TCRLA_Public/060725.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

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

          Tuesday, July 25, 2006, Vol. 7, Issue 146

                          Headlines

A R G E N T I N A

BY PLASTIC: General Report to be Presented in Court Tomorrow
CERVECERIA Y MALTERIA: Fitch Assigns B Long-Term Issuer Rating
COMERCIALIZADORA DE MULTIEMPRENDIMIENTOS: Seeks to Reorganize
EDITORIAL PLUS: General Report Presentation in Court on July 26
FARMINTER SA: Files Reorganization Petition in Buenos Aires

FIDEICOMISOS UBS: Fitch Arg Puts CCC Ratings on US$21.55MM Debts
FRONT LINE: Trustee to Submit General Report in Court on July 26
GARANTIZAR SGR: Moody's LatAm Affirms B1 Local Currency Rating
GYPSUM ARGENTINA: Individual Reports Due in Court Tomorrow
L AMPHITRYON: Moves to Reorganize After Debt Payments Halted

MASTELLONE HERMANOS: Buys US$300,000 of Obligaciones Negociables
SANITARIOS ADDUCCI: Awaits Court Approval to Reorganize
SAN PEDRO: Deadline for Verification of Claims Is on Sept. 13
SOLARIEGA SA: Asks Buenos Aires Court's Approval to Reorganize
STYLO CICLES: General Report to be Submitted in Court Tomorrow

TRANSPORTES EL SOL: Files Bankruptcy Petition in Buenos Aires
TRESERRE SA: Trustee Verifies Claims Until October 5

B E R M U D A

CARISMA LIMITED: Filing of Proofs of Claim Ends Tomorrow
CARISMA TRADING: Submission of Creditors' Claims Ends Tomorrow

B R A Z I L

BANCO BRADESCO: Unit Inks Transport Insurance with Estapostes
CAIXA DE ADMINISTRACAO: Moody's LatAm Rates Series 8 Note at Ba3
COMPANHIA ENERGETICA: Will Launch Operations of Generation Unit
GLOBO COMUNICACAO: S&P Puts BB- Rating on CreditWatch Positive
JBS SA: Moody's Puts B1 Rating on US$200MM Sr. Unsecured Notes

JBS SA: S&P Rates US$200MM Senior Unsecured Notes Due 2016 at B+
NET SERVICOS: Reports 14% Increase in Pay TV Subscriber Base
PETROLEO BRASILEIRO: CEO Lambasts G8 Industrialized Countries
PETROLEO BRASILEIRO: Inks Joint Venture Pact with Venezuela
SADIA SA: Perdigao Shareholders Decline Revised Offer

VARIG SA: Cutting 9,500 Workers Under Bankruptcy Plan
VARIG S.A.: Sojitz Corp. Blocks Plea for Permanent Injunction

* BRAZIL: Lowers Benchmark Lending Rate to 14.75 Percent

C A Y M A N   I S L A N D S

ATACAMA FUND: Holding Final General Meeting on August 10
ATACAMA MASTER: Schedules August 10 for Final General Meeting
ELC (CAYMAN) LTD.: Final General Meeting Set for August 10
ELC LTD. SERIES 1999-I: Will Hold Final Meeting on August 10
ELC LTD. 1999-III: Final General Meeting Scheduled for August 10

ELC LTD. 1999-III(C): Final General Meeting Set for August 10
ELC LTD. 2000-I: Sets August 10 for Final General Meeting
ENRON GLOBAL: Final Shareholders Meeting Scheduled for August 10
HERBALIFE LTD: Completes Refinancing of US$225MM Sr. Facility
HEXAVEST LTD.: Holding Final General Meeting on August 10

C O L O M B I A

* COLOMBIA: IDB Loans US$110MM to Improve Public Services System

C U B A

* CUBA: Inks Customs Agreement with Venezuela

D O M I N I C A N   R E P U B L I C

FALCONBRIDGE LIMITED: Directors Review Xstrata's Revised Offer

E C U A D O R

PETROECUADOR: Oriente Crude Price Drops to US$65.71 Per Barrel

E L   S A L V A D O R

BANCO SALVADORENO: S&P Puts BB Credit Rating on Watch Positive

H A I T I

DYNCORP INTERNATIONAL: Appoints Herb Lanese as President and CEO

J A M A I C A

DIGICEL LTD: Fitch Affirms B Long Term Issuer Default Rating
KAISER ALUMINUM: Terminates 4-1/8% & 4-3/4% Convertible Stocks
SUGAR COMPANY: Will Have New Board of Management, Says Minister

M E X I C O

MERIDIAN AUTOMOTIVE: Delaware Court Approves Disclosure Papers
MERIDIAN: Files Revised 3rd Amended Plan & Disclosure Statement
MERIDIAN AUTOMOTIVE: GECC Wants to Repossess Leased Equipment
UNITED RENTALS: Holding Conference Call & Webcast on Aug. 8

P A N A M A

BANCO DEL ISTMO: Moody's Reviews Ba1 Ratings & May Upgrade
BANCO DEL ISTMO: S&P Puts BB+ Credit Rating on Watch Positive

P E R U

IIRSA NORTE: Fitch Places BB Preliminary Rating on Firm
IIRSA NORTE: Moody's Assigns Ba2 Rating on US$220MM Sr. Notes
IIRSA NORTE: S&P Places Preliminary BB Rating on Firm
TELEFONICA DEL PERU: Posts PEN75.2MM Second Quarter Net Income

* PERU: S&P Assigns BB Foreign Curr. Rating with Stable Outlook

P U E R T O   R I C O

ADELPHIA COMMS: America Channel Will Appeal Permanent Injunction
ADELPHIA COMMS: Wants Court Nod on Extended DIP Facility
EAGLE FAMILY: S&P Lowers Corporate Credit Rating to CCC+ from B-
MAXXAM INC: Pacific & Britt Completes US$145 Million Financing
MUSICLAND HOLDING: Committee Has Until August 4 to File Claim

OCA INC: Court Denies BofA's Request to Disband Equity Committee
ORIENTAL FINANCIAL: First Quarter 2006 Earnings Dropped 120%

T R I N I D A D   &   T O B A G O

MIRANT CORP: Rule 2019 Dispute on PEPCO Settlement Resolved

U R U G U A Y

* URUGUAY: State Bank Posts UYU935 Mil. January-June Profits

V E N E Z U E L A

CITGO PETROLEUM: Likely to Sell Stake in Texas Plant to Lyondell
PETROLEOS DE VENEZUELA: Inks Joint Venture Pact with Petrobras
PETROLEOS DE VENEZUELA: Mulls Debt Issuance in European Market

* VENEZUELA: Inks Customs Agreement with Cuba
* VENEZUELA: Won't Break Off Trade Ties with United States


                          - - - - -


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


BY PLASTIC: General Report to be Presented in Court Tomorrow
------------------------------------------------------------
Roberto Leonardo Sapollnik, the trustee for Buenos Aires-based
bankrupt company By Plastic S.R.L., will present a general
report on the case on July 26, 2006.

A general report contains an audit of the company's accounting
and banking records as well as a summary of events pertaining to
the company's bankruptcy.

As reported in the Troubled Company Reporter-Latin America on
March 7, 2006, Mr. Sapollnik stopped validating creditors'
claims on April 12, 2006.  The trustee also presented the
validated claims in court as individual reports on May 30, 2006.

The trustee can be reached at:

     Roberto Leonardo Sapollnik
     Parana 851
     Buenos Aires, Argentina


CERVECERIA Y MALTERIA: Fitch Assigns B Long-Term Issuer Rating
--------------------------------------------------------------
Fitch Ratings Services places its B long-term issuer default
rating on brewery Cerveceria y Malteria Quilmes SA aka CMQ on
rating watch positive.  The outlook is stable.

Fitch has also placed these ratings of CMQ on Rating Watch
Positive:

        -- Foreign currency Issuer Default Rating 'B';
        -- Local currency Issuer Default Rating 'BB-';
        -- National scale rating of 'AA-(arg)'; and
        -- International scale rating of 'B+/RR3' on the US$150
           million notes due in 2012.

Argentine Beverages Financial Trust aka Gain Bebidas Argentinas,
whose underlying asset is a loan granted by CMQ, issued the
US$150 million notes.

CMQ is a subsidiary of Quilmes Industrial S.A. aka Quinsa, which
is jointly controlled by AmBev and the Bemberg family, via
Beverage Associates Corp. aka BAC through a shareholders'
agreement.  On April 13, 2006, it was announced that AmBev and
BAC had reached an agreement, in which BAC will sell its
remaining shares in Quinsa to AmBev for about US$1.2 billion.
Upon the closing of this transaction, which is awaiting
regulatory approval, AmBev will own about 91.18% of Quinsa.


COMERCIALIZADORA DE MULTIEMPRENDIMIENTOS: Seeks to Reorganize
-------------------------------------------------------------
Comercializadora de Multiemprendimientos SA, a company operating
in Buenos Aires, has requested for reorganization approval after
failing to pay its liabilities since March 5, 2006, La Nacion
reports.

The reorganization petition, once approved by the court, will
allow the company to negotiate a settlement with its creditors
in order to avoid a straight liquidation.

The case is pending before Court No. 5 in Buenos Aires.  Clerk
No. 9 assists the court on this case.

The debtor can be reached at:

     Comercializadora de Multiemprendimientos SA
     Paraguay 453
     Buenos Aires, Argentina


EDITORIAL PLUS: General Report Presentation in Court on July 26
---------------------------------------------------------------
The general report on the bankruptcy case of Editorial Plus
Ultra S.A. will be presented in Court No. 17, which is based in
Buenos Aires, tomorrow.

As reported in the Troubled Company Reporter-Latin America on
May 3, 2006, Nestor Rodolfo del Potro, the court-appointed
trustee, validated the claims until May 3, 2006.  Individual
reports on the verified claims were submitted in court on
May 31, 2006.

Clerk No. 34 assists the court in this case.

The trustee can be reached at:

     Nestor Rodolfo del Potro
     Avenida Corrientes 1291
     Buenos Aires, Argentina


FARMINTER SA: Files Reorganization Petition in Buenos Aires
-----------------------------------------------------------
Farminter SA has filed a petition to reorganize before Court No.
23 in Buenos Aires after failing to pay its liabilities, La
Nacion reports.

The reorganization petition, if granted by the court, will allow
Farminter to negotiate a settlement with its creditors in order
to avoid a straight liquidation.

Clerk No. 46 assists the court on this case.

The debtor can be reached at:

     Farminter SA
     Avenida Santa Fe 1531
     Buenos Aires, Argentina


FIDEICOMISOS UBS: Fitch Arg Puts CCC Ratings on US$21.55MM Debts
----------------------------------------------------------------
The Argentine arm of Fitch Ratings assigned these ratings on
Fideicomisos Financieros UBS Brinson Forestal I's debts:

   -- Títulos de Deuda for US$21,400,000, CCC; and
   -- Certificado de Participación for US$15,000, CC(arg).


FRONT LINE: Trustee to Submit General Report in Court on July 26
----------------------------------------------------------------
Gloria Kremer, the trustee for the bankruptcy proceeding of
Front Line S.A., will present tomorrow a general report on the
case in a court based in Buenos Aires.

As reported in the Troubled Company Reporter-Latin America on
March 17, 2006, Ms. Kremer stopped verifying claims filed by
Front Line's creditors on May 2, 2006.   Validated claims were
presented in court as individual reports on June 14, 2006.

The trustee can be reached at:

     Gloria Kremer
     Lavalle 1672
     Buenos Aires, Argentina


GARANTIZAR SGR: Moody's LatAm Affirms B1 Local Currency Rating
--------------------------------------------------------------
Moody's Latin America has upgraded the insurance financial
strength rating of Garantizar SGR to Aa3.ar from A1.ar on
Argentina's national rating scale and has affirmed Garantizar's
B1 insurance financial strength rating on the global local-
currency rating scale. Both ratings have a stable outlook.

According to Moody's, the rating upgrade of the financial
guarantor company on the national rating scale reflects
incremental improvement in its financial profile including
better profitability and lower operational leverage, as well as
its strengthened risk selection process.

Garantizar's operational leverage (total guarantees outstanding
to total investments) declined to 1.33x as of March 31, 2006,
down significantly from above 1.8x a few years ago.  Cash
contributions from new private entities -- banks and
corporations, profiting from the current income-tax benefit of
investments in financial guarantors in Argentina-- in 2005 led
to this improvement.

The rating agency also positively noted the drop in Garantizar's
delinquency ratio (i.e. non-performing assets that are
guaranteed) to 5.6%.  However, the company's recent rapid growth
in guarantees outstanding also has had a positive impact on
lowering the delinquency ratio, so a seasoning of the company's
guarantee pool is necessary to indicate whether the portfolio's
quality has materially improved.

Moody's said that Garantizar continues to benefit from the
implied support from some important state and province entities,
which sponsor the financial guarantor.  These entities-which
include stated-owned banks Banco de la Nacion Argentina and
Banco de la Ciudad de Buenos Aires, as well as the Province of
Santa Fe--have demonstrated their strong commitment to promoting
the reciprocal guarantee system that encourages small and medium
size companies in Argentina.  The rating agency noted that
Garantizar remains the largest financial guarantor in Argentina,
among over twenty local competitors, and benefits from its
strong brand and sustained leadership position and size.

Offsetting these positive credit considerations, Moody's noted
certain credit risk inherent in Garantizar's investment
portfolio and the existence of some degree of currency mismatch
between dollar-denominated outstanding guarantees and dollarized
investment assets.  As of March 31, 2006, dollar-denominated
investments represent 65% of dollar-denominated guarrantees- and
the company's exposure to Argentine Republic sovereign assets
was 49% of total investments.

Moody's said Garantizar's ratings could be upgraded if there is
a substantial reduction in Argentine sovereign assets (i.e.
below 30% of total cash and invested assets), a significant
increase in its sponsors' support, and/or a continued
improvement in profitability. Conversely, operational leverage
above 2.5x and a deterioration in the quality and
diversification of the guarantee pool characteristics are credit
drivers that could result in a rating downgrade.

Based in Buenos Aires, Garantizar SGR reported total assets of
ARS$180 million and shareholders' equity of ARS$162.9 million as
of March 31, 2006. Reported net income was ARS$1.09 million for
2006 first quarter and outstanding guarantees totaled ARS$ 211.9
million.


GYPSUM ARGENTINA: Individual Reports Due in Court Tomorrow
----------------------------------------------------------
The individual reports on the validated claims against bankrupt
company Gypsum Argentina S.R.L. will be presented in a Buenos
Aires court on July 26, 2006.

As reported in the Troubled Company Reporter-Latin America on
April 4, 2006, court-appointed trustee Jorge Alberto Arias
stopped validating claims forwarded by the creditors of bankrupt
company Gypsum Argentina S.R.L. on May 30, 2006.

A meeting between Gypsum Argentina and its creditors is
scheduled on Sept. 7, 2006, to decide on a settlement agreement.

The debtor can be reached at:

     Gypsum Argentina S.R.L.
     Almirante Brown 768
     Buenos Aires, Argentina

The trustee can be reached at:

     Jorge Alberto Arias
     Rivadavia 1227
     Buenos Aires, Argentina


L AMPHITRYON: Moves to Reorganize After Debt Payments Halted
------------------------------------------------------------
Court No. 23 in Buenos Aires is studying the merits for
reorganization submitted by local company L Amphitryon SRL, La
Nacion reports.

The report says that that the company filed the reorganization
petition after defaulting on its debt payments.

Clerk No. 45 assists the court on this case.

The debtor can be reached at:

     L Amphitryon SRL
     Vidal 2016
     Buenos Aires, Argentina


MASTELLONE HERMANOS: Buys US$300,000 of Obligaciones Negociables
----------------------------------------------------------------
Mastellone Hermanos SA reports that it has repurchased
US$300,000 of its Obligaciones Negociables issued in 1998, with
11.75% of annual interest rate and due in 2008 in order to
cancel them.  The transaction generates a gain of around
US$645,000.

As reported on Jul. 18, 2006, Moody's Latina Americana assigned
a D rating on Mastellone Hermanos' US$7.091 million Obligaciones
Negociables.


SANITARIOS ADDUCCI: Awaits Court Approval to Reorganize
-------------------------------------------------------
Court No. 26 in Buenos Aires is reviewing the merits of
Sanitarios Adducci Sociedad de Hecho de Damian Ariel Adducci,
Fabian Oscar Adducci y Marcelo Alejandro Adducci's petition to
reorganize, La Nacion reports.

La Nacion relates that the company filed the petition following
cessation of debt payments since June 16, 2006.

Reorganization will allow Sanitarios Adducci to avoid bankruptcy
by negotiating a settlement with its creditors.

Clerk No. 51 is assisting the court on the company's case.

The debtor can be reached at:

     Sanitarios Adducci Sociedad de Hecho de
     Damian Ariel Adducci, Fabian Oscar Adducci y
     Marcelo Alejandro Adducci
     Avenida Rivadavia 5675
     Buenos Aires, Argentina


SAN PEDRO: Deadline for Verification of Claims Is on Sept. 13
-------------------------------------------------------------
Court-appointed trustee Ricardo Hector Martinez will verify
creditors' proofs of claim against bankrupt company San Pedro de
Yacochuya SA until Sept. 13, 2006, La Nacion reports.

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

Court No. 17 in Buenos Aires declared San Pedro bankrupt at the
behest of Obra Social del Personal de la Actividad Vitivinicola,
which the company owes US$52,070.28.

Clerk No. 34 assists the court in this case.

The debtor can be reached at:

     San Pedro de Yacochuya SA
     Suipacha 1087
     Buenos Aires, Argentina

The trustee can be reached at:

     Ricardo Hector Martinez
     Avenida Independencia 2251
     Buenos Aires, Argentina


SOLARIEGA SA: Asks Buenos Aires Court's Approval to Reorganize
--------------------------------------------------------------
Solariega SA has requested for reorganization approval from
Court No. 21 in Buenos Aires after failing to pay its
liabilities, La Nacion relates.

The reorganization petition, once approved by the court, will
allow the company to negotiate a settlement with its creditors
in order to avoid a straight liquidation.

Clerk No. 42 assists the court on this case.

The debtor can be reached at:

     Solariega SA
     Avenida Boedo 491
     Buenos Aires, Argentina


STYLO CICLES: General Report to be Submitted in Court Tomorrow
--------------------------------------------------------------
A general report on Stylo Cicles S.H.'s bankruptcy will be
presented tomorrow in a court based in Mendoza.

A general report contains a company's audited business records
as well as a summary of events pertaining to the liquidation.

As reported in the Troubled Company Reporter-Latin America on
March 20, 2006, court-appointed trustee Jesus Luis Soria stopped
validating creditors' claims against Stylo Cicles on
April 28, 2006.  Verified claims were submitted in court as
individual reports on May 26, 2006.

The trustee can be reached at:

     Jesus Luis Soria
     9 de Julio 1575
     Ciudad de Mendoza
     Mendoza, Buenos Aires


TRANSPORTES EL SOL: Files Bankruptcy Petition in Buenos Aires
-------------------------------------------------------------
Transportes El Sol SRL, a company operating in Buenos Aires, has
filed for bankruptcy before Court No. 12 in Buenos Aires, La
Nacion reports.

The liquidation pronouncement from the court will place
Transportes El Sol's affairs as well as its assets under the
control of a court-appointed trustee.

Clerk No. 24 assists the court on this case.

The debtor can be reached at:

     Transportes El Sol SRL
     Concesionaria de la línea 529
     Buenos Aires, Argentina


TRESERRE SA: Trustee Verifies Claims Until October 5
----------------------------------------------------
Horacio Camiri, the court-appointed trustee for Treserre SA's
bankruptcy proceeding, will verify creditors' proofs of claim
until Oct. 5, 2006.

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

Court No. 19 in Buenos Aires declared Treserre bankrupt
at the behest of Talcahuano Cooperativa de Cr,dito Vivienda y
Consumo Ltda.

Clerk No. 37 assists the court in this case.

The debtor can be reached at:

     Treserre SA
     Avenida Varela 508
     Buenos Aires, Argentina

The trustee can be reached at:

     Horacio Camiri
     Avellaneda 1789
     Buenos Aires, Argentina




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


CARISMA LIMITED: Filing of Proofs of Claim Ends Tomorrow
--------------------------------------------------------
Submission of creditors' proofs of claim against Carisma Limited
to Beverly Mathias, the company's liquidator, will end on
July 26, 2006.

Creditors who fail to prove their claims by July 26 will be
excluded from receiving any distribution or payment that the
liquidator will make.

Creditors are required to send by the July 26 deadline their
full names, addresses, the full particulars of their debts or
claims, and the names and addresses of their lawyers, if any, to
Ms. Mathias.

Carisma Limited's shareholders agreed on July 7, 2006, to
place the company into voluntary liquidation under Bermuda's
Companies Act 1981.

The liquidator can be reached at:

     Beverly Mathias
     Argonaut Limited
     Argonaut House, 5 Park Road
     Hamilton HM O9, Bermuda


CARISMA TRADING: Submission of Creditors' Claims Ends Tomorrow
--------------------------------------------------------------
The submission of creditors' claims against Carisma Trading
Limited will end on July 26, 2006.

Creditors who fail to prove their claims to Beverly Mathias, the
company's liquidator, by July 26 will be excluded from receiving
any distribution or payment.

Creditors are required to send by the July 26 deadline their
full names, addresses, the full particulars of their debts or
claims, and the names and addresses of their lawyers, if any, to
Ms. Mathias.

Carisma Trading Limited's shareholders agreed on July 7, 2006,
to place the company into voluntary liquidation under Bermuda's
Companies Act 1981.

The liquidator can be reached at:

     Beverly Mathias
     Argonaut Limited
     Argonaut House, 5 Park Road
     Hamilton HM O9, Bermuda




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


BANCO BRADESCO: Unit Inks Transport Insurance with Estapostes
-------------------------------------------------------------
Banco Bradesco SA's transport insurance unit, Bradesco Auto/RE,
has reached a deal with Estapostes, a local transportation firm
specializing in heavy cargo shipments, Gazeta Mercantil reports.

The amount agreed was not disclosed, according to Gazeta
Mercantil.

Business News Americas relates that Auto/RE will provide
transport coverage for cargo that Estapostes ships all over
Brazil.

The insurance, private pension and savings bonds units of Banco
Bradesco's total billing increased 16.9% to BRL7.1 billion
during the first five months of 2006, compared with the same
period of 2005, BNamericas states.

Headquartered in Sao Paulo, Brazil, Banco Bradesco S.A. Banco
-- http://www.bradesco.com.br/-- prides itself on serving
low-and medium-income individuals in Brazil since the 1960s.
Bradesco is Brazil's largest private bank, with more than 3,000
banking branches, and also a leader in insurance and private
pension management.  Bradesco has branches throughout Brazil as
well as one in New York, two in the Bahamas, and four in the
Cayman Islands.  Bradesco offers Internet banking, insurance,
pension plans, annuities, credit card services (including
football-club affinity cards for the soccer-mad population), and
Internet access for customers.  The bank also provides personal
and commercial loans, along with leasing services.

                        *    *    *

Fitch Ratings upgraded on June 30, 2006, these ratings of Banco
Bradesco S.A., in the wake of the upgrade of the country's
foreign and local currency Issuer Default Ratings to 'BB':

   -- Foreign currency long-term IDR: to BB from BB-;
   -- Local currency long-term IDR: to BBB- from BB+; and
   -- National long-term rating: to 'AA+(bra)' from 'AA(bra)'.

Fitch said the long-term Outlook is Stable.


CAIXA DE ADMINISTRACAO: Moody's LatAm Rates Series 8 Note at Ba3
----------------------------------------------------------------
Moody's America Latina has confirmed the ratings of Caixa de
Administracao da Divida Publica Estadual S.A. aka CADIP Series 8
notes at Ba3 on the Global Local Currency Scale, and at A3.br on
the Brazilian National Scale.  Series 8 notes have been on
review since March 2006.

This rating action reflects the current level of
overcollateralization available to the notes outstanding (224%
as of July 1, 2006), the availability of a debt service reserve
account funded with two monthly bond payments, as well as
representations made by the officers of the Issuer and of the
State of Rio Grande do Sul (which acts as the seller of
receivables in the transaction), including a representation that
it intends to continue to substitute any loans written-off from
the Issuer's pool of receivables.

CADIP is a state-owned company, 99.99% controlled by the State
of Rio Grande do Sul (Not Rated), operating under the
supervision of the state's secretary of finance, with the sole
purpose to assist the state in managing its debt profile.
CADIP's Series 8 debentures are backed by receivables arising
from a portfolio of re-performing ICMS (sales taxes) owed by
corporations domiciled in the state of Rio Grande do Sul.  These
sales taxes were previously in default, however, following
renegotiation between the debtors and the state, the amounts in
arrears were rescheduled and as a result returned to performing
status. Interest and principal on the debentures are payable
from the cash flow of the re-performing sales tax receivables.


COMPANHIA ENERGETICA: Will Launch Operations of Generation Unit
---------------------------------------------------------------
Companhia Energetica de Minas Gerais has received approval from
Aneel, the power regulator in Brazil, for the launching of
commercial operations of the company's first 120-megawatt
generation unit at its 360MW Irape hydroelectric power project,
according to a report by the government's daily ledger.

Business News Americas relates that Irape is among the three
power projects that Companhia Energetica is developing.  It is
located in Minas Gerais' Vale region.

The project is deemed to cost around BRL1 billion, BNamericas
states.

Companhia Energetica de Minas Gerais -- http://www.cemig.com.br/
-- is one of the largest and most important electric energy
utilities in Brazil due to its strategic location, its technical
expertise and its market.  Cemig's concession area extends
throughout nearly 96.7% of the State of Minas Gerais, Brazil.
Cemig owns and operates 52 power plants, of which six are in
partnership with private enterprises, relying on a predominantly
hydroelectric energy matrix.  Electric energy is produced to
supply more than 17 million people living in the state's 774
municipalities.  In addition to those 52 plants, another three
are currently under construction.

Cemig is also active in several other states, through ventures
for the generation or the commercialization of energy in these
Brazilian states: in Santa Catarina (generation), Rio de Janeiro
(commercialization and generation), Esprito Santo (generation)
and Rio Grande do Sul (commercialization).

                        *    *    *

Cemig's BRL312,500,000 12.7% debentures due Nov. 1, 2009, carry
Moody's B1 rating.


GLOBO COMUNICACAO: S&P Puts BB- Rating on CreditWatch Positive
--------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'BB-' long-term
corporate credit rating on Globo Comunicacao e Participacoes
S.A. aka Globo on CreditWatch with positive implications, after
July 20's announcement that the company will voluntarily prepay
approximately US$200 million of its secured debt on
Oct. 20, 2006.

"The CreditWatch listing reflects our expectations that the
announced debt reduction, along with Globo's consistent free
operating cash flows will significantly strengthen the company's
financial risk profile," said Jean-Pierre Cote Gil, Standard
& Poor's credit analyst.

S&P now expects Globopoar to report funds from operations-to-
total debt ratio in excess of 50% and total debt to EBITDA close
to 1.0x by year-end 2006 -- from our previous estimates of
35% and 1.5 times, respectively.

Globo will use cash accumulated in its operations and the
proceeds from its US$110 million debt service reserve account to
fully prepay its secured restructured bonds series A & B.  Once
this transaction is completed, Globo's remaining debt --
approximately US$650 million -- will be mostly comprised of its
US$325 million perpetual bonds and other debts with maturities
concentrated in 2012.  Since the completion of its debt
restructuring in July 2005, Globo has voluntarily prepaid about
US$900 million -- including the prepayment scheduled for
October 2006 -- of its renegotiated debt, which ratifies the
company's commitment to deleverage.

S&P expects to resolve the CreditWatch placement within the next
few weeks following a review of the company's financial profile,
and the rating agency believes that the upgrade potential is
limited to one notch.


JBS SA: Moody's Puts B1 Rating on US$200MM Sr. Unsecured Notes
--------------------------------------------------------------
Moody's Investors Service assigned a B1 foreign currency rating
on JBS S.A.'s -- JBS-Friboi -- proposed issuance of
approximately US$200 million of senior unsecured notes due in
2016.

Approximately 70% of the net proceeds of the new notes will be
used to refinance existing short-term debt while the remaining
proceeds will be used for capital expenditure and general
corporate purposes.  Concurrently, Moody's affirmed JBS-Friboi's
B1 global local currency corporate family rating and B1 senior
unsecured rating.  The rating outlook is stable.

Moody's affirmation is based on the expectation that, although
the proposed new issuance will increase total indebtedness and
leverage in FY2006, JBS-Friboi will maintain Total Debt to
EBITDA below 4.0 times -- according to Moody's standard
definitions -- at the end of 2006 and generate positive free
cash flow in 2007.

Meanwhile, Moody's recognizes that the proposed notes improve
the company's liquidity profile with their tenor of 10 years,
which significantly lengthens the company's maturity profile.
The issuance will also reduce the high level of short-term debt
as a percentage of total debt from approximately 60% at the end
of 2005 to 30% following the issuance.

"JBS-Friboi's B1 corporate family rating continues to reflect
the risks posed by animal disease issues, the pricing volatility
inherent in a commodity business, and the current negative free
cash flow generation due to the company's growth strategy,
although we expect positive cash flow next year.  At the same
time, the B1 continues to be supported by JBS-Friboi's market
position as the largest Brazilian beef exporter and fourth
largest beef processor in the world in terms of slaughter
capacity, its competitive cost-structure, and the fact that
approximately 48.6% of revenues are from exports to
geographically diverse regions," said Soummo Mukherjee, Moody's
analyst.

As a result of the foot and mouth disease outbreak in October
2005, many countries continue to embargo fresh beef from a few
Brazilian states.  Moody's notes, however, that because JBS-
Friboi has strategically located its operations in six states in
Brazil and two provinces in Argentina, it has been able to
successfully redirect shipments among these production
facilities and continues to benefit from its competitive cost-
structure.  In US dollar terms, it has actually experienced
robust growth in exports of fresh meat during this period.  The
current rating and outlook could come under negative pressure if
Debt/EBITDA -- according to Moody's standard definitions --
weakens to 4.0 times and/or if free cash flow remains negative
beyond 2007.

Conversely, the ratings could come under positive ratings
momentum if the company were to generate positive free cash flow
on a consistent basis as well as maintain Debt/EBITDA within the
range of 3.0 to 3.5 times.

The B1 foreign-currency rating assigned to the senior unsecured
notes is at the same level as the global local currency
corporate family rating because of JBS-Friboi's overall low
level of secured debt -- less than 15% of total debt -- which
will be further reduced after the proposed new issue.  JBS-
Friboi's B1 foreign currency rating is currently not constrained
by Brazil's foreign currency country ceiling, rated at Ba3 with
positive outlook.

Moody's has reviewed preliminary draft legal documentation for
the transaction.  The rating and outlook assume that there will
be no material variation from the drafts reviewed and that all
legal agreements are legally valid, binding and enforceable.

Moody's also affirmed these ratings:

      -- B1 on Global local currency scale corporate family
         rating; and

      -- B1 US$275 senior unsecured notes due 2011.

Headquartered in Sao Paulo, Brazil, JBS-Friboi is the fourth
largest beef company in the world in terms of live cattle
slaughtering capacity and the largest beef processor and
exporter in Brazil and Latin America, as measured by revenues.
With operations in Brazil and Argentina, Grupo JBS-Friboi
produces, prepares, packages and delivers fresh, chilled and
processed beef and beef by-products to customers both in Brazil
and abroad.  Grupo JBS-Friboi also manufactures and sells
hygiene and cleaning products.


JBS SA: S&P Rates US$200MM Senior Unsecured Notes Due 2016 at B+
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' senior
unsecured debt rating to Brazil-based meat-processor JBS S.A.'s
(B+/Stable/--) proposed senior unsecured notes due 2016, offered
under Rule 144A/Reg S in the approximately amount of US$200
million.

Proceeds of the notes will be used to:

   -- refinance short-term maturities,
   -- fund capital expenditures, and
   -- for other corporate uses.

At March 2006, the company's total debt amounted to about US$900
million and cash position to about US$200 million.

"Taking into account the new notes, we expect JBS to report a
funds from operations-to-total debt ratio in the 10%-15% range
by year-end 2006, and total debt to EBITDA of about 5.0x," said
Standard & Poor's credit analyst Jean-Pierre Cote Gil.  These
ratios are relatively weak for the current rating, and are
expected to improve as the company gradually applies its excess
cash position in the repayment of forthcoming debt maturities
(70% of the proceeds from the new issuance is committed to debt
repayment).  Importantly, JBS has made strong efforts to improve
its capital structure in the past couple of years, with short-
term debt representing 33% of its total debt at March 2006,
substantially lower than the 70% reported in December 2004.

Founded in 1953, JBS is the largest meat-processor and exporter
in Brazil with about US$1.6 billion in sales in fiscal 2005. The
company is controlled by holding company J&F Participacoes,
which is, in turn, controlled by Mr. Jose Batista Sobrinho.

The stable outlook reflects our expectations that JBS will
maintain its leading position in the Brazilian beef sector and a
satisfactory balance of exports and domestic sales to mitigate
the risks associated with its operations, with export volumes
supported by the current strong long-term fundamentals of the
global beef industry, especially for low-cost Brazilian
producers.


NET SERVICOS: Reports 14% Increase in Pay TV Subscriber Base
------------------------------------------------------------
Net Servicos de Comunicacao S.A. disclosed its financial results
for the second quarter of 2006.

Pay-TV and Broadband maintained the same growth pace as in 1Q06.
Subscribers base increased by 14.0% and 110.0% year-over-year,
respectively, as a result of the Net Servicos' ongoing policy of
adopting aggressive sales practices and exploring existing
opportunities in the market.

As a result of the organic growth, net revenue ended the quarter
at BRL466.2 million, 21.2% above the BRL384.7 million posted in
2Q05.  In the same period, Client ARPU grew by 12%, from
BRL107.78 to BRL120.71, effect of the company's strategy to
increase penetration of Broadband subscribers over Pay-TV
subscriber base.

Sticking to its subscriber expansion policy while keeping track
of the return on this investment, the company has been
maintaining its EBITDA margin at around 27%.  Consolidated
EBITDA reached BRL125.9 million, 10.3% up on the BRL114.2
million recorded in 2Q05.

Net debt ended the quarter at BRL392.5 million and the Net debt
to EBITDA ratio remained at 0.85x.  The company's operations are
generating sufficient cash to support the investments necessary
for growth and to meet its financial obligations, thus
permitting this low financial leverage.

Net income ended the quarter at BRL21.8 million, reflecting the
company's healthy operating results and appropriate capital
structure.

                      About Net Servicos

Headquartered in Sao Paulo, Brazil, NET Servicos de Comunicacao
-- http://Nettv.globo.com/NETServ/br/home/indexNet.jsp?id=1--
is the largest subscriber TV multi-operator in Brazil, as it
operates the NET brand in major cities, including operations in
the 4 largest cities: Sao Paulo, Rio de Janeiro, Belo Horizonte
and Porto Alegre.

NET also offers Broadband InterNet services through its NET
VIRTUA brand name.

                        *    *    *

Moody's America Latina assigned on May 22, 2006, a Baa2.br
Brazilian National Scale Rating and a B1 Global Local Currency
Rating to Net Servicos de Comunicacao S.A.'s BRL650 million
debentures due in 2011 issued in September 2005.  Concurrently,
Moody's Investors Service affirmed Net's B1 global local
currency scale corporate family rating.  The ratings outlook is
stable.

                        *    *    *

As reported in the Troubled Company Reporter on March 15, 2006,
Standard & Poor's Rating Services raised on its foreign and
local currency corporate credit ratings on Brazilian cable pay-
TV and broadband operator Net Servicos de Comunicacao S.A to
'BB-' from 'B+'.  The Brazil National Scale rating assigned to
NET and its BRL650 million debentures due 2011 was also revised
to 'brA' from 'brBBB+'.  S&P said the outlook on the ratings was
revised to stable from positive.


PETROLEO BRASILEIRO: CEO Lambasts G8 Industrialized Countries
-------------------------------------------------------------
"I think the developed countries are failing on both ends," Jose
Sergio Gabrielli de Azevedo, Petroleo Brasileiro SA's chief
executive officer was quoted by The Australian as saying.  The
chief officer belives G8 to have failed in their quest to
enhance world energy security.

"We need to increase (oil and gas) supply.  You need to develop
unconventional oil -- deep water, ultra-deep water.  On the
other hand, you need to find substitutes on the demand side, for
example biofuels," Mr. de Azevedo emphasized.

According to The Australian, Mr. de Azevedo said that the lack
of G8 leadership would mean that the investment policies of
national oil companies and of governments of resource-rich
countries would play an increasingly important roll in
determining future average oil prices.

Additionally, Mr. de Azevedo criticized multi-national oil firms
for insufficient investments in new energy sources like ethanol,
The Australian says.

Brazil is a leading producer of ethanol, a motor fuel additive
that has seen a boost in investment over the past year after US
lawmakers last year ruled that companies would be liable for any
contamination claims against MTBE, ethanol's main competitor and
a known carcinogenic.

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.


PETROLEO BRASILEIRO: Inks Joint Venture Pact with Venezuela
-----------------------------------------------------------
Petroleo Brasileiro SA signed Thursday an agremeent migrating
its operating license to a joint venture with Venezuelan
Petroleum Corp., a subsidiary of Petroleos de Venezuela SA.

Under the joint venture, the state oil firm will have a majority
stake in Petrowayu that will operate in La Concepcion field in
the western Zulian state, according to AFP.  La Concepcion
yields 12,300 barrels of oil per day.

El Universal says that the new deal forms an integral part of
the plan started by the Government early this year to supersede
the operational agreements executed from 1990 to 1997.  Under
the new legislation on hydrocarbons, effective from 2001, these
instruments were made null and void.

                About Petroleos de Venezuela

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

                 About Petroleo Brasileiro

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.


SADIA SA: Perdigao Shareholders Decline Revised Offer
-----------------------------------------------------
Perdigao S.A., pursuant to Paragraph 4 of Article 157 of Law
6,404/76 and in accordance with the provisions of Article 2 of
CVM Instruction 358/02, (NYSE: PDA) announces that:

On July 20, 2006, Sadia S.A. disclosed presented a revised offer
from the one originally made in the "Notice of Tender Offer for
Acquisition of Shares Issued by Perdigao S.A.," published on
July 17, 2006, from BRL27.88 to BRL29.00 per share.

Sadia has once again received formal declarations refusing the
offer from shareholders holding an aggregate 55.38% stake in
Perdigao.  These declarations have been forwarded to the
Brazilian Securities and Exchange Commission -- CVM.

Given the reaffirmation by Sadia of all remaining terms and
conditions of the offer, Perdigao reiterates the clarifications
set out in the Announcement of a Relevant Fact published on July
18, 2006.  The Company's management confirms that it will not be
convening a General Shareholders' Meeting for the selection of
the financial institution to prepare a valuation report pursuant
to articles 37 and 43 of the Company's Bylaws.

Headquartered in Sao Paulo, Brazil, Sadia S.A. --
http://www.sadia.com-- operates in the agro industrial and food
processing sectors in Brazil and primarily produces a range of
processed products, poultry, and pork.  The company distributes
around 1,000 different products through distribution and sales
centers located in Brazil, Latin America, the Middle East, Asia,
and Europe.

                        *    *    *

As reported by Troubled Company Reporter on Feb. 1, 2006,
Standard & Poor's Ratings Services affirmed its 'BB' foreign and
local currency corporate credit rating on Sadia S.A.  The
ratings affirmation followed Sadia's announcement of a Brazilian
reais 1.5 billion (about US$650 million) capital investment for
the construction of a new production plant in the Brazilian
state of Mato Grosso.  The outlook on the ratings is stable.

Moody's Investors Service assigned on April 4, 2006, a Ba2
global local currency scale corporate family rating to Sadia.


VARIG SA: Cutting 9,500 Workers Under Bankruptcy Plan
-----------------------------------------------------
VARIG, S.A. will lay off 9,500 employees and immediately rehire
1,680 pursuant to its restructuring plan, Bloomberg News relates
citing Gelson Fochesato, vice president of Brazil's Federation
of Airline workers.

To keep jobs, VARIG's unions struck a deal with the airline's
new owner, Volo do Brasil, Mr. Fochesato says.

As previously reported, VARIG was sold to Volo for more than
US$600,000,000 at an auction on July 20, 206, averting a
piecemeal liquidation of the airline's assets.

"The idea," Mr. Fochesato told Bloomberg in an interview, "is to
immediately rehire some workers for the new company that's being
formed, and gradually rehire others as the company expands its
services over the next months."

Volo, which recently purchased VARIG's cargo unit, VARIG
Logistica S.A., is partially controlled by U.S. investment fund
MatlinPatterson Global Advisors.

                         About VARIG

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

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

Each of the Debtors' Boards of Directors authorized Vicente
Cervo as foreign representative.  In this capacity, Mr. Cervo
filed a Sec. 304 petition on June 17, 2005 (Bankr. S.D.N.Y. Case
Nos. 05-14400 and 05-14402).  Rick B. Antonoff, Esq., at
Pillsbury Winthrop Shaw Pittman LLP represents Mr. Cervo in the
United States.  As of March 31, 2005, the Debtors reported
BRL2,979,309,000 in total assets and BRL9,474,930,000 in total
debts.


VARIG S.A.: Sojitz Corp. Blocks Plea for Permanent Injunction
-------------------------------------------------------------
Sojitz Corporation of Japan asks the Honorable Robert D. Drain
of the U.S. Bankruptcy Court for the Southern District of New
York deny the request of Eduardo Zerwes, the Foreign
Representative of VARIG, S.A., and its affiliates, to convert
the Preliminary Injunction into a Permanent Injunction and
direct the airline to return its aircraft.

Sojitz, successor to Nissho Iwai Corporation, leases to VARIG
two Boeing model 767-300ER aircraft and two General Electric
model CF6-80C2B6F spare aircraft engines under a Lease Agreement
dated as of October 27, 1989, as amended.

Sojitz delivered on June 30, 2006, a formal demand letter to
VARIG in Brazil, its branch in Tokyo, Japan, and its U.S.
counsel, Pillsbury Winthrop Shaw Pittman LLP.  Sojitz demanded
that in compliance with the Contingency Return Plan, the
Aircraft Equipment be removed from commercial service and turned
over within 10 days from the date of the Demand Letter.

To date, the Foreign Debtors have failed to fully comply with
the terms of the Contingency Plan and the U.S. Bankruptcy
Court's July 5, 2006, Order requiring them to use their best
efforts to promptly implement the Contingency Plan, Alyssa
Englund, Esq., at Orrick, Herrington & Sutcliffe LLP, in New
York, asserts.

The Contingency Plan requires that the Foreign Debtors will
within 10 days remove the aircraft from commercial service and
make the aircraft available at one of their principal
maintenance bases in Brazil.  Ms. Englund says the Aircraft
Equipment were not removed from service until July 12, 2006, two
days past the time allowed in the Plan.  To date, Sojitz has not
been able to obtain control of the Aircraft Equipment.

Despite requests, VARIG has not cooperated with Sojitz in timely
executing a termination agreement, which has placed the Aircraft
Equipment at risk of further loss, Ms. Englund tells the Court.
Because VARIG Engineering and Maintenance will not provide
Sojitz with access to the Aircraft Equipment or allow Sojitz to
take control of the Aircraft Equipment, Sojitz is unable to
protect the Aircraft Equipment from being raided for parts by
VARIG or any other party.  Sojitz has been advised that parts
have been removed from certain of the Aircraft, Ms. Englund
adds.

         Trustees Need Time to Implement Contingency Plan

U.S. Bank National Association, Wells Fargo Bank Northwest,
N.A., and Wells Fargo Bank Northwest, N.A., as aircraft
trustees, ask the Court to continue for another 30 to 45 days
the hearing on the Foreign Representative's request so they can
continue to work to implement the terms of the Contingency Plan.

The Aircraft Trustees have demanded return of three leased
aircraft.  Ann Acker, Esq., at Chapman and Cutler LLP, in
Chicago, Illinois, relates that the Trustees' representatives
have been working with VARIG and VEM towards a cooperative
effort to initiate and complete the Contingency Plan with
respect to the leased aircraft, including:

   -- the securing of the Aircraft;

   -- the grounding of the Aircraft where necessary;

   -- the assembly of Aircraft parts, engines, equipment and
      documents in an airworthy condition; and

   -- obtaining VARIG's cooperation in the deregistration and
      repatriation of the Aircraft.

"VARIG has maintained that it is proceeding with diligence to
the same objectives.  However, at least with respect to these
three Aircraft, the objectives of the Contingency Plan have not
yet been accomplished," Ms. Acker says.

                         About VARIG

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

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

Each of the Debtors' Boards of Directors authorized Vicente
Cervo as foreign representative.  In this capacity, Mr. Cervo
filed a Sec. 304 petition on June 17, 2005 (Bankr. S.D.N.Y. Case
Nos. 05-14400 and 05-14402).  Rick B. Antonoff, Esq., at
Pillsbury Winthrop Shaw Pittman LLP represents Mr. Cervo in the
United States.  As of March 31, 2005, the Debtors reported
BRL2,979,309,000 in total assets and BRL9,474,930,000 in total
debts. (VARIG Bankruptcy News, Issue No. 25; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


* BRAZIL: Lowers Benchmark Lending Rate to 14.75 Percent
--------------------------------------------------------
Brazil's central bank lowered last week the benchmark lending
rate to 14.75% to spur economic growth and curb inflation.

Bloomberg News says that this is the lowest lending rate since
1994 and the ninth reduction since September 2005.

As a result of lower borrowing costs, growth in Latin America's
biggest economy is accelerating, fueling sales of cars, homes
and furniture, Bloomberg relates.

The economic activity, according to anaylysts quoted by
Bloomberg, is adding to President Lula da Silva's popularity and
makes him "practically unbeatable" as he seeks re-election in
October.

"Very low inflation, job creation and economic growth -- that's
a very strong combination that Lula will use in his favor,"
Alexandre Barros at Early Warning told Bloomberg in a telephone
interview.

Economists forecasted inflation in Brazil will be at 3.8% at the
end of the year.  The central bank targets inflation of 4.5% for
this year as well as for 2007 and 2008, Bloomberg states.

                        *    *    *

Fitch Ratings assigned these ratings on Brazil:

                     Rating     Rating Date
                     ------     -----------
   Country Ceiling    BB-      Nov. 18, 2004
   Long Term IDR      BB-      Dec. 14, 2005
   Short Term IDR     B        Dec. 14, 2005
   Local Currency
   Long Term Issuer
   Default Rating     BB-      Dec. 14, 2005




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


ATACAMA FUND: Holding Final General Meeting on August 10
--------------------------------------------------------
Atacama Fund Limited will hold a final general meeting, pursuant
to Section 145 of the Companies Law of the Cayman Islands, on
August 10, 2006, at:

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

During the meeting, the company's liquidator will present a
winding up account and provide explanation to support the
liquidation of assets.

Atacama Master's shareholders decided on April 27, 2006, to
place the company into voluntary liquidation under Section 135
of Cayman's Companies Law (2004 revision).

The company's liquidator can be reached at:

     Mike Hughes
     Maples Finance Limited
     P.O. Box 1093GT
     Grand Cayman, Cayman Islands


ATACAMA MASTER: Schedules August 10 for Final General Meeting
-------------------------------------------------------------
Atacama Master Fund Limited will hold a final general meeting,
pursuant to Section 145 of the Companies Law of the Cayman
Islands, on August 10, 2006, at:

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

During the meeting, the company's liquidator will present a
winding up account and provide explanation to support the
liquidation of assets.

Atacama Master's shareholders decided on April 27, 2006, to
place the company into voluntary liquidation under Section 135
of Cayman's Companies Law (2004 revision).

The company's liquidator can be reached at:

     Mike Hughes
     Maples Finance Limited
     P.O. Box 1093GT
     Grand Cayman, Cayman Islands


ELC (CAYMAN) LTD.: Final General Meeting Set for August 10
----------------------------------------------------------
ELC (Cayman) Ltd. will hold a final general meeting, pursuant to
Section 145 of the Companies Law of the Cayman Islands, on
August 10, 2006, at:

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

During the meeting, the company's liquidator will present a
winding up account and provide explanation to support the
liquidation of assets.

The company started liquidating assets on April 19, 2006.

The liquidator can be reached at:

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


ELC LTD. SERIES 1999-I: Will Hold Final Meeting on August 10
------------------------------------------------------------
ELC (Cayman) Ltd. CDO Series 1999-I will hold a final general
meeting, pursuant to Section 145 of the Companies Law of the
Cayman Islands, on August 10, 2006, at:

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

During the meeting, the company's liquidator will present a
winding up account and provide explanation to support the
liquidation of assets.

The company began liquidating assets on April 19, 2006.

The liquidator can be reached at:

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


ELC LTD. 1999-III: Final General Meeting Scheduled for August 10
----------------------------------------------------------------
ELC (Cayman) Ltd. 1999-III will hold a final general meeting,
pursuant to Section 145 of the Companies Law of the Cayman
Islands, on August 10, 2006, at:

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

During the meeting, the company's liquidator will present a
winding up account and provide explanation to support the
liquidation of assets.

The company started liquidating assets on April 19, 2006.

The liquidator can be reached at:

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


ELC LTD. 1999-III(C): Final General Meeting Set for August 10
-------------------------------------------------------------
ELC (Cayman) Ltd. 1999-III (C) will hold a final general
meeting, pursuant to Section 145 of the Companies Law of the
Cayman Islands, on August 10, 2006, at:

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

During the meeting, the company's liquidator will present a
winding up account and provide explanation to support the
liquidation of assets.

The company started liquidating assets on April 19, 2006.

The liquidator can be reached at:

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


ELC LTD. 2000-I: Sets August 10 for Final General Meeting
---------------------------------------------------------
ELC (Cayman) Ltd. 2000-I will hold a final general meeting,
pursuant to Section 145 of the Companies Law of the Cayman
Islands, on August 10, 2006, at:

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

During the meeting, the company's liquidator will present a
winding up account and provide explanation to support the
liquidation of assets.

The company started liquidating assets on April 19, 2006.

The liquidator can be reached at:

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


ENRON GLOBAL: Final Shareholders Meeting Scheduled for August 10
----------------------------------------------------------------
Enron Global Equity Ltd.'s shareholders will hold a final
meeting, pursuant to Section 145 of the Companies Law (2004
Revision) of the Cayman Islands, at 11:00 a.m. on Aug. 10, 2006,
at:

     Shearman & Sterling LLP
     599 Lexington Avenue, 2nd Floor
     New York, NY 10022

During the meeting, these agenda will be taken:

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

   2) authorizing the liquidator to retain the records of the
      company for a period of three years from the dissolution,
      after which they may be destroyed.

Enron Global's shareholders agreed on June 23, 2006, for the
company's voluntary liquidation under Section 135 of the
Companies Law (2004 Revision) of the Cayman Islands.

The company's liquidator can be reached at:

     Michael P. Borom
     Impala Partners, LLC
     18 Marshall Street, Suite 112
     Norwalk, CT 06854, U.S.A.,


HERBALIFE LTD: Completes Refinancing of US$225MM Sr. Facility
-------------------------------------------------------------
Herbalife Ltd., formerly known as WH Holdings (Cayman Islands)
Ltd., and its indirect subsidiary Herbalife International, Inc.
completed the refinancing of its existing US$225.0 million
senior secured credit facility.  The new US$300.0 million senior
secured credit facility consists of a US$200.0 million, seven-
year term loan and a US$100.0 million, six-year revolving credit
facility.  Merrill Lynch, Pierce, Fenner & Smith Inc., J.P.
Morgan Securities Inc. and Morgan Stanley served as joint lead
arrangers and joint book-runners on the transaction.

At closing, the Company used approximately US$65.0 million of
available cash and US$15.0 million of borrowings under the new
revolver to repay the outstanding borrowings under its existing
senior credit facility and fund closing costs.

The Company also announced today it has advised the Trustee of
its 9 1/2% Notes due 2011 (the "Notes"), of the company's
election to redeem the outstanding US$165.0 million aggregate
principal amount of Notes at the mandatory redemption price of
approximately US$109.80 per US$100.00 aggregate principal amount
of Notes.  The company intends to use the proceeds from the new
US$200.0 million term loan to fund the redemption and pay
accrued interest.  The anticipated redemption date is August 23,
2006.

"We continue to proactively de-leverage the company reflecting
the strong cash flow generation of our business coupled with the
creation of a more flexible and efficient capital structure,"
said Rich Goudis, the company's chief financial officer.  "The
result has been a reduction of debt, a lower effective interest
rate and improved coverage ratios which led to the recent
corporate family credit rating upgrades from both Moody's and
S&P to Ba1 and BB+, respectively. The benefits from this
recapitalization will allow us to invest further in the needs of
our distributors, our business and our shareholders," Goudis
continued.

Upon redemption of the Notes, the Company expects to incur an
after-tax one-time charge of approximately US$14.0 million,
representing the call premium and the write-off of unamortized
deferred financing costs.

                       About Herbalife

Herbalife (NYSE:HLF) -- http://ir.herbalife.com/-- is a global
network marketing company that sells weight-management,
nutritional supplements and personal care products intended to
support a healthy lifestyle.  Herbalife products are sold in 62
countries through a network of more than one million independent
distributors.  The company supports the Herbalife Family
Foundation and its Casa Herbalife program to bring good
nutrition to children.

                         *     *     *

As reported in the Troubled Company Reporter on July 4, 2006,
Moody's Investors Service rated the proposed bank loan of
Herbalife International, Inc. at Ba1 and upgraded the corporate
family rating to Ba1.  Herbalife will use proceeds from the new
debt to repay the existing term loan and to redeem the
$165 million issue of 9.5% senior subordinated notes.

At the same time, Standard & Poor's Ratings Services raised its
ratings on Herbalife International Inc., including its corporate
credit rating to 'BB+' from 'BB'.  Standard & Poor's also raised
its ratings on Herbalife's parent, Herbalife Ltd., including the
corporate credit rating to 'BB+' from 'BB'.  The outlook is
stable.


HEXAVEST LTD.: Holding Final General Meeting on August 10
---------------------------------------------------------
Hexavest Ltd. will hold a final general meeting, pursuant to
Section 145 of the Companies Law of the Cayman Islands, on
August 10, 2006, at the company's registered office.

During the meeting, these agenda will be taken:

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

   2) authorizing the liquidator to retain the records of the
      company for a period of three years from the dissolution,
      after which they may be destroyed.

Any person who is entitled to attend and vote at the meeting may
appoint a proxy to attend and vote in his stead.  A proxy need
not be a member or creditor.

The company's liquidator can be reached at:

     Q&H Nominees Ltd.
     Attn: Greg Link
     Tel: 949 4123
     Fax: 949 4647
     P.O. Box 1348, George Town
     Grand Cayman, Cayman Islands




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


* COLOMBIA: IDB Loans US$110MM to Improve Public Services System
----------------------------------------------------------------
The Inter-American Develoment Bank approved a US$10-million loan
for improving the quality of public services in Bogota.

"The overall objective of the program is to help improve
satisfaction among residents of Bogota, especially those in the
most disadvantaged groups, by strengthening the District's
public services system," said Raimundo Arroio Jr., project team
leader.

Specifically, the project seeks to improve the coverage,
quality, variety and efficiency of the public services system
by:

   -- providing and renovating infrastructure,

   -- increasing and diversifying the supply of services
      and channels, and

   -- improving the quality of service management.

In addition to providing funding for this operation, the Bank
has provided significant technical assistance to the project
which helped determine the scope of the demand of the different
services, identify the need to strengthen the different
components of customer service, including call centers, and
bring together the different entities participating in the
project, such as the Financial Secretariat and the Mayor's
General Secretariat's office.

Furthermore, through its participation, the Bank emphasized the
importance of carrying out risk analyses and of maintaining
permanent evaluation systems.

                       *    *    *

On May 30, 2005, Fitch Ratings affirmed Colombia's ratings as:

      -- Long-term foreign currency 'BB';
      -- Country ceiling 'BB';
      -- Local currency 'BBB-';
      -- Short-term 'B'.

Fitch said the Rating Outlook is Stable.




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


* CUBA: Inks Customs Agreement with Venezuela
---------------------------------------------
El Universal reports that Cuba and Venezuela have initialed an
agreement to relaunch bilateral trade exceeding US$3.5 billion a
year, according to Jose Gregorio Vielma Mora, head of the
Venezuelan National Integrated Service of Tax and Customs
Administration -- Seniat.

The deal "is the backbone of all of the agreements Presidents
Hugo Chavez and Fidel Castro have signed to activate bilateral
trade," Mr. Mora, was quoted by Cuban TV, AFP reported.

El Universal says Vielma Mora signed the agreement with the head
of the Cuban General Customs, Brigadier General Pedro Ramon
Pupo.

Under the pact "the parties are to exchange know-how and
expertise," said Prensa Latina without elaborating, El Universal
relates.  Mr. Vielma Mora stressed that the agreement "includes
not only Venezuela and Cuba, but it also will encompass Bolivia
and Ecuador."

In April, Cuba, Venezuela and Bolivia inked a number of
integration agreements under the Bolivarian Alternative for the
Americas, a trade bloc that opposes the US-endorsed Free Trade
Area for the Americas and Free Trade Agreements.

In 2005, Venezuela was Cuba's biggest trading partner, with
trade amounting to US$3.67 billion.

El Universal relates that Venezuela supplies daily almost
100,000 barrels of oil or by-products to Cuba.  In turn, Cuba
has sent to Venezuela over 20,000 doctors and has performed more
than 180,000 eye surgeries to low-income Venezuelans in the
island.

                        *    *    *

Moody's assigned these ratings to Cuba:

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




===================================
D O M I N I C A N   R E P U B L I C
===================================


FALCONBRIDGE LIMITED: Directors Review Xstrata's Revised Offer
--------------------------------------------------------------
Falconbridge Limited is reviewing the details of Xstrata plc's
intention to increase its offer for Falconbridge to CDN$62.50
per common share in cash and waive the minimum tender condition.
Under the terms of the offer, the Falconbridge shareholders will
also receive the special cash dividend of CDN$0.75 per common
share declared by Falconbridge on July 16, 2006, representing
total proceeds of CDN$63.25 per Falconbridge common share.  The
revised Xstrata offer will expire on Aug. 14, 2006, and is
subject to approvals from Xstrata shareholders and Investment
Canada.

The Falconbridge Board of Directors will evaluate the terms of
the revised Xstrata offer and provide Falconbridge shareholders
with a formal recommendation as soon as it has completed its
analysis.

                        About Xstrata

Xstrata plc (LSE: XTA) -- 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 CDNUS$150 million 5% convertible and callable
bonds due April 30, 2007, carries Standard & Poor's BB+ rating.




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


PETROECUADOR: Oriente Crude Price Drops to US$65.71 Per Barrel
--------------------------------------------------------------
Petroecuador told Dow Jones Newswire on Friday that the average
price of its Oriente crude oil for export decreased to US$65.71
per barrel on July 18 from US$65.90 per barrel on July 11.

The crude price was 43% higher than the US$46 per barrel in July
last year, Dow Jones relates, citing Petroecuador.

The government forecasted an average price of US$35 per barrel
in its 2006 budget, according to Dow Jones.

Petroecuador exports 156,000 barrels of crude per day.  The
barrels of crude are mainly shipped to the United States.

Crude oil is Ecuador's main export, which netted US$5.397
billion last year.  The oil sector is accountable for about 15%
of the country's gross domestic product, and a third of
government revenue.

Petroecuador, according to published reports, is faced with
cash-problems.  The state-oil firm has no funds for maintenance
has no funds to repair pumps in diesel, gasoline and natural gas
refineries, and has no capacity to pay suppliers and vendors.
The government refused to give the much-needed cash alleging
that Petroecuador has been inefficient and non-transparent in
its accounts.




=====================
E L   S A L V A D O R
=====================


BANCO SALVADORENO: S&P Puts BB Credit Rating on Watch Positive
--------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'BB/B'
counterparty credit rating on Banco Salvadoreno S.A. on
CreditWatch with positive implications.

S&P also placed its 'BB+/B' counterparty credit rating on Primer
Banco del Istmo S.A. on CreditWatch with positive implications
and affirmed its ratings on HSBC Holdings PLC (HSBC) and related
entities, including its 'AA-/A-1+' counterparty credit rating on
HSBC, with a stable outlook.

"These rating actions follow today's announcement that HSBC has
agreed to acquire Grupo Banistmo S.A. for US$1.77 billion in
cash," said Michelle Brennan, Standard & Poor's credit analyst.

Group Banistmo holds 99.4% of Banistmo and 56% of Banco
Salvadoreno, and owns Compania Nacional de Seguros -- which is
not rated by S&P.

The transaction is expected to complete in fourth-quarter 2006,
subject to regulatory approval and at least 65% of Banistmo's
shares being tendered.

The affirmation of the ratings on HSBC reflects the modest
impact of the acquisition on its strong financial position.
The transaction is consistent with its strategy of expanding
its presence in markets with higher growth potential.  Execution
risk is considered relatively low given HSBC's strong track
record in managing acquisitions.

The CreditWatch listing on Banistmo and Banco Salvadoreno
reflects S&P's expectations that the banks will benefit from
support from their prospective owner in terms of financial
flexibility, credit risk management, and operational processes.
Also, both entities will benefit from HSBC's know-how, products,
international distribution network, and experience in emerging
markets.  The CreditWatch will be resolved once the regulatory
approvals are provided and S&P meets with the banks to learn
further details about HSBC's strategy for its new subsidiaries.

The stable outlook on HSBC reflects S&P's expectation that HSBC
will underpin its strong profitability and mitigate the risk of
economic stress through its very strong geographic and earnings
diversification, and continuing organic earnings growth.  S&P
does not expect HSBC to compromise its strong liquidity, healthy
capitalization, and sound risk-management principles to chase
growth, or to make transformational acquisitions.




=========
H A I T I
=========


DYNCORP INTERNATIONAL: Appoints Herb Lanese as President and CEO
----------------------------------------------------------------
DynCorp International Inc. appointed Herb Lanese as president
and chief executive officer, effective immediately.  Mr. Lanese,
a member of the board, replaces Stephen Cannon, who resigned
after leading the company through its initial public offering.

Mr. Lanese is a former president, executive vice president and
chief financial officer of McDonnell Douglas Aircraft, where he
played a critical role in the corporation's achievement of a
"best in class" position in the 1990s.  Prior to joining
McDonnell Douglas, he served as corporate vice president of
Tenneco, Inc., responsible for strategic planning, capital
structure, accounting and information systems.  Earlier, he
served as vice president and chief financial officer of
Tenneco's Newport News Shipbuilding business and vice president
of Finance of Tenneco Chemicals.

"Herb Lanese has an impressive track record in leadership roles
in significant organizations," said Robert McKeon, chairman of
DynCorp International.  "The fundamentals of our business are
robust and we are confident Herb will solidly position us to
execute our strategic priorities.  His experience and valuable
insights made him an esteemed member of our Board and a strong
choice to lead the company in building on the strong existing
platform."

Mr. McKeon continued, "We thank Steve for his significant
contributions during a critical period for DynCorp
International, and his skill in guiding the company through two
landmark events: our acquisition of the company in 2005 and the
recent initial public offering. We wish him well in whatever he
chooses to take on in the future."

"I know DynCorp International well, and know it to be a dynamic
company with exciting opportunities," Mr. Lanese said.  "It is a
privilege to lead a company of such talented, dedicated
employees and in conjunction with a board I value highly.
Together we will develop strategies designed to deliver greater
value to our customers."

Headquartered in Irving, Texas, DynCorp International, LLC
(NYSE: DCP) -- http://www.dyn-intl.com/-- the operating company
of DynCorp International Inc., provides specialized mission-
critical technical and professional services to civilian and
military government agencies and commercial customers.  DynCorp
Inter'l employs more than 14,0000 people in 35 countries
including Haiti.

                        *    *    *

As reported in the Troubled Company Reporter on June 19, 2006,
Standard & Poor's Ratings Services raised its ratings, including
the corporate credit rating to 'BB-' from 'B+', on DynCorp
International LLC.  The ratings were removed from CreditWatch
where they were placed with positive implications on Oct. 3,
2005.  S&P said the outlook is stable.

As reported in the Troubled Company Reporter on June 13, 2006,
Moody's Investors Service upgraded the ratings of DynCorp
International LLC based on DI's consistently improving
performance over the past year plus the marginal added benefits
to its credit metrics from the recently completed IPO.  This
concludes the review for possible upgrade that was initiated by
Moody's on April 20th.

Moody's upgraded the Company's US$90 million senior secured
revolver maturing February 11, 2010, to Ba3 from B2; US$345
million senior secured term loan B due February 11, 2011, to Ba3
from B2; US$320 million 9.5% senior subordinated notes due Feb.
15, 2013, to B3 from Caa1; Corporate Family Rating, to B1 from
B2; and Speculative Grade Liquidity Rating, to SGL-2 from SGL-3.
The ratings outlook is stable.




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


DIGICEL LTD: Fitch Affirms B Long Term Issuer Default Rating
------------------------------------------------------------
Fitch Ratings Services affirmed its B long-term issuer default
rating on Digicel Limited.  The outlook is stable.

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.


KAISER ALUMINUM: Terminates 4-1/8% & 4-3/4% Convertible Stocks
--------------------------------------------------------------
According to a Form 15-12B regulatory filing with the U.S.
Securities and Exchange Commission dated July 6, 2006, Kaiser
Aluminum & Chemical Corp. has terminated these securities:

   (1) 4-1/8% Cumulative Convertible Preference Stock, par value
       US$100.00 per share; and

   (2) 4-3/4% Cumulative Convertible Preference Stock, par value
       US$100.00 per share.

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, along with its Jamaican subsidiaries
-- Alpart Jamaica Inc. and Kaiser Jamaica Corporation -- 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. 101; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


SUGAR COMPANY: Will Have New Board of Management, Says Minister
---------------------------------------------------------------
The Sugar Company of Jamaica will be having a new Board of
Management, Radio Jamaica reports, citing Roger Clarke, the
minister of agriculture.

Minister Clarke met with members of the All-Island Jamaica Cane
Farmers Association on Thursday to discuss the state of the
country's sugar industry.

Efforts are being made to appoint a new chief executive officer
after the resignation of Livingston Morrison, Minister Clarke
told the Financial Report on July 20.

According to Radio Jamaica, Mr. Morrison submitted his
resignation on Friday to Derrick Latibeaudiere, the chairmen of
the Sugar Company of Jamaica.

Other management vacancies will also be filled, Radio Jamaica
states, citing Minister Clarke.

Sugar Company of Jamaica registered a net loss of almost US$1.1
billion for the financial year ended Sept. 30, 2005, 80% higher
than the US$600 million reported in the previous financial year.
Sugar Company blamed its financial deterioration to the
reduction in sugar cane production.




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


MERIDIAN AUTOMOTIVE: Delaware Court Approves Disclosure Papers
--------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware approved
the Disclosure Statement and proposed solicitation procedures of
Meridian Automotive Systems, Inc., thereby allowing the company
to move towards exiting Chapter 11.  Meridian will begin
distributing balloting materials to all creditors in order to
solicit their votes in support of its Plan of Reorganization.
The company anticipated a confirmation hearing on Sept. 13, 2006
and that the Plan will become effective on or about
Sept. 29, 2006.

"We are pleased to have received the Bankruptcy Court's approval
of our Disclosure Statement today, which allows us to move
closer  to our ultimate emergence from Chapter 11," Richard E.
Newsted, Meridian's President and CEO, said.  "We are extremely
pleased to have the support of our major creditor
constituencies."

                 About Meridian Automotive

Headquartered in Dearborn, Mich., Meridian Automotive Systems,
Inc. -- http://www.meridianautosystems.com/-- supplies
technologically advanced front and rear end modules, lighting,
exterior composites, console modules, instrument panels and
other interior systems to automobile and truck manufacturers.
Meridian operates 22 plants in the United States, Canada and
Mexico, supplying Original Equipment Manufacturers and major
Tier One parts suppliers.  The Company and its debtor-affiliates
filed for chapter 11 protection on April 26, 2005 (Bankr. D.
Del. Case Nos. 05-11168 through 05-11176).  James F. Conlan,
Esq., Larry J. Nyhan, Esq., Paul S. Caruso, Esq., and Bojan
Guzina, Esq., at Sidley Austin Brown & Wood LLP, and Robert S.
Brady, Esq., Edmon L. Morton, Esq., Edward J. Kosmowski, Esq.,
and Ian S. Fredericks, Esq., at Young Conaway Stargatt & Taylor,
LLP, represent the Debtors in their restructuring efforts.  Eric
E. Sagerman, Esq., at Winston & Strawn LLP represents the
Official Committee of Unsecured Creditors.  The Committee also
hired Ian Connor Bifferato, Esq., at Bifferato, Gentilotti,
Biden & Balick, P.A., to prosecute an adversary proceeding
against Meridian's First Lien Lenders and Second Lien Lenders to
invalidate their liens.  When the Debtors filed for protection
from their creditors, they listed US$530 million in total assets
and approximately US$815 million in total liabilities.


MERIDIAN: Files Revised 3rd Amended Plan & Disclosure Statement
---------------------------------------------------------------
Meridian Automotive Systems, Inc., and its eight debtor-
affiliates delivered to the Court a revised Third Amended Joint
Plan of Reorganization and Disclosure Statement, on
July 19, 2006.

Meridian President and Chief Executive Officer Richard E.
Newsted discloses that the revised Third Amended Plan modifies
the treatment of Claims in Classes 3 and 4, expounds the
Preferred Equity Rights Offering, and provides for the
preservation of certain Causes of Action of the Debtors'
Estates.

                    Treatment of Class 3
               Prepetition First Lien Claims

Each Holder of an Allowed Prepetition First Lien Claim will, on
the Effective Date, receive in full and complete settlement,
release and discharge of the Claim:

   (a) the Lien Avoidance Release;

   (b) cash equal to 80% of its Allowed Prepetition First Lien
       Claim;

   (c) (i) Class A Convertible Preferred Stock having an
           aggregate Class A Stated Value equal to 20% of the
           Holder's Allowed Prepetition First Lien Claim; or

      (ii) if the Holder delivers to Reorganized Meridian a
           properly completed Cash Election Form prior to the
           Cash Election Deadline, then to the extent designated
           by the Holder in its Cash Election Form, in lieu of
           the Class A Convertible Preferred Stock, US$75 for
           every US$100 of Class A Stated Value of Class A
           Convertible Preferred Stock otherwise issuable to the
           Holder in respect of its Allowed Prepetition First
           Lien Claim, pursuant to clause (i); and

   (d) an inducement fee equal to US$0.50 for each US$100 of its
       Allowed Prepetition First Lien Claim.

Under the Plan, Prepetition First Lien Claims will be deemed
Allowed on the Effective Date in the aggregate amount of
US$300,642,146:

   (a) plus outstanding accrued interest from June 30, 2006,
       through the Effective Date pursuant to the DIP Order;

   (b) plus all reasonable fees, expenses and costs to the
       extent provided for, and allowable, under the Prepetition
       First Lien Credit Agreement or the Prepetition First Lien
       Hedge Agreement, or provided for pursuant to the DIP
       Order; and

   (c) minus amounts paid or repaid prior to the Effective Date,
       if any.

                    Treatment of Class 4
            Prepetition Second Lien Secured Claims

The Committed Holder of an Allowed Prepetition Second Lien
Secured Claim will, on the Effective Date, receive in full and
complete settlement, release and discharge of the Claim, a share
of a total commitment fee equal to US$8,000,000, payable in
Class A Convertible Preferred Stock, as provided for in the
Preferred Equity Funding Agreement or the funding agreements in
the forms attached to the Preferred Equity Funding Agreement.

Under the Plan, Prepetition Second Lien Claims will be deemed
Allowed on the Effective Date in the aggregate amount of
US$179,808,222 plus all reasonable fees, expenses and costs
payable under the Prepetition Second Lien Credit Agreement
pursuant to the DIP Order minus amounts paid or repaid prior to
the Effective Date, if any, provided that:

   (a) Prepetition Second Lien Claims will be deemed Secured
       Claims, in part, and Unsecured Claims, in part; and

   (b) Claims in Classes 4 and 5 will be deemed Allowed, and the
       amount of the Claims will be determined by the Bankruptcy
       Court if necessary.

                   Cash Election Deadline

The Plan reschedules the Cash Election Deadline to 5:00 p.m.,
prevailing Eastern time, on the day that is 15 days after the
Confirmation Date.

If the Effective Date does not occur on or before the day that
is 10 Business Days after the Cash Election Deadline, then the
Debtors will establish a new cash election deadline for 5:00
p.m., prevailing Eastern time, on the day that is five days
after the Debtors' provision of notice to Holders of Prepetition
First Lien Claims of the new Cash Election Deadline.

                Preferred Equity Rights Offering

The Plan further provides that to the extent that the Holders of
Prepetition Second Lien Secured Claims are not already bound by
the Preferred Equity Funding Agreement, the Debtors offer them
the opportunity to enter into:

   (a) an Additional Funding Agreement in substantially the form
       attached to the Preferred Equity Funding Agreement,
       during the period from the entry of the Voting Procedures
       Order until 5:30 p.m., prevailing Eastern time, on the
       day that is five business days later; or

   (b) a Final Funding Agreement in substantially the form
       attached to the Preferred Equity Funding Agreement,
       during the period from the first day after the
       Confirmation Date until 5:30 p.m., prevailing Eastern
       time, on the date that is five business days later.

             Preservation of Certain Causes of Action

The Plan provides for the preservation of all Causes of Action
of the Estates pursuant to Section 1123(b)(3) of the Bankruptcy
Code, except those expressly released or limited.

Pursuant to the Plan, Retained Actions will vest in the
Reorganized Debtors, and Avoidance Actions and Reserved Actions
will vest in the Litigation Trust.

A full-text blacklined copy of the revised Third Amended Plan of
Reorganization is available for free at
http://ResearchArchives.com/t/s?e38

A full-text blacklined copy of the revised Third Amended
Disclosure Statement is available for free at
http://ResearchArchives.com/t/s?e39

                      Plan Compendium

The Debtors also delivered to the Court two revised Plan
Compendium exhibits:

1. Preferred Equity Funding Agreement

   After the entry of the Voting Procedures Order, the Debtors,
   Camulos Master Fund LP, DK Acquisition Partners, L.P., and
   Stanfield Capital Partners LLC will execute and deliver the
   Preferred Equity Funding Agreement.

   The Agreement provides that on the Effective Date, the
   Debtors will issue to each of the Committed Holders a
   Commitment Fee comprised of shares of Class A Convertible
   Preferred Stock having an aggregate Class A Stated Value
   equal to the sum of:

      (a) the product of:

          (1) the First Lien Claim Commitment Fee Amount; and

          (2) a fraction:

              -- the numerator of which is the amount of its
                 Committed First Lien Claims; and

              -- the denominator of which is the aggregate
                 amount of All Committed First Lien Claims that
                 are subject to the Agreement or an Additional
                 Funding Agreement; and

      (b) the product of:

          (1) the Second Lien Claim Commitment Fee Amount; and

          (2) a fraction:

              -- the numerator of which is the amount of its
                 Committed Second Lien Claims; and

              -- the denominator of which is the aggregate
                 amount of All Committed Second Lien Claims that
                 are subject to the Agreement or an Additional
                 Funding Agreement.

   The First Lien Claim Commitment Fee Amount is an amount equal
   to the product of (i) 0.04 and (ii) the product of (x) 0.75
   and (y) an amount equal to 20% of the aggregate amount of All
   Committed First Lien Claims.

   The Second Lien Claim Commitment Fee Amount is an amount
   equal to US$8,000,000 less the First Lien Claim Commitment
   Fee Amount.

   A full-text copy of the Revised Preferred Equity Funding
   Agreement is available for free at
   http://ResearchArchives.com/t/s?e3a

2. Certificate of Designation of Series A Cumulative Convertible
   Preferred Stock

   If the Debtors determine that the funds available for
   redemption of Series A Cumulative Convertible Preferred
   Stock, on any Section 3(b) Redemption Date, are insufficient
   to redeem all of the shares, then none of the shares will be
   redeemed.  Instead, holders of the shares of Series A Stock
   will have the right to convert all or any of the shares of
   Series A Stock into shares of Common Stock.

   The holders can also opt, before the Section 3(b) Redemption
   Date, to convert their shares into shares of Common Stock.

   The aggregate number of shares of Common Stock to be issued
   will equal 50% of the total number of shares of Common Stock
   that would be outstanding on the Effective Date after the
   issuance of all Common Stock and Series A Stock, if all of
   the Series A Stock were immediately converted into Common
   Stock.

   At the close of business on the last Business Day preceding
   the Redemption Date, the holders' rights to convert shares of
   Series A Stock into shares of Common Stock will expire.

   At the close of business on the date on which the Certificate
   and all other related documents are delivered to the
   principal office of any Common Stock conversion agent, the
   right of the holder of the converted shares of Series A Stock
   will cease and the holder will be treated, for all purposes,
   as the record holder of the corresponding shares of Common
   Stock.

   A full-text copy of the Revised Certificate of Designation
   for the Class A Convertible Preferred Stock is available for
   free at http://ResearchArchives.com/t/s?e3b

Headquartered in Dearborn, Mich., Meridian Automotive Systems,
Inc. -- http://www.meridianautosystems.com/-- supplies
technologically advanced front and rear end modules, lighting,
exterior composites, console modules, instrument panels and
other interior systems to automobile and truck manufacturers.
Meridian operates 22 plants in the United States, Canada and
Mexico, supplying Original Equipment Manufacturers and major
Tier One parts suppliers.  The Company and its debtor-affiliates
filed for chapter 11 protection on April 26, 2005 (Bankr. D.
Del. Case Nos. 05-11168 through 05-11176).  James F. Conlan,
Esq., Larry J. Nyhan, Esq., Paul S. Caruso, Esq., and Bojan
Guzina, Esq., at Sidley Austin Brown & Wood LLP, and Robert S.
Brady, Esq., Edmon L. Morton, Esq., Edward J. Kosmowski, Esq.,
and Ian S. Fredericks, Esq., at Young Conaway Stargatt & Taylor,
LLP, represent the Debtors in their restructuring efforts.  Eric
E. Sagerman, Esq., at Winston & Strawn LLP represents the
Official Committee of Unsecured Creditors.  The Committee also
hired Ian Connor Bifferato, Esq., at Bifferato, Gentilotti,
Biden & Balick, P.A., to prosecute an adversary proceeding
against Meridian's First Lien Lenders and Second Lien Lenders to
invalidate their liens.  When the Debtors filed for protection
from their creditors, they listed US$530 million in total assets
and approximately US$815 million in total liabilities.
(Meridian Bankruptcy News, Issue No. 34; Bankruptcy Creditors'
Service, Inc., 215/945-7000).


MERIDIAN AUTOMOTIVE: GECC Wants to Repossess Leased Equipment
-------------------------------------------------------------
General Electric Capital Corporation asks the U.S. Bankruptcy
Court for the District of Delaware to:

   (a) terminate automatic stay under Section 362 of the
       Bankruptcy Code as to GECC and the Leased Equipment; and

   (b) permit it to exercise and enforce the terms and
       conditions of the Equipment Lease Documents and
       applicable law to reduce Meridian Automotive Systems,
       Inc., and its debtor-affiliates' indebtedness, including,
       without limitation:

          -- obtaining immediate possession of the Leased
             Equipment;

          -- selling the Leased Equipment; or

          -- re-leasing the Leased Equipment.

Meridian Automotive Systems, Inc., and General Electric Capital
Corporation signed a master lease agreement dated Aug. 1, 1997,
and Equipment Schedule No. 005 dated Sept. 30, 1998.

Under the agreement, GECC is leasing to the Debtors flax and
polypropylene blending and web forming system, and various
related parts and accessories.

The Equipment Lease Documents provide that:

   -- the Debtors will make certain monthly payments to GECC;
      and

   -- on Sept. 15, 1997, the Debtors will either return or
      purchase the Leased Equipment under certain terms and
      conditions.

GECC contends that the Debtors failed to comply with the
provisions of the Equipment Lease.

Louis J. Ebert, Esq., at Gebhardt & Smith LLP, in Baltimore,
Maryland, relates that on May 2006, the Debtors ceased all
monthly payments for the Leased Equipment.

Mr. Ebert argues that the Leased Equipment is not necessary for
an effective reorganization of the Debtors.

The value of the Leased Equipment is rapidly depreciating, and
GECC will sustain significant damages and injury unless it is
permitted to obtain immediate possession of the Leased
Equipment, Mr. Ebert asserts.

Headquartered in Dearborn, Mich., Meridian Automotive Systems,
Inc. -- http://www.meridianautosystems.com/-- supplies
technologically advanced front and rear end modules, lighting,
exterior composites, console modules, instrument panels and
other interior systems to automobile and truck manufacturers.
Meridian operates 22 plants in the United States, Canada and
Mexico, supplying Original Equipment Manufacturers and major
Tier One parts suppliers.  The Company and its debtor-affiliates
filed for chapter 11 protection on April 26, 2005 (Bankr. D.
Del. Case Nos. 05-11168 through 05-11176).  James F. Conlan,
Esq., Larry J. Nyhan, Esq., Paul S. Caruso, Esq., and Bojan
Guzina, Esq., at Sidley Austin Brown & Wood LLP, and Robert S.
Brady, Esq., Edmon L. Morton, Esq., Edward J. Kosmowski, Esq.,
and Ian S. Fredericks, Esq., at Young Conaway Stargatt & Taylor,
LLP, represent the Debtors in their restructuring efforts.  Eric
E. Sagerman, Esq., at Winston & Strawn LLP represents the
Official Committee of Unsecured Creditors.  The Committee also
hired Ian Connor Bifferato, Esq., at Bifferato, Gentilotti,
Biden & Balick, P.A., to prosecute an adversary proceeding
against Meridian's First Lien Lenders and Second Lien Lenders to
invalidate their liens.  When the Debtors filed for protection
from their creditors, they listed US$530 million in total assets
and approximately US$815 million in total liabilities.
(Meridian Bankruptcy News, Issue No. 33; Bankruptcy Creditors'
Service, Inc., 215/945-7000).


UNITED RENTALS: Holding Conference Call & Webcast on Aug. 8
-----------------------------------------------------------
United Rentals, Inc. (NYSE: URI), will hold its quarterly
conference call with Wayland Hicks, chief executive officer,
Martin Welch, chief financial officer, and Michael Kneeland,
executive vice president-operations, on Tuesday, August 8, 2006,
at 11:00 a.m. Eastern Time.

The conference call is available by audio Webcast at
http://unitedrentals.com/where it will be archived.

                   About United Rentals

Headquartered in Greenwich, Connecticut, United Rentals, Inc.
-- http://unitedrentals.com/-- is the largest equipment rental
company in the world, with an integrated network of more than
750 rental locations in 48 states, 10 Canadian provinces and
Mexico.  The company's 13,400 employees serve construction and
industrial customers, utilities, municipalities, homeowners and
others.  The company offers for rent more than 20,000 classes of
equipment with a total original cost of US$3.9 billion.  United
Rentals is a member of the Standard & Poor's MidCap 400 Index
and the Russell 2000 Index(R).

                        *    *    *

As reported in the Troubled Company Reporter on April 18, 2006,
Standard & Poor's Ratings Services revised the CreditWatch
implications for its ratings on equipment rental company United
Rentals (North America) Inc. (United Rentals) and for its
parent, United Rentals Inc. (URI), to developing from negative.
This includes the 'BB-' corporate credit rating on the company,

As reported in the Troubled Company Reporter on April 7, 2006,
Moody's Investors Service affirmed the B2 corporate family
rating; B2 senior secured rating; B3 senior unsecured rating;
Caa1 senior subordinate rating; Caa2 Quarterly Income Preferred
Securities rating; and SGL-3 speculative grade liquidity rating
of United Rental (North America) Inc., and its related entities.

Moody's said the rating outlook is changed to Developing from
Negative.




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

BANCO DEL ISTMO: Moody's Reviews Ba1 Ratings & May Upgrade
----------------------------------------------------------
Moody's Investors Service placed the Ba1/Not Prime long- and
short-term deposit ratings of Primer Banco del Istmo, S.A. aka
Banistmo on review for possible upgrade.

Moody's action follows the announcement that HSBC Holdings plc
has signed an agreement to acquire 100% of Grupo Banistmo S.A.
for approximately US$1.77 billion, in an all-cash tender offer.
The acquisition is subject to the receipt of regulatory
approvals and at least 65% of all outstanding shares of Banistmo
being tendered in the offer.

Moody's noted that Banistmo's leading market shares in Panama,
Costa Rica, El Salvador, and Honduras makes it the largest bank
franchise in Central America, and one that offers HSBC
significant growth potential in a fast growing region.

In reviewing Banistmo's deposit ratings, Moody's said it will
focus on whether the deal is consummated and on the potential
benefits of being part of a large and more highly-rated entity.
Moody's had previously stated that Banistmo's deposit ratings
are constrained by alternative liquidity risk due to the lack of
a lender of last resort and a deposit insurance scheme in
Panama.

Primer Banco del Istmo, S.A. is headquartered in Panama City,
Panama. The bank had total assets of US$7.07 billion and equity
of US$719.7 million as of March 2006. Banistmo is a wholly owned
subsidiary of Grupo Banistmo S.A. with total assets of US$8.98
billion and equity of US$803.5 million as of March 2006.


BANCO DEL ISTMO: S&P Puts BB+ Credit Rating on Watch Positive
-------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'BB+/B'
counterparty credit rating on Primer Banco del Istmo S.A. aka
Banistmo on CreditWatch with positive implications.

S&P has also placed its 'BB/B' counterparty credit rating on
Banco Salvadoreno S.A. on CreditWatch with positive implications
and affirmed its ratings on HSBC Holdings PLC (HSBC) and related
entities, including the 'AA-/A-1+' counterparty credit rating on
HSBC, with a stable outlook.

"These rating actions follow today's announcement that HSBC has
agreed to acquire Grupo Banistmo S.A. for US$1.77 billion in
cash," said Michelle Brennan, Standard & Poor's credit analyst.

Group Banistmo holds 99.4% of Banistmo and 56% of Banco
Salvadoreno, and owns Compania Nacional de Seguros -- which is
not rated by S&P.

The transaction is expected to complete in the fourth quarter of
2006, subject to regulatory approval and at least 65% of
Banistmo's shares being tendered.

The affirmation of the ratings on HSBC reflects the modest
impact of the acquisition on its strong financial position.  The
transaction is consistent with its strategy of expanding its
presence in markets with higher growth potential.  Execution
risk is considered relatively low given HSBC's strong track
record in managing acquisitions.

The CreditWatch listing on Banistmo and Banco Salvadoreno
reflects S&P's expectations that the banks will benefit from
support from their prospective owner in terms of financial
flexibility, credit risk management, and operational processes.
Also, both entities will benefit from HSBC's know-how, products,
international distribution network, and experience in emerging
markets.  The CreditWatch will be resolved once the regulatory
approvals are provided and we meet with the banks to learn
further details about HSBC's strategy for its new subsidiaries.

The stable outlook on HSBC reflects our expectation that HSBC
will underpin its strong profitability and mitigate the risk of
economic stress through its very strong geographic and earnings
diversification, and continuing organic earnings growth.  S&P
does not expect HSBC to compromise its strong liquidity, healthy
capitalization, and sound risk-management principles to chase
growth, or to make transformational acquisitions.




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


IIRSA NORTE: Fitch Places BB Preliminary Rating on Firm
-------------------------------------------------------
Fitch has assigned a preliminary rating of 'BB' to IIRSA Norte
Finance Limited, a Peruvian securitization of government payment
obligations in connection with a toll road concession.

The US$226 million in transaction proceeds will be used to cover
the costs of expansion and improvements on IIRSA Amazonas Norte,
a 960 kilometer network of existing toll roads in northern Peru.
The transaction also benefits from a $60 million partial
guarantee or PG provided by the Inter-American Development Bank
aka IDB.

Upon completion, the road is not expected to generate sufficient
revenues to cover its construction costs.  In lieu of strong
toll revenue, the government of Peru or GOP compensates the
concessionaire for construction progress with annual payments in
US dollars or Certificados de Reconocimiento de Pago Annual de
Obras -- CRPAOs -- prorated to the advance of works.  This
transaction will be a securitization of the CRPAOs.  CRPAOs
delivered from the GOP to the concessionaire will be sold to the
issuer.  Once generated, CRPAOs are not subject to any condition
or performance obligation relating to the concession agreement.
Noteholders are not exposed to construction risk.

Cash flow to maintain timely debt service on the transaction
will depend on the GOP's continued payment on CRPAOs.  While
CRPAOs are backed by the full faith and credit of the GOP, on a
stand-alone basis, CRPAOs would not receive the same rating as
Fitch rated dollar-denominated sovereign obligations.  The
expected rating of the notes reflects the strength of the
underlying CRPAO payments and the enhanced recovery in the event
of default derived from the PG provided by the IDB.


IIRSA NORTE: Moody's Assigns Ba2 Rating on US$220MM Sr. Notes
-------------------------------------------------------------
Moody's Investors Service assigned a rating of Ba2 to IIRSA
Norte Finance Ltd's proposed issuance of approximately US$220
million of senior secured Rule 144A Reg S Notes due in 2024.
The rating outlook is stable.

The rating and stable outlook reflect the economic importance of
the route served by the road and agreements with the government
of Peru and the Inter-American Development Bank.

The government of Peru and Concesionaria IIRSA Norte S.A.
entered into a Concession Agreement in June 2005 for a period of
25 years for the upgrade, construction, operation and
maintenance of the IIRSA Amazonas Norte Road, a toll road of
approximately 960 kilometers in northern Peru. The government's
first major public private partnership project, the Amazonas
Norte Road extends from Paita, the second largest port in Peru
to Yurimaguas, a port on the Amazon River.  The road currently
exists and the project consists mainly of upgrades of existing
facilities. The Concession Agreement requires that Phase 1 (352
kilometers) be completed by March, 2008 and that Phase 2 (603
kilometers, of which only 407 kilometers will involve works) be
completed no later than 24 months from the commencement of Phase
2. The company entered into a turnkey EPC contract with
Consorcio Constructor IIRSA Norte - Concin CONCIN earlier this
year.  The company also obtained a credit facility with the
Corporacion Andina de Fomento or CAF(senior unsecured A1) for
interim construction funding.  Draws on the CAF facility are
expected to be fully repaid from the current debt issue.

The Concession Agreement provides for the construction,
operation and maintenance of the Amazonas Norte Road.  However,
the senior secured Notes are structured to rely upon annual
payments from the Government of Peru for the full and timely
repayment of debt service.  The Government of Peru is currently
rated Ba3, with a stable outlook.  Under the structure, Note
repayment is not dependent upon the company's performance with
respect to traffic and revenues.

The key credit factors underpinning the rating will be the
issuance of Certificado de Reconocimiento de Derechos del Pago
Annual Por Obras or CRPAO by the Government of Peru, and the
partial guarantee by the IDB. When construction reaches certain
milestones, the company will request that Ositran, the
Supervising Body for the investment in Transportation
Infrastructure for Public Use (the Regulator) issue Works
Progress Certificates or Certificados de Avance de Obras.

When a Works Progress Certificate is issued, the Ministry of
Transportation and Communications will issue a Pago Annual Por
Obras certificate or PAO.  Within 510 days of the issuance of
each PAO, the GOP will deliver to the company a series of 30
Certificados de Reconocimientos de Derechos del Pago Annual Por
Obras.  CRPAO are certificates acknowledging the company's right
to collect the PAO.  Each CRPAO unconditionally and irrevocably
entitles the holder to a one-time payment of a fixed, US dollar-
denominated amount. Once issued, the right of the CRPAO holder
to collect the GOP payment is not subject to the company's
performance level or by any other circumstances including:
   -- destruction of the works performed, change of control of
      the company, or

   -- breach or termination of the Concession Agreement.

The GOP may not voluntary prepay any CRPAOs.

It is expected that the government will include CRPAO's in its
budget and appropriations for each fiscal year.  CRPAO's will be
considered to rank equally with all other existing and future
unsecured and unsubordinated obligations of the Government of
Peru.  However, the CRPAO is expressly stated not to be a
sovereign indebtedness of the Republic of Peru pursuant to
Article 75 of the Constitution and Law No.28,563. CRPAO's will
represent payment obligations of the MTC under the National
Budget System (Sistema Nacional de Presupuesto).  CRPAOs are to
be governed by the laws of the state of New York, except that
the authorization and issuance of each CRPAO will be governed by
Peruvian law.

Once all of the CRPAOs are fully issued, the transaction will
not subject to construction or operating risk. Regardless of the
performance of the toll road, the GOP has agreed to make semi-
annual payments to the Peruvian Trustee (Citibank Peru) equal to
the debt service on the Notes.  Tolls collected are to be
deposited to the Peruvian Trustee for the benefit of the GOP but
will not offset the annual CRPAO payments.  Payment of CRPAOs
will not be subject to any company performance standards.  The
transaction does not rely on a traffic and revenue consultant's
study since the structure is intended to eliminate demand risk
and operating/performance risk after the CRPAO's are issued.

The Noteholders benefit from an Inter-American Development Bank
(rated Aaa) liquidity facility provided to the GOP and sized to
cover 2 years of debt service payments.  To support the
transaction, the IDB partial guarantee covers GOP payments of
CRPAOs to the Peruvian Trustee up to a maximum of US$60 million.
There is an advance notification mechanism to facilitate timely
funding under the liquidity facility, if needed. CRPAO payments
are due the first last business day of the month preceding the
payment month.  If the Trustee determines that the GOP payment
is insufficient, it is required to notify the IDB within 10
business days.  IDB payments are then made directly to the
trustee within 10 days for debt service payments that are due at
the end of the month.  Any draws on the IDB facility that are
immediately repaid by the GOP within 30 days can then be made
available under the guarantee in the future.  Any draws that are
not immediately repaid by the GOP are converted to loans to be
repaid by the GOP.  The IDB guaranty expires in 2026 which is 2
years after the final maturity of the notes.

The transaction is structured with minimum structural
protections and relies on the IDB guaranty for liquidity.
Payments of the Rule 144 A Notes are sculpted to mirror the
expected future payment of CRPAOs, with semi-annual principal
and interest payments and a final maturity in 2024.  Interest is
capitalized through November 2008 when the first principal
payments begin.  The company will assign its collection rights
to CRPAOs, tolls revenues and IBD payments to the trustee and
there are no restricted payments to the company for the life of
the debt. There is a Reserve Fund but it is sized to primarily
cover certain expenses after construction.

Under the financing structure, all portions of the initial
principal debt would be covered either by the necessary amount
of CRPAO obligations or by Note proceeds held in an investment
vehicle. The transaction is designed so that Note proceeds will
be invested initially into a Credit Linked Note.  Proceeds from
the Note will not be released for the purchase of CRPAOs until
the corresponding certificates are issued by the government.  At
the end of the construction construction period, Note proceeds
would either be covered by a CRPAO payment obligation from the
government at the end of the construction period or by Note
proceeds kept in an account of the trustee that have not as yet
been disbursed from the Morgan Stanley CLN. Note proceeds
remaining at the end of the construction availability period
(three months after the expected construction date) will be
redeemed so that the amount of Notes outstanding will be
sufficiently covered by the annual payment obligations of the
government.  However, Note proceeds held in the CLNs are subject
to the credit risk of the Reference Entity, the Republic of
Peru.  A credit event with respect to the Republic of Peru may
result in an acceleration of the Notes and a loss of value for
the CLN.

While Noteholders do not have direct rights of enforcement
against the government of Peru, in Moody's view it is likely
that the government will support the project and issue CRPAOs in
a timely fashion in order to enhance the prospects for future
infrastructure financing.  The government is actively involved
in the project.  The engineering plan was approved by the GOP
and the regulator, OSITRAN, is providing oversight to
construction progress and acceptance.  The project consists
mainly of road improvements, installation of tolling and
communication facilities and various related services.  The
project is not a "Greenfield" project, and the level of
construction and technology risk is considered to be manageable.
IIRSA Norte is one of many infrastructure projects that the
government intends to finance through the PPP program.  The
success of this project will benefit future projects and this
financing structure could serve as a model for future high
priority infrastructure projects.  The involvement of the IDB
through the partial guarantee of GOP payments lends strength
despite the fact that neither the company nor the CRPAO
purchasers or Noteholders are parties to the IDB guaranty.

The Sponsor Support and Transfer Restriction Agreement provides
some limited support in the event of deficiencies resulting from
sponsor related delays during construction.  Each sponsor will
contribute, on a several but not joint basis, a stand-by letter
of credit with a face amount equal to its pro-rata share of the
aggregate sponsor support amount.  At closing the initial amount
of the Sponsor Support letter of credit will be US$12.9 million.
On a several but not joint basis the sponsors will also be
providing guarantees to the GOP in the form of performance bonds
totaling US$10 million for construction performance and a
concession agreement performance bond of US$10 million.

The Ba2 rating is based upon the assumption that the final
transaction and financing documents will be in accordance with
Moody's current understanding of the transaction.

The members of the Concesionaria IIRSA Norte S.A. include:

   -- Constructora Norberto Odebrecht S.A. (17.43%),

   -- Odebrecht Invesimientos em Enfra-Estructura Ltda.
      (32.37%),

   -- Constructora Andrade Gutierrez S.A. (40%), and

   -- Grana y Montero S.A. (10.2%).

The company was incorporated on June 10, 2005 in order to enter
in the Concession Agreement with the Government of Peru .


IIRSA NORTE: S&P Places Preliminary BB Rating on Firm
-----------------------------------------------------
Standard & Poor's Ratings Services placed its preliminary 'BB'
rating to IIRSA Norte Finance Ltd.'s US$226 million senior
secured notes due 2024.

The preliminary rating is based on information as of July 21,
2006.

Subsequent information may result in the assignment of a final
rating that differs from the preliminary rating.

The preliminary rating is based on:

   -- The sound legal and financial structure of the transaction
      that includes a true sale of the underlying assets;

   -- The unconditional and irrevocable payment obligation of
      the government of Peru or GOP under the certificados de
      reconocimiento de derechos del pago anual por obras
      or CRPAOs;

   -- An irrevocable US$60 million partial credit guarantee
      provided by the Inter-American Development Bank aka IDB to
      cover any unpaid amounts by the GOP on the outstanding
      CRPAOs or certificates issued by the GOP;

   -- The credit-linked notes, which are subject to the credit
      risk of Peru and Morgan Stanley;

   -- The 'BB' rating of the GOP;

   -- The 'A+' rating of Morgan Stanley;

   -- The 'AAA' rating assigned to the IDB;

   -- The irrevocable partial credit guarantee agreement
      provided by the IDB complies with Standard & Poor's
      Ratings Services' multiple-credit-dependent obligation
      criteria; and

   -- An expense reserve account to cover maintenance expenses
      on the securities, including a semiannual payment of the
      IDB partial guarantee fees.

The preliminary rating also addresses the timely payment of
principal and interest when due.


TELEFONICA DEL PERU: Posts PEN75.2MM Second Quarter Net Income
--------------------------------------------------------------
Telefonica del Peru, a unit of Spain's Telefonica and Peru's
largest telecommunications firm, posted PEN75.2 million net
income in the second quarter of 2006, compared with PEN47.1
million net income for the same period in 2005, Dow Jones
Newswire reports.

Telefonica del Peru's operating revenues in the second quarter
this year was PEN1.06 billion compared with PEN924.1 million in
the same period last year.

Mario Coronado, the corporate marketing manger of Telefonica del
Peru, told local paper Expreso that the penetration of fixed
line telephony services in the low-income residential market
rose from 37% to 60% from the end of 2003 to the end of 2005.

Business News Americas states that lower-income segments -- D
and E -- posted growth over the same period in fixed line
penetration of 26% and 21%, respectively.

Telefonica del Peru recently formed a division for Small and
Medium-sized Enterprise and professional business management.
Through the division, the firm offers broadband and corporate
services to the segments.

Telefonica del Peru is one of the world leaders in
Telecommunications with presence in Europe, Africa, and Latin
America.

                        *    *    *

As previously reported on Sept. 22, 2005, Fitch Ratings affirmed
Telefonica del Peru S.A.A.'s international scale local currency
unsecured debt rating at BBB+ and foreign currency unsecured
debt rating at BB and has assigned a 'BB' rating to its
proposed US$200 million senior unsecured notes to be issued in
PEN currency and paid in USD currency.  Fitch said the rating
outlook is stable.

On April 24, 2006, in conjunction with the roll out of Issuer
Default Ratings and Recovery Ratings for Latin America
Corporates, Fitch Ratings upgraded the previous BB Rating on its
US$754 million Senior Unsecured Notes due 2016 to BBB-.  Fitch
also assigned a BB long term issuer default rating on Telefonica
del Peru.


* PERU: S&P Assigns BB Foreign Curr. Rating with Stable Outlook
---------------------------------------------------------------
Standard and Poor's Ratings Services places its BB foreign
currency rating on the Republic of Peru with a stable outlook.

S&P also placed its BB+ local currency rating on the country.
The outlook is stable.




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


ADELPHIA COMMS: America Channel Will Appeal Permanent Injunction
----------------------------------------------------------------
The America Channel, LLC; Gray, Plant, Mooty, Mooty & Bennett,
P.A., and Alioto Law Firm notify the U.S. Bankruptcy Court for
the Southern District of New York that they will take an appeal
from Judge Gerber's judgment and permanent injunction to the
United States District Court for the Southern District of New
York.

Judge Gerber enjoined America Channel, et al., from violating
the automatic stay by prosecuting any claim for injunctive
relief under United States Antitrust Laws to prevent Comcast
Corporation and Time Warner Cable, Inc., from purchasing assets
of Adelphia Communications Corp.  America Channel, et al., have
a pending lawsuit against Time Warner and Comcast in the United
States District Court for the District of Minnesota.

America Channel, et al., present three issues for the District
Court for the Southern District of New York to review:

    (1) Does the Bankruptcy Court have original and exclusive
        jurisdiction, to the exclusion of all United States
        District Courts, over any antitrust action brought
        against Comcast, Time Warner, and any affiliated company
        to enjoin them from purchasing the assets of Adelphia
        under Sections 1 and 2 of the Sherman Act, Section 7 of
        the Clayton Act, and Section 16 of the Clayton Act?

    (2) Is the Bankruptcy Court's ruling that any effort to
        enjoin the buyers of the Adelphia assets in an antitrust
        action in any forum other than the Bankruptcy Court
        would constitute a violation of Section 362(a) of the
        Bankruptcy Code incorrect as a matter of law?

    (3) Is the Bankruptcy Court's injunction overly broad in
        permanently enjoining America Channel, et al., from
        pursuing any claim for injunctive relief, other than in
        the Bankruptcy Court, preventing the buyers of the
        Adelphia assets from dividing those and other assets,
        and allocating cable system markets in violation of
        United States antitrust laws?

America Channel, et al., insist that the June 26 injunction by
the Bankruptcy Court is an impermissible restraint on their
right to bring a federal antitrust action in the court of their
choice, and wrongfully interferes with the jurisdiction of the
Minnesota District Court in which America Channel, et al., filed
their action.  The injunction is also overly and improperly
broad in enjoining America Channel, et al., from seeking a
preliminary injunction against a planned division of markets by
Comcast and Time Warner once they have acquired the Adelphia
cable systems.

America Channel, et al., ask the District Court to reverse and
vacate the Bankruptcy Court's injunction.

The ACOM Debtors object to America Channel, et al.'s designation
of contents of record on appeal.  The ACOM Debtors point out
that their Petition for Reorganization was not before the
Bankruptcy Court in the adversary proceeding, and should not be
added to the record on appeal.

                About Adelphia Communications

Based in Coudersport, Pa., Adelphia Communications Corporation
(OTC: ADELQ) -- http://www.adelphia.com/-- is the fifth-largest
cable television company in the country.  Adelphia serves
customers in 30 states and Puerto Rico, and offers analog and
digital video services, high-speed Internet access and other
advanced services over its broadband networks.  The Company and
its more than 200 affiliates filed for Chapter 11 protection in
the Southern District of New York on June 25, 2002.  Those cases
are jointly administered under case number 02-41729.  Willkie
Farr & Gallagher represents the ACOM Debtors.
PricewaterhouseCoopers serves as the Debtors' financial advisor.
Kasowitz, Benson, Torres & Friedman, LLP, and Klee, Tuchin,
Bogdanoff & Stern LLP represent the Official Committee of
Unsecured Creditors.

Adelphia Cablevision Associates of Radnor, L.P., and 20 of its
affiliates, collectively known as Rigas Manged Entities, are
entities that were previously held or controlled by members of
the Rigas family.  In March 2006, the rights and titles to these
entities were transferred to certain subsidiaries of Adelphia
Cablevision, LLC.  The RME Debtors filed for chapter 11
protection on March 31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622
through 06-0642).  Their cases are jointly adminsitered under
Adelphia Communications and its debtor-affiliates chapter 11
cases.  (Adelphia Bankruptcy News, Issue No. 141; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


ADELPHIA COMMS: Wants Court Nod on Extended DIP Facility
--------------------------------------------------------
Adelphia Communications Corporation and its debtor-affiliates
ask the U.S. Bankruptcy Court for the Southern District of New
York to authorize and approve:

    (a) the amendment, restatement and extension of their
        existing Fourth Amended and Restated Credit and Guaranty
        Agreement dated as of March 17, 2006, with a group of
        lenders led by J.P. Morgan Securities, Inc., and
        Citigroup Global Markets, Inc., as Joint Bookrunners and
        Co-Lead Arrangers;

    (b) the related commitment letter for the Extended DIP
        Facility; and

    (c) the payment of related fees and expenses as provided for
        in the Commitment Letter and the related fee letter.

Shelley C. Chapman, Esq., at Willkie Farr & Gallagher LLP, in
New York, tells Judge Gerber that while the Debtors expect to
consummate the Sale Transaction prior to its outside date of
July 31, 2006 -- and thus prior to the current Aug. 7, 2006,
maturity date of the Existing DIP Facility -- in the exercise of
prudent business judgment, the Debtors have taken steps to
obtain the DIP Lenders' agreement to an extension of the
Existing DIP Facility in the event the Sale Transaction closing
is delayed.

Among other things, the Extended DIP Facility:

    (a) provides for a US$1.3 billion facility, comprised of an
        US$800,000,000 revolving credit facility -- including a
        US$500,000,000 letter of credit sub facility -- and a
        US$500,000,000 term loan, although prior to the closing
        date of the Extended DIP Facility, the Co-Lead Arrangers
        are entitled to change the allocations between the
        revolving credit facility and the term loan facility,
        but in any event the aggregate amount of the Extended
        DIP Facility cannot be reduced below US$1.3 billion;

    (b) provides for a Maturity Date of Nov. 7, 2006;

    (c) provides for the termination of the Extended DIP
        Facility on the earlier of:

           (i) the Maturity Date,

          (ii) the acceleration of the loans and the termination
               of the commitments in accordance with the terms
               of the Extended DIP Facility,

         (iii) the date on which the transactions contemplated
               by either Purchase Agreement are consummated,

          (iv) the date on which any Break-Up Fee is paid to
               either Buyer pursuant to the terms of the
               applicable Purchase Agreement, and

           (v) subject to the terms of the Extended DIP
               Facility, the substantial consummation of a plan
               of reorganization; and

    (d) provides that the EBITDA and EBITDAR definitions
        contained in the Extended DIP Facility will be modified
        to add back to net income the aggregate amount of any
        charges recorded or reserves taken by any Loan Party
        during any period for any Break-Up Fee that becomes
        payable under the Purchase Agreements or is otherwise
        accrued by the Loan Parties during that period,
        provided, that the aggregate amount of those charges or
        reserves does not exceed US$440,350,000.

The Borrowing Limits under the July 10, 2006, Commitment Letter
are:

                         Initial            Final
    Borrower Group       Borrowing Limits   Borrowing Limits
    --------------       ----------------   ----------------
    Century                US$690,000,000     US$650,000,000
    Century-TCI               230,000,000        250,000,000
    UCA                       100,000,000         75,000,000
    Parnassos                  10,000,000         10,000,000
    FrontierVision            215,000,000        205,000,000
    Olympus                    25,000,000         25,000,000
    Seven A                             0                  0
    Seven B                    20,000,000         75,000,000
    Seven C                    10,000,000         10,000,000
                         ----------------   ----------------
                TOTAL:   US$1,300,000,000   US$1,300,000,000
                         ================   ================

The ACOM Debtors are required to pay certain fees to the DIP
Lenders as consideration for the commitments under the
Commitment Letter and the extension of the Existing DIP
Facility:

    -- Marketing Fees totaling US$650,000
    -- Annual Administrative Fee equal to US$250,000
    -- Collateral Fee equal to US$250,000
    -- Arrangement Fee equal to US$250,000

The ACOM Debtors have agreed to reimburse each Co-Lead Arranger
and each Lead Lender for their reasonable out-of-pocket expenses
incurred.

According to Ms. Chapman, none of the fees associated with the
Extended DIP Facility will become payable -- except for
reimbursement of out-of-pocket expenses associated with the
negotiation and documentation of the extension -- unless the
Sale Transaction fails to close prior to the Existing DIP
Facility's August 7, 2006, maturity date and the Extended DIP
Facility is closed.

A full-text copy of the Fifth Amended and Restated Credit and
Guaranty Agreement is available for free at:

               http://ResearchArchives.com/t/s?e09

A full-text copy of the Commitment Letter is available for free
at http://ResearchArchives.com/t/s?e0a

                    Use of Cash Collateral

The Debtors further ask the Court to approve their continued use
of cash collateral.

The ACOM Debtors and the administrative agents for certain
prepetition lenders:

    -- Bank of America, N.A., for the Century Lenders;
    -- Bank of Montreal, for the Olympus Lenders;
    -- Wachovia Bank, N.A., for the UCA Lenders; and
    -- JPMorgan Chase Bank, for the FrontierVision Lenders,

agree that the Debtors will be authorized to continue to use the
Cash Collateral in which the Pre-Petition Secured Lenders claim
an interest.  The Debtors are directed to continue to provide
Adequate Protection Obligations pursuant to the terms and
conditions contained in the Final DIP Order; provided that
following consummation of the Purchase Agreements and the JV
Plan, the Debtors no longer will be obligated to:

    (a) comply with the requirements of Articles 5 and 6 of the
        DIP Credit Agreement; and

    (b) implement and follow the Cash Management Protocol.

                   Investment Guidelines

Upon the closing of the Sale Transaction, the Debtors will
require the services of one or more investment managers, a
custodian, and a cash management bank to hold, manage, and
disburse the proceeds of the Sale Transaction.  The Debtors
conducted an extensive selection process over the past several
weeks, during which representatives of the Debtors met with and
considered six sophisticated and qualified financial services
firms for the position of investment manager and five such firms
for the position of cash manager.  After careful consideration,
the Debtors have determined to retain UBS Global Asset
Management (Americas) Inc., and Morgan Stanley & Co., Inc., as
investment managers, with each Investment Manager to manage 50%
of the net proceeds received from the Sale Transaction.

Ms. Chapman explains that the Debtors' determination was based
on, among other things, the reputation and experience of UBS and
Morgan Stanley, the quality of the personnel from each firm who
will be dedicated to serving the Debtors' account, and the
willingness of the Investment Managers to offer highly
competitive pricing.

The Debtors also have determined to continue using Wachovia
Bank, National Association, who throughout their cases has
operated as the primary cash management bank for the Debtors, as
the institution that will transact the majority of the cash
activities for the Debtors.  "This determination was based on,
among other things, the operational efficiency of avoiding a
transition to a different system and Wachovia's willingness to
keep the same customer service team in place and offer
competitive pricing," Ms. Chapman says.

Accordingly, the Debtors seek the Court's authority (i) to enter
into investment management agreements with the Investment
Managers; and (ii) to continue using Wachovia as the Cash
Management Bank.

The Investment Management Agreements, among other things,
contain industry standard indemnification provisions.

The Debtors also ask Judge Gerber to approve certain investment
guidelines.

The Investment Guidelines are designed to:

    (a) safely preserve the value of the principal proceeds
        received from the Sale Transaction pending distribution
        to the Debtors' creditors;

    (b) maintain appropriate liquidity for the cash
        disbursements of the Debtors;

    (c) provide for prudent diversification of investments; and

    (d) maximize the after-tax rate of return on investments
        consistent with the safety, liquidity and
        diversification guidelines.

A full-text a copy of the Investment Guidelines is available for
free at http://ResearchArchives.com/t/s?e0b

                About Adelphia Communications

Based in Coudersport, Pa., Adelphia Communications Corporation
(OTC: ADELQ) -- http://www.adelphia.com/-- is the fifth-largest
cable television company in the country.  Adelphia serves
customers in 30 states and Puerto Rico, and offers analog and
digital video services, high-speed Internet access and other
advanced services over its broadband networks.  The Company and
its more than 200 affiliates filed for Chapter 11 protection in
the Southern District of New York on June 25, 2002.  Those cases
are jointly administered under case number 02-41729.  Willkie
Farr & Gallagher represents the ACOM Debtors.
PricewaterhouseCoopers serves as the Debtors' financial advisor.
Kasowitz, Benson, Torres & Friedman, LLP, and Klee, Tuchin,
Bogdanoff & Stern LLP represent the Official Committee of
Unsecured Creditors.

Adelphia Cablevision Associates of Radnor, L.P., and 20 of its
affiliates, collectively known as Rigas Manged Entities, are
entities that were previously held or controlled by members of
the Rigas family.  In March 2006, the rights and titles to these
entities were transferred to certain subsidiaries of Adelphia
Cablevision, LLC.  The RME Debtors filed for chapter 11
protection on March 31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622
through 06-10642).  Their cases are jointly adminsitered under
Adelphia Communications and its debtor-affiliates chapter 11
cases.  (Adelphia Bankruptcy News, Issue No. 141; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


EAGLE FAMILY: S&P Lowers Corporate Credit Rating to CCC+ from B-
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on niche
dry-grocery food products manufacturer Eagle Family Foods Inc.
The corporate credit rating was lowered to 'CCC+' from 'B-'.
The rating outlook is developing.  About US$199 million of debt
(adjusted for capitalized operating leases) was outstanding at
April 1, 2006.

"The downgrade reflects our heightened concern regarding Eagle's
weakened operating performance and financial condition,"
explained Standard & Poor's credit analyst Jayne Ross.  "Fiscal
2006 was a difficult year for the company, with margins
negatively affected by higher milk costs, the integration of the
Milnot acquisition, the transition of the company's two
manufacturing facilities to a lower cost facility in El Paso,
Texas, and higher fuel, sugar, and distribution costs.  Although
Eagle should benefit from much lower milk costs and cost savings
at the El Paso plant in fiscal 2007, we expect the company to
continue to be pressured by higher fuel, sugar, and distribution
costs over the near term. As a result, we believe that credit
protection measures will remain very weak."

The ratings on Eagle reflect the company's very high debt
leverage, limited liquidity, weak credit protection measures,
and highly concentrated seasonal sales in sweetened condensed
milk. Sales are highly concentrated in canned milk, especially
sweetened condensed milk, which represented about 94% of Eagle's
sales for the first nine months of fiscal 2006.  In addition,
sales are highly seasonal, as the products are primarily
consumed during the November-December holiday season (the second
quarter represents about 41% of the company's total fiscal year
end sales).  Despite Eagle's leading position in condensed milk,
the market is highly competitive, and the company faces
larger national and multinational companies, some of which have
substantially greater resources.

While revenues increased by about 44%, to US$199.4 million for
the 12 months ended April 1, 2006, EBITDA margins declined to
8.2% from 13% for the same period in 2005.  In addition, Eagle's
financial profile is highly leveraged.  For the 12 months ended
April 1, 2006, lease-adjusted EBITDA to interest coverage was
0.7x, compared with 1.0x in the prior year.  Lease-adjusted
total debt to EBITDA was about 12.1x, compared with 9.9x for the
12 months ended April 2, 2005, due to higher debt levels
incurred with the Milnot acquisition.

Eagle Family Foods, Inc.'s products are available in retail
outlets everywhere in the United States, Canada and Puerto Rico,
parts of Latin America and Asia, as well as in foodservice
channels and industrial markets.


MAXXAM INC: Pacific & Britt Completes US$145 Million Financing
--------------------------------------------------------------
Maxxam Inc.'s indirect wholly owned subsidiary, The Pacific
Lumber Company and Pacific Lumber's subsidiary, Britt Lumber
Co., Inc., as borrowers, closed, on July 18, 2006:

    * a revolving credit agreement relating to a five-year
      US$60 million secured asset-based revolving credit
      facility, and

    * a loan agreement relating to a five-year US$85 million
      secured term loan.

Marathon Structured Finance Fund L.P., acted as Administrative
Agent for the two transactions.  The Term Loan was fully funded
at closing.

Pursuant to two substantially identical Guarantee and Collateral
Agreements and substantially identical Deeds of Trust, the
Revolving Credit Agreement and the Term Loan Agreement are each
secured by a security interest in the stock of Pacific held by
MAXXAM Group Inc, Pacific's immediate parent.  The agreements
are also secured by substantially all of the assets of Pacific
and Britt, other than Pacific's equity interest in Scotia
Pacific Company LLC.  The Guarantee and Collateral Agreements
and Deeds of Trust also contain customary covenants regarding
insurance requirements and maintenance of the collateral, as
well as customary remedies upon the occurrence of events of
default.

Pacific and Britt used approximately:

    -- US$12 million of the Term Loan funds to pay off their
       existing revolving credit agreement with The CIT
       Group/Business Credit, Inc., and

    -- US$34 million of the Term Loan funds to pay off their
       existing term loan agreement with Credit Suisse First
       Boston.

Pacific and Britt also terminated the their credit agreement
with CIT Group and loan agreement with Credit Suisse.

A full-text copy of the New Revolving Credit Agreement is
available for free at http://ResearchArchives.com/t/s?e34

A full-text copy of the New Term Loan Agreement is available for
free at http://ResearchArchives.com/t/s?e35

Headquartered in Houston, Texas, MAXXAM Inc. (AMEX: MXM)
operates businesses ranging from aluminum and timber products to
real estate and horse racing.  MAXXAM's top revenue source is
Kaiser Aluminum, which has been in Chapter 11 bankruptcy since
2002.  MAXXAM's timber subsidiary, Pacific Lumber, owns about
205,000 acres of old-growth redwood and Douglas fir timberlands
in Humboldt County, California.  MAXXAM's real estate interests
include commercial and residential properties in Arizona,
California, Texas, and Puerto Rico.  The Company also owns the
Sam Houston Race Park, a horseracing track near Houston.  Its
Chairman and CEO, Charles Hurwitz, controls 77% of MAXXAM.

                        *     *     *

Maxxam's balance sheet at March 31, 2006 showed a US$671.3
million total stockholders' deficit resulting from US$1,013.1
million in total assets and US$1,684.4 million in total
liabilities.


MUSICLAND HOLDING: Committee Has Until August 4 to File Claim
-------------------------------------------------------------
Musicland Holding Corp., its debtor-affiliates, the Official
Committee of Unsecured Creditors and the Secured Trade Creditors
stipulate that the Creditors Committee's time to file any claim
against the Secured Trade Creditors under the DIP Order is
further extended until Aug. 4, 2006.

The Creditors Committee reserves the right to seek the U.S.
Bankruptcy Court for the Southern District of New York's
permission for examination of the Secured Trade Creditors,
provided that the Informal Committee of Secured Trade Vendors'
rights to object to the examination of its members are reserved.

The Court approves the parties' Stipulation.

Headquartered in New York, New York, Musicland Holding Corp., is
a specialty retailer of music, movies and entertainment-related
products.  The Debtor and 14 of its affiliates filed for chapter
11 protection on Jan. 12, 2006 (Bankr. S.D.N.Y. Lead Case No.
06-10064).  James H.M. Sprayregen, Esq., at Kirkland & Ellis,
represents the Debtors in their restructuring efforts.   Mark T.
Power, Esq., at Hahn & Hessen LLP, represents the Official
Committee of Unsecured Creditors.  When the Debtors filed for
protection from their creditors, they estimated more than US$100
million in assets and debts.  (Musicland Bankruptcy News, Issue
No. 14; Bankruptcy Creditors' Service, Inc., 215/945-7000)


OCA INC: Court Denies BofA's Request to Disband Equity Committee
----------------------------------------------------------------
The Honorable Jerry A. Brown of the U.S. Bankruptcy Court for
the Eastern District of Louisiana denied the request of Bank of
America, N.A., as agent for the secured lenders of OCA, Inc.,
and its debtor-affiliates, to disband the Official Committee of
Equity Security Holders.

The Securities and Exchange Committee, the U.S. Trustee, and
some shareholders objected to the move.

               SEC Says Equity Panel Need to
                Investigate Improprieties

E. Gordon Robinson, Esq., an SEC senior bankruptcy counsel at
its Atlanta District Office, told the Court that there is a
sufficient basis to justify the appointment and continuing
existence of an equity committee.  Financial information
available at the time the appointment decision was made,
including the exhibit to the Debtors' bankruptcy petition and
the most recent monthly operating report filed with the Court
under penalty of perjury, show positive book equity.  OCA is
delinquent in filing periodic public reports with the SEC, but
its most recent Form 10-Q filing shows significant positive book
equity.  Shareholders have file multiple actions alleging that
OCA's public filings with the SEC contain false and misleading
information, and OCA acknowledges that restatements of its
public financial statements are necessary, which creates
uncertainty regarding OCA's financial condition.  The valuation
analysis in the Disclosure Statement shows that the Debtors have
significant value as a going concern.  Considerable efforts are
underway to rehabilitate the Debtors' business.

Mr. Robinson added that other significant parties in the case
have entered into an agreement with the Debtors to support the
Debtors' Plan, which minimizes the likelihood that the Debtors'
estimation of value will be investigated or seriously challenged
without the continued existence of the Equity Committee.  The
Debtors' Plan, moreover, as currently drafted, includes releases
and injunctions, including releases of liability for certain
officers and directors, which likely will impact pending
shareholder litigation and seeks to preclude regulatory
agencies, such as the SEC, from performing their statutory
duties.  Whatever the Debtors rationale for including those
provisions in the Plan, if the Plan is confirmed with these
provisions intact, any investigations into the Debtors'
financial condition could be severely compromised.  Under these
circumstances, the issue of solvency is unresolved and is
appropriate for exploration by the Equity Committee, and the
need for the Equity Committee is apparent, Mr. Robinson
contends.

                 U.S. Trustee Insists on
                 Continuing Equity Panel

R. Michael Bolen, the U.S. Trustee for Region 5, reminded the
Court that under Section 1102(a)(1) of the Bankruptcy Code, the
U.S. Trustee is given authority to appoint and equity committee
as it "deems appropriate."  Furthermore, Section 1102 does not
contain any authority for a court to disband a committee that
has already been formed.

Mary S. Langston, Esq., the Asst. U.S. Trustee, told the Court
that the U.S. Trustee did not abuse its discretion in appointing
the equity panel.  Moreover, the Debtors' significant number of
shareholders, the size and complexity of the chapter 11 cases,
the cost of participation against the value, and BofA's lack of
standing to request for disbandment favor continuing the
existence of the Equity Committee.

Based in Metairie, Louisiana, OCA, Inc. -- http://www.ocai.com/
-- provides a full range of operational, purchasing, financial,
marketing, administrative and other business services, as well
as capital and proprietary information systems to approximately
200 orthodontic and dental practices representing approximately
almost 400 offices.  The Debtor's client practices provide
treatment to patients throughout the United States and in Japan,
Mexico, Spain, Brazil and Puerto Rico.

The Debtor and its debtor-affiliates filed for Chapter 11
protection on March 14, 2006 (Bankr. E.D. La. Case No.
06-10179).  Three debtor-affiliates also filed for bankruptcy
protection on June 1, 2006 (Bankr. E.D. La. Case No. 06-10503).
William H. Patrick, III, Esq., at Heller Draper Hayden Patrick &
Horn, LLC, represents the Debtors.  Patrick S. Garrity, Esq.,
and William E. Steffes, Esq., at Steffes Vingiello & McKenzie
LLC represent the Official Committee of Unsecured Creditors.
Carmen H. Lonstein, Esq., at Bell Boyd & Lloyd LLC and Robin B.
Cheatham, Esq., at Adams and Reese LLP represent the Official
Committee of Equity Security Holders.  When the Debtors filed
for protection from their creditors, they listed US$545,220,000
in total assets and US$196,337,000 in total debts.


ORIENTAL FINANCIAL: First Quarter 2006 Earnings Dropped 120%
------------------------------------------------------------
Oriental Financial Group Inc. said in a statement that its first
quarter earnings dropped 120% to US$6.9 million, compared with
the earnings in the same quarter in 2005, as rising short-term
interest rates kept squeezing margins.

Business News Americas relates that the group posted US$0.28 in
earnings per fully diluted common share in the first quarter of
2006, compared with the US$0.59 recorded in the same quarter of
2005 and the US$0.29 in the fourth quarter of 2005.

Jose Rafael Fernandez, the president and chief executive officer
of Oriental Financial, told BNamericas, "The results for the
period continued to reflect the adverse impact of rising short-
term interest rates.  Looking ahead, higher interest rates will
remain a significant issue."

According to BNamericas, the first quarter 2005 result included
a US$3.3 million decrease in non-cash compensation expense.  The
drop was due to the restating of previous financials and a
US$2.7 million tax benefit.

Thomson Financial poll states that as predicted by analysts, the
quarter profit a year ago -- excluding one-time items -- was
US$0.23 per share.

Thomas Monaco, an analyst with Sterne Agee, told BNamericas,
"They [results] were better than we thought.  The 1Q06 results
were driven by stronger than anticipated loan growth of 4.7% in
1Q05 and improved overhead controls."

BNamericas emphasizes that net interest income dropped 25.5% to
US$15.2 million.  Non-interest income -- earnings from charges
and other banking services like insurance -- increased 46.7% to
US$9 million.

Oriental Financial posted total assets of US$4.56 billion at the
end of the first quarter, about 8.3% higher than the one
recorded in the same period last year.  Net loans increased 9.8%
to US$941 million while deposits rose 6.4% to US$1.27 billion,
BNamericas says.

Oriental Financial had changed last year its fiscal year end to
Dec. 31 from June 30, BNamericas underscores.

Oriental Financial Group Inc. -- http://www.OrientalOnline.com/
-- is a diversified financial holding company operating under
U.S. and Puerto Rico banking laws and regulations.  Oriental
provides comprehensive financial services to its clients
throughout Puerto Rico and offers third party pension plan
administration through wholly owned subsidiary, Caribbean
Pension Consultants, Inc.  The Group's core businesses include a
full range of mortgage, commercial and consumer banking services
offered through 24 financial centers in Puerto Rico, as well as
financial planning, trust, insurance, investment brokerage and
investment banking services.

                        *    *    *

On Jan. 13, 2006, Standard & Poor's Ratings Services assigned
its 'BB+' long-term counterparty credit rating to Oriental
Financial Group.

At the same time, Standard & Poor's assigned its 'BBB-'
counterparty rating to Oriental's principal operating
subsidiary, Oriental Bank & Trust.

S&P said the outlook for both entities is negative.




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


MIRANT CORP: Rule 2019 Dispute on PEPCO Settlement Resolved
-----------------------------------------------------------
Holders of more than US$1,200,000,000 of Class 3 claims under
the Plan of Reorganization by Mirant Corporation and certain of
its debtor-affiliates assert that the settlement agreement with
Potomac Electric Power Company, among other things, constitutes
an impermissible modification of the Plan.

As reported in the Troubled Company Reporter on June 2, 2006,
the Reorganized Debtors asked the U.S. Bankruptcy Court for the
Northern District of Texas to approve the settlement agreement
it entered into with Potomac Electric Power Cooperative and
other settling parties:

    * Conectiv Energy Supply, Inc.;
    * PEPCO Energy Services, Inc.;
    * PEPCO Gas Services, Inc.;
    * PEPCO Holdings, Inc.; and
    * Potomac Capital Investment Corporation.

The Debtor and PEPCO have been involved in significant
litigation throughout the Debtors' bankruptcy proceedings.

Thus, Class 3 Claim Holders ask Judge Lynn to deny the PEPCO
Settlement Agreement as well as the related settlement agreement
with Southern Maryland Electric Cooperative, Inc.

Assumption of the SMECO Agreements creates a burden, rather than
a benefit to New Mirant's estate, Richard M. Pachulski, Esq., at
Pachulski Stang Ziehl Young Jones & Weintraub LLP, in Los
Angeles, California, contends.  Without the approval of the
SMECO Settlement Agreement, the PEPCO Settlement Agreement
cannot become effective.

According to Mr. Pachulski, the PEPCO Settlement Agreement
purports to give PEPCO a guaranteed cash recovery, rather than
simply a fixed allowed claim, resulting in a proportional
allocation of stock and litigation recoveries.  That treatment,
Mr. Pachulski says, is both disparate and more beneficial than
the treatment afforded to other Class 3 claimants under the
Plan.

Moreover, the New Mirant Entities have not provided any analysis
in support of their decisions to enter into the settlement
agreements and assume or reject various agreements, Mr.
Pachulski points out.

Of the US$520,000,000 proposed distribution to PEPCO under the
Settlement Agreement, Mr. Pachulski says US$70,000,000 is
nominally allocated to the "PEPCO Miscellaneous Claims."
However, Mr. Pachulski continues, given New Mirant's total lack
of analysis as to the value or merits of those claims, it is
clearly possible that the distribution constitutes an artificial
allocation designed to reduce the payment being made to PEPCO on
account of the PEPCO Rejection Claim.

Even an allocation of US$450,000,000 to the PEPCO Rejection
Claim appears to be significantly over-compensated, Mr.
Pachulski adds.

In a regulatory filing on May 31, 2006, New Mirant reported that
rejection of the Back-to-Back Agreement creates an immediate
"gain" to it totaling US$360,000,000.

Mr. Pachulski, however, asserts that New Mirant's failure to
provide any analysis as to the true long-term cost of assuming
the Back-to-Back Agreement makes it very difficult to determine
whether, in fact, its management is improperly motivated by
short-term gains rather than what is truly beneficial for the
Company and its stakeholders.

Although New Mirant provided no cost benefit analysis in its
requests, Mr. Pachulski further contends that there is evidence
demonstrating that it would be more advantageous for New Mirant
to assume the Back-to-Back arrangement rather than rejecting it
pursuant to the PEPCO Settlement Agreement.

Edison Mission Energy, a Class 3 Claim Holder with a
US$7,000,000 Allowed Claim, joins in the objections and
arguments raised by certain Class 3 Claim Holders.

                    Rule 2019 Compliance

Craig H. Averch, Esq., at White & Case LLP, in Miami, Florida,
relates that at the hearing on the proposed settlement with
Potomac Electric Power Company, the New Mirant Entities asked
the Class 3 Claim Holders and their attorneys to file a verified
statement pursuant Rule 2019 of the Federal Rules of Bankruptcy
Procedure.

Although Pachulski Stang Ziehl Young Jones & Weintraub LLP, as
the Holders' attorney, filed a Verified Statement on June 26,
2006, Mr. Averch says that Statement did not comply with Rule
2019.  The Verified Statement fails to provide any information
other than the names of the alleged holders of Mirant common
stock or their financial advisors, he says.

As of June 30, 2006, the Holders or their lawyers have not filed
a proper Rule 2019 statement, Mr. Averch says.

Hence, New Mirant asks the Court to compel the Holders and their
attorneys to provide all the information required by Rule 2019.
If the Committee will not disclose the information required, New
Mirant asks Judge Lynn to prohibit the Holders from
Participating further in the Chapter 11 cases and strike their
Objection.

The Class 3 Claim Holders are:

     (1) Resurgence Asset Management, L.L.C.
     (2) Luxor Capital Group
     (3) King Street Capital Management, L.L.C.
     (4) D.E. Shaw Laminar Portfolios, L.L.C.
     (5) Caspian Capital Advisors
     (6) Pirate Capital LLC
     (7) Quadrangle Master Funding LTD
     (8) Basso Capital Management, L.P.
     (9) Highland Capital Management, L.P.
    (10) Highland Floating Rate Fund
    (11) Highland Floating Rate Advantage
    (12) Cadence Master, Ltd.
    (13) Man Mac Gemstock 9B, Ltd.
    (14) Ivy MA Holdings Cayman 8, Ltd.

           Parties' Stipulation on Rule 2019 Issue

New Mirant and the Class 3 Claim Holders entered into an Agreed
Stipulation and Order regarding the submission of the Rule 2019
Exhibits under seal, and other matters.

The parties agree that the Holders will file Rule 2019 exhibits
as long as the Debtors will not:

    (a) distribute them or any of their portions to any third
        party other than the Debtors' representatives; and

    (b) communicate or disclose them to any third party other
        than the Debtors' representatives, except if the
        information:

        * is generally available to the public on a non-
          confidential basis;

        * is already acquired by the Debtors or their
          representatives;

        * has become available to the Debtors' counsel or
          representatives from a source other than the Holders;
          or

        * is independently developed by the Debtors' counsel or
          representatives.

Judge Lynn approves the parties' Agreed Order and Stipulation.

                     About Mirant Corp.

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 Nos. 100& 101; Bankruptcy
Creditors' Service, Inc., 215/945-7000)

                        *    *    *

As reported in the Troubled Company Reporter on July 17, 2006,
Moody's Investors Service downgraded the ratings of Mirant
Corporation and its subsidiaries Mirant North America, LLC and
Mirant Americas Generation, LLC.  The Ba2 rating for Mirant Mid-
Atlantic, LLC's secured pass through trust certificates was
affirmed.  Additionally, Mirant's Speculative Grade Liquidity
rating was revised to SGL-2 from SGL-1.  The rating outlook is
stable for Mirant, MNA, MAG, and MIRMA.

Moody's downgraded Mirant Americas Generation, LLC's Senior
Unsecured Regular Bond/Debenture, to B3 from B2.  Moody's also
downgraded Mirant Corporation's Corporate Family Rating, to B2
from B1, and Speculative Grade Liquidity Rating, to SGL-2 from
SGL-1.  Mirant North America, LLC's Senior Secured Bank Credit
Facility, was also downgraded to B1 from Ba3 and its Senior
Unsecured Regular Bond/Debenture, to B2 from B1.

As reported in the Troubled Company Reporter on July 13, 2006,
Fitch Ratings placed 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.

Ratings affected are Mirant Corp.'s 'B+' Issuer Default Rating
and Mirant Mid-Atlantic LLC's 'B+' Issuer Default Rating and the
Pass-through certificates' 'BB+/Recovery Rating RR1'.

Fitch also placed Mirant North America, Inc.'s Issuer Default
Rating of 'B+', Senior secured bank debt's 'BB/RR1' rating,
Senior secured term loan's 'BB/RR1' rating, and Senior unsecured
notes' 'BB-/RR1' rating on Rating Watch Negative.  Mirant
Americas Generation, LLC's Issuer Default Rating of 'B+' and
Senior unsecured notes' 'B/RR5' rating was included as well.

Standard & Poor's Ratings Services also placed the 'B+'
corporate credit ratings on Mirant Corp. and its subsidiaries,
Mirant North American LLC, Mirant Americas Generating LLC, and
Mirant Mid-Atlantic LLC, on CreditWatch with negative
implications.




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


* URUGUAY: State Bank Posts UYU935 Mil. January-June Profits
------------------------------------------------------------
Central bank figures show that Banco Republica, Uruguay's state-
run bank, posted UYU935 million profit in the January-June
period this year, Business News Americas reports.

BNamericas relates that the profits in the January-June 2006 was
4.02% higher than the amount recorded in the same period last
year.

According to BNamericas, Banco Republica's pre-tax profit
increased 23% to UYU1.10 billion.  Net service income rose 9.8%
to UYU402 million.

Banco Republica's financial margin grew 63% to UYU2.91 billion,
despite provisions increasing more than tenfold to UYU163
million, BNamericas states.

Banco Republica also posted these results:

     -- first half Return on Equity was 8.93% compared with
        7.34% in the same period 2005;

     -- return on Assets increased to 0.64% from 0.50%;

     -- assets rose 16% to UYU146 billion at the end of June
        compared to the same month in 2005;

     -- lending grew 17% to UYU111 billion.

     -- past-due loans accounted 6.27% of total loans,
        decreasing from 6.68% at the end of June 2005; and

     -- liabilities including deposits increased 18% to UYU135
        billion.

Banco Republica represents 40% of total assets in the Uruguayan
banking system, BNamericas says.

                        *    *    *

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


CITGO PETROLEUM: Likely to Sell Stake in Texas Plant to Lyondell
----------------------------------------------------------------
A sale of Citgo Petroleum Corp.'s 41.25% stake in Lyondell-Citgo
Refining L.P. -- a refinery based in Houston, Texas -- to
co-owner Lyondell Chemical Co. is expected by the end of July,
Reuters reports, citing sources familiar with the negotiations.

David Harpole, a Lyondell spokesperson, told Reuters that the
company is considering sole ownership of Lyondell-Citgo because
the plant's cash flow raises the firm's ability to pay debt.

As reported in the Troubled Company Reporter-Latin America on
July 24, 2006, Citgo and Lyondell discontinued the exploration
of a sale to a third party because not one of the bids submitted
was good enough to overcome the benefit of retaining a stake in
the 268,000 barrel-per-day refinery.

Reuters relates that after Lyondell called off the plant's sale
to a third party on Thursday, the company's shares dropped 4%.
Offers for the refinery had been over US$5 billion from at least
four prospective buyers.

David Harpole, a Lyondell spokesperson told Reuters that the
cancelled sale of the refinery provided Lyondell and Citgo time
to determine the plant's fair market value.

Reuters says that executives of Lyondell had long said they did
not want to sell Lyondell-Citgo due to the income the plant
makes and because it provides petrochemicals for the Lyondell's
chemical refineries.

Lyondell's fourth quarter earnings report indicates that
Lyondell-Citgo produced US$6.7 billion in revenue for Lyondell
last year, Reuters states.

According to Reuters, the refinery is attractive because it
converts cheaper high-density, high-sulfur crude into gasoline,
which meets strict US environmental regulations.

A Lyondell spokesperson refused to provide Reuters a specific
date for a buyout of the Citgo stake.

"I would be comfortable in saying in the very near future.
What's in question is does that go forward as a joint-venture or
as a sole ownership," Mr. Harpole told Reuters.

The spokesperson did not tell Reuters whether Lyondell and Citgo
would continue the partnership.

A spokesperson of Citgo refused to give comments due to ongoing
talks, Reuters says.

However, a source familiar with the sale negotiations told
Reuters that a sale of Citgo's stake was probable.

"Citgo wants out regardless of anything else," the source told
Reuters.

As reported in the Troubled Company Reporter-Latin America on
July 13, 2006, Citgo was realigning its national retail gasoline
network footprint.  In relation to this, Citgo will be focusing
strengthening its presence in marketing areas in the Northeast,
South, mid-Atlantic and portions of the Midwest that are served
by its refineries in Lake Charles, La., Corpus Christi, Texas,
and Lemont, Ill., while reducing the current number of branded
locations in markets in which the company is less efficient.

Reuters states that the decision to sell was to end Lyondell and
Citgo's 14-year troubled partnership.  The two firms had been
accusing each other of abuse and infidelity.

The partnership was created in 1992 when Citgo agreed to fund an
upgrade of Lyondell-Citgo to produce a market crude supplied by
Petroleos de Venezuela, Citgo's parent firm and Venezuela's
state-run oil firm.

                       About Lyondell

Lyondell Chemical Company, headquartered in Houston, Texas, is
North America's third-largest independent, publicly traded
chemical company.  Lyondell is a major global manufacturer of
basic chemicals and derivatives including ethylene, propylene,
titanium dioxide, styrene, polyethylene, propylene oxide and
acetyls.  It also is a significant producer of gasoline blending
components.  The company has a 58.75 percent interest in
LYONDELL-CITGO Refining LP, a refiner of heavy, high-sulfur
crude oil.  Lyondell is a global company operating on five
continents and employs approximately 10,000 people worldwide.

                        About CITGO

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.


PETROLEOS DE VENEZUELA: Inks Joint Venture Pact with Petrobras
--------------------------------------------------------------
Petroleo Brasileiro SA signed Thursday an agremeent migrating
its operating license to a joint venture with Venezuelan
Petroleum Corp., a subsidiary of Petroleos de Venezuela SA.

Under the joint venture, the state oil firm will have a majority
stake in Petrowayu that will operate in La Concepcion fiel in
the western Zulian state, according to AFP.  La Concepcion
yields 12,300 barrels of oil per day.

El Universal says that the new deal forms an integral part of
the plan started by the Government early this year to supersede
the operational agreements executed from 1990 to 1997.  Under
the new legislation on hydrocarbons, effective from 2001, these
instruments were made null and void.

                 About Petroleo Brasileiro

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.

                About Petroleos de Venezuela

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


                        *    *    *

On Jan. 23, 2006, Fitch Ratings upgraded the local and foreign
currency ratings of Petroleos de Venezuela S.A. aka PDVSA to
'BB-' from 'B+'.  The rating of PDVSA's export receivable future
flow securitization, PDVSA Finance Ltd, was also upgraded to
'BB+' from 'BB'.  In addition, Fitch has assigned PDVSA a
'AAA(ven)' national scale rating.  Fitch said the Rating Outlook
is Stable.  Both rating actions followed Fitch's November 2005
upgrade of Venezuela's sovereign rating.


PETROLEOS DE VENEZUELA: Mulls Debt Issuance in European Market
--------------------------------------------------------------
Petroleos de Venezuela SA considers issuing bonds in the
European market, El Universal reports, citing chief financial
offierEudomario Carruyo.

Mr. Carruyo explained that this move has kept momentarily frozen
Petroleos de Venezuela's issuance of about US$3.5 billion in
bonds in the domestic market.

The state oil firm's head and minister of energy and petroleum,
Rafael Ramirez, confirmed some days ago that the issuance was to
be announced in the domestic market and depicted it as an
alternative for Venezuelans' savings, El Universal relates.

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

                        *    *    *

On Jan. 23, 2006, Fitch Ratings upgraded the local and foreign
currency ratings of Petroleos de Venezuela S.A. aka PDVSA to
'BB-' from 'B+'.  The rating of PDVSA's export receivable future
flow securitization, PDVSA Finance Ltd, was also upgraded to
'BB+' from 'BB'.  In addition, Fitch has assigned PDVSA a
'AAA(ven)' national scale rating.  Fitch said the Rating Outlook
is Stable.  Both rating actions followed Fitch's November 2005
upgrade of Venezuela's sovereign rating.


* VENEZUELA: Inks Customs Agreement with Cuba
---------------------------------------------
El Universal reports that Cuba and Venezuela have initialed an
agreement to relaunch bilateral trade exceeding US$3.5 billion a
year, according to Jose Gregorio Vielma Mora, head of the
Venezuelan National Integrated Service of Tax and Customs
Administration -- Seniat.

The deal "is the backbone of all of the agreements Presidents
Hugo Chavez and Fidel Castro have signed to activate bilateral
trade," Mr. Mora, was quoted by Cuban TV, AFP reported.

El Universal says Vielma Mora signed the agreement with the head
of the Cuban General Customs, Brigadier General Pedro Ramon
Pupo.

Under the pact "the parties are to exchange know-how and
expertise," said Prensa Latina without elaborating, El Universal
relates.

Mr. Vielma Mora stressed that the agreement "includes not only
Venezuela and Cuba, but it also will encompass Bolivia and
Ecuador."

In April, Cuba, Venezuela and Bolivia inked a number of
integration agreements under the Bolivarian Alternative for the
Americas, a trade bloc that opposes the US-endorsed Free Trade
Area for the Americas and Free Trade Agreements.

In 2005, Venezuela was Cuba's biggest trading partner, with
trade amounting to US$3.67 billion.

El Universal relates that Venezuela supplies daily almost
100,000 barrels of oil or by-products to Cuba.  In turn, Cuba
has sent to Venezuela over 20,000 doctors and has performed more
than 180,000 eye surgeries to low-income Venezuelans in the
island.

                        *    *    *

Venezuela's foreign currency long-term debt is rated B1 by
Moody's, B+ by Standard & Poor's, and BB- by Fitch.


* VENEZUELA: Won't Break Off Trade Ties with United States
----------------------------------------------------------
"Neither they nor we have a plan to break off trade relations.
On the contrary, the investments of US oil companies in our
country are on the rise and we have large investments there,"
Venezuelan President Hugo Chavez answered reporters during last
week's summit of the Southern Common Market in Argentina when
asked about the country's trade ties with the United states.

Despite politicial differences, the Venezuelan president ruled
out the possibility of breaking off trade relations with the U.
However, El Universal relates, he clarified that Venezuela is
not to accept conditions from any nation. "The United States,
the elite wanting to rule the world, should understand that we
want to be free."

                        *    *    *

Venezuela's foreign currency long-term debt is rated B1 by
Moody's, B+ by Standard & Poor's, and BB- by Fitch.


                        ***********


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
re-mailing and photocopying) is strictly prohibited without
prior written permission of the publishers.

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

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


             * * * End of Transmission * * *