
mild.  There is some debt concentration in 2008, 2013, and 2015
coming from bullet bond maturities, but the company managed to
improve debt duration with US$750 million in perpetual notes
issued last year.  Strong free cash flow and adequate funding
sourcing for its large projects are relevant factors for its
ratings to be sustained at the current category.

Outlook

The stable outlook reflects Standard & Poor's expectation that
CSN will preserve strong liquidity thanks to its robust cash
generation and despite its significant capital expenditures
program and dividend distribution.  The rating agency does not
expect the BF#3 accident to jeopardize CSN's credit profile.  
The outlook also assumes that CSN will be able to maintain sound
operating results through the steel cycle thanks to its
favorable cost position and access to steel export markets.

While the recently announced expansion projects add risks to the
company's business and financial profiles during the
implementation phase, Standard & Poor's believes there is still
room for CSN to manage these projects without jeopardizing its
credit ratios significantly. Nevertheless, given incremental
risks associated with the company's capital expenditure plans,
we do not foresee upward potential for the ratings in the medium
term.  The rating could come under downward pressure if a
continuing increase in gross debt leads financial metrics to
deteriorate permanently.  Acquisitions or further capital
commitments that could potentially hurt the company's current
liquidity condition or add financial leverage could equally lead
to a negative revision of the ratings or a negative outlook.




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


CORBEL INVESTMENTS: Final Shareholders Meeting Is on Aug. 28
------------------------------------------------------------
Corbel Investments Inc.'s final shareholders meeting will be at
3:30 p.m. on Aug. 28, 2006, at:

   Strathvale House, North Church Street
   P. O. Box 513GT, George Town
   Grand Cayman, Cayman Islands

These agenda will be taken during the meeting:

   1) accounting of the liquidation process showing how the
      winding up has been conducted during the preceding year,

   2) requesting the members' approval of the liquidation fees
      incurred to date, approval of the liquidator's estimated
      costs to completion, and

   3) hearing any explanation that may be given by the
      liquidator.

A member entitled to attend and vote at the meeting may appoint
a proxy, who need not be a member, in his stead.

The liquidator can be reached at:

   MIL (Cayman) Limited
   Attention: Kareen Watler
              Yvonne Hines
   Strathvale House, North Church Street
   P.O. Box 513GT, George Town
   Grand Cayman, Cayman Islands
   Tel: (345) 949-9898
   Fax: (345) 949-7959


INVESTCORP SKS: Will Hold Final Shareholders Meeting on Aug. 22
---------------------------------------------------------------
Investcorp SKS Holdings Limited's final shareholders meeting
will be at 11:30 a.m. on Aug. 22, 2006, at the company's
registered office.

These agenda will be taken during the meeting:

   1) accounting of the liquidation process showing how the
      winding up has been conducted during the preceding year,

   2) requesting the members' approval of the liquidation fees
      incurred to date, approval of the liquidator's estimated
      costs to completion, and

   3) hearing any explanation that may be given by the
      liquidator.

A member entitled to attend and vote at the meeting may appoint
a proxy, who need not be a member, in his stead.

The liquidator can be reached at:

   Westport Services Ltd.
   Attention: Bonnie Willkom
   P.O. Box 1111
   Grand Cayman, Cayman Islands
   Tel: (345) 949-5122
   Fax: (345) 949-7920


MIDWAY INVESTMENT: Creditors Have Until Sept. 13 to File Claims
---------------------------------------------------------------
Midway Investment Int. Inc.'s creditors are required to submit
proofs of claim by Sept. 13, 2006, to the company's liquidator:

   Paolo Giacomelli
   MBT Trustees Ltd.
   P.O. Box 30622 S.M.B.
   Grand Cayman, Cayman Islands
   Tel: (345) 945-8859
   Fax: (345) 949-9793/4

Creditors who are not able to comply with the Sept. 13 deadline
won't receive any distribution that the liquidator will make.
Creditors are required to present proofs of claim personally or
through their solicitors.

Midway Investment's shareholders agreed on June 13, 2006, for
the company's voluntary liquidation under Section 135 of the
Companies Law (2004 Revision) of the Cayman Islands.


PULSAR PROPERTIES: Proofs of Claim Filing Is Until Sept. 13
-----------------------------------------------------------
Pulsar Properties Ltd.'s creditors are required to submit proofs
of claim by Sept. 13, 2006, to the company's liquidator:

   Paolo Giacomelli
   MBT Trustees Ltd.
   P.O. Box 30622 S.M.B.
   Grand Cayman, Cayman Islands
   Tel: (345) 945-8859
   Fax: (345) 949-9793/4

Creditors who are not able to comply with the Sept. 13 deadline
won't receive any distribution that the liquidator will make.
Creditors are required to present proofs of claim personally or
through their solicitors.

Pulsar Properties' shareholders agreed on June 13, 2006, for the
company's voluntary liquidation under Section 135 of the
Companies Law (2004 Revision) of the Cayman Islands.




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


METROGAS: May Raise Residential Rates Due to Argentine Gas Hike
---------------------------------------------------------------
A chief executive officer of Chile's Metrogas SA told local
newswire Valor Futuro that the company is considering increasing
its residential client rates to counterbalance the proposed gas
exporter tax of Argentina.

Metrogas' serves residential and industrial customers in the
Metropolitan Santiago area.

According to Dow Jones Newswire, Chile purchases 90% of
Argentina's gas exports and uses the fuel to generate a third of
its electricity under normal conditions.

The restriction Argentina imposed forced generators and
manufacturers in Chile to use more expensive fuels, increasing
energy costs, Dow Jones relates.

Eduardo Morande, the general manager of Metrogas, told Valor
Futuro, "There's no information on the impact that the (tax)
hikes could have.  We'll have to see, there's no final result on
how the taxes will be applied."

Dow Jones states that Metrogas met with Karen Poniachik, the
Mining and Energy Minister of Chile, on Monday.

Mr. Morande anticipates a meeting with Minister Poniachik next
week to get additional information on the proposed tax, Dow
Jones reports.

Headquartered in Buenos Aires, Argentina, MetroGAS S.A. --
http://www.metrogas.com.ar/-- distributes gas to Buenos Aires
and southern and eastern greater metropolitan Buenos Aires.  The
Company has a 35-year concession that began in 1992 to provide
natural gas in this area.  The concession is renewable for an
additional 10 years.  MetroGAS supplies some 2 million customers
in Buenos Aires through 15,840 km of pipelines, representing
about 26% of all gas retailed in Argentina.

                        *    *    *

As reported on June 29, 2006, the Argentine arm of Standard &
Poor's assigned these ratings on Metrogas S.A.'s four debts:  

    -- Program of Obligaciones Negociables for US$600 million  
      
       * Rate: raD  
       * Date of balance: Mar. 31, 2006  
      
    -- Obligaciones Negociables  
      
      i) Serie 2-A for US$6,254,764  
      
        * Rate: raBB  
        * Date of balance: Mar. 31, 2006  
      
     ii) Serie 2-B for EUR26,070,450   
      
        * Rate: raBB  
        * Date of balance: Mar. 31, 2006  
      
    iii) Serie 1 for US$236,285,638  
      
        * Rate: raBB  
        * Date of balance: Mar. 31, 2006  

                        *    *    *

As reported in the Troubled Company Reporter-Latin America on
July 6, 2006, Metrogas S.A.'s four debts were rated by Moody's
Latin America:

   -- Obligaciones Negociables Serie 2-A for US$6,254,764, B1

   -- Serie A for US$100 million included under the global
      program for US$600 million

      * Last due: April 1, 2003
      * Rate: D

   -- ON Serie 1 for US$236,285,638, B1

   -- ONs Serie B for EUR110 million

      * Last due: Sept. 27, 2002
      * Rate: D

The ordinary class B shares had been included in category 4.

The ratings actions were based on the financial status of
Metrogas at Mar. 31, 2006.




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


BANCOLOMBIA: Merrill Lynch Expects Bank's Strong 2007 Recovery
--------------------------------------------------------------
Merrill Lynch said in a report that it anticipates Bancolombia's
strong recovery in 2007 as the bank's core business continues to
show positive performance.

Business News Americas relates that Merrill Lynch said it
expects Bancolombia's profits to increase 42% to COP1.17
trillion next year, with a 29.4% Return on Equity due to strong
loan demand in Colombia.  Bancolombia would have 17.6% growth in
loans this year while in 2007 loan growth would be 16.8%.  

Merrill Lynch told BNamericas that Bancolombia's earnings in
2007 should also begin to benefit from the full effect of the
merger with Conavi -- a home loan provider -- and Corfinsura, an
investment bank.  The merger gave Bancolombia a strong presence
in the mortgage loan segment and has increased its client base
to about 4.68 million.  According to Merrill Lynch, the impact
of the merger is yet to be fully reflected in the bank's stock
price.

The main risk to the profitability of Bancolombia is connected
to the effectiveness and speed with which the bank is able to
benefit from the cost synergies and potential revenue that the
merger would bring, BNamericas states, citing Merrill Lynch.

Luis Fernando Munoz, the mortgage loan vice president of
Bancolombia, told BNamericas in April that the company's goal
include increasing by the end of the year its mortgage loan
market share by two percentage points to 23%, consolidating
second spot after Fondo Nacional de Ahorro, a Colombian state-
owned lending agency.

BNamericas emphasizes that Merrill Lynch foresees that these
factors will contribute to the Colombian mortgage business'
growth in 2006:

   -- lower interest rates,
   -- sustained economic growth,
   -- continued recovery of the housing sector,
   -- improved legal framework,
   -- availability of long-term funding, and
   -- continued development of the securitization market.

However, Bancolombia will likely have weak earnings this year
due to the instability of Colombian sovereign bond price and
increasing regulatory provisions.  Return on Equity for 2006 is
23.8%.  Last year, it was 28%, BNamericas reports.

                        *    *    *

The Troubled Company Reporter-Latin America reported on
April 28, 2006, that Moody's Investors Service upgraded
Bancolombia's bank financial strength ratings to D+ from D with
a stable outlook.

Moody's added that the action concludes the review for possible
upgrade that was announced on October 13, 2005.  Moreover,
Bancolombia's Ba3/Not Prime long- and short-term foreign
currency deposit ratings were affirmed.  Moody's said the
outlook on all ratings is stable.

                        *    *    *

On Dec. 22, 2005, Fitch affirmed the ratings assigned on
Bancolombia, as:

  -- Long-term/short-term foreign currency at 'BB/B';
  -- Long-term/short-term local currency at 'BBB-/F3';
  -- Individual at 'C';
  -- Support at '3'.


IMPSAT SA: Colombian Unit Sees 15% Increase in 2006 Revenues
------------------------------------------------------------
Jaime Pelaez, the head of Impsat SA's Colombian subsidiary, told
Business News Americas that the firm expects revenues to
increase up to 15% in 2006, from last year's COP142 billion.

"We grew a little bit over 10% from January to June this year
compared to the same period in 2005 and we estimate growth can
reach over 10% by year end," BNamericas states, citing Mr.
Pelaez.

According to BNamericas, Impsat bases its growth on its fiber
optic network's ongoing expansion.  

As reported in the Troubled Company Reporter-Latin America on
July 12, 2006, Impsat SA's Colombian unit said it planned to
invest COP1.9 billion to expand its fiber optic network and
offer interconnection between the cities of Bogota, Cali and
Medellin.  With the expansion of Impsat's fiber optic network,
the firm would have greater transmission capacity and will be
able to offer more services related to its "IP anywhere"
strategy.  For the expansion, Impsat is implementing technology
provided by Huawei, a Chinese telecoms manufacturer Huawei.  

Mr. Pelaez told BNamericas, "This investment will allow us to
considerably increase the company's installed capacity to
support operations for the corporate segment, where Impsat leads
the national market."

Impsat has spent almost US$3 million so far this year,
BNamericas states.  According to Mr. Pelaez, the company is
planning to spend the same amount for the second half of 2006.

"As we are a public company we can not provide figures, but we
can say that during the second half, investments will not be
destined to network expansion but to supporting clients' needs,"
Mr. Pelaez told BNamericas.

Impsat SA -- http://www.impsat.com-- is a provider of private
telecommunications networks and Internet services in Latin
America.  The company owns and operates 15 data centers and
metropolitan area networks in some of the largest cities in
Latin America, providing services to more than 4,200 national
and multinational companies, financial institutions,
governmental agencies, carriers, ISPs and other service
providers throughout the region.  Impsat has operations in
Argentina, Colombia, Brazil, Venezuela, Ecuador, Chile, Peru,
the United States and throughout Latin America and the
Caribbean.

Impsat registered an increase in losses from US$14.2 million in
2004 to US$36.2 million in 2005.




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


* CUBA: Extends Food Import Accord with Texas Port
--------------------------------------------------
Pedro Alvarez -- a representative of Alimport, the Cuban food
import firm -- has renewed a trade agreement with Ruben Bonilla,
the chairman of the Corpus Christi Port Commission, to keep
importing food from the latter, the Associated Press reports.

AP relates that a letter of intent to maintain trade
relationship between the two parties was signed despite US
efforts to tighten restrictions on Cuba.  Most US trade with
Cuba is prohibited under a 45-year-old US ban designed to weaken
the Cuban government.  Under an exception to those sanctions
created by a 2000 US law, however, Cuba may directly buy
American food and other agricultural products in cash.

Alimport first entered into an agreement with Corpus Christi
three years ago, AP relates, citing Mr. Alvarez.  Since then,
more than 100,000 metric tons of agricultural goods from the US
moved through the port to Cuba.

"We accept the commitment to broaden our relationship with
Corpus Christi," Mr. Alvarez told AP.

According to AP, Mr. Alvarez said that his group is sure that
Cuba will make efforts to normalize its relation with the US.

Solomon Ortiz -- a Democratic Congressman for Texas, USA --
accompanied Mr. Bonilla on the trade mission, AP states.

                        *    *    *

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
===================================


BANCO INTERCONTINENTAL: Court Rejects Defense's Plea to Postpone
----------------------------------------------------------------
The National District court in the Dominican Republic has
rejected the request of the defense lawyers to postpone the
fraud trial of Banco Intercontinental SA aka Baninter, Dominican
Today reports.

The defendants include:

     -- Ramon Baez Figueroa, the former president of the bank;
     -- former vice presidents of the bank:

        * Marcos Baez Coc
        * Vivian Lubrano de Castillo; and

     -- businessmen:

        * Luis Alvarez Renta, a Dominican financier; and
        * Jesus Maria Troncoso Ferrua, who can be reached at
          mt@troncoso-caceres.com.

According to the report, the defense lawyers asked judges
Antonio Sanchez Mejia, Rufino Pillar Diaz and Giselle Mendez to
postpone the hearing until after the notification and exchange
of documents of evidence from the Central Bank, the Banks
Superintendence and the Baninter Commission Liquidation.

The lawyer representing Mr. Coco requested the complete and
detailed communication of the case file, and to postpone the
hearing, the same request the defense of Mr. Figueroa sought and
which lawyers of Ms. de Castillo, Mr. Renta and Mr. Ferrua
supported, Dominican Today says.

Dominican Today states that the Mr. Coco's lawyer said the court
must grant adequate time to obtain copies, analyze and to know
the documents.

However, the judges denied the request, saying that there was no
need of extension as the evidence had been discussed during the
case's instruction phase, the DR1 Newsletter relates.

The judges then scheduled hearings on July 14 at 10:00 a.m., DR1
states.

Baninter collapsed in 2003 as a result of massive fraud
that drained it of about US$657 million in funds.  As a
consequence, all of its branches were closed.  The bank's
current and savings accounts holders were transferred to the
bank's new owner -- Scotiabank.  The bankruptcy of Baninter was
considered the largest in world history, in relation to the
Dominican Republic's Gross Domestic Product.  It cost Dominican
taxpayers DOP55 billion and resulted to the country's worst
economic crisis.


BANCO INTERCONTINENETAL: Lois Malkun Files for Inadmissibility
--------------------------------------------------------------
Jose Enrique Lois Malkun, the former governor of the Dominican
Republic's Central Bank, filed inadmissibility recourse against
the allegations of Ramon Baez -- the former head of Banco
Intercontinental aka Baninter -- before the District Attorney's
Department, Clave Digital reports.

As reported in the Troubled Company Reporter-Latin America on
July 11, 2006, Mr. Figueroa filed charges against Mr. Malkun
before Jose Manuel Hernandez -- the National District prosecutor
-- accusing Mr. Malkun of violation of the Monetary and
Financial Law 183-02 of the Dominican Republic when the former
Central Bank executive transferred more than DOP40 billion from
Baninter under his safekeeping without complying with the due
process.  Mr. Figueroa's lawyers -- Marino Vinicio Castillo
(Vincho), Juarez Castillo, and Vinicio Castillo -- said that Mr.
Malkun ordered paying all deposits in Baninter and the Baninter
Trust, in excess of the DOP500,000 limit that the law has
established.  

The DR1 Newsletter reports that Mr. Malkun presented a document
at the District Attorney's office saying that he had not
violated the Monetary and Finance Law.

The law states that no personal action, civil or criminal, can
be presented against staff serving the Monetary and Financial
Administration for acts carried out while performing their
duties.  A complainant must first obtain a definite and
irrevocable judicial resolution declaring the nullity of the
specific administrative act in which the person has involved.

Mr. Baez's allegation is on Mr. Malkun's being unable to follow
the legal framework when reimbursing the deposits of Baninter,
DR1 relates.

Baninter collapsed in 2003 as a result of massive fraud
that drained it of about US$657 million in funds.  As a
consequence, all of its branches were closed.  The bank's
current and savings accounts holders were transferred to the
bank's new owner -- Scotiabank.  The bankruptcy of Baninter was
considered the largest in world history, in relation to the
Dominican Republic's Gross Domestic Product.  It cost Dominican
taxpayers DOP55 billion and resulted to the country's worst
economic crisis.


FALCONBRIDGE: Xstrata Raises All-Cash Offer to CDN$59 Per Share
---------------------------------------------------------------
Xstrata plc, through its wholly-owned subsidiary Xstrata Canada
Inc., has increased its fully underwritten all-cash offer to
acquire all of the outstanding common shares of Falconbridge
Limited not already owned by the group from CDN$52.50 to CDN$59
in cash per Falconbridge share, or a total consideration of
approximately CDN$18.1 billion (US$16.2 billion).  The
expiration of the increased offer is on July 21, 2006 at
midnight (Vancouver time).
    
The increased Xstrata offer values the total common share
capital of Falconbridge at approximately CDN$22.5 billion or
US$20.0 billion. Xstrata expects to mail a formal notice of
variation to all Falconbridge shareholders.
    
Xstrata's revised offer price represents a premium of 9.6% over
the value of the revised offer made by Inco in its competing bid
for Falconbridge of CDN$53.83, based upon the June 23 closing
price on the Toronto Stock Exchange of Inco shares, which was
the trading day before the revised Inco offer was announced and
assuming full pro-ration of the share and cash consideration in
accordance with the terms of Inco's offer.
    
Mick Davis, Xstrata Chief Executive, said, "Our increased offer
price for Falconbridge underlines our belief that the
combination of Xstrata and Falconbridge represents an excellent
opportunity to create an outstanding global mining company,
ideally positioned to create further value for all stakeholders
through active involvement in the ongoing consolidation of our
industry.  We believe that the transaction will be substantially
earnings per share and cash flow per share accretive from the
first full year of consolidation and the combined group will
benefit from enhanced critical mass, leading market positions in
major commodities, a range of growth opportunities, best in
class diversification of earnings and a robust financial
position from which to pursue further organic and acquisition-
led growth.
    
"Xstrata has an excellent track record of support for and co-
operation with local communities, sound labour relations,
programmes to improve safety, environmental performance and
efficiency at operations, long term investment in operations and
devolved responsibility to locally-based management teams.  
Accordingly, we believe that a combination of Falconbridge and
Xstrata is the best possible outcome for all stakeholders of
both companies.  The Board of Falconbridge now has a duty to its
own shareholders to give Xstrata's compelling offer due and
careful consideration.
    
"Xstrata's increased all-cash offer of CDN$59 per share presents
all Falconbridge shareholders with a guaranteed full cash
premium for their shares.  It is certain, open to every
shareholder and easy to evaluate, and we are confident its
remaining conditions will be fulfilled shortly.  Set against the
continuing significant market and commodity risk inherent in the
Inco offer, particularly given Inco's significantly higher
leverage post transaction, and the continued uncertainty around
the completion of the Phelps Dodge offer for Inco, the Xstrata
offer represents compelling cash value for Falconbridge
shareholders and we urge Falconbridge shareholders to tender
their shares to Xstrata's superior offer."
    
Xstrata has varied the minimum tender condition of its offer to
delete the part of the condition that requires acceptances from
at least 66-2/3% of the outstanding Falconbridge common shares
including the common shares held by Xstrata and its affiliates.  
In keeping with its consistently stated interest in acquiring
100% of Falconbridge, the company's offer, as amended, is
subject to the minimum tender condition that at the expiry time
it will have received acceptances from at least a majority of
the Falconbridge common shares then outstanding, the votes
attached to which would be included in the minority approval of
a second step business combination or going private transaction
(or a majority of the approximately 80.2% of the outstanding
Falconbridge shares that Xstrata does not already own).  
Consistent with the recent ruling of the Ontario Securities
Commission and the fact that the Falconbridge Shareholder Rights
Plan still remains in place, Xstrata is only able to take up
shares tendered to its offer from the earlier of July 28, 2006,
or the date on which a majority of the 80.2% of Falconbridge
shares Xstrata does not already own is tendered to its offer and
provided Xstrata has received Investment Canada Act approval by
then.
    
Xstrata currently owns approximately 19.8% of Falconbridge's
issued common share capital, acquired at a price of CDN$28 per
share in August and September 2005.  If Xstrata's offer for
Falconbridge is successful, this will bring the weighted average
price paid per Falconbridge share to CDN$53.01 or a total of
CDN$20.2 billion (US$17.9 billion).
    
Xstrata announced on June 14 and June 15 respectively, that
anti-trust authorities in the United States and Canada had
confirmed that Xstrata's offer for Falconbridge presented no
competition concerns and that Xstrata is free to proceed without
further anti-trust review in those jurisdictions.  Xstrata's
shareholders at an extraordinary general meeting held on June
30, 2006 approved the proposed acquisition.
    
Outstanding conditions to Xstrata's offer include approval by
Industry Canada and by the European Commission.  No anti-trust
issues are anticipated and the European Commission is expected
to rule on Xstrata's offer for Falconbridge by July 13, 2006.  
Xstrata was notified by the Investment Review Division of
Industry Canada that the minister responsible for the Investment
Canada Act has extended the review period for up to 30 days from
July 3.  The company remains confident that the acquisition of
Falconbridge will deliver significant net benefits to Canada and
that, accordingly, it will receive the necessary approval under
the Investment Canada Act.
    
Other than as set out above, all of the terms and conditions of
Xstrata's offer for Falconbridge described in its offer and
offering circular dated May 18, 2006, as amended on
July 7, 2006, remain unchanged.
    
Xstrata will finance its increased offer through committed
financing of US$18 billion, which is currently undrawn, and cash
on hand.  The company remains committed, following the
successful completion of its acquisition of Falconbridge, to
undertake one or more equity capital raisings to refinance a
portion of the debt facilities entered into in connection with
the proposed acquisition of the latter.  Deutsche Bank AG and
J.P. Morgan Securities Ltd. have irrevocably undertaken to
underwrite any future equity offering to raise funds to repay
any amounts outstanding under a US$7 billion subordinated debt
facility agreement.  Xstrata also remains committed to
maintaining an investment grade credit rating.
    
Consistent with Xstrata's previous offer for Falconbridge, the
timing and terms of any such equity offering or offerings will
be based on an assessment of the combined group's capital
structure following the successful completion of the
acquisition.  The company's directors remain confident that any
rights issue will be fully supported by Credit Suisse and
Glencore International, its two largest shareholders with a
combined shareholding of approximately 35.9% of its issued
ordinary share capital.
    
Falconbridge shareholders who wish to withdraw their shares from
the Inco offer should immediately contact their broker or other
financial intermediary and instruct such intermediary to
withdraw their Falconbridge common shares, and they may contact:

          Kingsdale Shareholder Services Inc.
          Tel: 1-866-639-7993

Banks and brokers should call at 416-867-2272.

        Phelps Dodge Responds to Xstrata's Increased Offer

In response to Xstrata's increased all-cash offer of CDN$59 per
share to acquire Falconbridge Ltd., Phelps Dodge Corp., said:
    
"We are not surprised by Xstrata's increased bid for
Falconbridge, given the attractiveness of the Falconbridge
assets.  Based on the terms of our agreed combination with Inco,
the implied value of Inco's offer for Falconbridge is CDN$61.04
per share based on the closing price on July 10, of Phelps Dodge
shares.  The value of the Inco offer is therefore currently
superior to the Xstrata offer, and we continue to believe the
friendly three-way agreed deal between Phelps Dodge, Inco and
Falconbridge also will provide the greatest long-term value for
Falconbridge shareholders as well as net benefits to Canada that
would not be available under Xstrata's hostile offer.  
Importantly, Falconbridge shareholders will have the ability to
participate in the upside resulting from the three-way
combination through their ownership of almost 30 percent of the
combined company, which is not the case with Xstrata's cash
offer.  This upside includes a 30 percent share in the US$900
million of expected synergies, which have a net present value of
US$5.8 billion."

                     About Phelps Dodge

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

                        About Inco

Headquartered in Sudbury, Ontario, Inco Limited (TSX, NYSE:N)
-- http://www.inco.com/-- is the world's #2 producer of nickel,
which is used primarily for manufacturing stainless steel and
batteries.  Inco also mines and processes copper, gold, cobalt,
and platinum group metals.  It makes nickel battery materials
and nickel foams, flakes, and powders for use in catalysts,
electronics, and paints.  Sulphuric acid and liquid sulphur
dioxide are produced as byproducts.  The company's primary
mining and processing operations are in Canada, Indonesia, and
the UK.

                       About Xstrata

Xstrata plc -- http://www.xstrata.com/-- is a major global
diversified mining group, listed on the London and Swiss stock
exchanges.  The Group is and has approximately 24,000 employees
worldwide, including contractors.

Xstrata does business in six major international commodities
markets: copper, coking coal, thermal coal, ferrochrome,
vanadium and zinc, with additional exposures to gold, lead and
silver.  The Group's operations and projects span four
continents and nine countries: Australia, South Africa, Spain,
Germany, Argentina, Peru, Colombia, the U.K. and Canada.

                     About Falconbridge

Headquartered in Toronto, Ontario, Falconbridge Limited
(TSX:FAL.LV)(NYSE: FAL) -- http://www.falconbridge.com/-- is a
leading copper and nickel company with investments in fully
integrated zinc and aluminum assets.  Its primary focus is the
identification and development of world-class copper and nickel
orebodies.  It employs 14,500 people at its operations and
offices in 18 countries.  The Company owns nickel mines in
Canada and the Dominican Republic and operates a refinery and
sulfuric acid plant in Norway.  It is also a major producer of
copper (38% of sales) through its Kidd mine in Canada and its
stake in Chile's Collahuasi mine and Lomas Bayas mine.  Its
other products include cobalt, platinum group metals, and zinc.

                        *    *    *

Falconbridge's CDN$150 million 5% convertible and callable bonds
due April 30, 2007, carries Standard & Poor's BB+ rating.




=============
E C U A D O R
=============


PETROLEO BRASILEIRO: Will Invest US$500 Million in Ecuador
----------------------------------------------------------
An executive of Petroleo Brasileiro, the Brazilian state-owned
oil company, told Petrolworld that the company will invest
US$500 million in Ecuador over the next five years.

Nestor Cunat Cervero, the international director of Petroleo
Brasileiro, told local media, "This year we will invest US$160
million and our strategic plan, approved by the board for the
next five years, until 2011, foresees a US$500 million
investment in Ecuador,"

Petroleo Brasileiro is also interested in investing in the
Ishpingo-Tambococha-Tuputini project -- the heavy oil project of
Ecuador's located in the Amazon, Petrolworld states, citing Mr.
Cervero.   

Estimated cost of the project is US$3 billion, PetrolWorld
relates.

Headquartered in Rio de Janeiro, Brazil, Petroleo Brasileiro
S.A. aka Petrobras was founded in 1953.  The company explores,
produces, refines, transports, markets, distributes oil and
natural gas and power to various wholesale customers and retail
distributors in the country.

                        *    *    *

Petroleo Brasileiro SA's long-term corporate family rating is
rated Ba3 by Moody's.

                        *    *    *

Fitch Ratings assigned these ratings on Petroleo Brasileiro's
senior unsecured notes:

  Maturity Date           Amount        Rate       Ratings
  -------------           ------        ----       -------
  April  1, 2008      US$400,000,000    9%          BB+
  July   2, 2013      US$750,000,000    9.125%      BB+
  Sept. 15, 2014      US$650,000,000    7.75%       BB+
  Dec.  10, 2018      US$750,000,000    8.375%      BB+

Fitch upgraded the foreign currency rating of Petrobras to BB+
from BB, with positive outlook, in conjunction with Fitch's
upgrade of the long-term foreign and local currency IDRs of the
Federative Republic of Brazil to BB, from BB- on June 29, 2006.


* ECUADOR: Metal-Mechanics Firms Worry Over Free Trade Delay
------------------------------------------------------------
Some metal-mechanics firms in Ecuador are worried about the
country's faltering talks for a free trade agreement or FTA with
the United States, Business News Americas reports.

According to the report, the companies think that it would be a
disadvantage next to countries Peru and Colombia.

Sergio Tampire, the business manager of Siderurgica del Ecuador,
told BNamericas, "Our problem is that at the end of the year,
the APDEA benefits expire in all three countries, and in the
case of Peru and Colombia they would be replaced by the FTA, but
not in Ecuador's case.  In a way, this will shut us out of the
US market.  We cannot measure the consequences of the FTA talks
being postponed."

The APDEA or the Andean trade promotion and drug eradication
agreement is an accord between the US and the Andean Pact
nations that include:

     -- Peru,
     -- Colombia,
     -- Bolivia,
     -- Venezuela, and
     -- Ecuador.

With the APDEA, member countries are exempted from paying
customs tariffs.

BNamericas relates that FTA negotiations between Ecuador and US
were halted since Ecuador's President Alfredo Palacio passed at
the start of April a hydrocarbons law to congress, affecting US
firms.

Feditmetal, a metalworking industries association in Ecuador,
were able to limit a tariff on some products to be exported to
the US, BNamericas states.

"We have restricted that tariff.  It is close to 5% of anything
to do with steel and we will maintain that and we think that
we'll be able to survive comfortably," BNamericas states, citing
Raul Mendizabal, the head of Fedimetal.

However, Javier Lopez -- a plant director of Conduit, a tube
manufacturer -- told BNamericas, "It's not like that.  The US is
a volume market, not a margin market.  If the margins are very
low, you make that up with volume, so 5% does not make us
comfortable."

Mr. Lopez, according to BNamericas, said that the issue deals
with an unstable market and that the company is competing with
China, Mexico and Colombia -- countries that will continue with
zero tariffs -- due to FTAs with the US.

BNamericas emphasizes that businesses are forming an industrial
commission so they can ask the US government by the end of July
to extend the APDEA.

Mr. Lopez told BNamericas, "With this deadline, we hope the
domestic situation in Ecuador improves and FTA talks will start
up again, taking the next government into consideration since
the current administration will change within four months
without having made any political decisions. We hope this
situation has a happy ending."

BNamericas underscores that Fedimetal hopes the US can
understand that the Ecuadorean government's decision to
nationalize the hydrocarbons sector was not a political one as
it was only a domestic issue.

                        *    *    *

Fitch 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




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



DIGICEL LTD: Launches New Mobile Services in Turks & Caicos
-----------------------------------------------------------
Digicel Ltd. will launch new mobile services, such as per-second
billing, international roaming and free activation for customers
in Turks & Caicos.  The launch marks a new era in mobile
telecommunications advancement, not only delivering customers
innovative services, but also giving them the freedom to choose
their mobile service provider after U.K.-based incumbent Cable &
Wireless has dominated the market for more than a century.

Mobile customers in Turks & Caicos will also leverage the
benefits of belonging to the largest pan-Caribbean network that
provides seamless service across 20 markets.  Just last week,
Digicel opened 113 top-up locations and nine retail stores
throughout the country.  In conjunction with the launch, the
company hosted a free public concert at Turtle Cove Marina,
Providenciales.  Attended by thousands, the concert featured
Digicel's new branding campaign and tagline, "Expect More. Get
More."

"Digicel is proud to be heralding this new era of mobile
telecommunications in Turks & Caicos and we are committed to
working with the Turks & Caicos government to ensure everyone
enjoys the benefits of increased mobile competition in the
marketplace," said Denis O'Brien, Digicel founder and chairman.

Hon. Jeffrey Hall, Minister of Communication Works & Utilities
for Turks & Caicos, has welcomed Digicel's entry into the market
place, saying, "Digicel has an impressive track record in
placing the Caribbean region at the cutting edge of ICT
development as well as being a community-minded telecom
provider."  He says that they are looking forward to the
continuous value that Digicel will bring to Turks & Caicos."

Since receiving a license in Turks & Caicos in March 2006,
Digicel has established a robust GSM network with technology
partner Ericsson to provide crystal clear coverage throughout
the country, and it has also signed a sponsorship agreement with
the Turks & Caicos Football Association, further expanding its
support for local sports and the community.

Digicel's investment in the Caribbean currently stands at more
than US$1 billion and the company has doubled its employee
figures to 2,000 in the last year.

                    About Digicel Limited

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

                        *    *    *

On Mar. 10, 2006, Fitch affirmed the 'B' rating of Digicel
Limited, senior unsecured debt, including the US$300 million
senior notes due 2012, following the announcement that it is in
the process of acquiring Bouygues Telecom Caraibe.  Fitch said
the Outlook for the Ratings is Stable.


KAISER ALUMINUM: Asks for Royal Settlement Agreement Approval
-------------------------------------------------------------
Kaiser Aluminum Corporation and its debtor-affiliates ask the
U.S. Bankruptcy Court for the District of Delaware to approve
their settlement agreement with Royal Indemnity Company relating
to asbestos and other liability coverage disputes.

To obtain an adjudication of its rights for coverage under
certain insurance policies as to asbestos-related bodily injury
liabilities, Kaiser Aluminum & Chemical Corp. filed an action
against certain insurers, including Royal, before the Superior
Court of California, County of San Francisco.

Royal issued an insurance policy to KACC for the period from
April 1, 1983 to April 1, 1984.  Royal also issued other
policies, which are not involved in the Products Coverage
Action.

Kimberly D. Newmarch, Esq., at Richards, Layton & Finger, in
Wilmington, Delaware, relates that the Debtors and Royal have
engaged in negotiations to resolve their dispute with respect to
the Subject Policy and the Other Royal Policies.

Pursuant to the Settlement Agreement, Royal agreed to make a
US$4,500,000 settlement payment within 60 days after the Court
grants final approval to the Settlement.

Royal will pay the Settlement Amount to U.S. Bank National
Association, as settlement account agent, unless a Trigger Date
has occurred, in which case, payment will be made to Wells Fargo
Bank, N.A., as insurance escrow agent, for distribution to the
Funding Vehicle Trust.

The Trigger Date is the day that the last of these events has
occurred:

   * the Approval Order becomes a Final Order;
   * the Confirmation Order becomes final; and
   * the occurrence of the Plan Effective Date.

As part of the Settlement Agreement, KACC will also release all
its rights under the Subject Policy and the Other Royal
Policies, and dismiss Royal from the Products Coverage Action,
Ms. Newmarch says.

The Settlement Agreement also contains certain rights to
adjustment of the Settlement Amount if Asbestos Legislation:

   (a) is enacted into law before the earlier of the Trigger
       Date and July 31, 2006; and

   (b) does not provide Royal with a dollar-for-dollar credit
       for payments under the Settlement Agreement.

Ms. Newmarch tells the Court that the Official Committee of
Asbestos Claimants and the representatives of parties, whose
constituents have the principal economic stake at issue, have
been consulted regarding, and have no objection to, the
Settlement Agreement.

                    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.  The Debtors' Chapter 11 Plan became
effective on July 6, 2006.  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. 100; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


KAISER ALUMINUM: Deregisters Outstanding Securities with US SEC
---------------------------------------------------------------
According to regulatory filings with the U.S. Securities and
Exchange Commission, Kaiser Aluminum Corp. deregistered the
outstanding securities included in registration statements:

   (a) dated May 3, 2000 involving 5,500,000 shares of KAC
       common stock issuable pursuant to the company's 1997
       Omnibus Stock Incentive Plan;

   (b) November 15, 1996 providing for the offer and sale of the
       company's preferred stock, fractional interests of
       preferred stock represented by depositary shares; shares
       of KAC common stock, and warrants to purchase preferred
       stock or common stock at an aggregate initial offering
       price not to exceed US$150,000,000;

   (c) February 5, 1996 with respect to the offer and sale of up
       to 10,000,000 shares of KAC common stock by MAXXAM, Inc.;
       and

   (d) August 3, 1993 with respect to 2,500,000 shares of KAC
       common stock issuable pursuant to the company's 1993
       Omnibus Stock Incentive Plan.

Joseph P. Bellino, executive vice president and chief financial
officer of KAC, says that pursuant to the Confirmed Plan, all
outstanding grants and shares of KAC's old common stock will be
cancelled upon the Plan's Effective Date.  The Plan is expected
to become effective on July 6, 2006.

As a result of the actions contemplated in the Plan, KAC has
concluded that it will deregister, as of July 5, 2006, all
securities included in these Registration Statements that were
not previously issued, sold or offered.

                     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.  The Debtors' Chapter 11 Plan became
effective on July 6, 2006.  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. 100; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


NATIONAL WATER: St. Elizabeth Parliament Member Criticizes Firm
---------------------------------------------------------------
Lenworth Blake, a member of the parliament for South East St.
Elizabeth, has criticized the National Water Commission due to
the shoddy service it offers to residents of Southfield and
neighboring communities, Radio Jamaica reports.

Mr. Blake said during an outreach meeting in Southfield on
Monday night that the problem on the delivery of piped water to
Southfield has been there for more than 30 years, Radio Jamaica
relates.  Mr. Blake claimed that the National Water has also not
kept pace with the delivery of trucked water to the people.  The
National Water has also failed to take appropriate action
against illegal connections.

Illegal connections are the main problems affecting the delivery
of water, Claude Grindley -- the National Water production
manager for Manchester and St. Elizabeth -- admitted to Radio
Jamaica.

According to Radio Jamaica, Mr. Grindley said that National
Water's revenue officers have been working overtime to cut off
illegal connections.

The National Water official asked the residents' support to the
company's officials, Radio Jamaica states.

                        *    *    *

As reported in the Troubled Company Reporter on Feb. 7, 2006,
the National Water Commission of Jamaica had been criticized for
failing to act promptly in cutting its losses.  For the fiscal
years 2002 and 2003, the water commission accumulated a net loss
of US$2.11 billion.  The deficit fell to US$1.86 billion the
following year, and to US$670 million in 2004 and 2005.




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


ALERIS INT'L: Moody's Rates US$650MM Proposed Term Loan at Ba3
--------------------------------------------------------------
Moody's Investors Service confirmed Aleris International, Inc.'s
B1 corporate family rating.  In a related rating action, Moody's
assigned a Ba3 rating to the company's proposed 7 year senior
secured guaranteed term loans aggregating US$650 million, which
Aleris is issuing to partially finance its Euro 691 million
acquisition of certain aluminum assets from Corus Group plc and
refinance its existing debt.

The balance of the necessary funding will be provided under a
senior unsecured guaranteed bridge loan provided by Deutsche
Bank and Citigroup.  Aleris has initiated a tender offer for its
10-3/8% senior secured notes due 2010 and its 9% senior notes
due 2014 and is seeking consent to a number of modifications to
restrictive covenants, events of default, and in the case of the
10-3/8% senior secured notes, the release of security.

Moody's confirmed the B2 rating on the 10-3/8% senior secured
notes and the B3 rating on the 9% senior unsecured notes.  The
ratings for the proposed financings assume that the tender offer
will be successful, the desired consents obtained and that the
acquisition and associated financing transactions will close as
contemplated.  At such time, Moody's ratings for Aleris's
existing debt will be withdrawn.  The ratings outlook is
negative.

This concludes the review for possible downgrade, initiated on
March 17, 2006, following the company's announcement that it had
entered into a non-binding letter of intent to acquire the
downstream aluminum rolled products and extrusion businesses of
Corus for Euro 700 million, or approximately US$840 million.  
The ratings on the proposed facilities assume that they will
close on the terms and in the amounts indicated.

Key favorable factors reflected in Aleris's ratings include:

   1) increased diversity and size following the acquisition of
      certain aluminum rolling assets from Corus, including a
      portfolio of higher value-added end use markets,

   2) an improving cost position, and

   3) robust demand trends expected to continue in many of the
      company's end markets into 2007.

Key rating considerations offsetting these stronger business
attributes however include:

   1) the significant increase in leverage following the
      transaction, with pro forma outstanding debt of
      approximately US$1.6 billion,

   2) the relatively thin margin nature of the business and
      sensitivity to volume levels,

   3) the company's propensity towards acquisitions, which
      Moody's believes will be a continuing impetus for growth
      over the intermediate term, and

   4) integration risk associated with this predominately
      European acquisition.

The negative outlook reflects Moody's view that the degree of
leverage being incurred in conjunction with the acquisition is
high for a business whose performance is subject to cyclicality
and which continues to have a relatively high degree of exposure
to more commodity based products and end market use.  Although
the ratings reflect the increased diversity/size and broader end
use market profile following the acquisition of certain assets
from Corus, Moody's anticipates that leverage and debt coverage
metrics will remain weak within the current rating category over
the near term.

Given the current favorable operating environment for aluminum
fabricators, and ability to generate free cash flow, the
application of cash flow generated during this highpoint of the
cycle to meaningful debt reduction in a timely fashion would be
viewed favorably.  To the degree that margins and volumes track
at current levels, and the company uses free cash flow to reduce
debt incurred, Moody's would expect to the company's metrics to
become more solidly positioned in the B1 rating category.

The outlook could experience upward pressure if the company is
able to:

   1) maintain and improve volume levels,

   2) maintain gross margins per pound in the US$0.18 range,

   3) improve its EBIT to interest coverage ratio to greater
      than 2.5 times on a sustainable basis,

   4) generate free cash flow to debt above 6%, and

   5) reduce debt to EBITDA substantially below 4x.

Downward rating pressure would exist should the company continue
to make debt financed acquisitions, experience volume and margin
declines or have free cash flow to debt less than 2.5%.

Moody's assigned a Ba3 rating to Aleris's US$400 million 7 year
term loan secured by domestic plant and equipment as well as a
second lien on the receivables and inventory securing a US$750
million asset backed revolver and guaranteed by the domestic
subsidiaries.

Moody's also assigned a Ba3 rating to Aleris Deutschland Holding
GmbH's Euro 200 million 7-year term loan secured by foreign
plant and equipment.  This term loan is guaranteed by Aleris
International as well as its domestic subsidiaries and the
subsidiaries of Aleris Deutschland, and also has a second lien
on the receivables and inventory securing the ABL.  The term
loans will be cross-collateralized.  The rating reflects the
good coverage associated with the security package on a primary
and secondary position.  While the term loans are not at parity
in the overall capital structure, in that the term loan to
Aleris International does not benefit from guarantees from the
foreign subsidiaries, Moody's has equalized the rating on the
term loans reflective of the low leverage at the European level
and the excess collateral available.

At the outset of the financing secured debt will be
approximately 67% of the total debt in the capital structure,
which Moody's expects will decrease modestly over the next
twelve months as the company pays down its outstanding revolver
balance.  Moody's does not expect the company will need to
borrow additional funds from the secured revolver, unless used
to help finance further acquisitions or substantive capital
expenditures.  The bridge loan, which is unsecured, has the same
guaranty structure as the domestic term loan.  Moody's previous
rating action on Aleris was on March 17, 2006 when the company's
ratings were put under review for possible downgrade.

These ratings were confirmed:

Aleris International Inc.

   * Corporate Family Rating -- B1
   * US$210 million senior secured notes, 10.375% due 2010 -- B2
   * US$125 million senior unsecured notes, 9.0% due 2014 -- B3

These ratings were assigned:

Aleris International Inc.

   * US$400 million senior secured guaranteed term loan due
     2013 -- Ba3

Aleris Deutschland Holding GmbH

   & Euro 200 million senior secured guaranteed term loan due
     2013 -- Ba3

Aleris, headquartered in Beachwood, Ohio, had revenues of
US$2.4 billion in 2005.  LTM March 31, 2006 pro-forma revenues
for the acquisitions made by Aleris in late 2005 and for the
acquisition of select assets of Corus were US$4.7 billion.

                 About Aleris International

Headquartered in Beachwood, Ohio, a suburb of Cleveland, Aleris
International, Inc. (NYSE: ARS) -- http://www.aleris.com/-- is   
a major North American manufacturer of rolled aluminum products
and is a global leader in aluminum recycling and the production
of specification alloys.  The company is also a leading
manufacturer of value-added zinc products that include zinc
oxide, zinc dust and zinc metal.  The Company operates 42
production facilities in the United States, Brazil, Germany,
Mexico and Wales, and employs approximately 4,200 employees.


GRUPO MEXICO: Expects La Caridad Mine Closure Approval Next Week
----------------------------------------------------------------
Juan Rebolledo, the international relations director of Grupo
Mexico SA de CV, told Business News Americas that the company
expects the Sonora state authorities to approve next week or
even sooner the closing of the La Caridad copper mine.

According to BNamericas, Grupo Mexico decided to close the mine
due to the strike that has paralyzed operations at the mine for
more than three months.  

Walkouts had started at the La Caridad mine on March 24, 2006,
when Grupo Mexico and the Mexican government refused to
recognize Napoleon Gomez Urrutia as the workers union head due
to allegations of embezzling about US$55 million in funds paid
into a trust by Grupo Mexico in relation to the 1990
privatization of La Caridad and Cananea.  

As reported in the Troubled Company Reporter-Latin America on
July 11, 2006, Mr. Rebolledo, Grupo Mexico's production declined
since the strikes started, with production losses rising at
about US$2 million daily.  Production losses of copper
concentrates reached 35,000 metric tons, while those of copper
cathodes amounted to 6,000 tons.  Total losses incurred were
estimated at US$150 million.

The losses made Grupo Mexico abandon its growth plans at La
Caridad, Mr. Rebolledo told BNamericas.  Grupo Mexico had
disclosed in January 2005 to pump US$300 million into the mines
of La Caridad and Cananea to boost copper production by 7% by
2008.  Expansions had also been planned on the mines' plants.

Grupo Mexico plans to terminate all worker contracts
immediately.  There are about 2,000 workers at the mine and some
1,200 of them are union members, BNamericas states, citing Mr.
Rebolledo.

According to the report, Mr. Rebolledo said the mine will be
reopened by the end of this year with new workers.  Those who
participated in the strike would not be allowed to work in the
company again.

There are workers who did not join the strike although they are
union members, Mr. Rebolledo told BNamericas.  He said he hopes
that most of them would be hired back once the mine reopens.

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.


INDUSTRIAS UNIDAS: S&P Affirms B Long-Term Corp. Credit Rating
--------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B' long-term
corporate credit rating on Industrias Unidas S.A. de C.V. aka
IUSA, and revised the outlook to negative from stable.
     
The rating action reflects Standard & Poor's concern regarding
the group's refinancing risk and its weak operating cash-flow
generation. The rating agency's continued concern regarding
IUSA's liquidity has augmented given the increasing working
capital needs derived from higher copper prices that have led to
higher debt levels and a reduction in cash balances.
      
"The ratings on IUSA reflect the inherent cyclicality of the
construction industry, the company's high leverage, commodity
price volatility, competitive pressure on core products and
markets, tight liquidity, and low operational margins," said
Standard & Poor's credit analyst Jose Coballasi.  These factors
are partially offset by the company's

   -- leading market positions in Mexico and the U.S.,
   -- product mix, and
   -- some geographic diversification in the manufacturing and
      distribution of:

        * copper tubing,
        * copper-alloy products,
        * valves,
        * controls,
        * watt-hour meters,
        * wire and cable, and
        * electrical devices.
     
IUSA is one of Mexico's largest diversified industrial
companies, offering a large variety of products through
integrated manufacturing and distribution operations located
principally in Mexico and the U.S.  Seven principal business
groups conduct the company's operations:

   -- copper tubing,
   -- wire and cable,
   -- copper alloys,
   -- electrical products,
   -- watt-hour meters,
   -- valves and controls, and
   -- diversified assets group.
     
Despite the group's tight liquidity and slightly weaker volumes,
particularly copper tubing in the United States, IUSA has posted
double-digit growth in revenues and EBITDA, driven by the
continued increase in copper prices and a disciplined commercial
strategy. Although higher copper prices have led to an increase
in the group's use of debt, particularly its supplier working
capital facilities and its CP program, Standard & Poor's
anticipates that key financial ratios for the 12 months ended
June 30, 2006, should show an improvement relative to those
posted for the 12 months ended March 30, 2006, given that the
operating loss posted in second-quarter 2005 continues to weigh
heavily on the group's financials. For the 12 months ended March
31, 2006, IUSA posted:

   -- total debt-to-EBITDA ratio at 4.4x,
   -- EBITDA interest coverage ratio at 1.6x, and
   -- funds from operations-to-total debt ratio 1.4%.

Although management has indicated that it has been able to
secure copper for its operations during the second and third
quarters, we are concerned regarding the possible disruption in
the supply of copper as a result of the work stoppage at two of
Grupo Mexico's Mexican mining units.  The group's decision to
reduce finished product inventory, increase the use of scrap,
sharply reduce sales of copper to other processors, and pull
back from unprofitable markets should also aid its efforts to
offset possible disruptions of its copper supply.
     
The negative outlook reflects Standard & Poor's concerns
regarding the group's liquidity, particularly the increasing
working capital needs derived from higher copper prices, and the
rating agency's continued concerns regarding the group's
refinancing risk and its negative free cash-flow generation.  An
improvement in the group's free operating cash flow generation,
securing long-term financing to improve the debt maturity
schedule, and increasing the group's unrestricted cashholdings
and committed credit line availability should lead to a stable
outlook.


KERR-MCGEE: Declares Quarterly Dividend of US$0.3125 Per Share
--------------------------------------------------------------
Kerr-McGee Corp. declared a quarterly dividend of US$0.3125
per share of common stock for the quarter ending Sept. 30, 2006.
    
The dividend will be payable October 2, 2006, to stockholders of
record as of Sept. 1, 2006.  If Kerr-McGee's merger with
Anadarko Petroleum Corp. is completed on or before
Sept. 1, 2006, the dividend will not be payable to former
company stockholders.
    
Headquartered in Oklahoma City, Kerr-McGee Corp. --
http://www.kerr-mcgee.com/-- is an oil and natural gas  
exploration and production company focused in the U.S. onshore,
deepwater Gulf of Mexico, as well as in Africa, Asia, and Latin
America.

                        *    *    *

Moody's Investors Service upgraded on May 2, 2006, Kerr-McGee
Corp.'s long-term debt ratings to Ba2 from Ba3. The upgrade
reflected improved operating performance and reduced financial
risk following repayment of US$4.25 billion in term loans
borrowed in 2005.

Standard & Poor's Ratings Services affirmed on May 10, 2006, its
'BB+' corporate credit rating on Kerr-McGee Corp. and revised
its outlook on the company to stable from negative.

Fitch Ratings placed on June 26, 2006, these ratings of Kerr-
McGee Corp. on Rating Watch Positive following the company's
announcement that it has agreed to be acquired by Anadarko
Petroleum Corporation:

  -- Long-term Issuer Default Rating 'BB';
  -- Senior unsecured credit facility 'BB'; and
  -- Senior unsecured notes 'BB'.


* MUNICIPALITY OF SOLIDARIDAD: Moody's Withdraws B1 Rating
----------------------------------------------------------
Moody's has withdrawn the issuer ratings of Baa2.mx and B1 local
currency assigned to the Municipality of Solidaridad.  Moody's
has withdrawn these ratings for business reasons.


* Thacher Proffitt's Names Two New Counsel in Mexico City Office
----------------------------------------------------------------
Thacher Proffitt & Wood LLP, a 158-year-old law firm, reported
that two new Counsel in the Firm -- Derek Woodhouse, Esq., has
been promoted to Counsel effective April 26, 2006, and J.
Anthony Girolami, Esq., joins the Firm as Counsel, effective
June 19, 2006.

Both Derek and Anthony are members of the Structured Finance
Practice Group and reside in Thacher Proffitt's Mexico City
office, Thacher Proffitt & Wood S.C.

"We want to congratulate both Derek on his promotion and Anthony
on joining the Firm," said Boris Otto, Mexico City's Office
Managing Partner.  "Derek is an experienced advisor of public-
private partnerships, and will bring a sophisticated UK approach
to Mexico's nascent PPS (projects for the provisions of
services) programs.  Anthony has considerable experience in the
areas of infrastructure development and cross-border financings
throughout Latin America. Both will add tremendously to our
depth in structured finance in Latin America."

Recently, Thacher Proffitt significantly broadened the scope of
its Mexico City office by almost doubling its number of
attorneys -- a group that includes Luis Enrique Graham, a
prominent Latin American attorney -- in the areas of litigation,
arbitration, bankruptcy and infrastructure.

Derek Woodhouse has extensive experience advising public and
private entities on energy and infrastructure projects in
countries all over the world.  He also advised the Mexican
President's office and Ministry of Finance and Public Credit on
the adoption of a new finance initiative which would allow
private participation in the infrastructure projects
traditionally reserved only for the public sector.  In addition,
he counseled the Communications and Transport Ministry on the
design and implementation of the first road project under this
program.

Derek's background includes working in Mexico's federal
government for over seven years in the energy sector, as well as
in private practice in London for five years on both energy and
infrastructure projects.  In addition, he has worked extensively
on public-private partnerships throughout Latin American and
Europe.

Derek received his JD equivalent at Escuela Libre de Derecho in
1996.  He also received an international diploma from Harvard
Institute for International Development in 1999, and completed a
legal program at the International Law Institute, George
Washington University, in 1997.

Anthony Girolami represents clients in transactions involving
the development, construction and financing of large scale
infrastructure projects throughout Latin America, as well as
lenders and borrowers in cross-border syndicated credit
facilities.  He has advised financial institutions,
infrastructure developers and energy companies with the
formation of joint ventures, project financings, engineering,
procurement and construction contracts and restructurings.

Before joining Thacher Proffitt, Anthony was with Shearman &
Sterling, LLP, practicing in the Project Development and Finance
Group in New York and Sao Paulo, Brazil.  He also served as the
Director of International Legal Affairs at Grupo ICA, S.A. de
C.V., Mexico's largest infrastructure development company.

Anthony received his JD from the University of San Diego School
of Law, and his BA from the University of San Diego, magna cum
laude. He is admitted to the California bar and the Orden dos
Advogados in Brazil as a foreign legal consultant.

               About Thacher Proffitt & Wood LLP

A law firm that focuses on the capital markets and financial
services industries, Thacher Proffitt & Wood LLP --
http://www.tpw.com/-- advises domestic and global clients in a  
wide range of areas, including corporate and financial
institutions law, securities, structured finance, investment
funds, swaps and derivatives, cross-border transactions, real
estate, commercial lending, insurance, admiralty and ship
finance, litigation and dispute resolution, technology and
intellectual property, executive compensation and employee
benefits, taxation, trusts and estates, bankruptcy,
reorganizations and restructurings.  The Firm has approximately
300 lawyers with five offices located in New York City;
Washington, DC; White Plains, New York; Summit, New Jersey; and
Mexico City, Mexico.




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


* PARAGUAY: Posts PYG217 Billion Profits in January-May Period
--------------------------------------------------------------
Paraguay's central bank told Business News Americas that the
banking sector saw profits increase 73.4% to PYG217 billion in
the January to May period in 2006, compared with the same period
in 2005.

The combined revenues of the 13 banks based in Paraguay totaled
PYG2.53 trillion, increasing 132% from the amount recorded in
the same period last year, BNamericas relates.  Their gross
financial margin grew 16.8% to PYG391 billion.

The report states that the operating profit in the sector
increased 24.6% at PYG543 billion.  Provisions were PYG18.9
billion.  Net service income grew 17.1% at PYG97.2 billion.
Administrative expenses rose 6.9% to PYG285 billion.

Lending increased 11.5% to PYG7.65 trillion at the end of May,
compared with the same month in 2005.  Consolidated past-due
loan ration dropped to 5.77% in May 2006 from 10.3% in May 2005,
BNamericas underscores.

The banking sector's assets increased 8.7% to PYG15.5 trillion,
BNamericas states.  Equity rose 13.4% to PYG1.78 trillion.  
Deposits grew 7.2% to PYG12.8 trillion.

Interbanco -- the largest bank in Paraguay owned by Unibanco,
Brazil's third largest private sector bank -- reported a profit
at GTQ54.4 billion, which is the biggest among the 13 banks.  
The Paraguayan unit of BBV, a Spanish banking group, ranked as
the second highest, with a GTQ35.8 billion, according to
BNamericas.  

                        *    *    *

Moody's assigned these ratings on Paraguay:

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

                        *    *    *

Standard & Poor's assigned these ratings on Paraguay:

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




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


G+G RETAIL: Wants Until Oct. 23 to Remove State Court Actions
-------------------------------------------------------------
G+G Retail Inc. asks the U.S. Bankruptcy Court for the Southern
District of New York to extend the period within which it can
remove state court actions to the U.S. District Court for the
Southern District of New York to October 23, 2006.

Sandra G.M. Selzer, Esq., at Pachulski Stang Ziehl Young Jones &
Wientraub LLP, in Manhattan, reminds the Court that since the
Debtor filed for bankruptcy, the Debtor focused its efforts on
obtaining Court approval for the sale of substantially all of
its assets, addressing issues attendant to the sale, and working
with key constituencies on issues relating to the case.  Early
this year, Max Rave, and Guggenheim Corporate Funding LLC, won
the auction of substantially all of the Debtor's assets for
US$35 million.

More recently, Ms. Selzer tells the Court, the Debtor has
focused on rejection, assumption and assignment of unexpired
real property leases and executory contracts designated by
MaxRave and the preparation of a draft plan of reorganization
and accompanying draft disclosure statement that has been
circulated to the Committee.  Accordingly, the Debtor has not
had an opportunity to thoroughly review prepetition actions that
may need to be removed from other jurisdictions.

Ms. Selzer contends that the extension will afford the Debtor
the opportunity necessary to make fully informed decisions
concerning removal of each prepetition action and will assure
that the Debtor does not forfeit valuable rights under Section
1452 of the Bankruptcy Code.

Headquartered in New York, New York, G+G Retail Inc. retails
ladies wear and operates 566 stores in the United States and
Puerto Rico under the names Rave, Rave Girl and G+G.  The Debtor
filed for Chapter 11 protection on Jan. 25, 2006 (Bankr.
S.D.N.Y. Case No. 06-10152).  William P. Weintraub, Esq., Laura
Davis Jones, Esq., David M. Bertenthal, Esq., and Curtis A.
Hehn, Esq., at Pachulski, Stang, Ziehl, Young & Jones P.C.
represent the Debtor in its restructuring efforts.  Scott L.
Hazan, Esq.. at Otterbourg, Steindler, Houston & Rosen, P.C.,
represents the Official Committee of Unsecured Creditors.  When
the Debtor filed for protection from its creditors, it estimated
assets of more than US$100 million and debts between US$10
million to US$50 million.




=================================
T R I N I D A D   &   T O B A G O
=================================


MIRANT CORP: To Repurchase Common Stock & Sell Int'l Businesses
---------------------------------------------------------------
Mirant Corp. disclosed a strategic plan to enhance shareholder
value.  The elements of Mirant's plan are:

    (1) the immediate launch of a modified "Dutch Auction"
        tender offer for up to 43 million shares of Mirant
        common stock, using available cash and cash to be
        distributed to Mirant upon completion of a term loan
        to be entered into by Mirant's Philippines business, and
  
    (2) the commencement of auction processes to sell Mirant's
        Philippines and Caribbean businesses.

As Mirant generates cash through these sales, it plans to
continue returning cash to its shareholders.
    
Mirant Chairman and Chief Executive Officer Edward R. Muller
said, "Our strategic plan reflects our continued commitment to
enhance shareholder value, both through the return of cash to
our shareholders and through our continuing U.S. business."
    
                       Share Repurchases

Mirant's Board of Directors has authorized the repurchase of up
to 43 million shares of Mirant common stock for an aggregate
purchase price of up to US$1.25 billion.  The repurchase will be
made through a modified "Dutch Auction" tender offer in which
Mirant's shareholders will be given the opportunity, subject to
certain conditions, to sell all or a portion of their shares of
Mirant common stock to Mirant at a price not less than US$25.75
and not more than US$29.00 per share.  The tender offer will
commence tomorrow and will be funded through a combination of
cash on hand and cash distributed to Mirant upon completion of a
term loan to be entered into by Mirant's Philippines business.

               Sales of International Businesses
    
Mirant is also commencing auction processes to sell its
Philippines and Caribbean businesses.  Certain of the sales will
be subject to regulatory and other approvals and consents.  The
planned sales will result in these businesses being reported as
"discontinued operations" beginning in the third quarter of
2006.  The sales are expected to close by mid-2007.  As Mirant
generates cash from these sales, it plans to continue returning
cash to its shareholders while maximizing the value of its net
operating loss carryforwards.
    
Mirant's financial advisor for the sale of its international
businesse will be:

   -- Credit Suisse for the Philippine businesses, and
   -- JPMorgan for the Caribbean businesses.
    
Mirant has ownership interests in three generating facilities in
the Philippines:

   -- Sual,
   -- Pagbilao and
   -- Ilijan.

Its net ownership interest in these three generating facilities
to be sold is 2,203 MW.  The Philippines business contributed
US$370 million in adjusted EBITDA in 2005.  In light of its
decision to sell its Philippines business, Mirant has adjusted
its plan to recapitalize the business.  The recapitalization
will now consist of a US$700 million term loan for which Mirant
has obtained a commitment from Credit Suisse.  The term loan
will be prepayable at par.
    
Mirant's net ownership interest in the Caribbean businesses
comprises 1,050 MW.  The ownership includes controlling
interests in two vertically integrated utilities:

   -- an 80% interest in Jamaica Public Service Company Limited
      and

   -- a 55% interest in Grand Bahama Power Company.

Mirant also owns a 39% interest in the Power Generation Company
of Trinidad and Tobago (PowerGen), and a 25.5% interest in
Curacao Utilities Company.  In 2005, the Caribbean businesses
contributed US$156 million in adjusted EBITDA.
    
                     Continuing Business
    
The continuing business of Mirant will consist of its 14,161 MWs
in the United States.  Mirant expects to generate sufficient
cash from its continuing business to meet all of its capital
requirements, including planned environmental capital
expenditures.
    
                  Estimated Available Cash
    
Proceeds for the tender offer will come from available cash on
hand of US$885 million and cash to be distributed to Mirant upon
completion of the US$700 million term loan to be entered into by
Mirant's Philippines business.  The remainder of the term loan
will be used to pay off existing debt in the Philippines.
                    

                                   Estimated Available Cash
                                        (in millions)

Estimated consolidated cash &
cash equivalents as of June 30, 2006                $1,765
        
Less restricted international cash                   (403)
Less restricted cash at New York subsidiaries         (72)
Less restricted Mirant North America cash            (105)
Total available cash at Mirant Corporation           1,185
Less cash reserved for the Pepco settlement          (100)
Less reserved corporate cash                         (200)
Total available cash for distribution as
of June 30, 2006                                       885

Plus available cash to be distributed
to Mirant Corporation upon completion
of the Philippines term loan                           376
Total estimated available cash for distribution     $1,261


                Details of Tender Offer
    
The modified "Dutch Auction" tender offer for shares of Mirant
common stock commenced yesterday, july 12, 2006, and will expire
on August 21, 2006, at 5:00 p.m., New York City time, unless
extended by Mirant. Under the tender offer, Mirant's
shareholders will have the opportunity to tender all or a
portion of their shares at a price not less than US$25.75 and
not more than US$29.00 per share.  Based on the number of shares
tendered and the prices specified by the tendering shareholders,
Mirant will determine the single per share price within the
specified range that will allow it to buy 43 million shares, or
such lesser number of shares that are properly tendered.  If
shareholders properly tender more than 43 million shares at or
below the determined price per share, Mirant will purchase
shares tendered by such shareholders, at the determined price
per share, on a pro rata basis based upon the number of shares
each shareholder tenders.  All shares that have been tendered
and not purchased will be promptly returned to the shareholder.
Shareholders whose shares are purchased in the offer will be
paid the determined purchase price per share net in cash,
without interest, after the expiration of the offer period.
    
The tender offer is not contingent upon any minimum number of
shares being tendered.  The offer is, however, subject to
certain terms and conditions that will be specified in the offer
to purchase to be distributed to shareholders, including
obtaining the necessary financing for the offer through the term
loan to be entered into by Mirant's Philippines business.  
JPMorgan will serve as dealer manager for the tender offer.  
Innisfree M&A Incorporated will serve as information agent and
Mellon Investor Services will act as depositary.
    
Neither Mirant nor its Board of Directors, dealer manager,
depositary or information agent is making any recommendation to
shareholders as to whether to tender or refrain from tendering
their shares into the tender offer.  Shareholders must decide
how many shares they will tender, if any, and the price within
the stated range at which they will offer their shares for
purchase to Mirant.
   
Headquartered in Atlanta, Georgia, Mirant Corporation --
http://www.mirant.com/-- is a competitive energy company that
produces and sells electricity in North America, the Caribbean,
and the Philippines.  Mirant's investments in the Caribbean
include three integrated utilities and assets in Jamaica, Grand
Bahama, Trinidad and Tobago and Curacao.  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.  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. 100; Bankruptcy Creditors'
Service, Inc., 215/945-7000)

                         *     *     *

As reported in the Troubled Company Reporter on Dec. 8, 2005,
Standard & Poor's Ratings Services assigned its 'B+' corporate
credit rating to power generator and developer Mirant Corp. and
said the outlook is stable.  That rating reflected the credit
profile of Mirant, based on the structure the company expects to
have on emergence from bankruptcy at or around year-end 2005,
S&P said.


MIRANT CORP: Buy Back Plan Cues Fitch to Put Ratings on NegWatch
----------------------------------------------------------------
Fitch Ratings places the ratings of Mirant Corp., including the
Issuer Default Rating of 'B+', and its subsidiaries on Rating
Watch Negative following its announced plans to buy back stock
and sell its Philippine and Caribbean assets.

The company plans to use available cash on-hand of approximately
US$1.2 billion and repatriated funds of US$376 million from a
refinancing of the Philippine assets to repurchase up to 43
million shares of common stock under an auction process for a
total price of up to US$1.25 billion.  This use of cash along
with the sale of Mirant's higher margined international assets,
which Fitch expected would generate 30% to 40% of consolidated
EBITDA in 2006, will also reduce the company's liquidity
position and thus financial flexibility.

The announcement follows a recent unsolicited offer to purchase
a competitor which has since been terminated, and Fitch believes
further strategic announcements are likely as management has not
yet articulated its plans for the cash generated from the sale
of the international assets.  Redeployment of the sales proceeds
combined with the planned treasury share repurchase and pending
sale of international assets will transform Mirant's business
franchise, risk and financial profile.  Mirant will be
challenged to redeploy the cash generated from the international
asset sales in a manner that maintains leverage and coverage
metrics.  Consequently, in the absence of the use of the
proceeds from the sale of the international assets to pay down
debt in a material way, Fitch expects to downgrade Mirant's
ratings.

Mirant, through its subsidiaries, is engaged in the generation
and sale of electricity in the wholesale power markets in the
U.S. Additionally, Mirant has interests in power projects and
vertically integrated utilities in the Philippines and the
Caribbean.

These ratings were affected:

   Mirant Corp

      -- Issuer Default Rating: 'B+'.

   Mirant Mid-Atlantic LLC

      -- IDR: 'B+'; and
      -- Pass-through certificates: 'BB+/Recovery Rating RR1'.

   Mirant North America, Inc.

      -- IDR: 'B+';
      -- Senior secured bank debt: 'BB/RR1';
      -- Senior secured term loan: 'BB/RR1'; and
      -- Senior unsecured notes: 'BB-/RR1'.

   Mirant Americas Generation, LLC

      -- IDR: 'B+'; and
      -- Senior unsecured notes: 'B/RR5'.


MIRANT CORP: Buy Back Plan Cues S&P to Put B+ Rating on NegWatch
----------------------------------------------------------------
Standard & Poor's Ratings Services placed the 'B+' corporate
credit ratings on Mirant Corp. and its subsidiaries, Mirant
North American LLC or MNA, Mirant Americas Generating LLC or
MAG, and Mirant Mid-Atlantic LLC or MIRMA, on CreditWatch with
negative implications.  The CreditWatch listing follows Mirant's
announcement that they will buy back up to 43 million common
shares with cash on hand and cash to be freed up from a near-
term recapitalization of its Philippines business.  

Mirant also announced that its Philippines and Caribbean
businesses will be sold through an auction process.  The use of
cash to buy back the company's common stock will reduce Mirant's
liquidity position to levels below those established, when the
company emerged from bankruptcy in late 2005.  The sale of the
international assets will reduce future cash flow and more
importantly, reduces the company's portfolio diversification.  
The share repurchases and divestitures are both negative for
credit quality and could lead to a downgrade of company ratings.  
Mirant's management stated on their analyst call that as the
company generates cash, they plan to return it to their
shareholders, and that at present, there is no intention to
repay any debt at MNA, MAG or MIRMA.
      
"Standard & Poor's expects to resolve the CreditWatch with
negative implications listing over the near term," said Standard
& Poor's credit analyst Arthur F. Simonson.

After the sale of the international assets, Mirant will largely
be a U.S. merchant power generator.  "We will analyze the
company's ability to generate cash flow and the volatility
profile of that cash flow in relation to Mirant's capital
structure, when determining the appropriate rating levels," Mr.
Simnoson continued.




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


* URUGUAY: State Power Company Launches Energy Auction
------------------------------------------------------
UTE, the states power firm in Uruguay, told Business News
Americas that it has launched a bidding to buy 60 megawatt of
energy from wind, biomass and small hydroelectric sources.

According to BNamericas, submission of offers will end on
Aug. 2.  

The project aims to diversify the Uruguay's energy matrix, which
has weakened due to low rainfall, BNamericas states.

UTE, says BNamericas, will buy from private entities up to 20
megawatt from each of the three renewable sources.

Energy is valued at US$40 to US$45 per megawatt in Uruguay.  
However, UTE would be willing to pay slightly more to promote
renewable generation development, BNamericas reports, citing
Oscar Ferrero, the hydro generation chief of UTE.

                         *    *    *

Fitch Ratings assigned these ratings on Uruguay:

                     Rating     Rating Date
                     ------     -----------
   Country Ceiling     BB-      Mar. 7, 2005
   Long Term IDR       B+      Dec. 14, 2005
   Short Term IDR      B       Dec. 14, 2005
   Local Currency
   Long Term Issuer
   Default Rating      BB-      Mar. 7, 2005




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


BANESCO BANCO: Fitch Lowers Individual Rating to D/E from D
-----------------------------------------------------------
Fitch Ratings downgraded Banesco Banco Universal's individual
rating to 'D/E' from 'D'.

Fitch Ratings has downgraded the individual rating of several
banks in Venezuela.  The rating action reflects the sustained
decrease in capital ratios due the significant increase in
assets, lower expected profitability and growing government
intervention over the system.

After many years of low loan demand in a sluggish domestic
economy, the dramatic rebound in economic activity and the
liquidity pressures resulting from the imposition of a foreign
exchange control since early 2003 has resulted in an almost 150%
nominal increase in the loan portfolio and assets (+118% in real
terms) since end-2002.  Lower interest rates (due to higher
liquidity and the imposition of interest rates controls since
mid-2005) and decreasing foreign exchange gains have resulted in
a sustained plunge in historically high profitability levels.  
The aforementioned growth has increased the leverage of the
system, while lower expected profitability will not be
sufficient to relieve pressure on the bank's capitalization
ratios in the short and medium term.  Also, loan loss provisions
have lagged the loan expansion, resulting in one of the lowest
loan loss reserves to total loans ratio since the financial
crisis of 1994 (2.4% at end-2005), a level considered low in
view of the unseasoned nature of the loan portfolio, existing
and potential directed lending guidelines, the potential
volatility of the environment, and the rapidly declining capital
cushions.

Though recent measures towards reducing the regulatory capital
requirements have eased pressures for some banks to comply with
local requirements, Fitch believes that current minimum capital
requirements could prove insufficient to cope with the historic
volatility of the Venezuelan market; more over, higher
government intervention could impose more burdens on local
banks, while many shareholders may not have the capacity or
incentives to support higher capital ratios in the short and
medium term.

The risk profile of Venezuelan banks remains under pressure in
the short term, coping with increasing assets and a lower
profitability level that could further erode capitalization
ratios, in addition to continued uncertainties regarding
government intervention. Support ratings of 5, in place for all
rated Venezuelan banks since 2003, have reflected Fitch's
concern that the government intervention could reduce the bank's
financial flexibility; recent performance has born out this
concern.  Long-term Issuer Default Ratings, below the
sovereign's ratings, have already incorporated these systemic
concerns.  The Negative Outlook continues to reflect concerns
that government interference will continue, and potentially
increase, further reducing banks financial flexibility.  Fitch
continues to take some comfort that operational and management
support from foreign shareholders and the leading banks'
management expertise can help offset some of the concerns raised
by the continuing possibility of further restrictions of the
banks' operating flexibility.


BANCO DE VENEZUELA: Fitch Lowers Individual Rating to D from C/D
----------------------------------------------------------------
Fitch Ratings downgraded Banco de Venezuela's individual rating
to 'D' from 'C/D'.

Fitch Ratings has downgraded the individual rating of several
banks in Venezuela.  The rating action reflects the sustained
decrease in capital ratios due the significant increase in
assets, lower expected profitability and growing government
intervention over the system.

After many years of low loan demand in a sluggish domestic
economy, the dramatic rebound in economic activity and the
liquidity pressures resulting from the imposition of a foreign
exchange control since early 2003 has resulted in an almost 150%
nominal increase in the loan portfolio and assets (+118% in real
terms) since end-2002.  Lower interest rates (due to higher
liquidity and the imposition of interest rates controls since
mid-2005) and decreasing foreign exchange gains have resulted in
a sustained plunge in historically high profitability levels.  
The aforementioned growth has increased the leverage of the
system, while lower expected profitability will not be
sufficient to relieve pressure on the bank's capitalization
ratios in the short and medium term.  Also, loan loss provisions
have lagged the loan expansion, resulting in one of the lowest
loan loss reserves to total loans ratio since the financial
crisis of 1994 (2.4% at end-2005), a level considered low in
view of the unseasoned nature of the loan portfolio, existing
and potential directed lending guidelines, the potential
volatility of the environment, and the rapidly declining capital
cushions.

Though recent measures towards reducing the regulatory capital
requirements have eased pressures for some banks to comply with
local requirements, Fitch believes that current minimum capital
requirements could prove insufficient to cope with the historic
volatility of the Venezuelan market; more over, higher
government intervention could impose more burdens on local
banks, while many shareholders may not have the capacity or
incentives to support higher capital ratios in the short and
medium term.

The risk profile of Venezuelan banks remains under pressure in
the short term, coping with increasing assets and a lower
profitability level that could further erode capitalization
ratios, in addition to continued uncertainties regarding
government intervention. Support ratings of 5, in place for all
rated Venezuelan banks since 2003, have reflected Fitch's
concern that the government intervention could reduce the bank's
financial flexibility; recent performance has born out this
concern.  Long-term Issuer Default Ratings, below the
sovereign's ratings, have already incorporated these systemic
concerns.  The Negative Outlook continues to reflect concerns
that government interference will continue, and potentially
increase, further reducing banks financial flexibility.  Fitch
continues to take some comfort that operational and management
support from foreign shareholders and the leading banks'
management expertise can help offset some of the concerns raised
by the continuing possibility of further restrictions of the
banks' operating flexibility.


BANCO EXTERIOR: Fitch Downgrades Individual Rating to D from C/D
----------------------------------------------------------------
Fitch Ratings downgraded Banco Exterior's individual rating to
'D' from 'C/D'.

Fitch has downgraded the individual rating of several banks in
Venezuela.  The rating action reflects the sustained decrease in
capital ratios due the significant increase in assets, lower
expected profitability and growing government intervention over
the system.

After many years of low loan demand in a sluggish domestic
economy, the dramatic rebound in economic activity and the
liquidity pressures resulting from the imposition of a foreign
exchange control since early 2003 has resulted in an almost 150%
nominal increase in the loan portfolio and assets (+118% in real
terms) since end-2002.  Lower interest rates (due to higher
liquidity and the imposition of interest rates controls since
mid-2005) and decreasing foreign exchange gains have resulted in
a sustained plunge in historically high profitability levels.  
The aforementioned growth has increased the leverage of the
system, while lower expected profitability will not be
sufficient to relieve pressure on the bank's capitalization
ratios in the short and medium term.  Also, loan loss provisions
have lagged the loan expansion, resulting in one of the lowest
loan loss reserves to total loans ratio since the financial
crisis of 1994 (2.4% at end-2005), a level considered low in
view of the unseasoned nature of the loan portfolio, existing
and potential directed lending guidelines, the potential
volatility of the environment, and the rapidly declining capital
cushions.

Though recent measures towards reducing the regulatory capital
requirements have eased pressures for some banks to comply with
local requirements, Fitch believes that current minimum capital
requirements could prove insufficient to cope with the historic
volatility of the Venezuelan market; more over, higher
government intervention could impose more burdens on local
banks, while many shareholders may not have the capacity or
incentives to support higher capital ratios in the short and
medium term.

The risk profile of Venezuelan banks remains under pressure in
the short term, coping with increasing assets and a lower
profitability level that could further erode capitalization
ratios, in addition to continued uncertainties regarding
government intervention. Support ratings of 5, in place for all
rated Venezuelan banks since 2003, have reflected Fitch's
concern that the government intervention could reduce the bank's
financial flexibility; recent performance has born out this
concern.  Long-term Issuer Default Ratings, below the
sovereign's ratings, have already incorporated these systemic
concerns.  The Negative Outlook continues to reflect concerns
that government interference will continue, and potentially
increase, further reducing banks financial flexibility.  Fitch
continues to take some comfort that operational and management
support from foreign shareholders and the leading banks'
management expertise can help offset some of the concerns raised
by the continuing possibility of further restrictions of the
banks' operating flexibility.


BANCO MERCANTIL: Fitch Lowers Individual Rating to D from C/D
-------------------------------------------------------------
Fitch Ratings downgraded Banco Mercantil's individual rating to
'D' from 'C/D'.

Fitch Ratings has downgraded the individual rating of several
banks in Venezuela.  The rating action reflects the sustained
decrease in capital ratios due the significant increase in
assets, lower expected profitability and growing government
intervention over the system.

After many years of low loan demand in a sluggish domestic
economy, the dramatic rebound in economic activity and the
liquidity pressures resulting from the imposition of a foreign
exchange control since early 2003 has resulted in an almost 150%
nominal increase in the loan portfolio and assets (+118% in real
terms) since end-2002.  Lower interest rates (due to higher
liquidity and the imposition of interest rates controls since
mid-2005) and decreasing foreign exchange gains have resulted in
a sustained plunge in historically high profitability levels.  
The aforementioned growth has increased the leverage of the
system, while lower expected profitability will not be
sufficient to relieve pressure on the bank's capitalization
ratios in the short and medium term.  Also, loan loss provisions
have lagged the loan expansion, resulting in one of the lowest
loan loss reserves to total loans ratio since the financial
crisis of 1994 (2.4% at end-2005), a level considered low in
view of the unseasoned nature of the loan portfolio, existing
and potential directed lending guidelines, the potential
volatility of the environment, and the rapidly declining capital
cushions.

Though recent measures towards reducing the regulatory capital
requirements have eased pressures for some banks to comply with
local requirements, Fitch believes that current minimum capital
requirements could prove insufficient to cope with the historic
volatility of the Venezuelan market; more over, higher
government intervention could impose more burdens on local
banks, while many shareholders may not have the capacity or
incentives to support higher capital ratios in the short and
medium term.

The risk profile of Venezuelan banks remains under pressure in
the short term, coping with increasing assets and a lower
profitability level that could further erode capitalization
ratios, in addition to continued uncertainties regarding
government intervention. Support ratings of 5, in place for all
rated Venezuelan banks since 2003, have reflected Fitch's
concern that the government intervention could reduce the bank's
financial flexibility; recent performance has born out this
concern.  Long-term Issuer Default Ratings, below the
sovereign's ratings, have already incorporated these systemic
concerns.  The Negative Outlook continues to reflect concerns
that government interference will continue, and potentially
increase, further reducing banks financial flexibility.  Fitch
continues to take some comfort that operational and management
support from foreign shareholders and the leading banks'
management expertise can help offset some of the concerns raised
by the continuing possibility of further restrictions of the
banks' operating flexibility.


BANCO PROVINCIAL: Fitch Lowers Individual Rating to D from C/D
--------------------------------------------------------------
Fitch Ratings downgraded Banco Provincial's individual rating to
'D' from 'C/D'.

Fitch Ratings has downgraded the individual rating of several
banks in Venezuela.  The rating action reflects the sustained
decrease in capital ratios due the significant increase in
assets, lower expected profitability and growing government
intervention over the system.

After many years of low loan demand in a sluggish domestic
economy, the dramatic rebound in economic activity and the
liquidity pressures resulting from the imposition of a foreign
exchange control since early 2003 has resulted in an almost 150%
nominal increase in the loan portfolio and assets (+118% in real
terms) since end-2002.  Lower interest rates (due to higher
liquidity and the imposition of interest rates controls since
mid-2005) and decreasing foreign exchange gains have resulted in
a sustained plunge in historically high profitability levels.  
The aforementioned growth has increased the leverage of the
system, while lower expected profitability will not be
sufficient to relieve pressure on the bank's capitalization
ratios in the short and medium term.  Also, loan loss provisions
have lagged the loan expansion, resulting in one of the lowest
loan loss reserves to total loans ratio since the financial
crisis of 1994 (2.4% at end-2005), a level considered low in
view of the unseasoned nature of the loan portfolio, existing
and potential directed lending guidelines, the potential
volatility of the environment, and the rapidly declining capital
cushions.

Though recent measures towards reducing the regulatory capital
requirements have eased pressures for some banks to comply with
local requirements, Fitch believes that current minimum capital
requirements could prove insufficient to cope with the historic
volatility of the Venezuelan market; more over, higher
government intervention could impose more burdens on local
banks, while many shareholders may not have the capacity or
incentives to support higher capital ratios in the short and
medium term.

The risk profile of Venezuelan banks remains under pressure in
the short term, coping with increasing assets and a lower
profitability level that could further erode capitalization
ratios, in addition to continued uncertainties regarding
government intervention. Support ratings of 5, in place for all
rated Venezuelan banks since 2003, have reflected Fitch's
concern that the government intervention could reduce the bank's
financial flexibility; recent performance has born out this
concern.  Long-term Issuer Default Ratings, below the
sovereign's ratings, have already incorporated these systemic
concerns.  The Negative Outlook continues to reflect concerns
that government interference will continue, and potentially
increase, further reducing banks financial flexibility.  Fitch
continues to take some comfort that operational and management
support from foreign shareholders and the leading banks'
management expertise can help offset some of the concerns raised
by the continuing possibility of further restrictions of the
banks' operating flexibility.


CITGO PETROLEUM: Cutting Gasoline Sale in 14 States in US
---------------------------------------------------------
Citgo Petroleum Corp. disclosed it will stop selling gasoline to
stations in 14 states in the United States, the Wall Street
Journal reports.  Affected customers have until March 2007 to
look for other suppliers.

Citgo's action stemmed from its decision to only sell fuel
refined at its US plants, instead of buying gas from other
sources to supply its customers all over the country, the
Journal says.  The oil refining firm's three facilities can
process up to 750,000 barrels of crude oil per day.

Citgo chief executive officer Felix Rodriguez said in a
statement that buying gasoline from other sources strained the
company's resources and it can also potentially compromise its
ability to provide optimum service to customers.

Meanwhile, some parties believe that the move is colored with
politics.  It's no secret that Venezuelan President Hugo Chavez
is openly campaigning to sever Washington's hold in Latin
America.  The president even went as far as threatening to cut
oil supplies to his biggest customer.

"It is not unreasonable to wonder if politics instead of
economics are at work when the man behind the company routinely
uses it to dabble in American politics," the Journal quoted
Larry Neal, deputy staff director for the US House Energy and
Commerce Committee, who criticized the move.

The Journal enumerates the states in which all supplies will
stop: Iowa, Kansas, Kentucky, Minnesota, Missouri, Nebraska,
North Dakota, Ohio, Oklahoma and South Dakota. The states in
which some cities will be affected are Arkansas, Illinois,
Indiana and Texas.

The United States buys half of Venezuela's oil exports, meeting
14% of the country's oil need.

Headquartered in Houston, Texas, CITGO Petroleum Corporation
-- http://www.citgo.com/-- is owned by PDV America, an
indirect, wholly owned subsidiary of Petroleos de Venezuela
S.A., the state-owned oil company of Venezuela.

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

                        *    *    *

As reported in the Troubled Company Reporter on Feb. 16, 2006,
Standard and Poor's Ratings Services assigned a 'BB' rating on
CITGO Petroleum Corp.


CITGO PETROLEUM: Decides to Realign National Gasoline Network
-------------------------------------------------------------
Citgo Petroleum Corp. reported that its board of directors has
decided to realign its national retail gasoline network
footprint.  This action will result in a stronger company
presence in the East and Gulf Coast regions, and a transitioning
from parts of the Midwest, Kentucky, Oklahoma and northern Texas
by the end of March 2007.

Felix Rodriguez, the president and the chief executive officer
of Citgo, said, "We are taking this action to best position the
company for a strong future.  Citgo's current branded sales
exceed our in-house production capabilities, straining our
resources and potentially compromising our ability to provide
optimum service to our customers.  We will be focusing on
strengthening our presence in marketing areas in the Northeast,
South, mid-Atlantic and portions of the Midwest that are served
by our refineries in Lake Charles, La., Corpus Christi, Texas,
and Lemont, Ill., while reducing the current number of branded
locations in markets in which we are less efficient."

In order to offset the roughly 130,000 barrel-per-day shortfall
required to meet customer obligations, Citgo purchases gasoline
from other refining companies on the open market, a move that
places the company at a competitive disadvantage.

At the end of the realignment, the number of CITGO branded
locations will be reduced by approximately 14% with little
impact on the more than 10 million customers who visit our
locations each day.

Citgo markets gasoline through agreements with independent
marketers and does not own or operate any of its locations,
including those in the affected areas.  Citgo will work with
marketers to ensure the transition is as smooth as possible for
their operations and customers.

"Our commitment to the markets where we are staying is as strong
as ever.  This strategy allows Citgo to better serve its
customer base by focusing on reliable supply, competitive
pricing and exceptional customer service," Mr. Rodriguez noted.

                        *    *    *

As reported in the Troubled Company Reporter on Feb. 16, 2006,
Standard and Poor's Ratings Services assigned a 'BB' rating on
CITGO Petroleum Corp.


CITGO PETROLEUM: Delivers US$280M Dividend to Parent Company
------------------------------------------------------------
Citgo Petroleum Corp. has declared a US$280 million dividend
payable to Petroleos de Venezuela aka PDVSA -- its parent --
bringing the total dividend amount for 2006 to US$400 million.

"The payment of this dividend reflects the company's strong
performance and the continued alignment of Citgo and PDVSA.  
Citgo is positioned for another excellent year, due to the focus
on its core, strategic business," said Alejandro Granado, the
chairman of Citgo's board of directors.

Headquartered in Houston, Texas, CITGO Petroleum Corporation
-- http://www.citgo.com/-- is owned by PDV America, an
indirect, wholly owned subsidiary of Petroleos de Venezuela
S.A., the state-owned oil company of Venezuela.

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

                        *    *    *

As reported in the Troubled Company Reporter on Feb. 16, 2006,
Standard and Poor's Ratings Services assigned a 'BB' rating on
CITGO Petroleum Corp.


ELECTRICIDAD DE CARACAS: Will Begin Trading Shares in Latibex
-------------------------------------------------------------
Officials of Electricidad de Caracas, which is owned by AES
Corp., told Business News Americas that the company will begin
trading shares on Latibex -- the stock exchange in Madrid, Spain
-- today.

BNamericas states that Electricidad de Caracas is the first
Venezuela-based power firm to be included in a major European
exchange.

Created in 1999 by four Spanish stock exchanges, Latibex is a
meeting place for European investors and Latin American firms
with capitalizations of more than EUR300 million.

An official from Electricidad de Caracas who refused to be named
told BNamericas, "The actual listing will take place on
Thursday."

According to BNamericas, Electricidad de Caracas will use the
American Depositary Shares or ADS format, with 50 common shares
equivalent to one ADS.

Julian Nebreda, the president of Electricidad Caracas, had said
in an interview with BNamericas that the listing will give
stockholders of Electricidad de Caracas a new market to trade
their shares on.

Mr. Nebreda is in Spain putting the finishing touches on the
listing, BNamericas reports.

EDC is a vertically integrated utility in Venezuela, operating
in electricity distribution, transmission, and generation in the
capital city of Caracas and its metropolitan area.  It is the
largest private electric utility in the country and is owned by
US-based AES Corp. (B+/Positive/--).  EDC reported net profits
of US$20.6 million from January to March, versus net losses of
US$26.9 the same period in 2005.

                        *    *    *

On Feb 9, 2006, Standard & Poor's Ratings Services affirmed its
'B' long-term corporate credit rating on C.A. La Electricidad de
Caracas aka EDC and its 'B' rating on Electricidad de Caracas
Finance B.V.'s US$260 million senior unsecured notes.  S&P said
the outlook is stable.

On Feb. 3, 2006, S&P raised the long-term local and foreign
currency sovereign credit ratings on the Bolivarian Republic of
Venezuela to 'BB-' from 'B+'.  The decision to raise the ratings
on Venezuela was supported by the continued sharp improvements
in Venezuela's external indicators, which are attributable to a
large current account surplus, a high level of international
reserves, and lower external debt in addition to buoyant
economic growth and the potential buyback of external debt.


* Large Companies with Insolvent Balance Sheets
-----------------------------------------------  
                                Total  
                                Shareholders  Total     
                                Equity        Assets    
Company                 Ticker  ($MM)          ($MM)     
-------                 ------  ------------  -------  
Alpargatas SAIC          ALPA     (262.27)     646.43
Kuala                    ARTE3     (33.57)      11.86
Kuala-Pref               ARTE4     (33.57)      11.86
Bombril                  BOBR3    (554.69)     488.38
Bombril-Pref             BOBR4    (554.69)     488.38
CIC                      CIC    (1,883.69)  22,312.12
Telefonica Holding       CITI   (1,481.31)     307.89
Telefonica Holding       CITI5  (1,481.31)     307.89
IMPSAT Fiber Networks    IMPTQ     (17.16)     535.01
Paranapanema SA          PMAM3    (214.08)   2,847.86
Paranapanema-PREF        PMAM4    (214.08)   2,847.86
TEKA                     TEKA3    (180.22)     557.47
TEKA-PREF                TEKA4    (180.22)     557.47


* Matthew Berk Joins A&M as Senior Director in Charlotte
--------------------------------------------------------
Matthew Berk, a seasoned financial restructuring professional,
has joined Alvarez & Marsal as a senior director.  He is based
in Charlotte.

Bringing more than 25 years of financial restructuring
experience as an attorney and acting as a principal advisor to
primary debt holders, Mr. Berk specializes in plan development,
operational improvements and financial strategies for corporate
turnarounds and restructurings.  Throughout the course of his
career, he has participated in numerous Chapter 11 proceedings
and out-of-court restructurings in the U.S., Europe and South
America.

"Matthew brings a depth and breadth of experience in handling
operational and financial restructurings across a wide span of
industries," Bill Runge, managing director and co-head of the
Southeast Region at Alvarez & Marsal, said.

"As we continue to expand in Charlotte and beyond, he is a great
addition to the firm."

Prior to joining A&M, Mr. Berk spent six years as managing
director in the special situations group of Wachovia in
Charlotte.  Prior to that, he spent nine years as senior counsel
at BankBoston.

A graduate of Brooklyn College, Mr. Berk earned a J.D. from
Western New England College School of Law.

                    About Alvarez & Marsal

Alvarez & Marsal is a leading global professional services firm
with expertise in guiding underperforming companies and public
sector entities through complex operational, financial and
organizational challenges.  The firm excels in problem solving
and value creation, and brings a bias toward executing solutions
with a distinctive hands-on approach to serving clients,
management and stakeholders.

Founded in 1983, Alvarez & Marsal draws on its strong
operational heritage to provide specialized services, including
Turnaround and Management Advisory, Crisis and Interim
Management, Performance Improvement, Creditor Advisory Services,
Corporate Finance, Dispute Analysis and Forensics, Tax Advisory,
Business Consulting, Real Estate Advisory and Transaction
Advisory.  A network of experienced professionals in locations
across the U.S., Europe, Asia and Latin America, enables the
firm to deliver on its proven reputation for leadership, problem
solving and value creation.


                         ***********


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

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

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

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
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Information contained herein is obtained from sources believed
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delivered via e-mail.  Additional e-mail subscriptions for
members of the same firm for the term of the initial
subscription or balance thereof are $25 each.  For subscription
information, contact Christopher Beard at 240/629-3300.


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