TCRLA_Public/060731.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

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

          Monday, July 31, 2006, Vol. 7, Issue 150

                          Headlines

A R G E N T I N A

BIDWELL SA: Court Moves Claims Verification Deadline to Sept. 28
DEOBAL SA: Trustee Verifies Creditors' Claims Until Sept. 20
FLAMARION SA: Claims Verification Extended Until Oct. 18
LA PARMESANA: Verification of Proofs of Claim Is Until Sept. 20
LUCES ARGENTINAS: Claims Verification Deadline Is Set for Aug. 7

PAN AMERICAN: S&P Rates US$250 Million Amortizing Bonds at BB-
SAN JORGE: Claims Verification Deadline Moved to Sept. 22
YPF S.A.: Parent Posts Second Quarter Profit of EUR1.782 Billion

* BUENOS AIRES: S&P Affirms B Rating, Revises Outlook to Pos.

B A H A M A S

COMPLETE RETREATS: Gets Interim Access to Cash Collateral
WINN-DIXIE: Five Parties Object to Disclosure Statement
WINN-DIXIE: Visagent Wants Claim Allowed for Voting Purposes

B E R M U D A

ARCH CAPITAL: Posts US$137.8 Mil. Net Income in Second Quarter
MONTPELIER RE: Net Income Reaches US$63.2MM in Second Quarter

B O L I V I A

* BOLIVIA: Mines Minister Supports Comibol Joint Project
* BOLIVIA: Asserts Intermediary in Oil Sale to Brazil Is Legal

B R A Z I L

BANCO BRADESCO: Fitch Ups Local Currency Rating to F3 from B
BANCO BRADESCO: S&P Says B Ratings Reflect Brazil's Econ. Risks
BANCO DO ESTADO: Fitch Ups Local Currency Rating to F3 from B
BANCO ITAU BBA: Fitch Raises Local Currency Rating to F3 from B
BANCO ITAU: Fitch Upgrades Local Currency Rating to F3 from B

BANCO ITAU HOLDING: Fitch Ups Local Currency Rating to F3 from B
BANCO NACIONAL: Grants BRL20.4 Million to 50 Cane Producers
BANCO SAFRA SA: Fitch Affirms Low B Currency Issuer Ratings
BANCO VOTORANTIM: Fitch Ups Local Currency Rating to F3 from B
SANTANDER BRASIL: Fitch Ups Local Currency Rating to F3 from B

SANTANDER MERIDIONAL: Fitch Ups Local Currency Rating to F3

* BRAZIL: Holds Nov. 28 Auction of Oil & Gas Exploration Areas

C A Y M A N   I S L A N D S

CAIRNWOOD GLOBAL: Shareholder Decides for Voluntary Liquidation
CCM INTERNATIONAL: Filing of Proofs of Claim Is Until Aug. 15
CCM MASTER: Last Day for Proofs of Claim Filing Is on Aug. 15
CENTAURO FUND: Deadline for Proofs of Claim Filing Is on Aug. 15
E&H REAL: Proofs of Claim Filing Deadline Is Set for Aug. 14

HORATIO CORP: Creditors Have Until Aug. 14 to Prove Claims
HORATIO REAL: Creditors Must File Proofs of Claim by Aug. 14
LAWRENCIUM CORP: Last Day to File Proofs of Claim Is on Aug. 14
LAWRENCIUM PORTFOLIO: Proofs of Claim Filing Is Until Aug. 14
NIELVAL LIMITED: Shareholders Vote to Liquidate Business

C H I L E

BLOCKBUSTER INC: To Terminate EVP Christopher Wyatt's Employment

C O L O M B I A

ECOPETROL: Gets Government Approval to Sell 20% of Company

* COLOMBIA: Will Start Free Trade Negotiations with Chile

C O S T A   R I C A

BAC SAN JOSE: Unit Aims to Hold US$75 Million in Funds in 2006

* COSTA RICA: Commission Studying Free Trade Postpones Meeting
* COSTA RICA: Retailers Say Sale of Economical Cars Is Rising

D O M I N I C A N   R E P U B L I C

* DOMINICAN REPUBLIC: Gov't Panel to Oversee Shell's Asset Sale

E C U A D O R

PETROECUADOR: Returns Offers for Crude Supply Lots Tender

* ECUADOR: Posts US$814.7 Million in Exports to Andean Nations

D O M I N I C A N   R E P U B L I C

FALCONBRIDGE LTD: Inco Fails to Meet Tender Condition of 50.01%
FALCONBRIDGE: Phelps Dodge Responds to Inco's Terminated Offer
FALCONBRIDGE: Xstrata Responds to Termination of Inco Offer

E L   S A L V A D O R

* EL SALVADOR: Launches Recruitment Program for Call Centers

G U A T E M A L A

BANCO DEL CAFE: Financiero Uno Snatches Sale Limelight

H O N D U R A S

* HONDURAS: Snubs Talk with Groups Against Foreign Miners

J A M A I C A

AIR JAMAICA: Workers to Hold Strike on Reduced Wage Offer
DIGICEL: Jamaica Accounts for 67% of Revenues at March 31
DIGICEL LTD: Wins Innovation & Creativity Award from PSOJ
SUGAR COMPANY: Farmers Group Leader Doubtful of Bidding Process

M E X I C O

BERRY PLASTICS: S&P Changes B+ Rating's Outlook to Negative
GRUPO MEXICO: Posts US$353 Mil. Second Quarter 2006 Net Profit
GRUPO MEXICO: Protesters Give Back La Caridad Mine to Firm
GRUPO MEXICO: Workers End Strike at Cananea Mine
GRUPO TMM: Reports Loss of US$0.13 Per Share in Second Quarter

TV AZTECA: Posts MXN2,653 Million Second Quarter 2006 Net Sales

* MEXICO: Posts US$21.2 Billion Export Revenues in June

N I C A R A G U A

* NICARAGUA: IDB & Bancentro Close First Transaction Under TFFP
* NICARAGUA: Seeks Private Aid on Hydroelectric Generation

P A N A M A

* PANAMA: Launches Energy Projects with Venezuela

P A R A G U A Y

PETROLEO BRASILEIRO: Launches First Service Station in Paraguay

P E R U

* PERU: Applies for US$400M Loan from IDB to Develop LNG Project

P U E R T O   R I C O

ADELPHIA COMMS: Names JPMorgan as Custodian Under DIP Facility
ADELPHIA COMMUNICATIONS: Discloses Terms of Plan Agreement
AVALON RE: Fitch Removes Junk Ratings from Negative Watch
CROWN HOLDINGS: S&P Affirms BB- Rating on US$1.5 Bil. Facilities
LA REINA: Case Summary & 20 Largest Unsecured Creditors

NEWPARK RESOURCES: Receives Default Notice from Noteholders

U R U G U A Y

CUMMINS INC: Inks Agreement to Manufacture New Engines

* URUGUAY: Congress Ratifies Bill to Acquire 60% of Water Firm

V E N E Z U E L A

ARVINMERITOR: Moody's Lowers Rating on US$10.9MM Remaining Notes

* VENEZUELA: Posts US$2.6 Bil. First Sem. Agricultural Portfolio
* VENEZUELA: Launches Energy Projects with Panama
* VENEZUELA: Tax Unit Closes Firms on Bookkeeping Irregularities

* BOOK REVIEW: The Titans of Takeover


                          - - - - -


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


BIDWELL SA: Court Moves Claims Verification Deadline to Sept. 28
----------------------------------------------------------------
Court No. 18 in Buenos Aires moved the deadline for verification
of creditors' proofs of claim against Bidwell S.A. to
Sept. 28, 2006.  The deadline was previously set for
Sept. 9, 2006.

Aldo Bassagaisteguy, the court-appointed trustee for Bidwell's
bankruptcy case, is validating creditors' claims.

Bidwell was declared bankrupt at the request of Compania Teensun
S.A., which it owes US$117,000.

Clerk No. 36 assists the court on the case.

The debtor can be reached at:

    Bidwell S.A.
    Junin 237
    Buenos Aires, Argentina

The trustee can be reached at:

    Aldo Bassagaistegy
    Avenida Presidente Roque Saenz Pena 1134
    Buenos Aires, Argentina


DEOBAL SA: Trustee Verifies Creditors' Claims Until Sept. 20
------------------------------------------------------------
Court-appointed trustee Jorge E. del Hoyo verifies creditors'
proofs of claim against bankrupt company Deobal S.A. until
Sept. 20, 2006.

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

Mr. del Hoyo will submit the validated claims in court as
individual reports on Nov. 1, 2006.  He will also present a
general report that contains an audit of Deobal's accounting and
business records on Dec. 14, 2006.

The trustee can be reached at:

    Jorge E. del Hoyo
    Cerrito 484
    Buenos Aires, Argentina


FLAMARION SA: Claims Verification Extended Until Oct. 18
--------------------------------------------------------
Court No. 1 in Buenos Aires moved the deadline for verification
of creditors' proofs of claim against Flamarion S.A. to
Oct. 18, 2006.  The deadline was previously set for
Aug. 10, 2006.

Andrea Isabel Sita, the court-appointed trustee for San Jorge's
bankruptcy case, will validate creditors' claims.

Flamarion was declared bankrupt at the behest of Andrea Gomez,
whom it owes US$148,833.69.

Clerk No. 2 assists the court on the case.

The debtor can be reached at:

    Flamarion S.A.
    Zabala 2488
    Buenos Aires, Argentina

The trustee can be reached at:

    Andrea Isabel Sita
    Cramer 2175
    Buenos Aires, Argentina


LA PARMESANA: Verification of Proofs of Claim Is Until Sept. 20
---------------------------------------------------------------
Susana Beatriz Fernandez, the court-appointed trustee for La
Parmesana S.A.'s bankruptcy proceeding, verifies creditors'
proofs of claim until Sept. 20, 2006.

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

Under Argentine bankruptcy law, Ms. Fernandez is required to
submit individual reports and a general report that contains an
audit of La Parmesana's accounting and banking records after the
claims are verified.  The report submission dates have not been
disclosed.

The debtor can be reached at:

    La Parmesana S.A.
    Zuviria 863
    Buenos Aires, Argentina

The trustee can be reached at:

    Susana Beatriz Fernandez
    Florida 520
    Buenos Aires, Argentina


LUCES ARGENTINAS: Claims Verification Deadline Is Set for Aug. 7
----------------------------------------------------------------
Court-appointed trustee Agustin Cueli Gomez verifies creditors'
proofs of claim against bankrupt company Luces Argentinas S.R.L.
until Aug. 7, 2006.

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

The verified claims will be presented in court as individual
reports on Sept. 6, 2006.  A general report that contains an
audit of Luces Argentinas' accounting and banking records will
follow on Oct. 19, 2006.

The debtor can be reached at:

    Luces Argentinas S.R.L.
    Tinogasta 5311
    Buenos Aires, Argentina

The trustee can be reached at:

    Agustin Cueli Gomez
    Avenida Corrientes 915
    Buenos Aires, Argentina


PAN AMERICAN: S&P Rates US$250 Million Amortizing Bonds at BB-
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB-' senior
unsecured debt rating to Argentina-based oil and gas company Pan
American Energy LLC Sucursal Argentina's upcoming issuance of
US$250 million amortizing bonds with final maturity in 2012.

"Because the bonds will be guaranteed by Pan American Energy
LLC, the Branch's sole owner, the rating on the current issue
relies on the ratings on PAE," said Standard & Poor's credit
analyst Pablo Lutereau. The Branch is PAE's most important
subsidiary (accounting for 78.5% of the production during 2005
and 54% of the reserves as of December 2005).  Proceeds will be
used mainly to finance part of the company's capital
expenditures program in hydrocarbon's exploration and
production.

Standard & Poor's ratings on PAE reflect its heavy concentration
in Argentina, which exposes the company to the risks of
operating under a highly uncertain and rapidly changing economic
and regulatory environment, as well as a significant need for
capital expenditures to develop its large reserve base.  The
ratings also reflect the company's relatively large reserve
base, low operating costs, outstanding credit measures, and a
very sound financial profile.  The foreign currency rating on
PAE is two notches above the foreign currency rating on
Argentina.  The foreign currency rating reflects PAE's partial
insulation from transfer and convertibility risks due to its
substantial foreign currency generation (about 46% of revenues
are from exports), the preferred export repatriation requirement
granted to Argentine oil and gas companies throughout the crisis
that allowed the company to access offshore cash, a moderate
financial policy, and strong credit metrics for the rating
category.

The stable outlook on PAE reflects Standard & Poor's
expectations that PAE should continue to show solid operating
and financial performance in the challenging Argentine
institutional and regulatory environment.  From an operating
performance standpoint, the rating agency expects the company to
be able to continue increasing production in the next three
years while crude oil reserve life remains strong.  Standard &
Poor's also expects PAE's operating performance to translate
into free operating cash-to-net debt in excess of 20% and EBITDA
interest coverage above 7.0x, even with realization prices 40%
lower than observed in 2005.  Rating stability also requires PAE
to lengthen its maturity schedule.  Rating upside is limited by
our perception of country risk in Argentina.  The outlook could
be re-evaluated (and the ratings could be lowered) following
additional intervention by the government, which could seriously
jeopardize the company's profitability and cash flow generation
ability.  The stable outlook on the foreign currency rating also
reflects Standard & Poor's current views on transfer and
convertibility risk in Argentina.


SAN JORGE: Claims Verification Deadline Moved to Sept. 22
---------------------------------------------------------
Court No. 1 in Buenos Aires moved the deadline for verification
of creditors' proofs of claim against San Jorge Mayorista S.A.
to Sept. 22, 2006.  The deadline was previously set for
Aug. 22, 2006.

Gonzalo Daniel Cueva, the court-appointed trustee for San
Jorge's bankruptcy case, validates creditors' claims.

Court No. 1 declared San Jorge bankrupt at the request of Coca
Cola Polar Argentina S.A., which it owes US$162,935.

Clerk No. 2 assists the court on the case.

The debtor can be reached at:

    San Jorge Mayorista S.A.
    Maipu 26
    Buenos Aires, Argentina

The trustee can be reached at:

    Guillermo Daniel Cueva
    Terrero 1752
    Buenos Aires, Argentina


YPF S.A.: Parent Posts Second Quarter Profit of EUR1.782 Billion
-----------------------------------------------------------
In first half 2006, Repsol YPF net income rose 9.9% year-on-
year, from EUR1,621 million in 2005 to EUR1,782 million in 2006.
Income from operations rose 8.3% year-on-year to EUR3,294
million.  Both net and operating income were the highest ever
marked by the company in any half-year.

The 29.6% rise in operating income posted by the Repsol YPF
exploration & production area was of special significance.
EBITDA (earnings before interest, tax and depreciation
amortization) rose 13% to EUR4,711 million, and earnings per
share were 9.8% up at EUR1.46 versus EUR1.33 for the same period
in 2005.

In the first half 2006, crude oil prices were high, with Brent
oil rising 32.3%, while the international refining margin
indicator fell 15.7% as well as in chemicals where margins
narrowed while energy costs rose.

                        Debt reduction

Repsol YPF net debt at the end of first half 2006 was EUR4,111
million, representing a reduction of EUR402 million from year
end 2005.  The high cash flow generated in the period was
sufficient to finance investments, dividend payout, and an
increase in working capital resulting from the rise in oil
prices.  The depreciation of the dollar against the euro in this
first half caused a EUR366 million nominal debt reduction (debt
is mostly expressed in dollars).

The net debt to capitalisation ratio as of June 2006 was 16.1%,
falling nearly 2.5 percentage points since March 2006.  Taking
preferred shares into account, this ratio went from 31.8% in
June 2005 to 29.7% in June of this year.

                Performance by Business Areas

     Exploration & Production Posts 29.6% Income Growth

At EUR1,928 million in first half 2006, income from exploration
& production operations was 29.6% higher than the EUR1,488
million posted a year earlier.  Adjusted operating income
(eliminating extraordinary revenues and expenses) for the period
was 20.8% up year-on-year.  Growth in operating income was
mainly shored up by high crude oil reference prices, which
boosted the company's liquids realization price to an average
US$46.12 per barrel in this half-year versus the 2005 equivalent
of US$33.26 per barrel and raised the average gas selling price
in Argentina.

Total production in the period at 1,100,300 boepd was 4.8% down
year-on-year, mainly curtailed by lower production in Argentina
because of oil field decline, and strikes in southern Argentina
in the first quarter; by a drop in production in Venezuela due
to the migration from Operating Concessions to Mixed Companies
in the second quarter, and problems in delivery to PDVSA during
the whole year to date.  First-half 2006 investments in this
area totaled EUR1,126 million, 102.9% up on the 2005 equivalent.

     Refining & Marketing Marks 2.7% Sales Growth

First half 2006 income from operations in the refining &
marketing area was EUR1,249 million, falling 7.7% against the
EUR1,354 million posted in 2005.  Lower performance was mainly
the outcome of lower refining margins and narrower marketing
margins in Argentina, where the discount on international prices
applied to internal oil sales continued in place.  Adjusted
operating income (discounting extraordinary revenues and costs)
was 10.3% less than in the same period a year ago.  Total oil
product sales rose 2.7% to 29.2 million tons.  In Spain and
Argentina, Brazil and Bolivia (ABB), light product sales to our
own network were higher.  LPG sales in Latin America rose 15.1%
year-on-year, and fell 3.3% in Europe, although this was offset
by a rise in prices.

First half 2006 investments in refining & marketing were EUR305
million, 33.6% down on the 2005 figure of EUR459, period in
which were bought assets of Shell's in Portugal.

            Chemicals Post 7.3% Rise in Sales

In Chemicals, income from operations in first half 2006 was
EUR123 million, 49.2% down year-on-year, mainly because of
narrower international margins on base chemicals, curtailed by a
rise in naphtha and crude oil prices.  Also of influence were
two extraordinary items in 2005 -- the capital gains on the sale
of a 28% stake in PBB Polisur booked in the first quarter, and a
non-recurring revenue resulting from the Sines acquisition
booked in the second quarter.  Total petrochemical product sales
this first half reached 2,334 thousand tons, 7.3% more than the
year before.

First half 2006 investments in Chemicals totalled EUR70 million,
55.6% higher than the same period a year ago, and included the
project for a capacity revamp of the PO/SM and Derivatives plan
at the Tarragona complex, which will make these products
considerably more competitive.

        Gas & Power Reports 25.5% Income Growth

Income from gas & power operations in the first half totalled
EUR246 million versus EUR196 million in the same period a year
earlier.  This rise was mainly attributable to larger capital
gains from the sale of Enagas shares and a positive earnings
performance by Gas Natural SDG.  Investments in Gas & Power
during the first six months totalled EUR165 million, and were
much lower than the 2005 equivalent, which included the
acquisition of Dersa, an eolic power generation company.

               First Half 2006 Highlights

              Start of the Peru LNG Project

In Peru, work started on the Peru LNG project in January last.
This venture, in which Repsol YPF has a 20% share, contemplates
the construction of an LNG plant in Pampa Melchorita, due to go
into operation by 2009, with a nominal production capacity of 4
million tons per annum of liquefied natural gas, to be marketed
on the West Coast of the USA and Mexico.  This project will be
fed with natural gas from the Camisea field, in which Repsol YPF
holds a 10% stake.

          Strategic Agreement for Projects in Russia

In February Repsol YPF and West Siberian Resources signed a
strategic agreement whereby Repsol YPF acquired a 10% stake in
the latter, and will be able to take an active part in
developing projects for the exploration and production of oil
and gas in Russia, where WSR owns high-interest exploration
assets.

                    Leader in Biofuels

Last March, Repsol YPF and ACCIONA signed a memorandum of
agreement for the construction and development in Spain of
biodiesel plants that could produce over one million tons per
year using first-use vegetable oils and feedstock.  This
agreement involves an estimated investment of EUR300 million,
and is one of the largest entered to date in the sphere of
biodiesel.  On 24 April last, the Ministry of Industry, Tourism
and Commerce, via the Centre for Technological and Industrial
Development (with the Spanish initials CDTI), granted a subsidy
of over EUR22 million to a group of companies, headed by Repsol
YPF, for a research and development project on biodiesel. This
CENIT biodiesel project will make it possible to develop
technology that will aid in the reduction of the greenhouse
gases causing climate change and encourage the diversification
of energy sources in order to reduce our dependence on imported
oil products.

       Agreement for the Gassi Touil Porject in Algeria

In Algeria, Repsol YPF, Gas Natural and Sonatrach signed last
March the constitution of a joint venture called Sociedad de
Licuefaccion, which will construct and operate the natural gas
liquefaction plant for the Gassi Touil project, the most
important undertaking ever carried out in Algeria by an
international consortium.

                  Corporate Responsibility

In March, Repsol YPF joined the World Business Council for
Sustainable Development, one of the largest international
business associations, having the mission of advancing towards
sustainable development through innovation, eco-efficiency and
corporate social responsibility, and the group of companies
collaborating with the Fundacion Entorno-Business Council for
Sustainable Development Spain.

During this period, Repsol YPF has received several
international awards for the information and services provided
by its website, which include that for the best corporate
website, according to the Best IR Websites in the Energy Sector.

            Third Largest Oil Producer in Brazil

In April, Repsol YPF and Petrobras launched the production
start-up at Brazil's largest offshore floating rig in the
Albacora Leste field, making our company the third largest oil
producer in that country. The P-50 Albacora-Leste platform, in
which Repsol YPF holds a 10% stake, is anchored to the seabed at
a depth of 1,240 metres, 120 km from the coast, and is one of
the most modern and complex production units in the world.

            Successful Exploration in Algeria

It was announced last April that Repsol YPF has successfully
drilled two gas wells in the Reggane Basin in the Algerian
Sahara Desert. The first well yielded a production rate of
636,000 m3/day. The second well was drilled in the Sali area and
is a new discovery, yielding a preliminary production rate of
100,000 m3/day.  Repsol YPF, with a 33.75% stake, is operator of
the consortium, comprising the:

   -- Algerian national company Sonatrach (25%),
   -- RWE Dea (22.50%) and
   -- Edison (18.75%).

In May, Repsol YPF made another new gas discovery in Algeria,
producing a gas flow of 763,000 m3/day at a depth of 3,983
metres, and 483,000 m3/day at a depth of 2,360 metres.

      Agreement with Gas Natural for LNG Transport

Repsol YPF and Gas Natural signed on May 8, 2006, a Time Charter
Contract with the shipbuilders, Knutsen, for a methane tanker
with a capacity of 138,000 cubic metres, which both companies
will use to transport liquefied natural gas from the year 2009
onwards.

        Construction of LNG Plant in Canada

On May 17, Repsol YPF started construction in Canada of one of
the largest LNG regasification plants in North America,
scheduled to go into operation in the last quarter of 2008.
This plant will have an initial capacity of 1 billion cubic feet
of gas per day (some 10 billion cubic metres per year),
equivalent to 20% of the Northeast USA market.  The maximum
capacity for this plant will be 1,200 million cubic feet per
day, which may be increased to 2 billion cubic feet per day.  At
the same time, Repsol YPF signed contracts relating to the
construction of the gas pipeline from Saint John, New Brunswick,
to supply the most important markets in the USA, such as Boston
and New York.

              Conclusion of the Independent
              Revision of the Reserves Cut

On June 15, Repsol YPF's Audit and Control Committee presented
the conclusions of the independent revision carried out with the
assistance of King & Spalding LLP on the cut in reserves
disclosed on January 26, 2006.  In this respect, the report
concludes that the reserves reduction at year-end 2005 was
consistent with the recommendations of the Company's external
reserves auditors, and resulted from, among other things, a
disciplined process regarding technical issues and
commercialisation requirements.  The changes in law in Bolivia
also played a role in the reductions.  In the course of the
review, King & Spalding found no reason to doubt the integrity
of the process in 2005 and resulting revision in reserves.

                   20% Dividend Rise

On June 16, Repsol YPF held its Annual General Shareholders
Meeting, at which all the resolutions presented were passed,
including payment of a gross dividend of EUR0.60 per share
against the 2005 financial year, equivalent to a 20% rise year-
on-year, thanks to the good performance posted in what Antonio
Brufau described as "an excellent year," when the company marked
a record profit.

            Investment Plan in Argentina

On June 23, Antonio Brufau presented to Nestor Kirchner,
President of Argentina, during his official visit to Spain, a
schedule for a total investment in Argentina of US$6 billion
(EUR4.77 billion) during the three-year period of 2007 to 2009,
of which US$4.6 billion (EUR3.658 billion) has been earmarked
for the area of Exploration & Production, and the remaining
US$1.4 billion (EUR1.113 billion) has been allotted to the
Refining & Marketing and Chemical areas.  Repsol YPF will apply
this schedule to bring forward investments in Argentina in order
to increase reserves and production, based on a deeper knowledge
of the fields acquired over the past year.

     Greater Activity in North Africa and the Caribbean

In Libya, where Repsol YPF is the largest operator, second only
to the national company NOC, there was a new discovery of light
crude in the Murzuq basin, testing at a preliminary production
level of 2,300 barrels of oil equivalent per day.

In Trinidad & Tobago, a Caribbean country housing 10% of Repsol
YPF's total oil and gas reserves and of strategic importance
because of its magnificent location for supplying gas to the
Atlantic coast, gas production rose considerably to 117,000
boepd with the start up of the fourth Atlantic LNG train.

            MOU with the Government of Nigeria

Repsol YPF and Gas Natural, through their joint venture in the
international liquefied natural gas business, signed a
memorandum of understanding with the government of Nigeria for
the future development of an important LNG project in that
country, establishing the terms for the possible construction
and operation of an LNG plant, which could have an initial
capacity of some 7 million tons per annum (equivalent to
approximately 10 Bcm of natural gas), and for the acquisition
and development of gas reserves to feed the plant.

      Acquisition in Deep Waters of the Gulf of Mexico

In June, Repsol YPF announced the acquisition from BP of a 28%
stake in the deepwater Shenzi field, in the Green Canyon area of
the Gulf of Mexico.  This acquisition will increase the
company's probable and proved oil reserves and boost Repsol
YPF's production in the Gulf of Mexico USA to over 35,000
barrels per day by 2009.

                        *    *    *

On Jan. 27, 2006, Standard & Poor's Rating Services revised the
outlook on its 'BB+' local currency rating for Argentina-based
integrated oil and gas producer YPF S.A. to negative from
positive following the company's announcement of a 22% downward
revision of its 2004 year-end consolidated proven reserves.  At
the same time, Standard & Poor's affirmed its 'BB+' local
currency corporate credit rating and its 'BB' foreign currency
rating on the company.  The outlook on the foreign currency
rating remains stable.


* BUENOS AIRES: S&P Affirms B Rating, Revises Outlook to Pos.
-------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on its
ratings on the City of Buenos Aires, Republic of Argentina, to
positive from stable.  At the same time, Standard & Poor's
affirmed its 'B' foreign and local currency credit ratings on
the city.

According to Standard & Poor's credit analyst Sebastian Briozzo,
the change in outlook reflects the city of Buenos Aires'
improved and solid economic and fiscal performance in recent
years and its increased capacity to service its large upcoming
amortizations.  However, growing pressure for salary increases
will continue to test the ability of the authorities to maintain
a solid fiscal position in 2006 and 2007.

"Should the fiscal 2006 performance result in a balanced budget
or a small fiscal deficit, the rating could be upgraded," Mr.
Briozzo said.  "Conversely, additional fiscal slippage might
result in the outlook being revised back to stable from positive
at the current rating level," he added.

Mr. Briozzo explained that a strong economic base, combined with
the rapid recovery of the economy after the 2001-2002 crisis,
has supported a strong performance that produced three years of
fiscal surpluses.  Consequently, debt levels have declined
significantly during the same period, to 36% of total revenue in
2005 from about 81% in 2002.

"However, as indicated by the decrease in the fiscal surplus
from 2004 to 2005, the rapid recovery of revenue is expected to
slow while expenditure pressures are expected to rise, enhancing
the fiscal challenge going forward," Mr. Briozzo added.
"Maintaining balanced budgets or a limited fiscal deficit over
the medium term remains a necessary condition for this rating to
continue its upward trend, even more so if it is to exceed the
rating on Argentina," he said.

Standard & Poor's said that the positive outlook incorporates
the expectation that conservative management and relatively high
economic growth will continue to provide additional fiscal
flexibility over the next two to three years to deal with
growing pressures on the expenditure side of the budget.

"If the city government runs balanced budgets or small deficits
going forward, a rating upgrade could follow," noted Mr.
Briozzo.  "However, given the city's still-limited fiscal
flexibility, any greater fiscal slippage will increase downward
pressure on the rating, and could result in the outlook being
revised back to stable from positive," he concluded.




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


COMPLETE RETREATS: Gets Interim Access to Cash Collateral
---------------------------------------------------------
The Honorable Alan H.W. Shiff of the U.S. Bankruptcy Court for
the District of Connecticut authorized Complete Retreats LLC and
its debtor-affiliates, on an interim basis, to use the cash
collateral securing their obligations to The Patriot Group, LLC,
and LLP Mortgage, Ltd., assignee of Beal Bank, S.S.B.

Each of the Lenders will have priority in payment to the extent
their liens on and security interests in the Collateral or any
other form of adequate protection of their interests is
insufficient, as a result of any postpetition diminution in the
value of their existing liens on the Collateral.

As further adequate protection, the Debtors are permitted to pay
to the Lenders each month (i) the reasonable attorneys' fees and
expenses incurred by each Lender in connection with the Debtors'
cases and the Existing Loans, and (ii) accrued interest on the
Existing Loans.

Any action, claim or defense challenging the extent, priority,
avoidability, or enforceability of the Debtors' obligations or
the liens granted to the Lenders must be filed:

    (a) by any official committee -- and no other party --
        within 60 days from its formation; or

    (b) by any party-in-interest with requisite standing -- in
        the event no committee is appointed within 30 days from
        the Debtors' bankruptcy filing -- on or before
        Oct. 9, 2006.

The Court will convene a final cash collateral hearing on
Aug. 15, 2006, at 2:00 p.m.

Before the Court entered the Interim Cash Collateral Order, the
United States Trustee opposed the Debtors' request contending
that the Debtors should clarify that they have not granted any
liens on avoidance actions.

The U.S. Trustee asserted that since no committee has been
appointed, no schedules have been filed, and it has not had an
opportunity to review the underlying financing documents, it is
premature for the Court to enter a final order on the Debtors'
Cash Collateral Motion.

                    About Complete Retreats

Complete Retreats, LLC, Preferred Retreats, LLC, and their
subsidiaries were founded in 1998.  Owned by Robert McGrath and
four minority owners, the companies operate a five-star
hospitality and real estate management business and are a
pioneer and market leader of the "destination club" industry.
Under the trade name "Tanner & Haley Resorts," Complete
Retreats, et al.'s destination clubs have numerous individual
and company members.

Destination club members pay up-front membership deposits,
annual dues, and daily usage fees.  In return, members and their
guests enjoy the use of first-class private residences, and
receive an array of luxurious services and amenities in certain
exotic vacation destinations in the United States and locations
around the world, including: Abaco, Bahamas; Cabo San Lucas,
Mexico; Nevis, West Indies; Telluride, Colorado; and Jackson
Hole, Wyoming.

Complete Retreats and its debtor-affiliates filed for chapter 11
protection on July 23, 2006 (Bankr. D. Conn. Case No. 06-50245
through 06-50306).  Nicholas H. Mancuso, Esq., Jeffrey K. Daman,
Esq., Joel H. Levitin, Esq., David C. McGrail, Esq., Richard A.
Stieglitz Jr., Esq., at Dechert LLP, are representing the
Debtors in their restructuring efforts.  Xroads Solutions Group,
LLC, is the Debtors financial and restructuring advisor.  When
the Debtors filed for chapter 11 protection, they listed total
debts of US$308,000,000.  (Complete Retreats Bankruptcy News,
Issue No. 2; Bankruptcy Creditors' Service, Inc., 215/945-7000).


WINN-DIXIE: Five Parties Object to Disclosure Statement
-------------------------------------------------------
Five parties filed objections to Winn-Dixie Stores, Inc., and
its debtor-affiliates' disclosure statement:

   -- The Louisiana Department of Revenue;
   -- E&A Financing and other parties;
   -- Terranova Landlords;
   -- Unarco Industries; and
   -- Visagent Corp.

               Louisiana Department of Revenue

The Louisiana Department of Revenue has filed numerous claims,
including unsecured general claims that are classified under
Class 16 pursuant to the Debtors' Disclosure Statement, David M.
Hansen, Esq., in Baton Rouge, Louisiana, relates.

The Debtors' Plan and Disclosure Statement provide that holders
of Class 16 claims will receive either shares of stock or 67% of
the claim amount in cash if the holder agrees to reduce each
claim to US$3,000 and sufficient cash remains available.

Mr. Hansen asserts that the Louisiana Department of Revenue
should not be forced to receive shares of common stock because,
as a state agency, it is forbidden from collecting anything
except money as payment of taxes.

Thus, the Louisiana Department of Revenue asks the U.S.
Bankruptcy Court for the Middle District of Florida to deny
approval of the Disclosure Statement.

                     E&A Financing, et al.

E&A Financing II L.P., E&A Southeast L.P., Shields Plaza, Inc.,
Woodberry Plaza (E&A) LLC, Villa Rica Retail Properties LLC,
West Ridge LLC, E&A Acquisition Two L.P., and Bank of America,
as trustee of Betty Holland, leased retail space for several of
the Debtors' stores.

The Debtors rejected the leases postpetition.  The Landlords
have filed claims for rejection damages.

The Landlords complain that the Disclosure Statement does not
provide adequate information regarding the effect of substantive
consolidation, specifically:

   (1) the difference in treatment that various creditor groups
       would receive in the Debtors' proposed consolidated plan
       as opposed to the deconsolidated plan; and

   (2) differences between the Debtors' proposed distribution
       and the distribution that would occur under a Court-
       ordered substantive consolidation.

It is not clear to the Landlords how the Debtors' proposed
deemed substantive consolidation would affect their claims.
They are concerned that the portion of the distribution that
would have gone to them under a deconsolidated plan will now go
to holders of Vendor/Supplier Claims under the consolidated
plan.

Adam N. Frisch, Esq., at Herld & Israel, in Jacksonville,
Florida, says that if the Landlords are to vote for a Plan that
is unfavorable to them, they should at least be told
specifically how much more or less they are getting as a result
of the deemed consolidation.

If the Landlords' claims are being reduced disproportionately to
the other creditors to finance the payoff to the
Vendor/Suppliers, the Landlords may decide to vote against the
Plan and object to it, Mr. Frisch adds.

The Landlords ask the Bankruptcy Court to withhold approval of
the Disclosure Statement unless it is amended to include
specific information showing the recovery that each group of
creditors would receive under these scenarios:

   (a) the proposed substantive consolidation compromise;
   (b) a Court-ordered substantive consolidation; and
   (c) a plan with no substantive consolidation.

                      Terranova Landlords

Westfork Tower LLC, Concord Fund Retail IV LLP, TA Cresthaven
LLC, Flagler Retail Associates Ltd., and Elston/Leetsdale LLC,
are landlords of five of the Debtors' stores in South Florida.
Terranova Corporation is their property manager.

The Terranova Landlords filed claims against the Debtors that
constitute administrative cure claims.  The cure claims may be
categorized as unsecured Landlord Claims under Class 13 of the
Disclosure Statement if the Debtors reject the Landlords' leases
after the effective date of the Plan.

Karen K. Specie, Esq., at Scruggs & Carmichael PA, in
Gainesville, Florida, says that the Disclosure Statement does
not contain adequate information for the Terranova Landlords,
whose leases are subject to pending but unresolved assumption
motions and objections to proposed cure amounts.

The Disclosure Statement, Ms. Specie asserts, should be
clarified as to the status and voting rights for landlords whose
leases are subject to pending assumption motions.

Accordingly, Terranova asks the Bankruptcy Court to deny
approval of the Disclosure Statement.

                     Unarco Industries

Shopping carts-maker Unarco Industries, Inc., holds an
unsecured, non-priority claim for US$132,492 against the
Debtors.

It is not clear to Unarco if its claim will be treated under
Class 14 or Class 16 under the Disclosure Statement.

According to Jason B. Burnett, Esq., at Gray/Robinson P.A., in
Jacksonville, Florida, Unarco requested clarification from the
Debtors on its claim classification but the Debtors were unable
to provide the information prior to the Disclosure Objection
Deadline.

Unarco objects to the Disclosure Statement and requests
confirmation of its assigned class.  Depending on its claim
classification, Unarco reserves its right to further object to
the Disclosure Statement.

                        Visagent Corp.

Visagent Corporation disagrees with the proposed treatment of
its $131,875,000 general unsecured claim.

Visagent's claim has been included under Class 16, although it
is not substantially similar to the other claims in that class
as required by Section 1122(a) of the Bankruptcy Code, Guy
Bennett Rubin, Esq., in Stuart, Florida, explains.

Mr. Rubin says that the vote with respect to the Visagent Claim
was improperly solicited by the Debtors prior to their
submission of the Disclosure Statement to their creditors, which
violates Section 1125(b) of the Bankruptcy Code.

Thus, Visagent asks the Bankruptcy Court to deny confirmation of
the Plan.

Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc.
-- http://www.winn-dixie.com/-- is one of the nation's largest
food retailers.  The Company operates stores across the
Southeastern United States and in the Bahamas and employs
approximately 90,000 people.  The Company, along with 23 of its
U.S. subsidiaries, filed for chapter 11 protection on
Feb. 21, 2005 (Bankr. S.D.N.Y. Case No. 05-11063, transferred
Apr. 14, 2005, to Bankr. M.D. Fla. Case Nos. 05-03817 through
05-03840).  D.J. Baker, Esq., at Skadden Arps Slate Meagher &
Flom LLP, and Sarah Robinson Borders, Esq., and Brian C. Walsh,
Esq., at King & Spalding LLP, represent the Debtors in their
restructuring efforts.  Paul P. Huffard at The Blackstone Group,
LP, gives financial advisory services to the Debtors.  Dennis F.
Dunne, Esq., at Milbank, Tweed, Hadley & McCloy, LLP, and John
B. Macdonald, Esq., at Akerman Senterfitt give legal advice to
the Official Committee of Unsecured Creditors.  Houlihan Lokey &
Zukin Capital gives financial advisory services to the
Committee.  When the Debtors filed for protection from their
creditors, they listed US$2,235,557,000 in total assets and
US$1,870,785,000 in total debts.  (Winn-Dixie Bankruptcy News,
Issue No. 45; Bankruptcy Creditors' Service, Inc., 215/945-7000)


WINN-DIXIE: Visagent Wants Claim Allowed for Voting Purposes
------------------------------------------------------------
Visagent Corp. asks the U.S. Bankruptcy Court for the Middle
District of Florida to permit it to cast a provisional ballot in
the voting on Winn-Dixie Stores, Inc., and its debtor-
affiliates' Plan of Reorganization pursuant to Rule 3018(a) of
the Federal Rules of Bankruptcy Procedure.

Guy Bennett Rubin, Esq., in Stuart, Florida, informs the Court
that Visagent has contested the Debtors' objection to Claim No.
9953 and has filed a response in due course, which will be the
subject of further proceedings.  Visagent filed Claim No. 9953
for US$131,875,000.

Visagent seeks to have the Claim temporarily allowed for voting
purposes on the Plan.

Mr. Rubin assures the Court that no harm may be caused by the
granting of Visagent's request as the Court may order Visagent's
vote to be considered provisional until its claim is finally
determined by the Court or agreed by the parties.

Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc.
-- http://www.winn-dixie.com/-- is one of the nation's largest
food retailers.  The Company operates stores across the
Southeastern United States and in the Bahamas and employs
approximately 90,000 people.  The Company, along with 23 of its
U.S. subsidiaries, filed for chapter 11 protection on Feb. 21,
2005 (Bankr. S.D.N.Y. Case No. 05-11063, transferred Apr. 14,
2005, to Bankr. M.D. Fla. Case Nos. 05-03817 through 05-03840).
D.J. Baker, Esq., at Skadden Arps Slate Meagher & Flom LLP, and
Sarah Robinson Borders, Esq., and Brian C. Walsh, Esq., at King
& Spalding LLP, represent the Debtors in their restructuring
efforts.  Paul P. Huffard at The Blackstone Group, LP, gives
financial advisory services to the Debtors.  Dennis F. Dunne,
Esq., at Milbank, Tweed, Hadley & McCloy, LLP, and John B.
Macdonald, Esq., at Akerman Senterfitt give legal advice to the
Official Committee of Unsecured Creditors.  Houlihan Lokey &
Zukin Capital gives financial advisory services to the
Committee.  When the Debtors filed for protection from their
creditors, they listed US$2,235,557,000 in total assets and
US$1,870,785,000 in total debts.  (Winn-Dixie Bankruptcy News,
Issue No. 45; Bankruptcy Creditors' Service, Inc., 215/945-7000)




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


ARCH CAPITAL: Posts US$137.8 Mil. Net Income in Second Quarter
--------------------------------------------------------------
Arch Capital Group Ltd. reports that net income available to
common shareholders for the 2006 second quarter was US$137.8
million, or US$1.81 per share, compared with US$126.0 million,
or US$1.69 per share, for the 2005 second quarter, and US$267.5
million, or US$3.52 per share, for the six months ended June 30,
2006, compared with US$241.9 million, or US$3.26 per share, for
the 2005 period.  The company also reported after-tax operating
income available to common shareholders of US$171.0 million, or
US$2.24 per share, for the 2006 second quarter, compared to
US$113.1 million, or US$1.52 per share, for the 2005 second
quarter, and US$314.1 million, or US$4.13 per share, for the six
months ended June 30, 2006, compared with US$225.0 million, or
US$3.03 per share, for the 2005 period.  The company's after-tax
operating income available to common shareholders represented a
26.1% annualized return on average common equity for the 2006
second quarter, compared to 18.9% for the 2005 second quarter,
and 24.3% for the six months ended June 30, 2006, compared with
19.0% for the 2005 period. After-tax operating income available
to common shareholders, a non-GAAP measure, is defined as net
income available to common shareholders, excluding net realized
gains or losses and net foreign exchange gains or losses, net of
income taxes.

Arch Capital's book value per common share increased to US$36.39
at June 30, 2006 from US$33.82 per share at December 31, 2005.
Gross and net premiums written for the 2006 second quarter were
US$1.14 billion and US$794.6 million, respectively, compared
with US$940.8 million and US$723.7 million, respectively, for
the 2005 second quarter, and US$2.30 billion and US$1.67
billion, respectively, for the six months ended June 30, 2006,
compared with US$1.92 billion and US$1.52 billion, respectively,
for the 2005 period.  The company's combined ratio was 86.3% for
the 2006 second quarter, compared with 89.4% for the 2005 second
quarter, and 87.2% for the six months ended June 30, 2006,
compared to 89.1% for the 2005 period.  All per share amounts
discussed in this release are on a diluted basis.

The table summarizes Arch Capital's underwriting results:

                   (Unaudited)             (Unaudited)
               Three Months Ended       Six Months Ended
                   June 30,                June 30,
(U.S. dollars
in thousands)     2006        2005        2006        2005

Gross
premiums
written     US$1,136,274 US$940,753 US$2,304,088 US$1,921,445

Net
premiums
written          794,558   723,728     1,668,277    1,523,529

Net
Premiums
earned           797,450   739,892     1,559,051    1,436,960

Underwriting
income           112,214    79,013       202,442      162,321

Combined ratio     86.3%     89.4%        87.2%        89.1%


The combined ratio represents a measure of underwriting
profitability, excluding investment income, and is the sum of
the loss ratio and expense ratio.  A combined ratio under 100%
represents an underwriting profit and a combined ratio over 100%
represents an underwriting loss. The combined ratio of the
Company's insurance and reinsurance subsidiaries consisted of a
loss ratio of 58.0% and an underwriting expense ratio of 28.3%
for the 2006 second quarter, compared to a loss ratio of 60.0%
and an underwriting expense ratio of 29.4% for the 2005 second
quarter.  The combined ratio of the Company's insurance and
reinsurance subsidiaries consisted of a loss ratio of 59.7% and
an underwriting expense ratio of 27.5% for the six months ended
June 30, 2006, compared to a loss ratio of 60.5% and an
underwriting expense ratio of 28.6% for the 2005 period.  The
loss ratio of 58.0% for the 2006 second quarter was comprised of
32.6 points of paid losses, 8.1 points related to reserves for
reported losses and 17.3 points related to incurred but not
reported reserves.

In establishing the reserves for losses and loss adjustment
expenses, the company has made various assumptions relating to
the pricing of its reinsurance contracts and insurance policies
and also has considered available historical industry experience
and current industry conditions.  Arch Capital primarily uses
the expected loss method of reserving, which is commonly applied
when limited loss experience exists.  Any estimates and
assumptions made as part of the reserving process could prove to
be inaccurate due to several factors, including the fact that
limited historical information has been reported to the company
through June 30, 2006.

Consolidated cash flow provided by operating activities was
US$400.0 million for the 2006 second quarter, compared to
US$357.8 million for the 2005 second quarter, and US$823.2
million for the six months ended June 30, 2006, compared to
US$685.6 million for the 2005 period.  The increase in operating
cash flows in the 2006 periods was due to growth in net premiums
written and net investment income, partially offset by a higher
level of paid losses as the company's loss reserves have
continued to mature and due to payments related to the 2004 and
2005 catastrophic events that contributed US$63.6 million to
paid losses for the 2006 second quarter and US$104.4 million for
the six months ended June 30, 2006.

Net investment income was US$90.5 million for the 2006 second
quarter, compared to US$53.7 million for the 2005 second
quarter, and US$170.8 million for the six months ended June 30,
2006, compared to US$103.6 million for the 2005 period.  The
increase in net investment income in the 2006 periods resulted
from a higher level of average invested assets primarily due to
cash flows from operations.  In addition, an increase in the
pre-tax investment income yield to 4.5% for the 2006 second
quarter and 4.4% for the six months ended June 30, 2006,
compared to 3.4% for the 2005 periods, contributed to the growth
in net investment income.  Arch Capital's investment portfolio,
which mainly consists of high quality fixed income securities,
had an average Standard & Poor's quality rating of "AA+" at June
30, 2006, December 31, 2005 and June 30, 2005.  The average
effective duration of the Company's investment portfolio was
reduced to 2.9 years at June 30, 2006, from 3.3 years at
December 31, 2005 and 3.9 years at June 30, 2005, while the
imbedded book yield increased to 4.8% at June 30, 2006, from
4.2% at December 31, 2005 and 3.7% at June 30, 2005.

Net foreign exchange losses for the 2006 second quarter of
US$1.1 million consisted of net unrealized losses of US$0.1
million and net realized losses of US$1.0 million, compared to
net foreign exchange gains for the 2005 second quarter of
US$10.2 million, which consisted of net unrealized gains of
US$10.7 million and net realized losses of US$0.5 million.  Net
foreign exchange losses for the six months ended June 30, 2006
of US$11.4 million consisted of net unrealized losses of US$8.0
million and net realized losses of US$3.4 million, compared to
net foreign exchange gains of US$13.4 million for the 2005
period, which consisted of net unrealized gains of US$13.4
million and minimal net realized gains. Net unrealized foreign
exchange gains or losses result from the effects of revaluing
the company's net insurance liabilities required to be settled
in foreign currencies at each balance sheet date.  The company
holds investments in foreign currencies which are intended to
mitigate its exposure to foreign currency fluctuations in its
net insurance liabilities.  However, changes in the value of
such investments due to foreign currency rate movements are
reflected as a direct increase or decrease to shareholders'
equity and are not included in the statement of income. For the
2006 and 2005 periods, the net unrealized foreign exchange gains
or losses recorded by the company were largely offset by changes
in the value of the company's investments held in foreign
currencies.

On January 1, 2006, Arch Capital adopted the fair value method
of accounting for share-based awards using the modified
prospective method of transition as described by FASB Statement
No. 123 (revised 2004), "Share-Based Payment."  As required by
the provisions of SFAS 123(R), the Company recorded after-tax
share-based compensation expense related to stock options of
US$1.7 million, or US$0.02 per share, in the 2006 second
quarter, and US$2.8 million, or US$0.04 per share, for the six
months ended June 30, 2006. Under the modified prospective
method of transition, no expense related to stock options was
recorded in the 2005 periods.  For the remaining six months of
2006, the company expects to record after-tax share-based
compensation expense related to stock options of approximately
US$2.9 million, or US$0.04 per share.

For the 2006 and 2005 second quarters, the effective tax rates
on income before income taxes were 9.1% and 5.8%, respectively,
and the effective tax rates on pre-tax operating income were
7.6% and 7.0%, respectively.  For the six months ended June 30,
2006 and 2005, the effective tax rates on income before income
taxes were 8.6% and 6.7%, respectively, while the effective tax
rates on pre-tax operating income were 7.5% in both periods.
The company's effective tax rates may fluctuate from period to
period based on the relative mix of income reported by
jurisdiction primarily due to the varying tax rates in each
jurisdiction.  The company's quarterly tax provision is adjusted
to reflect changes in its expected annual effective tax rates,
if any.  The Company currently expects that its annual effective
tax rate on pre-tax operating income for the year 2006 will be
in the range of 6.5% to 9.5%.

On May 24, 2006, Arch Capital issued in a public offering
US$125.0 million of its 7.875% series B non-cumulative preferred
shares with a liquidation preference of US$25.00 per share and
received net proceeds of approximately US$120.9 million.  The
company may redeem all or a portion of the preferred shares at a
redemption price of US$25 per share on or after May 15, 2011.
Dividends, as and if declared by the Company's board of
directors, are payable from the date of original issue on a non-
cumulative basis, quarterly in arrears, commencing on August 15,
2006, at an annual rate of 7.875%.  The company declared
dividends on its series A and series B non-cumulative preferred
shares of US$5.0 million and US$7.7 million, respectively, for
the 2006 second quarter and six months ended June 30, 2006.

At June 30, 2006, the company's capital of US$3.32 billion
consisted of US$300.0 million of senior notes, representing 9.0%
of the total, US$325.0 million of preferred shares, representing
9.8% of the total, and common shareholders' equity of US$2.69
billion, representing the balance.  The increase in the
company's capital during 2006 of US$535.3 million was primarily
attributable to the issuance of preferred shares and net income
for the six months ended June 30, 2006, partially offset by an
after-tax decline in the market value of the Company's
investment portfolio of US$64.3 million which was primarily due
to an increase in the level of interest rates.

Diluted weighted average common shares and common share
equivalents outstanding, used in the calculation of after-tax
operating income and net income per common share, was 1.7
million shares, or 2.3%, higher in the 2006 second quarter than
in the 2005 second quarter, and 1.8 million shares, or 2.4%,
higher for the six months ended June 30, 2006 than for the 2005
period.  The higher level of shares outstanding in the 2006
periods was primarily due to increases in the assumed dilutive
effects of stock options and nonvested restricted stock
calculated using the treasury stock method.  Under the treasury
stock method, the assumed dilutive impact of options and
nonvested stock on diluted weighted average shares outstanding
increases as the market price of the company's common shares
increases.


           Arch Capital Group Ltd. And Subsidiaries
              Consolidated Statements Of Income
        (U.S. dollars in thousands, except share data)


                       (Unaudited)               (Unaudited)
                 Three Months Ended         Six Months Ended
                     June 30,                  June 30,
                 2006         2005         2006         2005
             ------------ ------------ ------------ ------------
Revenues
Net premiums
written     US$794,558    US$723,728  US$1,668,277 US$1,523,529
(Increase)
decrease in
unearned
premiums      2,892         16,164     (109,226)     (86,569)
             ------------ ------------ ------------ ------------
Net premiums
earned        797,450      739,892    1,559,051    1,436,960
Net investment
income         90,503       53,660      170,829      103,576
Net realized
gains
(losses)      (32,202)       2,105      (35,585)       2,566
Fee income       3,468        1,025        5,273        7,137
             ------------ ------------ ------------ ------------
Total
revenues      859,219      796,682    1,699,568    1,550,239


Expenses
Losses and loss
adjustment
expenses     462,255      443,918      930,433      869,454
Acquisition
expenses     148,581      148,538      278,253      274,671
Other
operating
expenses      84,367       74,985      167,344      149,160
Interest
expense        5,651        5,629       11,206       11,265
Net foreign
exchange
(gains)
losses         1,146      (10,198)      11,399      (13,435)
            ------------ ------------ ------------ ------------
Total
expenses      702,000      662,872    1,398,635    1,291,115

Income before
income taxes  157,219      133,810      300,933      259,124

Income tax
expense        14,332        7,818       25,756       17,240
            ------------ ------------ ------------ ------------

Net income     142,887      125,992      275,177      241,884

Preferred
dividends      5,039           --        7,706           --
            ------------ ------------ ------------ ------------

Net income
available to
common
shareholders US$137,848   US$125,992   US$267,471   US$241,884
            ============ ============ ============ ============

Net income per
common share
Basic          US$1.88      US$3.65      US$3.66      US$7.02
Diluted        US$1.81      US$1.69      US$3.52      US$3.26

Weighted average
common shares and
common share
equivalents
outstanding
Basic        73,188,101   34,563,565   73,044,473   34,464,740
Diluted      76,155,438   74,412,553   76,014,819   74,249,728



               Arch Capital Group Ltd. and Subsidiaries
                      Consolidated Balance Sheets
            (U.S. dollars in thousands, except share data)



                                             (Unaudited)
                                        June 30,   December 31,
                                          2006         2005
                                      ------------ ------------
Assets
Investments and cash:
Fixed maturities available
for sale, at fair
value (amortized cost:
2006, US$6,023,605;
2005, US$5,310,712)                US$5,948,595   US$5,280,987

Short-term investments
available for sale,
at fair value (amortized cost:
2006, US$969,886;
2005, US$679,530)                       973,671        681,887

Short-term investment of
funds received under
securities lending
agreements, at
fair value                              762,226        893,379

Other investments,
at fair value (cost:
2006, US$119,136;
2005, US$59,839)                        132,046         70,233
Cash                                     366,373        222,477
                                      ------------ ------------
Total investments and cash              8,182,911     7,148,963
                                      ------------ ------------

Accrued investment income                  65,617        62,196

Fixed maturities and short-term
Investments pledged under
securities lending
agreements, at fair value                741,901       863,866

Premiums receivable                       897,400       672,902

Funds held by reinsureds                   84,860       167,739

Unpaid losses and loss adjustment
Expenses recoverable                   1,584,824     1,389,768

Paid losses and loss adjustment
Expenses recoverable                      96,827        80,948

Prepaid reinsurance premiums              444,586       322,435

Deferred income tax assets, net            84,021        71,139

Deferred acquisition costs, net           323,328       317,357

Receivable for securities sold            150,902           220

Other assets                              430,536       390,903
                                      ------------ ------------
Total Assets                        US$13,087,713 US$11,488,436
                                      ============ ============

Liabilities
Reserve for losses and
loss adjustment
expenses                            US$6,121,878   US$5,452,826

Unearned premiums                       1,939,140      1,699,691

Reinsurance balances payable              255,644        150,451

Senior notes                              300,000        300,000

Deposit accounting liabilities             46,526         43,104

Securities lending collateral             762,226        893,379

Payable for securities purchased          166,694         12,020

Other liabilities                         479,825        456,438
                                        ----------- ------------
Total Liabilities                      10,071,933      9,007,909
                                        ----------- ------------

Commitments and Contingencies

Shareholders' Equity
Non-cumulative preferred shares
(US$0.01 par value, 50,000,000 shares
  authorized)
- Series A (issued: 2006, 8,000,000)         80           --
- Series B (issued: 2006, 5,000,000)         50           --

Common shares (US$0.01 par value,
200,000,000 shares authorized,
issued: 2006, 73,937,973;
2005, 73,334,870)                           739          733

Additional paid-in capital             1,923,156    1,595,440

Deferred compensation under share
  award plan                                 --       (9,646)

Retained earnings                      1,168,819      901,348

Accumulated other comprehensive income
(loss), net of deferred income tax     (77,064)      (7,348)
                                     ------------ ------------
Total Shareholders' Equity             3,015,780    2,480,527
                                     ------------ ------------

Total Liabilities and
Shareholders' Equity             US$13,087,713 US$11,488,436
                                     ============ ============

Arch Capital Group Ltd., a Bermuda-based company with
approximately US$3.32 billion in capital at June 30, 2006,
provides insurance and reinsurance on a worldwide basis through
its wholly owned subsidiaries.

                        *    *    *

Standard & Poor's Ratings Services assigned on July 2, 2006, its
preliminary 'BBB' senior debt, 'BBB-' subordinated debt, and
'BB+' preferred stock ratings to Arch Capital Group Ltd.'s
universal shelf registration.

                        *    *    *

A.M. Best Co. assigned on MAy 23, 2006, a debt rating of "bb" to
Arch Capital Group Limited's US$125 million 7.875% non-
cumulative Series B preferred shares.  The outlook for this
rating is stable.  Arch's remaining debt ratings and the
financial strength rating of A- of Arch Reinsurance Ltd.
(Hamilton, Bermuda) and its affiliated companies are unchanged.


MONTPELIER RE: Net Income Reaches US$63.2MM in Second Quarter
-------------------------------------------------------------
Montpelier Re Holdings Ltd. reported comprehensive income for
the quarter ended June 30, 2006, of US$63.2 million, or US$0.69
per share, compared with US$110.6 million, or US$1.65 per share,
for the same quarter last year.  Net income excluding net
realized and unrealized gains and losses for the second quarter
was US$53.5 million.

Fully converted book value per share increased from US$12.27 per
share at March 31, 2006, to US$13.00 at June 30, 2006, net of a
dividend of 7.5 cents per share, an increase of 6.6% (.

Anthony Taylor, Chairman and CEO, commented, "This was a
satisfactory quarter. Pricing in our core markets continued to
firm and we saw ample opportunity, particularly in the US, to
deploy our capital at attractive expected returns.  Our combined
ratio was 72.9% which included US$19 million of net adverse
development for the 2005 hurricanes, most of which was due to
Wilma.

"We were pleased to complete a US$100 million private equity
investment by WL Ross and Co., enabling us to take increased
advantage of some of the attractive opportunities we saw during
the June and July renewals. In addition the US$180 million
forward sale agreement with Credit Suisse on May 31, 2006,
provides us with an immediate source of equity capital, should
we need it."


                    Montpelier Re Holdings Ltd.
                    Consolidated Balance Sheets
          (millions, except share and per share amounts)

                                        As at        As at
                                      June 30,    December 31,
                                        2006         2005
                                   ------------ ------------
Assets

Investments and cash:
Fixed maturities, at fair value    US$ 2,653.1    US$ 2,307.1
Equity investments, at fair value        169.7        113.7
Other investments, at estimated
fair value                               36.2         31.5
Cash and cash equivalents                205.6        450.1
                                      ----------   ----------

Total investments and cash             3,064.6      2,902.4

Unearned premium ceded                    80.4         83.8
Premiums receivable                      390.4        270.9
Investment trades pending                    -          4.7
Securities lending collateral            268.0        315.6
Funds withheld                             2.1          1.5
Deferred acquisition costs                55.7         53.4
Reinsurance receivable on paid losses     33.9         55.6
Reinsurance recoverable on
unpaid losses                           232.1        305.7
Accrued investment income                 24.6         22.1
Other assets                              12.5         44.0
                                     ----------   ----------

Total Assets                         US$4,164.3  US$4,059.7
                                     ==========   ==========

Liabilities

Loss and loss adjustment
expense reserves                      1,448.9      1,781.9
Unearned premium                         394.3        262.8
Reinsurance balances payable             170.8        205.1
Investment trades pending                 32.4            -
Securities lending payable               268.0        315.6
Debt                                     352.2        249.1
Accounts payable, accrued expenses
and other liabilities                    19.6         16.4
Dividends payable                          8.7          7.2
                                      ----------   ----------

Total Liabilities                    US$2,694.9   US$2,838.1
                                      ----------   ----------

Minority Interest - Blue Ocean
Preferred shares                         58.0         54.2
Minority Interest - Blue Ocean
common shares                           155.9        109.7
                                      ----------   ----------
Total Minority Interest                 213.9        163.9
                                      ----------   ----------

Shareholders' Equity
Common voting shares and additional
paid-in capital                       1,817.1      1,715.1
Accumulated other comprehensive
income (loss)                             5.2         (9.1)
Retained deficit                        (566.8)      (648.3)
                                      ----------   ----------

Total Shareholders' Equity            1,255.5      1,057.7
                                      ----------   ----------

Total Liabilities, Minority
Interest and Shareholders' Equity    US$4,164.3    US$4,059.7
                                      ==========   ==========


Common voting shares outstanding
  (000's)                             107,876 sh    89,178 sh
Common voting and common equivalent
Shares outstanding (000's)           108,354       96,360

Book value per share:

Basic book value per common
  voting share                         US$13.07    US$11.86
                                      ==========   ==========
Fully converted book value per common
  voting and common equivalent share   US$13.00    US$11.86
                                      ==========   ==========

Headquartered in Bermuda, Montpelier Re Holdings Ltd., through
its operating subsidiary Montpelier Reinsurance Ltd., is a
premier provider of global property and casualty reinsurance and
insurance products.  During the year ended December 31, 2005,
Montpelier underwrote US$978.7 million in gross premiums
written.  Shareholders' equity at December 31, 2005, was US$1.1
billion.

                        *    *    *

On Jan. 4, 2006, Moody's Investors Service assigned Ba1 rating
on Montpelier Re Holdings Ltd.'s subordinated shelf and Ba2
rating on preferred shelf.  Moody's said the outlook for the
ratings is stable.




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


* BOLIVIA: Mines Minister Supports Comibol Joint Project
--------------------------------------------------------
Walter Villarroel Morochi, Bolivia's Minister of Mines and
Metallurgy, released a written statement of support and
commitment to organize and "guarantee a normal functioning
mining operation" for Corporacion Minera de Bolivia aka Comibol
and Franklin Mining, Inc.

Mr. Morochi was also quoted from a press conference, promoting
mining development with the assurance that "Bolivia remains
competitive on an international level."

Mr. Morochi addressed the need to "create a competitive and
secure environment for mining investment that will foster job
creation, infrastructure modernization and industry
partnership."

Mr. Morochi said, "We believe that many of these existing mining
areas and areas with new potential, when properly evaluated with
modern exploration technology and mining techniques, will
highlight the potential for the discovery of important mineral
deposits -- deposits which can surely have the opportunity to be
transformed into business enterprises of world-wide importance."

"One of the key objectives of my office is to send a positive
message to participants at the annual convention of the PDAC, to
attract investor interest in developing and expanding the small
existing mining operations, as we are confident that there are
very high probabilities of finding many more important mineral
deposits. Currently, we have an extensive list of investment
requests from mining cooperatives and active mining companies
that range from one-half million dollars to 2 million dollars.
These are important opportunities that are available to be taken
advantage of."

"Furthermore, we will take measures that will encourage
investment in ventures both large and small.  One example of
this will be the declaration of 'integrated mining areas' that
will respect pre-existing mineral rights in areas where many
small mining concessions exist by unifying development efforts.
This will allow the Bolivian state to promote the search of
strategic partners for the development of these areas. "

"This is just one example of several measures that will be taken
to promote mining development and ensure Bolivia remains
competitive on an international level.  We are pleased and very
willing to provide any information that the investors interested
in our country will require."

"I am pleased to have this opportunity to send the message from
the President, that we are working hard to establish the legal
security that investment in the mining industry requires on a
long term basis."

                 About Franklin Mining, Inc.

Franklin Mining, Inc - http://franklinmining.com/-- currently
have interests in Bolivia and the United States.  The company
opened opened a division named Franklin Oil & Gas, and opened
subsidiaries in Bolivia -- Franklin Mining, Bolivia and Franklin
Oil & Gas, Bolivia.

                        *    *    *

Fitch Ratings assigned these ratings on Bolivia:

                     Rating     Rating Date
                     ------     -----------
   Country Ceiling    B-       Jun. 17, 2004
   Long Term IDR      B-       Dec. 14, 2005
   Local Currency
   Long Term Issuer
   Default Rating     B-       Dec. 14, 2005


* BOLIVIA: Asserts Intermediary in Oil Sale to Brazil Is Legal
--------------------------------------------------------------
Andres Soliz, Bolivia's energy minister, and Jorge Alvarado
-- the head of Yacimientos Petroleros Fiscales Bolivianos, the
country's state oil company -- denied to Prensa Latina that
using an mediator in selling oil to Brazil at a less expensive
rate was against the law.

Prensa Latina relates that under a contract, YPFB exchanges
2,000 oil barrels for Brazilian diesel at a low price through
intermediary Iberoamerica Trading SRL, to ensure supplies to
northeast Bolivia.

Minister Soliz and Mr. Alvarado told Prensa Latina that the
transparent exchange will save Bolivia US$4 million, assuring
that it will not cost the country US$2 million.

Minister Soliz said that Bolivia lacks refining capacity in
Cochabamba and Santa Cruz, and wants to avoid a diesel shortage
in those places, Prensa Latina states.

                        *    *    *

Fitch Ratings assigned these ratings on Bolivia:

                     Rating     Rating Date
                     ------     -----------
   Country Ceiling    B-       Jun. 17, 2004
   Long Term IDR      B-       Dec. 14, 2005
   Local Currency
   Long Term Issuer
   Default Rating     B-       Dec. 14, 2005




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


BANCO BRADESCO: Fitch Ups Local Currency Rating to F3 from B
------------------------------------------------------------
Fitch Ratings upgraded Banco Bradesco S.A.'s short-term local
currency rating to 'F3' from 'B.'

Fitch upgraded select Brazilian banks' short-term local currency
ratings to 'F3' from 'B'.  This follows the recent upgrade of
these banks' local currency Issuer Default ratings to 'BBB-'
from 'BB+'.


BANCO BRADESCO: S&P Says B Ratings Reflect Brazil's Econ. Risks
---------------------------------------------------------------
Standard & Poor's assigned these ratings to Banco Bradesco S.A.:

   -- Credit Rating: BB+/Stable/B;
   -- Counterparty Credit: BB+/Stable/B;
   -- Local Currency: BB+/Stable/B
   -- Foreign Currency: BB/Stable/B

The rating on Bradesco incorporates its exposure to Brazil's
economic risk; its direct exposure to the Brazilian sovereign
through its marketable securities and open-market operations;
and the relatively higher operating costs and relative Standard
& Poor'saker capitalization when compared to some of its Latin
American peers.  These negatives are partially mitigated by
Bradesco's significant market share in Brazil and its strong
franchise as one of the most diversified retail banks in Latin
America; improving earnings poStandard & Poor'sr with increasing
cross selling; and its strong liquidity.

The counterparty credit rating assigned to Bradesco is one notch
above the sovereign foreign currency rating on Brazil (FC:
BB/Stable/--; LC: BB+/Stable/--).  Standard & Poor's views the
greatest risk of potential government intervention detrimental
to Bradesco's creditors to be a deposit freeze, as opposed to
currency controls.  It estimates the potential probability of a
deposit freeze to be at the 'BB+' level, the same as the local
currency rating on Brazil, and consequently encompass this risk
in the 'BB+' counterparty credit rating on Bradesco.

While Bradesco is exposed to Brazilian country risk, Standard &
Poor's believes that it could survive the likely economic chaos
of a sovereign default due to Bradesco's

   -- strong retail funding base, which Standard & Poor's
      expects remain stable even during a sovereign crisis;

   -- low exposure to foreign currency in asset and liabilities;

   -- relatively conservative credit underwriting;

   -- diversified operations; and

   -- overall strong franchise and financial performance.

Standard & Poor's sees the economic and industry environment for
Brazilian banks more favorably, given improvements in the
structure of the banking industry, banks' better profitability
levels, the Brazilian Central Bank's commitment to improve the
quality and transparency of banking supervision, and signs of
greater banking penetration.  Besides, overall country risks
affecting the industrial sector are also improving.

Bradesco's strong intrinsic creditworthiness is explained by its
above-average franchise and relevant market position in several
banking segments in Brazil, which alloStandard & Poor'sd for a
strong diversification of its assets and deposits, and a track
record of deposit stability and strong liquidity.  These
characteristics, added to Bradesco's importance and relevant
size in the local market, should allow the bank to withstand the
impact of a foreign currency crisis. With adjusted assets of
BRL208.7 billion at year-end 2005, Banco Bradesco maintains its
position as the largest private-sector bank in Brazil and in
Latin America.

Bradesco has improved its earning fundamentals in recent years,
and presented a higher profitability level with ROA of 2.5% in
2005 compared to 1.5% average from 2002 to 2004.  Still, it is
challenged to improve its efficiency. Standard & Poor's
recognizes Bradesco's efforts to control operating expenses,
which resulted in a relevant drop in the noninterest expenses-
to-revenues ratio to 60% in 2005 from average 70% in 2001 to
2004.

The bank's dense retail branch network and its larger clientele
have traditionally facilitated the collection and increase of
cheap domestic deposits, even during crises.  Liquidity as a
consequence has been kept at strong levels (liquid assets
excluding repos reached around 30% in 2005).

The rating on Bradesco considers the bank's exposure to Brazil's
local sovereign risk through its securities and open market
portfolios of approximately 2.5x its equity.  As the local
currency has been the reference currency in Brazil, and because
of the strong volatility of the foreign currency, Bradesco
carries low exposure to foreign currency (total foreign currency
assets/liabilities of 12% of total assets).

Bradesco has a diversified funding base, providing the bank with
a low cost and adequate liquidity.  The bank funds its
operations with an increasing and low-cost deposit base, which
is the largest among the private retail banks.  As of December
2005, core deposits represented 35% of total liability and
funded 93% of its gross loans.

Bradesco's dense retail branch network has traditionally
facilitated the collection of cheap domestic deposits.
Bradesco's cost of funding is among the lowest in the Brazilian
market with a leading market share in demand and savings
deposits among private banks.  A larger clientele was
responsible for the increase in the bank's customer deposits.
Standard & Poor's Ratings Services believes the bank will
continue to increase its deposit base mainly as a consequence of
the cross-selling opportunities derived from Postal Bank and its
operating agreement with retailers.

Bradesco has kept its liquidity at a good level given its large
deposit base and its large investment in cash and liquid
government securities portfolio.  On the asset side of the
balance sheet, liquidity is strengthened by significant
investment in Brazil risk securities (local currency federal
government securities and private securities of Standard &
Poor'sll-regarded Brazilian companies).

Bradesco's position in the banking industry and its good
financial profile have helped the bank to maintain its access to
both local and international markets.  The bank also enjoys
ample correspondent bank lines and has successfully accessed the
international capital markets. As of December 2005, other
borrowing represented 14% of total funding, related mainly to:

   -- credit lines (24%),
   -- local repasses of de Development banks-BNDES (32%),
   -- foreign issuance (9%),
   -- local debentures (9%), and
   -- subordinated debt (23%).

The stable outlook reflects our expectation that the bank will
maintain its strong credit standings, including the above-
average diversification, strong liquidity, good profitability,
and a comfortable amortization schedule of obligations.  In the
case of an increase in the sovereign local currency rating, the
ratings on the bank would be reviewed based on its own merits.
The rating would be raised if there were further improvement in
Brazil's economic environment, and as long as Bradesco:

   -- presents comfortable asset and liability management and
      asset quality indicators under less-favorable economic
      conditions (and after a strong credit expansion);

   -- sustains its profitability with improving efficiency; and

   -- improves capitalization ratios (total equity to adjusted
      assets) in line with those of international peers.

On the other hand, if there is deterioration on the sovereign
local currency rating, the rating on Bradesco would follow in
tandem.  The ratings would trend downward if the bank's
liquidity profile deteriorates significantly or if it presents a
more concentrated debt amortization schedule; Bradesco increases
significantly its dollar exposure or currency mismatch; or its
asset quality indicators deteriorate (nonperforming loans ratio
higher than 9%).

With adjusted assets of BRL208.7 billion at year-end 2005
(approximately US$89 billion, at BRL2.34 per US$1), Banco
Bradesco maintains its position as the largest private-sector
bank in Brazil and in Latin America.  In Brazil it has 10% and
13% market share in terms of assets and loans, respectively.  In
the region, Bradesco is followed by:

   -- Banco Itau S.A.,
   -- BBVA Bancomer in Mexico,
   -- Banamex in Mexico,
   -- Unibanco in Brazil, and
   -- Santander-Banespa in Brazil.

Bradesco's strong franchise is the result of its diversified
business profile, long track record in the market, and good
financials. Established by Amador Aguiar as Banco Brasileiro de
Descontos S.A. in 1943, Banco Bradesco grew both organically and
through the acquisition of a number of banks since 1948.  In
recent years, acquisition has been the main driver for growth
given the strategy to main Bradesco's position in the market.
The bank has been historically one of the major players in
acquisitions in Brazil, with the purpose of increasing its share
in specific markets (such was the case of consumer finance with
Finasa in 2002 and the Brazilian operation of American Express
just announced and acquired for US$490 million) and maintaining
leadership position in others.  It also targeted specific market
opportunities such Standard & Poor'sre the cases of state-owned
banks (Banco do Estado do Maranhao in 2004 and Banco do Estado
do Ceara in 2005) and the acquisition of credit portfolio from
smaller banks (mainly payroll discount lending) possible after
the banks' funding reduction as consequence of the intervention
of Banco Santos.  Organic growth is also a target and Bradesco
has successfully grown its clientele base with the ability to
reach low-income individuals previously not serviced by the
banking system (through the correspondent Banking network of
Banco Postal) and individuals that Standard & Poor'sre serviced
by large retailers (through agreement with the retail stores
such as Casa Bahia and Lojas Salfer in 2004).  The number of
checking accounts reached 16.5 million in 2005, up from 13
million in 2002.

Bradesco's diversified business profile also reflects a strategy
toward leadership in most of the markets in which it operates.
Bradesco has been among the largest private players in most of
the markets including savings accounts (19.3% market share),
number of credit cards (15%; compared to 14.3% in 2004), largest
insurance company by total premiums (26% in 2005), the largest
pension company in terms of revenues (37.5% in 2005), consumer
finance (22%) and vehicle finance (23%), export market (21%),
and investment funds (15%).  In some other markets, Bradesco is
searching for growth and to increase its market position. The
bank has just announced the acquisition of American Express'
operation in Brazil, which includes credit cards, consumer
finance, insurance brokerage, dealing of foreign currency and
travel services commercialized by Amex, and the use of the
Centurion brand for 10 years.  This acquisition will add 1.2
million cards to its current base of 8.7 million and raise its
share to approximately 17% from 11%.  Amex is a premium brand
that has a complementary role to Bradesco's client profile.

Bradesco's spread-out and larger branch network (2,921 branches-
second largest branch network in Brazil) has helped the bank to
maintain a low funding costs and increase and service its ample
clientele base.  In addition, Bradesco has accessed the low-
income population that was not necessarily serviced by the
banking system.  Through its exclusive partnership with the
Brazilian Postal company (Postal Bank), Bradesco offers its
services and products such as credit, capitalization, insurance,
and saving accounts to low income customers (mainly classes C
and D). Since 2003, the bank has opened 4.5 million new cash
accounts through Banco Postal through its 5,461 branches in all
Brazilian states.  In addition, Bradesco has close partnerships
with large retail stores in an attempt to access their clientele
base that can be transformed into banking clients.

               Ownership and Legal Status

Bradesco is a limited liability corporation and is one of the
most widely held financial stocks in the Brazilian market.  A
portion of Bradesco's shares is held by:

   -- the bank's directors,
   -- members of the Board of Directors, and
   -- employees through Elo Participacao.

Fundacao Bradesco holds approximately 40% of the bank's voting
share through its direct and indirect investment in the bank.
Elo Participacoes indirectly controls 11.56% of the bank's
voting shares. The Aguiar family, one of the founders of the
bank, holds 11% of voting shares through its interest in Cidade
de Deus Participacoes S.A.

                   Bradesco Ownership

                          Voting shares Total shares

Fundacao Bradesco              39.95  25.12
Elo Participacao                   11.56   2.79
Aguiar family                    11           5.52
Stock Exchange                 24.52  58.31
Other banks
(BBVA, BES and UFJ Bank)      12.97        8.26
Total                           100      100

Fundacao Bradesco is a philanthropic organization dedicated to
elementary and technical education for underprivileged youth,
providing tuition-free education.  Fundaxao Bradesco's president
is the President of the bank's Board of Directors, Lazaro de
Mello Brandao, and the company is managed by some of the bank's
board members and directors. Elo Participacoes, on its turn,
comprises mainly the bank's directors, members of the board and
other employees (approximately 200 in total). Although Standard
& Poor's consider that the control by a charitable foundation
potentially reduces financial flexibility, Fundacao Bradesco has
maintained additional liquidity through its ownership in
Bradespar. Bradespar was created in 2000 to handle the
nonfinancial investments of the group (CVRD, CPFL, CSN, VBC
Energia, and Net) and reduce the bank's direct investment in
industrial companies.  Its portfolio comprises industrial
companies with strong market value.  Bradesco's financial
flexibility is reinforced by the bank's good access to capital
markets and ample shareholder base.

Bradesco has a centralized management style-most of the senior
officers are required to have worked for Bradesco for a minimum
of 10 years before becoming Executive Officers and directors.
The Board of Directors comprises eight members who establish
corporate strategy and review business plans and policies.  It
includes two of the founder's grandchildren -- Joao Aguiar
Alvarez and Denise Aguiar Alvarez Valente.  A 22-member
directorate implements the board of directors' strategy.

Strategy

Bradesco's major strategic goals are to maintain its leading
market position, growing through acquisitions and organically;
stronger cross selling to existing clients with efforts to
improve banking penetrations, and assuring a sustainable
profitability with efforts on cost controls and higher banking
revenues.

A clear and well-executed strategy, added to strong efforts in
commercialization and segmentation and constant development in
controlling tools and technological investments, has helped
Bradesco to achieve its good market position.  Six years ago,
Bradesco moved from a product-focused to a client-focused bank
with emphasis on results rather than just revenues.  This
movement has been accompanied by a focus on segmentation and
increasing client's profitability and cross selling.

Anticipating improving economic conditions, the bank has also
made movements to add clients that Standard & Poor'sre not
serviced by the banking system.  It acquired the right to
service these individuals through Postal Bank structure,
agreements with retailer stores closed mainly in 2004 and 2005
(such as Casa Bahia and Lojas Salfer in 2004 that operate with
more than 10 million clients and have credit operation of more
than BRL1 billion per year) and the acquisition of the credit
portfolio of smaller banks focused on payroll discount loans.
Bradesco also has a longstanding policy of forming partnerships
as a means of establishing itself as a full-service financial
conglomerate.  In that sense, Bradesco has acquired expertise
while expanding the number of services it offers and its client
base.

Bradesco will continue to pursue market opportunities in
segments where it lacks participation and scale, while
maintaining its focus on segmentation and higher profitability
of its client base.  Bradesco has a successful track record in
integrating acquired institutions and in building on their
particular strengths. In the past three years, the high price of
acquisition targets made banks focus more on organic growth and
target specific market opportunities to gain scale.  Several
agreements Standard & Poor'sre done with emphasis on channels
and institutions that had the track record and agility in
servicing the underbanked population.

The bank's efforts to strengthen its commercialization, its
constant technological investments, and the focused approach per
segment has translated into improving revenue from fee
generation and higher cross selling opportunities to its
existing base.  In addition, Bradesco is well placed to benefit
from the trend of increasing penetration into lower-income
markets, a segment that is still seriously underbanked.

Following the strategy to achieve an international standard of
efficiency, the bank will continue to focus on revenue
enhancement while increasing its cost at inflation rate.
Through an activity-based costing program, the bank is able to
identify cost generation per area and implement changes to
increase gain of scale.

                        Risk Management

Credit risk

Bradesco's asset quality track varied betStandard & Poor'sen
periods of positive economic conditions and period of economic
deterioration, as verified when there was a strong currency
devaluation affecting local borroStandard & Poor'srs in 1999 and
2002.  As a consequence of the local conditions, Bradesco, like
most of the Brazilian banks, has been prepared to face the
country's volatility and has invested heavily to improve its
credit risk tools while improving lending diversification by
customers and sectors.  The bank was able to reduce the growth
pace of its lending portfolio in periods of economic
contraction, renegotiating contracts and improving the creation
of provisions for unexpected risks.  In recent years, Bradesco
has maintained an adequate credit risk management even with a
change to a higher financial intermediation environment with
improvement in asset quality indicators and reinforcement of
provisions.

Since 2004, with positive economic indexes and growth, the
banking system has increased the pace of lending (48% the past
two years), being that Bradesco grew 49% in the same period.
Bradesco is among the most diversified banks in the market in
terms of clients, sector, and segments, and operates with all
clusters of the pyramid.  A boom in lending to individuals and
government regulatory approval of the payroll discount lending
(to pensioners and public employees) drove the bank's lending
growth, thus changing the bank's credit portfolio mix toward
individuals and small and midsize companies.

Asset quality ratios have been improving in recent years with a
reduction of nonperforming assets (NPAs; credits classified from
E to H) to total loans ratio reaching 4.8% at year-end 2005
(average 6% from 2001 to 2004).  In addition, net charge-offs to
total loans ratio reached 1.2% in the same period.  The new
loans originated in 2005 are of good quality (NPL ratio of
2.5%).  Conservatively, provisions were created above the
regulatory requirement with more than 100% provision coverage
over NPL (as the bank has maintained around $432 million excess
credit provisions for unexpected risk). Standard & Poor's
believes that Bradesco has shown adequate and diversified
earnings poStandard & Poor'sr, which gives the bank enough
flexibility to constitute additional provision if needed.

Credit risk also considers the investment in the securities
portfolio (30% of adjusted assets in December 2005 for
consolidated balance sheet).  Like all banks operating in
Brazil, Bradesco consolidated is exposed to government risk in
the form of a public-sector securities portfolio and open-market
operations, equivalent to approximately 2.5x its net worth.

Market risk

Standard & Poor's believes that Bradesco manages its market risk
adequately to its profile.  Credit, interest rate, and foreign
exchange risk exposure generated by the treasury units are
monitored on a daily basis. The monitoring of market risk for
the different business units and markets is centralized.  Market
risk is measured, controlled, and managed using a portfolio of
commonly used tools, including stress testing and a one-day
Value At Risk (VaR) at the 97.5% confidence interval.  Maximum
daily VaR in 2005 for Bradesco was BRL82 million, while average
VaR in the year stayed at BRL70 million (half of the limit of
BRL130 million).  The bank performs three ad hoc scenarios.

The group's margin is negatively affected by interest rate
increases with a potential loss in the value on the fixed-rate
assets and liabilities not higher than BRL270 million.  This is
the result of a mismatch in the book betStandard & Poor'sen the
prefixed credit operations (mainly lending to individuals with
an average tenor of 180-360 days and government securities) and
the variable funding from deposits.  Structural currency risk
represented by its investments in international subsidiaries is
managed for capital purpose and to reduce mismatch.  As of
December 2005, Bradesco had a net foreign currency sold position
of BRL4.9 billion, or 25% of net worth, bringing a positive
impact with the expected real appreciation.

Profitability

Bradesco has improved its earning fundamentals and has presented
a higher profitability level with ROA of 2.5% in 2005 compared
to 1.5% average in from 2002 to 2004.  Increase in credit to
profitable segments, efforts in cost control, and the bank's
ability to increase scale and cross selling supported the bank's
development.  The change in profitability level is expected to
be sustained in the future with improving economic condition
that would bring higher credit operations to profitable
segments, increasing clientele and loStandard & Poor'sring
provision costs to the bank.

With the higher use of the balance sheet to profitable credit
operations, the adjusted interest margin increased to 8.4% in
2005 from 7.2% in 2004.  The increment in credit operations to
almost 40% balance sheet at year-end 2005 from 33% at year-end
2004 and a change in lending mix with lending to individuals
more than compensated the spread reduction in the industry.  In
addition, Bradesco benefits from a low funding cost given its
large deposit base.

The bank's segmentation brought benefits in terms of cross-
selling and increased clientele number, important for the
generation of higher fee income revenues.  The importance of
revenues from fees over total revenues has been increasing in
recent years, to 28.2% in 2005, which is higher than that of
most of its Latin American peers.  The jump in 2005 was
attributed to higher revenues from credit operations, the better
pricing policy with increasing clientele base that helped on
checking accounts revenues, and increased usage of credit/debit
cards.

Achieving material improvements in operating efficiency and cost
controls are among the bank's key goals.  Standard & Poor's
recognizes Bradesco's efforts to control administrative and
personnel expenses, which resulted in a relevant drop of
noninterest expenses to revenues ratio to 60% in 2005 from
average 70% in the 2001 to 2004 period.  The effort was done on
the expenses side where the growth was in line with inflation
index, but was more relevant on the revenues side.

Bradesco's increase in loan-loss provisions is loStandard &
Poor'sr than that of other peers, but reflects the expectation
of controlled credit risk of its portfolio.  The bank has
maintained excess provisions of US$432 million or 1.2% its total
loan operation (total loan-loss reserve of 6.1% its gross
portfolio), which helps generate a comfortable provision
coverage ratio of 127%.  The insurance, capitalization and
pension plan net income represented 29% of Bradesco's
consolidated result, emphasizing the importance of the insurance
business to the group.  Bradesco Seguros continued to report
good operating results.

Standard & Poor's expects profitability to be maintained, driven
by expansion in personal lending, gains of scale, and cost
control that tend to compensate a lower interest rate
environment.  The risk implications of these trends should be
modest, helped by the bank's strong diversification and good
credit risk management.

Capital

Bradesco is expected to maintain adequate capitalization.
Although Bradesco's equity to risk-weighted assets ratio (15.2%
at year end 2005) exceeds Central Bank regulations, the level of
Tier I capital is below its immediate local peers.  Still, with
speed-up of lending, Tier I capital has been maintained at the
11.5% level through mainly earnings retention.

Adjusted Common Equity (ACE) to assets and loans increased to 6%
and 17% in 2005 from 4% and 13%, respectively, in 2004 due to
the loStandard & Poor'sr goodwill amortization and tax credits
and strong earnings for the year.  Still the ACE-to-total assets
and loans ratio is relatively lower than those of some of its
Latin American peers.

Bradesco's management is committed to maintain capitalization
levels of 11.5% Tier I capital through internal capital
generation mainly (as profitability level has increased enough
to support lending growth), which is enough to support the
bank's expansionist strategy. In the medium to long term, the
bank can still make use of hybrid capital to leverage on its
operations or inject capital.


BANCO DO ESTADO: Fitch Ups Local Currency Rating to F3 from B
-------------------------------------------------------------
Fitch Ratings upgraded the Short-term local currency ratings of
Banco Santander Central Hispano's subsidiaries in Brazil - Banco
do Estado de Sao Paulo S.A. aka Banespa, Banco Santander Brasil
S.A. and Banco Santander Meridional S.A. -- to 'F3' from 'B'.
All other ratings are affirmed.

These ratings of Banespa are affirmed:

   -- Foreign currency Issuer Default rating: 'BB' with a
      Stable Outlook;

   -- Local currency IDR: 'BBB-' with a Stable Outlook;

   -- Short-term foreign currency ratings: 'B';

   -- Individual rating: 'C';

   -- Support rating at '3';

   -- National Long-term rating: 'AA+(bra)' with a Stable
      Outlook; and

   -- National Short-term rating at 'F1+(bra)'.

The upgrade of the short-term local currency ratings follows the
recent upgrade of these banks' long-term local currency IDRs to
'BBB-'from 'BB+'.  The three banks are separate legal entities,
but in practice function as a multiple bank and consolidate on
an audited pro-forma basis into a group known as Santander
Banespa, with unified management, strategies, systems, and
controls.  Although it is not a legal entity, Fitch evaluates
the group on a pro-forma consolidated basis and makes no
distinctions between the IDRs of these banks.  Brazilian
regulatory supervision focuses on the 'consolidated' Santander
Banespa.

Their foreign currency IDRs are constrained by Brazil's 'BB'
Country Ceiling.  The National ratings and the local currency
IDRs are higher than Brazil's 'BB' sovereign rating, reflecting
shareholder strength and the strategic importance of the
Brazilian operation to SAN, as well as Fitch's conviction that
SAN is fully committed to developing Santander Banespa's
competitive advantages.  Banespa's Individual rating is higher
than BSB's and BSM's, reflecting a strong and evolving franchise
in Brazil's most prosperous region, tempered by a high yet
rapidly declining volume of intangible assets.  BSB's Individual
rating reflects a large volume of intangibles and a relatively
weak but improving operating performance.  BSM's Individual
rating reflects its weak operating performance.  The Individual
ratings are supported by SAN's franchise and the group's risk
management and technological support.

Santander Central (IDR 'AA') is Spain's largest banking group
(FYE05 assets: USD954 billion).  It currently holds around 10%
of the Latin American commercial banking market, which generates
about a third of SAN's pre-tax profits.  Brazil has the largest
population in Latin America and the second largest GDP, which
renders it of key importance to SAN's strategy for the region.
Santander Banespa has the fifth largest loan portfolio and core
deposit base among private banks in Brazil.


BANCO ITAU BBA: Fitch Raises Local Currency Rating to F3 from B
---------------------------------------------------------------
Fitch Ratings upgraded Banco Itau BBA S.A.'s short-term local
currency rating to 'F3' from 'B.'

Fitch upgraded select Brazilian banks' Short-term local currency
ratings to 'F3' from 'B'.  This follows the recent upgrade of
these banks' local currency Issuer Default ratings to 'BBB-'
from 'BB+.'


BANCO ITAU: Fitch Upgrades Local Currency Rating to F3 from B
-------------------------------------------------------------
Fitch Ratings upgraded Banco Itau S.A.'s short-term local
currency rating to 'F3' from 'B.'

Fitch upgraded select Brazilian banks' Short-term local currency
ratings to 'F3' from 'B'.  This follows the recent upgrade of
these banks' local currency Issuer Default ratings to 'BBB-'
from 'BB+'.


BANCO ITAU HOLDING: Fitch Ups Local Currency Rating to F3 from B
----------------------------------------------------------------
Fitch Ratings upgraded Banco Itau Holding Financeira S.A.'s
short-term local currency rating to 'F3' from 'B.'

Fitch upgraded select Brazilian banks' Short-term local currency
ratings to 'F3' from 'B'.  This follows the recent upgrade of
these banks' local currency Issuer Default ratings to 'BBB-'
from 'BB+'.


BANCO NACIONAL: Grants BRL20.4 Million to 50 Cane Producers
-----------------------------------------------------------
Banco Nacional de Desenvolvimento Economico e Social aka BNDES
approved a BRL20.4 million financing to a group of 50 sugar cane
producers in Medium Tiete, to expand the cane supply of Zillo
Lorenzetti Group.  The whole project will cost BRL32.6 million,
of which 63% will come from BNDES and will be handed over via
Unibanco.  Expansion and renewal of the 10,739 hectares of sugar
cane will contribute to maintain the jobs of the 7,300 people
that work in the cane production. The financing will also
contribute to increase the volume of crushing, which will go
from the current 7,750 million to 8,250 million tons/year.

Hiring will be made by two labor consortia formed by a union of
producers, under the guidance of the Labor Ministry Agency in
the region.

The cane producers that will supply Zillo Lorenzetti Group have
the support of the Association of Cane Planters in Medium Tiete
or Ascana, founded in 1956.  Its staff is composed of agronomist
engineers and advisors specializing in the sugar and alcohol
industry.  Suppliers are from the municipalities of:

   -- Areiopolis,
   -- Pratania,
   -- Borebi,
   -- Agudos,
   -- Macatuba,
   -- Pederneiras,
   -- Boraceia,
   -- Sao Manoel,
   -- Avare and
   -- Lencois Paulistas.

The sugar cane production in Brazil is the most competitive in
the world.  It has a positive growth perspective in the foreign
sugar market, especially now that the World Trade Organization
imposed restrictions on the European exports.

Sugar production mainly comes from cane, which accounts for 70%
of the production, and the remaining 30% comes from beet and
corn.  Brazil accounts for 17% of the production and 32% of
exports, and is also the leading producer of alcohol,
contributing 57% in the global market and 38% for exports.

The USA, which manufactures corn alcohol, ranks second among
global alcohol producers, with a production slightly lower than
that of Brazil.

                        *    *    *

As reported in the Troubled Company Reporter on March 3, 2006,
Standard & Poor's Ratings Services raised its foreign currency
counterparty credit rating on Banco Nacional de Desenvolvimento
Economico e Social S.A. aka BNDES to 'BB' with a stable outlook
from 'BB-' with a positive outlook.  The company's local
currency credit rating was also shifted to 'BB+' with a stable
outlook from 'BB' with a positive outlook.


BANCO SAFRA SA: Fitch Affirms Low B Currency Issuer Ratings
-----------------------------------------------------------
Fitch Ratings affirmed Brazil-based Banco Safra S.A.'s ratings,
after one of the two main shareholders Joseph Safra has agreed
to purchase Moise Safra's, his brother and the other
shareholder, ownership in the Brazilian and international
financial entities that comprise the Safra Financial Group.  The
transaction is contingent upon approval by the Central Bank of
Brazil and the respective regulators of the home countries of
the other entities.

Fitch affirmed these ratings of Banco Safra:

   -- Foreign currency Issuer Default rating: 'BB' with
      a Stable Outlook;

   -- Local currency IDR: 'BB+' with a Stable Outlook;

   -- Short-term foreign and local currency ratings: 'B';

   -- Individual rating: 'C';

   -- Support rating: '4';

   -- National Long-term rating: 'AA (bra)', with a Stable
      Outlook; and

   -- National Short-term rating: 'F1+(bra).'

In Fitch's opinion, the consolidation of control of Safra will
simplify succession issues in a family-owned business.  Fitch
does not expect this agreement to have any significant impact on
Safra since day-to-day management of Safra rests with an
experienced and proven professional management team that reports
to Joseph Safra.

The ratings reflect Safra's capacity to successfully anticipate
and adapt to market changes and the volatility of the Brazilian
economy. Fitch notes the bank's nimble management, solid
knowledge of its borrowers, and unusually good controls on
collateral flows.  The foreign currency IDR is capped by
Brazil's Country Ceiling.  The local currency IDR is higher than
Brazil's sovereign rating, reflecting Safra's consistent
performance and balance sheet strength and management capacity.
These qualities, which are taken into account in the bank's
Individual rating, have allowed Safra to see off turbulent
economic cycles.

Joseph Safra established two banks, Banque Jacoub Safra in
Geneva which is dedicated to private banking and is run by his
eldest son, and Banco J. Safra S.A. in Sao Paulo, which is run
by another son.  The latter bank has a profile akin to Safra's
and operates in the same markets and products as Safra, and for
regulatory capital adequacy purposes is consolidated into Safra.
Moise Safra in turn owns two brokerage houses called M. Safra &
Co., one headquartered in Sao Paulo and the other in New York,
which are run by his sons.  Noteworthy financial investments not
held under Safra, which are encompassed by the agreement between
the two brothers, are:

   -- Banque Safra Luxembourg S.A. and its subsidiary Banque
      Safra-France S.A.;

   -- Safra National Bank of New York;

   -- Safra International Bank and Trust Ltd.; and

   -- I.F.E. Safra (Uruguay).

Safra is the only financial entity under individual or joint
control of the Safra brothers that is rated by Fitch.  Joseph
and Moise will continue to maintain joint ownership of 20% of
the voting stock in Aracruz Celulose S.A., Brazil's leading pulp
and paper company (foreign currency IDR of 'BBB-').


BANCO VOTORANTIM: Fitch Ups Local Currency Rating to F3 from B
--------------------------------------------------------------
Fitch Ratings upgraded Banco Votorantim S.A.'s short-term local
currency rating to 'F3' from 'B.'

Fitch upgraded select Brazilian banks' Short-term local currency
ratings to 'F3' from 'B'.  This follows the recent upgrade of
these banks' local currency Issuer Default ratings to 'BBB-'
from 'BB+'.


SANTANDER BRASIL: Fitch Ups Local Currency Rating to F3 from B
--------------------------------------------------------------
Fitch Ratings today upgraded the Short-term local currency
ratings of Banco Santander Central Hispano's subsidiaries in
Brazil - Banco do Estado de Sao Paulo S.A. aka Banespa, Banco
Santander Brasil S.A. and Banco Santander Meridional S.A. -- to
'F3' from 'B'.  All other ratings are affirmed.

These ratings of Banco Santander Brasil are affirmed:

   -- Foreign currency IDR: 'BB' with a Stable Outlook;

   -- Local currency IDR: 'BBB-' with a Stable Outlook;

   -- Short-term foreign currency ratings at 'B';

   -- Individual rating at 'C/D';

   -- Support rating at '3';

   -- National long-term rating: 'AA+(bra)' with a Stable
      Outlook;

   -- National short-term rating at 'F1+(bra)'.

The upgrade of the short-term local currency ratings follows the
recent upgrade of these banks' long-term local currency IDRs to
'BBB-'from 'BB+'.  The three banks are separate legal entities,
but in practice function as a multiple bank and consolidate on
an audited pro-forma basis into a group known as Santander
Banespa, with unified management, strategies, systems, and
controls.  Although it is not a legal entity, Fitch evaluates
the group on a pro-forma consolidated basis and makes no
distinctions between the IDRs of these banks.  Brazilian
regulatory supervision focuses on the 'consolidated' Santander
Banespa.

Their foreign currency IDRs are constrained by Brazil's 'BB'
Country Ceiling.  The National ratings and the local currency
IDRs are higher than Brazil's 'BB' sovereign rating, reflecting
shareholder strength and the strategic importance of the
Brazilian operation to SAN, as well as Fitch's conviction that
SAN is fully committed to developing Santander Banespa's
competitive advantages.  Banespa's Individual rating is higher
than BSB's and BSM's, reflecting a strong and evolving franchise
in Brazil's most prosperous region, tempered by a high yet
rapidly declining volume of intangible assets.  BSB's Individual
rating reflects a large volume of intangibles and a relatively
weak but improving operating performance.  BSM's Individual
rating reflects its weak operating performance.  The Individual
ratings are supported by SAN's franchise and the group's risk
management and technological support.

Santander Central (IDR 'AA') is Spain's largest banking group
(FYE05 assets: USD954 billion).  It currently holds around 10%
of the Latin American commercial banking market, which generates
about a third of SAN's pre-tax profits.  Brazil has the largest
population in Latin America and the second largest GDP, which
renders it of key importance to SAN's strategy for the region.
Santander Banespa has the fifth largest loan portfolio and core
deposit base among private banks in Brazil.


SANTANDER MERIDIONAL: Fitch Ups Local Currency Rating to F3
-----------------------------------------------------------
Fitch Ratings upgraded the Short-term local currency ratings of
Banco Santander Central Hispano's subsidiaries in Brazil - Banco
do Estado de Sao Paulo S.A. aka Banespa, Banco Santander Brasil
S.A. and Banco Santander Meridional S.A. -- to 'F3' from 'B'.
All other ratings are affirmed.

These ratings of Banco Santander Meridional are affirmed:

   -- Foreign currency IDR at 'BB' with a Stable Outlook;

   -- Local currency IDR at 'BBB-' with a Stable Outlook;

   -- Short-term foreign currency ratings at 'B';

   -- Individual rating at 'D';

   -- Support rating at '3';

   -- National long-term rating at 'AA+(bra)' with a Stable
      Outlook; and

   -- National short-term rating at 'F1+(bra)'.

The upgrade of the short-term local currency ratings follows the
recent upgrade of these banks' long-term local currency IDRs to
'BBB-'from 'BB+'.  The three banks are separate legal entities,
but in practice function as a multiple bank and consolidate on
an audited pro-forma basis into a group known as Santander
Banespa, with unified management, strategies, systems, and
controls.  Although it is not a legal entity, Fitch evaluates
the group on a pro-forma consolidated basis and makes no
distinctions between the IDRs of these banks.  Brazilian
regulatory supervision focuses on the 'consolidated' Santander
Banespa.

Their foreign currency IDRs are constrained by Brazil's 'BB'
Country Ceiling.  The National ratings and the local currency
IDRs are higher than Brazil's 'BB' sovereign rating, reflecting
shareholder strength and the strategic importance of the
Brazilian operation to SAN, as well as Fitch's conviction that
SAN is fully committed to developing Santander Banespa's
competitive advantages.  Banespa's Individual rating is higher
than BSB's and BSM's, reflecting a strong and evolving franchise
in Brazil's most prosperous region, tempered by a high yet
rapidly declining volume of intangible assets.  BSB's Individual
rating reflects a large volume of intangibles and a relatively
weak but improving operating performance.  BSM's Individual
rating reflects its weak operating performance.  The Individual
ratings are supported by SAN's franchise and the group's risk
management and technological support.

Santander Central (IDR 'AA') is Spain's largest banking group
(FYE05 assets: USD954 billion).  It currently holds around 10%
of the Latin American commercial banking market, which generates
about a third of SAN's pre-tax profits.  Brazil has the largest
population in Latin America and the second largest GDP, which
renders it of key importance to SAN's strategy for the region.
Santander Banespa has the fifth largest loan portfolio and core
deposit base among private banks in Brazil.


* BRAZIL: Holds Nov. 28 Auction of Oil & Gas Exploration Areas
--------------------------------------------------------------
The National Petroleum Agency, Brazil's hydrocarbons regulator,
announced it will hold November 28 its eighth annual auction of
oil and gas exploration and production areas.

The auction was previously set for August 28 but was cancelled
to give authorities and potential bidders additional time to
prepare for the process.

                        *    *    *

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


CAIRNWOOD GLOBAL: Shareholder Decides for Voluntary Liquidation
---------------------------------------------------------------
Cairnwood Global Technology Fund, Ltd.'s sole shareholder
decided on May 3, 2006, to place the company in voluntary
liquidation under the Companies Law (2004 Revision) of the
Cayman Islands.

Richard Douglas and John Ackerley at Rawlinson & Hunter were
appointed as liquidators to facilitate the winding up of
Cairnwood Global's business.

The liquidators can be reached at:

     Richard Douglas
     John Ackerley
     P.O. Box 897 GT
     One Capital Place, George Town
     Grand Cayman, Cayman Islands
     Tel: (345) 949 7576
     Fax: (345) 949 8295


CCM INTERNATIONAL: Filing of Proofs of Claim Is Until Aug. 15
-------------------------------------------------------------
CCM International Small Cap Value Fund, Ltd.'s creditors are
required to submit proofs of claim by Aug. 15, 2006, to the
company's liquidator:

   Coghill Capital Management, LLC
   One North Wacker Drive, Suite 4350
   Chicago, IL 60606

Creditors who are not able to comply with the Aug. 15 deadline
won't receive any distribution that the liquidator will make.
Creditors are required to present proofs of claim personally or
through their solicitors.

CCM International's shareholders agreed on July 1, 2006, for the
company's voluntary liquidation under Section 135 of the
Companies Law (2004 Revision) of the Cayman Islands.

Parties-in-interest may contact:

    Ramanan Navakadadcham
    c/o Ogier
    P.O. Box 1234, George Town
    Grand Cayman, Cayman Islands
    Tel: (345) 949 9876
    Fax: (345) 949 1986


CCM MASTER: Last Day for Proofs of Claim Filing Is on Aug. 15
-------------------------------------------------------------
CCM Master International Fund, Ltd.'s creditors are required to
submit proofs of claim by Aug. 15, 2006, to the company's
liquidator:

   Coghill Capital Management, LLC
   One North Wacker Drive, Suite 4350
   Chicago, IL 60606

Creditors who are not able to comply with the Aug. 15 deadline
won't receive any distribution that the liquidator will make.
Creditors are required to present proofs of claim personally or
through their solicitors.

CCM Master's shareholders agreed on July 1, 2006, for the
company's voluntary liquidation under Section 135 of the
Companies Law (2004 Revision) of the Cayman Islands.

Parties-in-interest may contact:

    Ramanan Navakadadcham
    c/o Ogier
    P.O. Box 1234, George Town
    Grand Cayman, Cayman Islands
    Tel: (345) 949 9876
    Fax: (345) 949 1986


CENTAURO FUND: Deadline for Proofs of Claim Filing Is on Aug. 15
----------------------------------------------------------------
Centauro Fund Limited's creditors are required to submit proofs
of claim by Aug. 15, 2006, to the company's liquidator:

   David A. K. Walker
   Lawrence Edwards
   PricewaterhouseCoopers
   Strathvale House, George Town
   Grand Cayman, Cayman Islands

Creditors who are not able to comply with the Aug. 15 deadline
won't receive any distribution that the liquidator will make.
Creditors are required to present proofs of claim personally or
through their solicitors.

Centauro Fund's shareholders agreed on June 27, 2006, for the
company's voluntary liquidation under Section 135 of the
Companies Law (2004 Revision) of the Cayman Islands.

Parties-in-interest may contact:

    Aysha Jackson
    P.O. Box 258, George Town
    Grand Cayman, Cayman Islands
    Tel: (345) 914 8695
    Fax: (345) 949 4590


E&H REAL: Proofs of Claim Filing Deadline Is Set for Aug. 14
------------------------------------------------------------
E&H Real Estate Corp.'s creditors are required to submit proofs
of claim by Aug. 14, 2006, to the company's liquidator:

   John Andrew Harry Leigh
   24th Floor, St. George's Building
   2 Ice House Street, Hong Kong
   Tel: 00 852 2524 9221
   Fax: 00 852 2845 9133

Creditors who are not able to comply with the Aug. 14 deadline
won't receive any distribution that the liquidator will make.
Creditors are required to present proofs of claim personally or
through their solicitors.

E&H Real's shareholders agreed on July 13, 2006, for the
company's voluntary liquidation under Section 135 of the
Companies Law (2004 Revision) of the Cayman Islands.


HORATIO CORP: Creditors Have Until Aug. 14 to Prove Claims
----------------------------------------------------------
Horatio Corp.'s creditors are required to submit proofs of claim
by Aug. 14, 2006, to the company's liquidator:

   John Andrew Harry Leigh
   24th Floor, St. George's Building
   2 Ice House Street, Hong Kong
   Tel: 00 852 2524 9221
   Fax: 00 852 2845 9133

Creditors who are not able to comply with the Aug. 14 deadline
won't receive any distribution that the liquidator will make.
Creditors are required to present proofs of claim personally or
through their solicitors.

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


HORATIO REAL: Creditors Must File Proofs of Claim by Aug. 14
------------------------------------------------------------
Horatio Real Estate Corp.'s creditors are required to submit
proofs of claim by Aug. 14, 2006, to the company's liquidator:

   John Andrew Harry Leigh
   24th Floor, St. George's Building
   2 Ice House Street, Hong Kong
   Tel: 00 852 2524 9221
   Fax: 00 852 2845 9133

Creditors who are not able to comply with the Aug. 14 deadline
won't receive any distribution that the liquidator will make.
Creditors are required to present proofs of claim personally or
through their solicitors.

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


LAWRENCIUM CORP: Last Day to File Proofs of Claim Is on Aug. 14
---------------------------------------------------------------
Lawrencium Corp.'s creditors are required to submit proofs of
claim by Aug. 14, 2006, to the company's liquidator:

   John Andrew Harry Leigh
   24th Floor, St. George's Building
   2 Ice House Street, Hong Kong
   Tel: 00 852 2524 9221
   Fax: 00 852 2845 9133

Creditors who are not able to comply with the Aug. 14 deadline
won't receive any distribution that the company will make.
Creditors are required to present proofs of claim personally or
through their solicitors.

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


LAWRENCIUM PORTFOLIO: Proofs of Claim Filing Is Until Aug. 14
-------------------------------------------------------------
Lawrencium Portfolio Holdings Corp.'s creditors are required to
submit proofs of claim by Aug. 14, 2006, to the company's
liquidator:

   John Andrew Harry Leigh
   24th Floor, St. George's Building
   2 Ice House Street, Hong Kong
   Tel: 00 852 2524 9221
   Fax: 00 852 2845 9133

Creditors who are not able to comply with the Aug. 14 deadline
won't receive any distribution that the company will make.
Creditors are required to present proofs of claim personally or
through their solicitors.

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


NIELVAL LIMITED: Shareholders Vote to Liquidate Business
--------------------------------------------------------
Nielval Limited's sole shareholder decided on July 13, 2006, to
place the company in voluntary liquidation under the Companies
Law (2004 Revision) of the Cayman Islands.

Condor Nominees Limited was appointed as liquidators to
facilitate the winding up of Nielval Limited's business.

The liquidators can be reached at:

     Condor Nominees Limited
     C/o Barclays Private Bank & Trust (Cayman) Limited
     4th Floor FirstCaribbean House
     25 Main Street, George Town
     Grand Cayman, Cayman Islands




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


BLOCKBUSTER INC: To Terminate EVP Christopher Wyatt's Employment
----------------------------------------------------------------
Blockbuster Inc. disclosed that as part of its ongoing efforts
to streamline its organization, it notified, on July 19, 2006,
Mr. Christopher J. Wyatt, Executive Vice President and
President, International, of its intention to terminate Mr.
Wyatt's employment agreement in accordance with the terms of a
mutual agreement.

Mr. Wyatt is expected to continue his services and to assist
with the transition of his responsibilities through the end of
2006.

Mr. Wyatt's responsibilities are expected to be assumed by
Mr. Nicholas P. Shepherd, Executive Vice President and
President, Blockbuster North America.  Mr. Wyatt's employment
agreement is expected to be terminated effective June 30, 2007.

Mr. Wyatt's agreement provides that, in connection with the
termination of his employment by Blockbuster other than for
breach and conditioned on Mr. Wyatt entering into a waiver of
claims against Blockbuster and its affiliated companies, he is
entitled to receive his salary and bonus compensation for up to
18 months after the termination date, subject to mitigation
after the first six months following the termination date.

                       About Blockbuster

Blockbuster Inc. (NYSE: BBI, BBI.B) --
http://www.blockbuster.com/-- is a global provider of in-home
movie and game entertainment, with more than 9,000 stores
throughout the Americas, Europe, Asia and Australia.  The
company operates in Puerto Rico, Argentina, Brazil and Chile.

                         *     *     *

As reported in the Troubled Company Reporter on Mar. 15, 2006,
Moody's Investors Service affirmed Blockbuster Inc. long-term
debt ratings and its SGL-3 speculative grade liquidity rating.
Moody's affirmed its B3 rating on the Company's Corporate family
rating and Senior secured bank credit facilities at B3.  Moody's
also affirmed its Caa3 rating on the Company's Senior
subordinated notes.

Standard & Poor's Ratings Services lowered, in November 2005,
its corporate credit and bank loan ratings on Blockbuster Inc.
to 'B-' from 'B' and the subordinated note rating to 'CCC' from
'CCC+'.  S&P said the outlook is negative.

Fitch downgraded, in August 2005, Blockbuster Inc.'s Issuer
default rating to 'CCC' from 'B+'; Senior secured credit
facility to 'CCC' from 'B+' with an 'R4' recovery rating; and
Senior subordinated notes to 'CC' from 'B-' with an 'R6'
recovery rating.




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


ECOPETROL: Gets Government Approval to Sell 20% of Company
----------------------------------------------------------
Ecopetrol SA, the state-run oil firm in Colombia, has received
the government's approval to sell up to 20% of the company,
according to a statement by the country's mines and energy
ministry.

The ministry said in the statement that private sector
participation would help ensure Ecopetrol's financial and
administrative independence needed to carry out investments on
exploration and production as well as to upgrade oil
infrastructure.

President Alvaro Uribe told Business News Americas that Colombia
would boast a larger and stronger company and that new oil
discoveries require funds to be injected into Ecopetrol.

A regulation must now be drafted outlining how the process will
take place, BNamericas relates, citing President Uribe.

However, local reports say that the oil workers union rejected
the plan, threatening to hold demonstrations.

Jorge Gamboa, the president of the union, said that autonomy can
be achieved by reforming the budget statute and Ecopetrol would
be allowed to take on debt and more resources, the press reports
say.

Ecopetrol is an integrated-oil company that is wholly owned by
the Colombian government.  The company's activities include
exploration for and production of crude oil and natural gas, as
well as refining, transportation, and marketing of crude oil,
natural gas and refined products.  Ecopetrol is Latin America's
fourth-largest integrated-oil concern.  Operations are organized
into Exploration & Production, Refining & Marketing,
Transportation, and International Commerce & Gas.

On June 27, 2006, Fitch Ratings revised the rating outlook of
the long-term foreign currency issuer default rating of
Ecopetrol S.A. to Positive from Stable.  This rating action
follows the recent revision in the Rating Outlook to Positive
from Stable of the 'BB' foreign currency IDR of the Republic of
Colombia.  Ecopetrol's IDR remain strongly linked with the
credit profile of the Republic of Colombia.


* COLOMBIA: Will Start Free Trade Negotiations with Chile
---------------------------------------------------------
Colombia has agreed to start free trade talks with Chile, the
Associated Press reports.

AP relates that after a meeting between Jorge Botero, the trade
minister of Colombia, and Alejandro Foxley, the Chile's foreign
minister, a report was issued stating that Chile agreed to allow
6,000 tons of sugar and 15,000 tons of sugar-related products
from Colombia to enter its market, free of duties, beginning
Jan. 1, 2007.

Colombia, says AP, also agreed to immediately lift up to 35% of
the punitive customs duties it had imposed on the Chilean
automobiles entering its market.  Duties ranging up to 15% on
other Chilean products, including wine, pears, apples, grapes
and cigarettes would also be cancelled.

Both countries said that they have resolved a controversy over
exports of Colombian sugar to Chile, AP states.  A report was
issued saying that the dispute was damaging trade relations
between the two governments.

The report issued after the meeting did not state the date for
the start of the free trade negotiations, according to AP.

However, both governments expect the talks -- which would cover
products, services and investments -- to advance quickly,
Minister Botero told AP.

                        *    *    *

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 O S T A   R I C A
===================


BAC SAN JOSE: Unit Aims to Hold US$75 Million in Funds in 2006
--------------------------------------------------------------
Javier Sancho -- the Chief Executive Officer of BAC San Jose
SA's unit, BAC San Jose Pensiones -- told Business News Americas
that the company is aiming for US$75 million in funds under
management by the end of 2006.

BAC San Jose Pensiones predicts that affiliates would increase
to 55,000 at the end of this year, from the current 49,000,
BNamericas reports, citing Mr. Sancho.

BNamericas relates that the BAC group is also aiming for
US$40,000 net profits -- a significant achievement as the
company reported US$769,904 losses in 2005.  In 2004, the
company posted US$1,078,989.83 losses.

Mr. Sancho told BNamericas that the results would be positive
this year due to efficiency improvements and higher volume of
funds under management.

According to BNamericas, BAC is implementing a four-phase
strategy to spend in foreign securities to look for higher
investment returns on its fund, without increasing risk
exposure.  BAC, during the first phase, is acquiring US Treasury
Bonds and debt instruments of firms.  It will then buy:

    -- corporate bonds issued by international entities,
    -- index funds, and
    -- structured notes.

BAC San Jose Pensiones had US$56.4 million worth of assets --
3.9% market share -- at the end of May, BNamericas states.

BAC San Jose, created in 1968, is a wholly owned unit of
financial group Corporacion Tenedora BAC San Jose aka Grupo
Financiero BAC San Jose.

                        *    *    *

As reported in the Troubled Company Reporter on Dec. 22, 2005,
Standard & Poor's Ratings Services assigned these ratings to
Banco BAC San Jose S.A.:

   -- Local currency credit rating:  BB+/Stable/B
   -- Foreign currency credit rating:  BB/Stable/B


* COSTA RICA: Commission Studying Free Trade Postpones Meeting
--------------------------------------------------------------
The Comision de Asuntos Internacionales y Comercio Exterior -- a
group that is studying the Tratado de Libre Comercio or TLC,
Costa Rica's free trade accord with the United States -- called
off a meeting for the second time due to lack of forming a
quorum, Inside Costa Rica reports.

Inside Costa Rica relates that members of the commission who
were present at the meeting were upset and are now calling for
action.

Four deputies from the Partido Liberacion Nacional arrived on
time for the meeting, Inside Costa Rica states.  However, the
three members from the Partido Accion Ciudadana, a
representative from the Partido Unidad Social Cristiana and one
from the Movimiento Libertario came in late.  Because of this,
the required quorum of five legislators was not reached,
canceling the session.

Partido Accion Ciudadana told Inside Costa Rica that there was
an error in protocol as deputy Alberto Salom was to take the
place of Elizabeth Fonseca, the party's commission member.
However, the substitution did not come into effect, as Mr. Salon
did not have the proper document signed by the head of the
legislature from the session held on Tuesday.

Even though Mr. Salom was present with the other four commission
members, a quorum could not be formed and no session could be
held, Inside Costa Rica says, citing Janina Del Vecchio, the
president of the commission.

Ronald Solis, the deputy of Partido Accion Ciudadana and a
member of the commission, told Inside Costa Rica that there was
no intention of disrupting the commission's work.  He assured
that there was no plan of boycotting the commission, saying that
he simply was not able to make it to the meeting on time.

Legislators decided to meet with representatives of the Camara
de Textileros de Costa Rica, a textile group who fully supports
the TLC, the report says.

Meanwhile, rice growers feel that the TLC was badly negotiated
and negatively affected the local rice market, according to
Inside Costa Rica.

Inside Costa Rica emphasizes that Oscar Campos, the head of the
Corporacion Arrocera Nacional, was anxious to face the
legislative commission.

Upset that the commission postponed the July 26 session, Mr.
Campos told Inside Costa Rica, "We want an audience to expose
the official position of the rice growers."

                        *    *    *

Costa Rica is rated by Moody's:

      -- CC LT Foreign Bank Depst Ba2
      -- CC LT Foreign Curr Debt  Ba1
      -- CC ST Foreign Bank Depst NP
      -- CC ST Foreign Curr Debt  NP
      -- Foreign Currency LT Debt Ba1
      -- Local Currency LT Debt   Ba1

Fitch assigned these ratings to Costa Rica:

      -- Foreign currency long-term debt, BB
      -- Local currency long-term debt, BB
      -- Foreign currency short-term debt, B

Costa Rica carries these ratings from Standard & Poor's:

      -- Foreign Currency LT Debt BB
      -- Local Currency LT Debt   BB+
      -- Foreign Currency ST Debt B
      -- Local Currency ST Debt   B


* COSTA RICA: Retailers Say Sale of Economical Cars Is Rising
-------------------------------------------------------------
The sale of economical vehicles in Costa Rica has risen in 2006,
especially after a gas price increase, Inside Costa Rica
reports, citing new car retailers.

According to Inside Costa Rica, the frequent gasoline price
hikes caused many residents to buy cars that are economical like
those that are compacts and diesel powered that can run up to
100 kilometers on less than US$3 of gas.  Some new car buyers
even trade their "gas guzzlers" for these kind of cars.

The report emphasizes that the price of a liter of super
gasoline will soon become CRC592.  With the crisis in the Middle
East, more price increases are expected this year.

Inside Costa Rica relates that one of the leaders in small car
sales is Purdy Motors, the exclusive Toyota dealer.

Luis Mastreoni, the marketing manager for Purdy Motors, told
Inside Costa Rica that the sale of compact cars had grown by 15%
in the last three years.

Buyers also prefer cars with small engines like the KIA Picanto,
Inside Costa Rica states.

The sale of the Picanto has risen 100% over the last year,
Quality Motors, the dealer of Kia, told Inside Costa Rica.

Inside Costa Rica says that Agencia Datsun, the dealer of
Nissan, posted boost in the sale of its Micra model.

Tania Mauricio -- a representative of Automotriz S.A., the
dealer of Ford -- told Inside Costa Rica that the company sold
three Ecosports for every V6 powered vehicle,

Sava -- the dealer of Fiat -- and Xiri, the Peugeot dealer, both
told Inside Costa Rica that sales in their economical vehicles
surpassed those of larger engine vehicles, Inside Costa Rica
states.

Inside Costa Rica underscores that Subaru, Suzuki and Honda
dealers also reported the same result.

The high cost of gasoline has forced buyers to be more
intelligent in their decision-making, Alfredo Chavarria, the
general manager of Agencia Datsun, told Inside Costa Rica.
According to him, buyers are now more concerned about the
efficiency of the engine.

                        *    *    *

Costa Rica is rated by Moody's:

      -- CC LT Foreign Bank Depst Ba2
      -- CC LT Foreign Curr Debt  Ba1
      -- CC ST Foreign Bank Depst NP
      -- CC ST Foreign Curr Debt  NP
      -- Foreign Currency LT Debt Ba1
      -- Local Currency LT Debt   Ba1

Fitch assigned these ratings to Costa Rica:

      -- Foreign currency long-term debt, BB
      -- Local currency long-term debt, BB
      -- Foreign currency short-term debt, B

Costa Rica carries these ratings from Standard & Poor's:

      -- Foreign Currency LT Debt BB
      -- Local Currency LT Debt   BB+
      -- Foreign Currency ST Debt B
      -- Local Currency ST Debt   B




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


* DOMINICAN REPUBLIC: Gov't Panel to Oversee Shell's Asset Sale
---------------------------------------------------------------
The Dominican Republic's Finance Minister, Vicente Bengoa
Albizu, disclosed the creation of a commission that will study
and oversee all aspects of Shell's sale since the government has
a 50% stake in the Dominican Petroleum Refinery endeavor,
according to a local paper.

The finance minister said that the sale of Shell's assets must
be in consultation with its partner.  Mr. Albizu noted that the
process could take a year to end and that Shell will offer its
shares to foreign and Dominican companies, the Dominican Today
relates.

"The commission will evaluate the situation and will, at an
opportune time, reveal which is the government's position on
this matter," the finance minister added.

                        *    *    *

The Troubled Company Reporter-Latin America reported on
May 9, 2006, that Fitch Ratings upgraded these debt and issuer
Default Ratings of the Dominican Republic:

   -- Long-term foreign currency Issuer Default Rating
      to B from B-;

   -- Country ceiling upgraded to B+ from B-;

   -- Foreign currency bonds due 2006 to B-/RR4 from CCC+/RR4;

   -- Foreign currency Brady bonds due 2009 to B/RR4
      from B-/RR4;

   -- Foreign currency bonds due 2011 to B/RR4 from B-/RR4;

   -- Foreign currency bonds due 2013 to B-/RR4 from CCC+/RR4;

   -- Foreign currency bonds due 2018 to B/RR4 from B-/RR4; and

   -- Foreign currency collateralized Brady bonds due 2024
      to B+/RR3 from B/RR3.

Fitch also affirmed these ratings:

   -- Long-term local currency Issuer Default Rating: B; and
   -- Short-term Issuer Default Rating: B.

Additionally, Fitch assigned a debt and Recovery Rating to this
issue:

   -- Foreign currency bonds due 2027: B/RR4.

Fitch said the rating outlook for the long-term foreign and
local currency IDRs is Stable.




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


PETROECUADOR: Returns Offers for Crude Supply Lots Tender
---------------------------------------------------------
An unnamed source from Petroecuador told Business News Americas
that the company has decided to return the 17 offers it received
for the tender of six 12,000 barrel-a-day crude supply lots.
The number of bids fell short of the company's expectations.

The bids came from:

     -- Glencore,
     -- Tevier Petroleum,
     -- Citizens Resources,
     -- Anglo Energy,
     -- Trafigura,
     -- Repsol YPF,
     -- Valero Energy,
     -- Shell Trading,
     -- LG International,
     -- Taurus Petroleum,
     -- Rio Energy,
     -- Mitsubishi International,
     -- Mitsubishi Corporation,
     -- Sumitomo,
     -- Pertamina,
     -- Arkham, and
     -- Sinopec.

BNamericas relates that the source said Petroecuador returned
the offers without opening them.

Petroecuador will likely launch another tender next week for the
crude supplies produced on block 15, the source told BNamericas.

Firms were permitted to bid on up to two of the six crude lots,
which would have had an eight-month supply period starting
August.

As reported in the Troubled Company Reporter-Latin America on
July 26, 2006, about 50 firms were pre-qualified to participate
in the bidding.  These include state companies from nations that
signed strategic alliances or bilateral cooperation accords in
the hydrocarbons sector with Ecuador.  State firms invited to
make their bidding are:

       -- Uruguay's Ancap,
       -- Colombia's Ecopetrol,
       -- Chile's Enap,
       -- Finland's Fortum Oil and Gas,
       -- PMI Trading subsidiary of Mexico's Pemex,
       -- Brazil's Petrobras,
       -- Nicaragua's Petronic,
       -- PDVSA Trading subsidiary of Venezuela's Petroleos de
          Venezuela,
       -- Peru's Petroperu,
       -- Trinidad & Tobago's Petrotrin,
       -- Norway's Statoil,
       -- Costa Rica's Recope, and
       -- Jamaica's PCJ.

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.


* ECUADOR: Posts US$814.7 Million in Exports to Andean Nations
--------------------------------------------------------------
The central bank of Ecuador told Dow Jones Newswires that the
country's exports to Andean nations rose 59% to US$814.7 million
between January and May, compared with the same period in 2005.

The Andean nations include:

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

Exports to the Andean nations in the January-May period in 2005
totaled US$513.2 million, Dow Jones relates, citing the central
bank.

Dow Jones reports that Ecuador's imports from the Andean
countries in the January-May period this year decreased 1% to
US$881.5 million, compared with the US$889.7 million recorded in
the same period in the previous year.

The central bank posted these results in Ecuador's exports:

      -- US$506.7 million or 62% of the exports went to Peru,
      -- US$200.2 million or 25% went to Colombia,
      -- US$104.9 million or 13% went to Venezuela, and
      -- US$3 million went to Bolivia; and

in imports:

      -- US$590.1 million come from Colombia,
      -- US$148.8 million come from Venezuela,
      -- US$140.6 million come from Peru, and
      -- US$2 million come from Bolivia.

In 2005, Ecuador's exports to the Andean nations stood at
US$1.536 billion, according to Dow Jones.  Imports from the
group amounted to US$2.325 billion.

The central bank said that Ecuador's exports worldwide --
between January and May -- stood at US$5.077 billion.
Meanwhile, imports of the country amounted to US$4.424 billion,
Dow Jones states.

                        *    *    *

Fitch assigned these ratings on Ecuador:

                     Rating     Rating Date
                     ------     -----------
   Country Ceiling     B-      Aug. 29, 2005
   Long Term IDR       B-      Dec. 14, 2005
   Short Term IDR      B       Dec. 14, 2005




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


FALCONBRIDGE LTD: Inco Fails to Meet Tender Condition of 50.01%
---------------------------------------------------------------
Inco Limited has received less than 50.01% of all the
outstanding common shares of Falconbridge Limited and has not
succeeded in its bid to acquire Falconbridge.  Inco has elected
not to extend its offer for Falconbridge.

As a result of Inco not extending its offer and in light of the
failure to acquire the necessary minimum tender from
Falconbridge shareholders, the support agreement between Inco
and Falconbridge has been terminated and a payment of US$150
million is now payable to Inco.  In the event that Xstrata plc's
offer for Falconbridge is successful, a further US$300 million
will be payable to Inco.

The Falconbridge Board of Directors will meet to review these
latest developments, including the implications of Xstrata
having stated its intention to acquire up to 5% of the common
shares of Falconbridge through market purchases, as well as
Xstrata's having been granted approval by Investment Canada to
proceed with its proposed acquisition of Falconbridge.  The
Board will provide Falconbridge shareholders with a formal
recommendation thereafter.

As a result of these developments, the sale of Falconbridge's
Nikkelverk refinery to LionOre Mining International Ltd. will
not proceed, as this sale was contingent on the successful
acquisition of Falconbridge by Inco.

                         About Inco

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

                        About Xstrata

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


FALCONBRIDGE: Phelps Dodge Responds to Inco's Terminated Offer
--------------------------------------------------------------
J. Steven Whisler, chairman and chief executive officer of
Phelps Dodge, said, "We are disappointed that less than 50.01
percent of Falconbridge shareholders chose to tender their
shares in support of Inco's offer and participate in the new
Phelps Dodge Inco.  However, we are excited about our agreed
combination with Inco, which will create both the world's
leading base metals company and a must-own stock for investors
who want exposure to our leading positions in copper and nickel.
With an excellent outlook for sustained high copper and nickel
prices, Phelps Dodge Inco will have tremendous earnings and cash
flow potential.  Our combination with Inco will be immediately
and meaningfully accretive to cash flow and accretive to
earnings in 2008, using our base case commodity price
assumptions."

Phelps Dodge's agreed offer for Inco consists of CDN$20.25 plus
0.672 Phelps Dodge shares for each Inco share.  As of the close
of business on July 27, 2006, the implied value of Phelps
Dodge's offer for Inco was CDN$79.83 per share.

                         About Inco

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

                     About Phelps Dodge

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

                     About Falconbridge

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

                        *    *    *

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


FALCONBRIDGE: Xstrata Responds to Termination of Inco Offer
-----------------------------------------------------------
Xstrata plc's Chief Executive Mick Davis said, "We welcome the
fact that Falconbridge shareholders have acted decisively in
rejecting the Inco offer and we urge them now to tender to
Xstrata's all cash offer by 14 August 2006."

"The success of Xstrata's offer is the best outcome for
Falconbridge stakeholders, including, in particular,
shareholders and employees.  Throughout this process, we have
maintained that Xstrata's 20% stake in Falconbridge, purchased
at CDN$28 per share, has put us in a unique position to make a
definitive, compelling and generous offer to Falconbridge
shareholders, while ensuring that the acquisition of
Falconbridge remains value, earnings and cash flow accretive to
Xstrata shareholders."

Falconbridge shareholders who want to tender shares to the
Xstrata Offer may contact:

    Kingsdale Shareholder Services Inc.
    Tel: 1-866-639-7993 (North American Toll Free)
         +1 (416) 867-2272 (Outside North America, Banks and
                            Brokers Call Collect)
    E-mail: contactus@kingsdaleshareholder.com


                         About Inco

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

                        About Xstrata

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




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


* EL SALVADOR: Launches Recruitment Program for Call Centers
------------------------------------------------------------
El Salvador has started a program to recruit residents of the
United States and Canada as employees to work for call centers,
CNN Money reports.

The program is called "Meet Your Roots."

CNN relates that El Salvador created the program to meet the
demands of firms outsourcing their call centers to the nation.

According to the program's Web site, children of Salvadorians
born in the US and Canada would be recruited to live and work
temporarily in El Salvador for a year to strengthen their
identity and ties to the nation.

CNN states that recruits that would work in call centers serving
the US market can earn up to US$1,500 per month.

Produccion y Especialidades en Aluminio S.A. de C.V. or PROESA,
a development organization, told CNN that though the program was
first disclosed this year, it is still in its early stages.

The report underscores that meetings have been held in Los
Angeles and Dallas to promote the program to Salvadorians in
those states.

Karla Rivas, a representative of PROESA, told CNN that under the
plan, PROESA searches for prospective employees and puts firms
in touch with them, offering the job over the phone.  PROESA and
the Salvadorian government would then take care the details.

Parents of high school graduates have been receptive to the
program, wanting their children to get to know their roots, CNN
says, citing Ms. Rivas.

There are nine call centers operated by Atento, Dell, GMC,
Teleperformance and Sykes in El Salvador.

CNN underscores that El Salvador, as one of the most
"deregulated economies" in Central America, is eager to boost
its call center industry.

Peter Rodriguez, an economist at the University of Virginia,
told CNN that call centers makes sense as a strategy for small
nations needing export earnings.

Ms. Rivas told CNN, "But the [call center] companies can't grow
unless there are people to work in them."

About 3% of the people working in the call centers are foreign
born, CNN states, citing Ms. Rivas.

The Salvadorian government runs a National English Center to
increase the number of qualified bilingual employees.  English
is also being taught as a secondary language in schools, CNN
states.

                        *    *    *

Fitch Ratings assigned these ratings on El Salvador:

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




=================
G U A T E M A L A
=================


BANCO DEL CAFE: Financiero Uno Snatches Sale Limelight
------------------------------------------------------
Interest in purchasing Banco del Cafe aka Bancafe is waning due
to the potential sale of Grupo Financiero Uno, Business News
Americas reports, citing sources close to the deal.

As reported in the Troubled Company Reporter on July 26, 2006,
sources familiar with the deal said Bancafe was expecting up to
five bids from other banks.  Citigroup is conducting the sale
process and has invited interested banks to present their bids.
The banks will not be bidding for the offshore operation.  Banco
Agromercantil is among those interested in participating.  The
sources said that other interested entities are Canada's
Scotiabank and UK banking group HSBC.  The banks have finished
due diligence at Bancafe and are preparing to submit bids for
the company in the next coming weeks.

However, one of the sources told BNamericas, "The sale of Grupo
Uno is pushing interest in Bancafe down as Banco Uno is a
regional bank."

According to BNamericas, the sources said that though Banco Uno
units do not have dominant banking or insurance positions in
their markets, they are an attractive for international entities
as it has presence in all of Central America and Mexico.

"At present, Grupo Financiero Uno has not officially announced
and will not announce anything related to changes in our share
capital composition or similar transactions," Enrique Canas, the
Chief Executive Officer of Banco Uno, told BNamericas.

Bancafe was formed by the merging of Bancafe assets and part of
Granahorrar, a local mortgage bank, in March 2005.  To save them
from bankruptcy when the country was hit by financial crisis in
the late 90s, the government had taken control of the banks.
The bank has US$204 million in securities under custody at
bankrupt U.S. commodity trader Refco Inc.



===============
H O N D U R A S
===============


* HONDURAS: Snubs Talk with Groups Against Foreign Miners
---------------------------------------------------------
The Honduran government refused to negotiate with groups
protesting on the law that allowed foreigners to own up to 34%
of the mines in the country, Prensa Latina reports.

As reported in the Troubled Company Reporter-Latin America on
July 27, 2006, Honduras' 1998 law on foreign mine ownership
sparked a protest -- organized by the Civic and Democratic
Alliance -- that closed parts of the Pan-American Highway, the
major route in Honduras.

However, the protest made the government decide to meet with
heads of the Civic Alliance for Democracy to talk on the future
of the mining industry, Prensa Latina reports.

                        *    *    *

Moody's Investor Service assigned these ratings on Honduras:

                     Rating     Rating Date
                     ------     -----------
   Senior Unsecured    B2       Sept. 29, 1998
   Long Term IDR       B2       Sept. 29, 1998




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


AIR JAMAICA: Workers to Hold Strike on Reduced Wage Offer
---------------------------------------------------------
Workers of Air Jamaica are preparing to hold a strike because
the airline has reduced its wage offer, Granville Valentine,
Radio Jamaica reports, citing the Deputy Island Supervisor of
the National Workers Union.

Air Jamaica offered its workers a 25% wage increase over a
two-year contract, Mr. Valentine told Radio Jamaica.

However, when talks resumed on Wednesday Air Jamaica reduced its
offer to 20%, and even decreased it to 15% the next day, Radio
Jamaica relates.

Radio Jamaica states that Air Jamaica's ground staff is
reportedly restive.

The union gave the management until the July 27 to provide a
better offer before it would start the strike, Mr. Valentine
told Air Jamaica.

                        *    *    *

On May 26, 2006, Moody's Investors Service upgraded Jamaica's
rating under a revised foreign currency ceiling:

   -- Long-term foreign currency rating: Ba3 from B1 with
      stable outlook.


DIGICEL: Jamaica Accounts for 67% of Revenues at March 31
---------------------------------------------------------
Jamaica accounts for 67% of Digicel's revenue for the year ended
Mar. 31, 2006.  Of the total US$623.3 million revenue, Jamaica
contributed US$416.6 million, the Jamaica Observer reports.

Digicel's other markets contribution:

     -- St. Lucia, Grenada and St Vincent, and the Grenadines
        contributed US$52.4 million

     -- Aruba, Antigua, Anguilla, Barbados, Bermuda, Cayman and
        St. Kitts and Nevis contributed US$154.3 million.

The Observer says that Jamaica, with an estimated population of
2.7 million, represents 19% of the aggregate population Digicel
serves.  The company states that its subscriber base was 1.9
million across the Caribbean.

Digicel incurred an after-tax loss of US$26.1 million.  For the
three months ended March 31, 2006, the company reported earnings
of US$27 per customer with 97% of its customers using prepaid
services.

                   About Digicel Limited

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

                        *    *    *

On July 12, 2006, Moody's Investors Service assigned a B3 senior
unsecured rating to the US$150 million add-on Notes offering of
Digicel Limited and affirmed Digicel's existing B3 senior
unsecured and B1 Corporate Family Ratings.  The outlook has been
changed to stable from positive.

Fitch Ratings assigned on July 14, 2006, a 'B' rating to Digicel
Limited's proposed add-on offering of US$150 million 9.25%
senior notes due 2012.  These notes are an extension of the
US$300 million notes issued in July 2005.  In addition, Fitch
also affirms Digicel's foreign currency Issuer Default Rating
and the existing US$300 million senior notes due 2012 at 'B'.
Fitch said the Rating Outlook is Stable.


DIGICEL LTD: Wins Innovation & Creativity Award from PSOJ
---------------------------------------------------------
Digicel Jamaica received the "Outstanding Innovation and
Creativity" award for its products and services by the Private
Sector Organisation of Jamaica, the country's premier business
association.  The accolades were presented at the PSOJ 30th
Anniversary Award Banquet, which was attended by the Prime
Minister of Jamaica and the Hon. Portia Simpson-Miller.

Digicel also won PSOJ's Outstanding Member Company Award.  The
Caribbean company earned the accolade of Outstanding Member by
ranking among the top 10 companies in Jamaica that support
activities and programs of the Private Sector of Jamaica.

David Hall, CEO of Digicel Jamaica, accepted both awards on
behalf of 790 staff members saying that the commitment of
Digicel Jamaica's employees remains at the cornerstone of
delivering its customers unmatched levels of service and value
to build better customer experiences over the competition.

"We at Digicel have been responsive to the needs of our
customers, and this dedication to their needs and lifestyle is
the main factor driving our creativity and innovation," said Mr.
Hall.  "We will always anticipate, innovate and develop mobile
products services that our customers demand and we are very
committed to exceeding their expectations," he added.

Recognition by the PSOJ follows the company's recent launch of
its landmark pan-Caribbean, multimedia campaign, "I'm Number One
at Digicel", which was designed to reinforce the company's
continued commitment to always put the customer first.

Since launching in the Caribbean just five years ago, Digicel
has played a leading role in making quality mobile
telecommunications service more accessible to consumers across
the region, and it has introduced for the first time ever many
innovative high value customer offerings such as:

   -- free incoming calls,
   -- per second billing,
   -- international roaming,
   -- rollover minutes and
   -- GPRS.

Independent researchers recognize Digicel as a leader in
customer service.

A distinguished panel of leaders from Jamaica's commerce,
academia and industry sectors judges the annual PSOJ awards.
Criteria for awards are based on companies providing innovative
and creative services, proven reputation for innovation and
creativity, innovative and creative public relations and
advertising campaigns and enhanced customer service and
satisfaction.

                    About Digicel Limited

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

                        *    *    *

On July 12, 2006, Moody's Investors Service assigned a B3 senior
unsecured rating to the US$150 million add-on Notes offering of
Digicel Limited and affirmed Digicel's existing B3 senior
unsecured and B1 Corporate Family Ratings.  The outlook has been
changed to stable from positive.

Fitch Ratings assigned on July 14, 2006, a 'B' rating to Digicel
Limited's proposed add-on offering of US$150 million 9.25%
senior notes due 2012.  These notes are an extension of the
US$300 million notes issued in July 2005.  In addition, Fitch
also affirms Digicel's foreign currency Issuer Default Rating
and the existing US$300 million senior notes due 2012 at 'B'.
Fitch said the Rating Outlook is Stable.


SUGAR COMPANY: Farmers Group Leader Doubtful of Bidding Process
---------------------------------------------------------------
Allan Rickards, the chairperson of the All-Island Cane Farmers
Association, is doubtful of the transparency in the bidding
process for the assets of the Sugar Company of Jamaica, the
Jamaica Gleaner reports.

According to the Gleaner, a sugar cane enterprise team created
to supervise the bidding process had set the deadline for the
submission of proposals for pre-qualification on June 30.

However, Coimex and Aracatu -- which are Brazilian firms -- are
being allowed to present their bids even though they did not
submit a proposal in the pre-qualification round, the Gleaner
states, citing Mr. Rickards, who was also a potential investor
for the Sugar Company.

Mr. Rickards told the Gleaner, "What it means is that we have
wasted a lot of time with the pre-qualification process and
therefore should be just advertising and receiving bids for the
assets."

Mr. Rickards said he is still waiting for a response from the
Sugar Cane Enterprise Team regarding his qualification to bid in
the Sugar Company auction, the Gleaner relates.

Mr. Rickards told the Gleaner, "On that date (June 30) the sugar
enterprise team were to have opened these requests for pre-
qualification, peruse them, decided who were suitable and then
permit these persons to purchase bid documents to then submit
their bids."

However, Farmers Weekly states that the Jamaican government
plans to extend the pre-qualification period by one month for
those firms that missed the deadline to submit their documents
as well as for those that had already submitted theirs to
resubmit.

Meanwhile, Aubyn Hill, the chairperson of the Sugar Enterprise
Team, told the Gleaner he would not be making comments on the
issue.

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
===========


BERRY PLASTICS: S&P Changes B+ Rating's Outlook to Negative
-----------------------------------------------------------
Standard & Poor's Ratings Services revised its CreditWatch
implications on the 'B+' corporate credit rating on Berry
Plastics Corp. to negative from developing.  The ratings were
initially placed on CreditWatch with developing implications on
April 4, 2006.

The CreditWatch revision follows the company's announcement that
it has commenced a cash tender offer for all of its outstanding
US$335 million of 10.75% senior subordinated notes due 2012.
The tender offer and consent solicitation are subject to the
satisfaction of certain conditions, including:

   -- The receipt of tenders from holders of a majority in
      principal amount of the outstanding notes;

   -- The consummation of the previously announced acquisition
      of the parent company, BPC Holding Corp., by the private
      equity firms Apollo Management L.P. and Graham Partners
      and their affiliates; and

   -- The availability of funds to pay the total consideration
      with respect to the notes.

The funding is to be raised from borrowings under a proposed
credit facility and sale of newly issued notes.

Berry's announcement removes upside potential for the ratings
stemming from the acquisition.

"The negative implications reflect the likelihood of a
substantial increase in the company's debt levels, given that
the proposed transaction will be mostly debt financed," said
Standard & Poor's credit analyst Liley Mehta.

Ratings could be affirmed or lowered upon resolution of the
CreditWatch listing.  In assessing the impact on the ratings,
Standard & Poor's will examine the implications for the
financial profile, as well as review the company's business and
financial strategies.

In June 2006, private equity firms, Apollo and Graham Partners
signed a definitive agreement to acquire BPC Holding Corp. from
Goldman Sachs Capital Partners and JPMorgan Partners for an
enterprise value of US$2.25 billion in aggregate consideration.
The transaction is subject to regulatory approval and other
customary closing conditions, and is expected to close by the
end of the third quarter of 2006.  Following the transaction,
Apollo will own a majority of Berry's common stock. Evansville,
Ind.-based Berry had total debt outstanding of about US$1.2
billion at March 31, 2006.

The ratings on Berry reflect the company's large market shares
in its niche segments, a well-diversified customer base, strong
customer relationships, and a highly leveraged financial
profile.  With annual revenues of about US$1.3 billion,
privately held Berry is a leading manufacturer and supplier of
rigid plastic injection-molded and thermoformed open-top
containers, aerosol overcaps, drinking cups, housewares,
closures for the health care and food and beverage segments,
pharmaceutical bottles, and prescription vials.


GRUPO MEXICO: Posts US$353 Mil. Second Quarter 2006 Net Profit
--------------------------------------------------------------
Grupo Mexico SA de CV told Dow Jones Newswires that its net
profit increased to US$353.0 million in the second quarter of
2006, from the US$238.9 million recorded in the same quarter in
2005.

Higher metals prices more than compensated for the effect of
strikes in Mexico, Dow Jones states, citing Grupo Mexico.

Grupo Mexico posted these results:

     -- sales in the second quarter of 2006 increased 16.6% to
        US$1.51 billion;

     -- earnings before interest, taxes, depreciation and
        amortization grew 40.8% to US$802.3 million;

     -- copper sales dropped 12.8% to 149,282 metric tons,
        although prices of the metal more than doubled from the
        the second quarter of 2005 to 337.45 cents per pound;

     -- sales at the railroad division increased 51.1% to
        US$297.0 million, with volume of goods transported up
        31.2%; and

     -- consolidated net debt was US$561.8 million.

Grupo Mexico SA de C.V. -- http://www.grupomexico.com/--  
through its ownership of Asarco and the Southern Peru Copper
Company, Grupo Mexico is the world's third largest copper
producer, fourth largest silver producer and fifth largest
producer of zinc and molybdenum.

                        *    *    *

Fitch Ratings assigned these ratings to Grupo Mexico SA de C.V.:

     -- foreign currency long-term debt, BB; and
     -- local currency long-term debt, BB.


GRUPO MEXICO: Protesters Give Back La Caridad Mine to Firm
----------------------------------------------------------
Grupo Mexico SA de CV told Reuters that workers blocking its La
Caridad mine had returned the installations to the firm.

In exchange, Grupo Mexico will withdraw the lawsuits it filed
against the workers, the company's Mexicana de Cobre unit said
in a press release.

As reported in the Troubled Company Reporter-Latin America on
July 11, 2006, Grupo Mexico and the Mexican government have been
in conflict with the union.  La Caridad mine workers had walked
off their jobs on March 24, 2006, in support of Napoleon Gomez
Urrutia, whose leadership in the union was snubbed by both the
government and Grupo Mexico due to allegations of embezzling
about US$55 million in funds paid into a trust by Grupo Mexico
in relation to the 1990 privatization of La Caridad and Cananea.
Eduardo Bours Castelo -- the governor of Sonora, where the La
Caridad mine is situated -- had tried to intervene to stop the
shutting down of the mine.

Comtex Business underscores that labor authorities had approved
earlier in July Grupo Mexico's request to shut the La Caridad
mine and end the collective contract.

Grupo Mexico told Comtex Business that it will hire new workers.
Reuters says that Grupo Mexico fired about 2,000 La Caridad
workers this month.

However, Grupo Mexico told Reuters that it was willing to hire
back miners fired for participating in the strike.

According to Comtex Business, Grupo Mexico would rehire workers
involved in the strike but had expressed interest in going back
to their jobs.

Grupo Mexico told Comtex Business that it expects to restart
operations at the La Caridad mine soon.

Workers at Cananea, another mine Grupo Mexico owned, also ended
their protest, Reuters states.

Grupo Mexico SA de C.V. -- http://www.grupomexico.com/--  
through its ownership of Asarco and the Southern Peru Copper
Company, Grupo Mexico is the world's third largest copper
producer, fourth largest silver producer and fifth largest
producer of zinc and molybdenum.

                        *    *    *

Fitch Ratings assigned these ratings to Grupo Mexico SA de C.V.:

     -- foreign currency long-term debt, BB; and
     -- local currency long-term debt, BB.


GRUPO MEXICO: Workers End Strike at Cananea Mine
------------------------------------------------
Workers at Grupo Mexico SA de CV's Cananea mine ended their
protest last week, Reuters reports.

As reported in the Troubled Company Reporter-Latin America on
June 15, 2006, the Cananea copper mine workers had been holding
demonstrations since June 1, when they first walked out of their
job after Grupo Mexico refused half of them a day off to
celebrate the 100th anniversary of a historic 1906 strike at the
mine.

The union had demanded:

    -- that Napoleon Gomez Urrutia be recognized as the union's
       new head,

    -- that full payment of their wages during the strike be
       made, and

    -- that the four arrested union members be released.

Grupo Mexico had threatened earlier a shutdown on its Cananea
mine.

Workers at the La Caridad mine have also ended their
demonstrations against Grupo Mexico, Reuters relates.

Grupo Mexico SA de C.V. -- http://www.grupomexico.com/--  
through its ownership of Asarco and the Southern Peru Copper
Company, Grupo Mexico is the world's third largest copper
producer, fourth largest silver producer and fifth largest
producer of zinc and molybdenum.

                        *    *    *

Fitch Ratings assigned these ratings to Grupo Mexico SA de C.V.:

     -- foreign currency long-term debt, BB; and
     -- local currency long-term debt, BB.


GRUPO TMM: Reports Loss of US$0.13 Per Share in Second Quarter
--------------------------------------------------------------
Grupo TMM, S.A. reported a loss of US$0.13 per share for the
second quarter of 2006 compared to a loss of US$0.21 per share a
year ago.  The company reported earnings of US$1.26 per share
for the first half of 2006 compared to earnings of US$2.53 per
share for the same period in 2005.

Revenues in the second quarter and first six months of 2006
compared to the same periods of 2005 were primarily impacted by
the sale of TMM's port assets in Colombia, by US$5.9 million in
the second quarter of 2006 and by US$10.8 million in the first
six months of 2006. Revenues were also impacted by US$3.7
million in the second quarter of 2006 due to the cancellation of
a service agreement between Ford Motor Company and Kansas City
Southern de Mexico at the end of March, in which TMM was a
subcontractor.

TMM reported the following results for the second quarter of
2006:

   -- Revenue of US$61.3 million, down 19.0% from US$75.7
      million the previous year;

   -- Operating income of US$3.2 million, up US$3.1 million from
      operating income of US$0.07 million a year ago;

   -- Operating margin of 5.2%, up 5.1 %age points from the
      previous year; and

   -- Net loss of US$7.4 million compared to a net loss of
      US$11.7 million in the second quarter of 2005;

TMM reported the following results for the first half of 2006:

   -- Revenue of US$123.7 million, down 11.8 % from
      US$140.2 million the previous year;

   -- Operating income of US$4.9 million, up US$3.7 million
      from operating income of US$1.2 million a year ago;

   -- Operating margin of 4.0%, up 3.1 %age points from
      the previous year; and

   -- Net income of US$71.5 million compared to net income of
      US$144.0 million in the first half of 2005.

Net interest expense of US$6.6 million was recorded in the
second quarter of 2006, compared to net interest expense of
US$22.4 million in the second quarter of 2005.  Comprehensive
financial expenses of US$9.8 million, including US$1.1 million
attributable to the amortization of expenses associated with the
company's debt were recorded in the second quarter of 2006
compared to comprehensive financial expenses of US$29.1 million
incurred in the second quarter of 2005, which included US$7.2
million attributable to the amortization of expenses associated
with the company's debt.

In the first half of 2006, TMM recorded net interest expense of
US$13.6 million compared to net interest expense of US$42.3
million in the same period of 2005.  Comprehensive financial
expenses of US$34.3 million, including US$18.4 million
attributable to the amortization of expenses associated with the
debt were recorded in the first half of 2006 compared to
comprehensive financial expenses of US$52.6 million incurred in
the first half of 2005, which included US$10.6 million
attributable to the amortization of expenses related to the
company's debt.

SG&A increased US$1.5 million in the second quarter of 2006 to
US$9.0 million compared to the 2005 period.  In the first half
of 2006, SG&A increased US$2.6 million to US$17.3 million
compared to the 2005 period.  The increase in the first half of
2006 was mainly due to the peso appreciation, to a one-time
payment of past due bonuses to TMM employees which had been
delayed for three years, to the ceased recovery of expenses from
discontinued operations and to higher costs related to the
operation of the IT platform.


As we stated in our first quarter conference call, TMM has
structured a program to reduce its current annual corporate
expenses by a further 1.5% of annual revenue during the second
half of 2006, which will provide approximately US$5.0 million in
additional free cash flow on an annualized basis.  Cost
reductions will include the simplification of procedures at all
levels impacted by corporate activities, and are being carried
out during the third and fourth quarters.  These reductions
include the consolidation of personnel in each of the operating
units producing one consolidated back office for accounting and
administrative functions, the renegotiation of insurance
policies at Logistics and at the Maritime division, the funding
of pensions, which reduce annual expenditures and the redesign
of the corporate office building which reduces on-going
maintenance and energy cost in a substantial way.  The corporate
list of reductions continues to grow in the third quarter and is
joined with further human resource personnel reductions at
Logistics.

Additionally, shareholder equity improved US$57.8 million in the
first half of 2006.

Javier Segovia, president of Grupo TMM, said, "In the first half
of 2006, we have focused on strengthening the operating profit
at each of our divisions in order to improve TMM's performance
now and in 2007.  We focused on operating profit as the key
measure for our success and for improving our credibility with
shareholders. We are focused upon profitable and sustainable
growth. Throughout the year, we have overcome a number of
hurdles that have made our tasks and goals more difficult to
attain, and while second quarter results are still somewhat
restrained, we remain committed to building a stronger company
for all of our shareholders.  As we approach 2007, we believe
that our EBITDA run rate commitments described in earlier
conference calls will be met. We are currently operating at a
consolidated US$35.1 million EBITDA run rate (after corporate
expenses) compared to US$29.2 million in the first quarter of
2006.  With improvements that are currently under way in
Logistics and at the Maritime division, and with corporate
reductions, we remain confident in our guidance.

"In the first half of 2006, our results have been impacted with
decisions and events from the past which distracted us from the
true nature of improvements now occurring.  Discontinued
operations and special one-time charges continued to impact our
results in period-over-period comparisons.  At Logistics, the
termination in late March and early April of a contract between
Kansas City Southern de Mexico and Ford Motor Company, in which
TMM Logistics participated as a subcontractor, continued to
impact the division's results.  The Kansas City Southern
contract cancellation joined with other discontinued operations,
including RoadRailer, pre-trip and terminal operations, cost TMM
Logistics' operating profit US$1.5 million during the first half
of 2006. Without these one-time charges, which are now behind
us, TMM Logistics would have produced US$2.7 million of
operating profit for the first half of this year."

Mr. Segovia continued, "Despite these hurdles, I believe we have
taken significant steps in the first half of this year to build
sustainable value in the future.  In the offshore segment we are
in the process of growing and modernizing our fleet.  The
additional anchor handler tug supply vessel announced in the
first quarter was received and is currently working under a two-
year contract with Pemex. We have recently purchased a newly
built 150-ton bollard pull anchor handler, which we expect to
receive in September of this year. Also, during the third
quarter of 2006, we have converted from leased to owned an
additional fast crew vessel currently operating under a short-
term contract.

"We believe greater opportunities exist in deeper water
exploration to accelerate oil and gas production in Mexico, and
we continue discussions with our clients for additional
chartering of tonnage through long-term charters of Mexican flag
vessels.  I would like to add that the current stand-alone
EBITDA run rate for the Maritime division is US$43.8 million,
before events that will occur during the third and fourth
quarter, including the two anchor handlers and the fast crew
vessel mentioned above."

Mr. Segovia concluded, "Finally, I am very pleased to report
that as of today, subject to final documentation, we are in the
final stages of closing a financing facility with Deutsche Bank
that will be used to redeem our outstanding 2007 Bonds and to
fund capital projects."

                       Segment Results

Maritime

In the second quarter of 2006, the Maritime division reported:

   -- Revenue of US$36.9 million, down 13.6 % from last
      year's US$42.7 million;

   -- Operating income of US$8.0 million, up 70.2% from
      US$4.7 million a year ago; and

   -- Operating margin of 21.5%, up 10.5 percentage points from
      the previous year.

In the first half of 2006, the Maritime division reported:

   -- Revenue of US$68.1 million, down 6.2% from last year's
      US$72.6 million;

   -- Operating income of US$13.4 million, up 71.8% from
      US$7.8 million a year ago; and

   -- Operating margin of 19.7 %, up 9.0 percentage points from
      the previous year.

Comparing second quarter and first half of 2006 with the same
periods of last year, revenues at the Maritime division
decreased mainly due to an increase in off-hire activity due to
cyclical maintenance, particularly in the offshore and product
tanker segments and to operating less vessels.  However,
operating income and gross profit increased, improving margins
as a result of the conversion of several vessels from leased to
owned status as part of the acquisition of the 40 % stake of
Seacor in the offshore business segment earlier this year.
Also, margins improved due to the switch from chartered product
tanker vessels in the spot market to owned vessels under long-
term contracts, which all together resulted in a cost decrease
in the Maritime division of 31.7 % in the second quarter and of
23.5 % in the first half of 2006, compared to the same periods
last year.

Ports and Terminals

In the second quarter of 2006, Ports and Terminals reported:

   -- Revenue of US$1.7 million, down 80.2% from last year's
      US$8.6 million;

   -- Operating income of US$0.1 million, unchanged from
      US$0.1 million a year ago; and

   -- Operating margin of 7.8%, up 6.2 percentage points from
      the previous year.

In the first half of 2006, Ports and Terminals reported:

   -- Revenue of US$3.8 million, down 78.3% from last year's
      US$17.5 million;

   -- Operating income of US$0.7 million, down 30.0% from
      US$1.0 million a year ago; and

   -- Operating margin of 17.8%, up 12.1 percentage points from
      the previous year

In the second quarter and first six months of 2006, the revenue
decrease in Ports and Terminals was attributable to the
elimination of US$5.9 million and US$10.8 million of revenue,
respectively, generated by the Company's port assets in
Colombia, which were sold in the fourth quarter of 2005 and was
also impacted by a reclassification of net revenue at the
shipping agencies business segment.

At the port of Acapulco, revenues increased by 11.8 % in the
second quarter of 2006 compared to the same period last year
mainly due to a US$0.3 million revenue increase in the auto-
handling segment. Comparing the first half of 2006 with the same
period last year, revenues at Acapulco decreased by 15.0 %
impacted by a 33.4 % revenue reduction in the cruise ship
segment due to decreased calls during this period. However, the
high season for this business segment begins in September and we
expect 64 calls for the remainder of the year, which exceeds
last years' calls for this period.

Logistics

In the second quarter of 2006, Logistics reported:

   -- Revenue of US$22.6 million, down 7.4% from last year's
      US$24.4 million;

   -- Operating income of US$0.6 million, up from an operating
      loss of US$0.7 million a year ago; and

   -- Operating margin of 2.6%, up 5.6 percentage points from
      the previous year

In the first half of 2006, Logistics reported:

   -- Revenue of US$51.8 million, up 3.2% from last year's
      US$50.2 million;

   -- Operating income of US$1.3 million, up 116.7% from US$0.6
      million a year ago; and

   -- Operating margin of 2.4%, up 1.2 percentage points from
      the previous year.

In the second quarter of 2006, gross profit for this division
increased from US$0.5 million to US$2.4 million and from US$3.1
million to US$4.7 million in the first six months of 2006,
compared to the same periods last year.  These improvements were
mainly attributable to revenue increases in trucking and
dedicated inbound logistics services as well as to improvements
in prices and in process controls in the automotive segment,
specifically in operations at Volkswagen.

In the first half of 2006, trucking has gradually improved its
operating profit, from an operating income of US$32,000 dollars
in January to an operating income of US$300,000 dollars in June,
as 81 trucks and 60 trailers were added to the fleet in March
and April.  The division could have made an additional US$1.0
million of operating profit during the first half of the year,
but trucks and trailer orders were delayed but are now arriving
in the July/August periods.

Going forward, by September we anticipate that the trucking
division with new equipment in place will be able to produce a
minimum of US$600,000 dollars of operating profit per month
which with other divisional operating profits from outbound and
inbound automotive services and from maintenance and repair
terminals joined with new governmental services, the Logistics
division should be able to produce after SG&A between US$0.8
million and US$1.0 million of operating profit per month.

        Balance Sheet Improvements and Debt Breakdown

As of June 30, 2006, TMM's total nominal debt was US$311.4
million of which US$158.7 million is related to the Company's
outstanding Notes and is supported by US$161.3 million in a
combination of cash on hand, marketable securities and
receivables from KCS, and US$152.7 million is supported with
shipping assets and with long-term contracted revenues.

            Divisional Results (All numbers in thousands)

                          Second Quarter 2006

                                             Corporate
                                                and
            Ports      Maritime   Logistics   Others    Total

Revenues    1,729      36,945      22,607       (16)   61,265
Costs       1,199      27,712      20,168        35    49,114
Gross
Result       530       9,233       2,439       (51)   12,151
Gross
Margin      30.7%       25.0%       10.8%   (318.8%)    19.8%
SG & A
(Estimate)   395       1,273       1,860      5,438    8,966
Operating
Results      135       7,960         579      (5,489)  3,185
Operating
Margin       7.8%       21.5%        2.6%      n.a.      5.2%


                       Second Quarter 2005

                                              Corporate
                                                and
             Ports      Maritime   Logistics   Others   Total

Revenues     8,608      42,702      24,402       (40)  75,672
Costs        7,390      36,929      23,892       (62)  68,149
Gross
Result      1,218       5,773         510        22    7,523
Gross
Margin       14.1%       13.5%        2.1%     55.0%     9.9%
SG & A
(Estimate)   1,076       1,058       1,240     4,078    7,452
Operating
Results       142       4,715        (730)   (4,056)      71
Operating
Margin        1.6%       11.0%      (3.0%)     n.a.      0.1%


                       First Six Months 2006

                                             Corporate
                                                and
             Ports      Maritime   Logistics   Others    Total

Revenues     3,833      68,134      51,766       (76)  123,657
Costs        2,370      52,097      47,073      (111)  101,429
Gross
Result      1,463      16,037       4,693        35    22,228
Gross
Margin       38.2%       23.5%        9.1%     46.1%     18.0%
SG & A
(Estimate)    782       2,594       3,433    10,518    17,327
Operating
Results       681      13,443       1,260   (10,483)    4,901
Operating
Margin       17.8%       19.7%        2.4%     n.a.       4.0%


                       First Six Months 2005

                                               Corporate
                                                  and
               Ports      Maritime   Logistics   Others   Total

Revenues      17,496      72,632      50,162       (73) 140,217
Costs         14,378      62,833      47,088       (89) 124,210
Gross
Result        3,118       9,799       3,074        16   16,007
Gross
Margin         17.8%       13.5%        6.1%     21.9%    11.4%
SG & A
(Estimate)    2,112       2,001       2,486     8,170   14,769
Operating
Results       1,006       7,798         588    (8,154)   1,238
Operating
Margin          5.7%       10.7%        1.2%     n.a.      0.9%


                  Grupo TMM, S.A. and subsidiaries
            Balance Sheet (under discontinuing operations)
                        - millions of dollars -




                                                     December
                                          June 30,      31,
                                            2006       2005
                                         =========  =========

Current assets:
Cash and cash equivalents                  36.403    400.809

Marketable securities                      35.000
                                         ---------  ---------
                                           71.403    400.809
                                         ---------  ---------
Accounts receivable
   Accounts receivable - Net               40.468     43.267
                                         ---------  ---------
   Other accounts receivable               18.501     19.615
                                         ---------  ---------
   Prepaid expenses and others
   current assets                           8.629      7.295
                                         ---------  ---------
Total current assets                      139.001    470.986
                                         =========  =========

Long-term account receivable               89.938     48.763
                                         =========  =========
Property, machinery and equipment
- Net                                    238.028    166.661
                                         =========  =========
Other assets                               21.027     23.160
                                         =========  =========
Deferred taxes                             86.958     83.556
                                         =========  =========

Total assets                              574.952    793.126
                                         =========  =========

Current liabilities:
Bank loans and current maturities of
long term liabilities                     35.349     35.546
                                          ---------  ---------
Suppliers                                  12.786     22.755
                                          ---------  ---------
Other accounts payable and
accrued expenses                          28.494     48.845
                                          ---------  ---------
      Total current liabilities            76.629    107.146
                                          =========  =========
Long-term liabilities:
   Bank loans and other obligations       279.803    524.763
                                          ---------  ---------
   Other long-term liabilities             23.984     24.471
                                          ---------  ---------
Total long-term liabilities               303.787    549.234
                                          =========  =========

Total liabilities                         380.416    656.380
                                          =========  =========

Stockholders' equity
Common stock                              121.158    121.158
                                          ---------  ---------
   Retained earnings                        85.998     14.454
                                          ---------  ---------
   Initial accumulated translation
    loss                                   (17.757)   (17.757)
                                          ---------  ---------
   Cummulative translation adjusted         (3.804)     1.422
                                          =========  =========
                                           185.595    119.277
                                          ---------  ---------
   Minority interest                         8.941     17.469
                                          ---------  ---------
Total stockholder's equity                 194.536    136.746
                                          =========  =========

Total liabilities and stockholders'
equity                                    574.952    793.126
                                          =========  =========


                     Grupo TMM, S.A. and subsidiaries
          * Statement of Income (under discontinuing operations)
                          - millions of dollars -


                       Three months ended   Six months ended
                            June 30,            June 30,
                          2006      2005      2006      2005
                       ========  ========  ========  ========

Revenue from freight
and services           61.265    75.672   123.657   140.217
                       --------  --------  --------  --------

Cost of freight and
services              (45.463)  (66.831)  (95.082) (121.527)
                       --------  --------  --------  --------
Depreciation of
vessels and
operating equipment    (3.651)   (1.318)   (6.347)   (2.683)
                       --------  --------  --------  --------

                        12.151     7.523    22.228    16.007
                       --------  --------  --------  --------

Administrative
expenses               (8.966)   (7.452)  (17.327)  (14.769)
                       --------  --------  --------  --------

Operating Income         3.185     0.071     4.901     1.238
                       ========  ========  ========  ========

Other expenses
- Net                  (0.615)   (0.683)   (0.461)   (0.626)
                       --------  --------  --------  --------

                       --------  --------  --------  --------
Financial (expenses)
income - Net           (6.648)  (22.370)  (13.605)  (42.281)
                       --------  --------  --------  --------
Amortization of expenses
related to debt        (1.110)   (7.230)  (18.351)  (10.645)
                       --------  --------  --------  --------
Exchange (loss) gain
- Net                  (2.065)    0.468    (2.356)    0.295
                       --------  --------  --------  --------

Net financial cost      (9.823)  (29.132)  (34.312)  (52.631)
                       --------  --------  --------  --------

Loss before taxes
and profit sharing     (7.253)  (29.744)  (29.872)  (52.019)
                       ========  ========  ========  ========

Benefit for taxes and
Profit sharing          1.124     7.173     2.799     8.302
                       --------  --------  --------  --------

Net  loss before
discontinuing
operations             (6.129)  (22.571)  (27.073)  (43.717)
                        ========  ========  ========  ========

Income from discontinuing
operations                                            1.364
                       --------  --------  --------  --------
(Loss) income from
disposal discontinuing
business               (0.675)   11.592    99.391   188.004
                       --------  --------  --------  --------

Net (loss) income for
the period             (6.804)  (10.979)   72.318   145.651
                       ========  ========  ========  ========

Attributable to:
Minority interest        0.554     0.768     0.773     1.606
                       --------  --------  --------  --------
Equity holders of
  Grupo TMM, S.A.       (7.358)  (11.747)   71.545   144.045
                       ========  ========  ========  ========

Weighted average
outstanding shares
(millions)             56.963    56.963    56.963    56.963
Income (loss) earnings
per share
(dollars / share)       (0.13)    (0.21)     1.26      2.53

Outstanding shares at
end of period
(millions)             56.963    56.963    56.963    56.963
Income (loss) earnings
per share
(dollars / share)       (0.13)    (0.21)     1.26      2.53
                       ========  ========  ========  ========


                   Grupo TMM, S.A. and subsidiaries
         Statement of Cash Flow (under discontinuing operations)
                          - millions of dollars -


                         Three Months Ended  Six Months Ended
                              June 30,            June 30,
                           2006      2005     2006      2005
                        ========  ========  ========  ========

Cash flow from operation
activities:
Net  loss before
Discontinuing
operations             (6.129)  (22.571)  (27.073)  (43.717)
                        --------  --------  --------  --------

Charges (credits) to
income not
affecting resources:

Depreciation &
  Amortization           5.590     5.886    11.177    13.595
                       --------  --------  --------  --------
Deferred income
  taxes                 (1.260)   (8.194)   (3.401)   (9.647)
                       --------  --------  --------  --------
Income from
  discontinued
  operation             (0.675)             68.715
                       --------  --------  --------  --------
Other non-cash items    2.978    (5.045)   17.167     0.905
                       --------  --------  --------  --------
Total non-cash items    6.633    (7.353)   93.658     4.853
                       --------  --------  --------  --------
Changes in assets &
liabilities            (0.089)   31.316   (38.268)   30.736
                       --------  --------  --------  --------
Total adjustments       6.544    23.963    55.390    35.589
                       --------  --------  --------  --------

Net cash provided
(used in) by
operating activities    0.415     1.392    28.317    (8.128)
                       ========  ========  ========  ========

Cash flow from investing
activities:
   Proceeds from sales
    of assets (net)      0.381     1.132     8.901     1.221
                       --------  --------  --------  --------
Payments for purchases
of assets             (30.419)   (8.951)  (96.755)  (12.207)
                       --------  --------  --------  --------
Acquisition of shares
of subsidiaries       (19.070)  (34.059)  (19.070)  (34.059)
                       --------  --------  --------  --------
Sale of share of
subsidiaries          183.712             191.804
                       --------  --------  --------  --------
Dividends paid to
Minority partners      (1.680)             (1.680)
                       --------  --------  --------  --------

Net cash (used in)
provided by
investment activities (50.788)  141.834  (108.604)  146.759
                       ========  ========  ========  ========

Cash flow provided by financing
activities:

Short-term borrowings
(net)                  (0.150)   (0.150)   (0.150)   (0.300)
                       --------  --------  --------  --------
Principal payments
under capital
lease obligations                                    (0.025)
                       --------  --------  --------  --------
(Repurchase) sale
of accounts
receivable (net)      (69.974)            (74.972)
                       --------  --------  --------  --------
Repayment of long-term
debt                   (6.486)  (68.383) (340.432)  (68.858)
                       --------  --------  --------  --------
Proceeds from issuance
of long-term debt      21.800     1.589    91.463     3.325
                       --------  --------  --------  --------

Net cash provided
(used in) by financing
activities             15.164  (136.918) (249.119) (140.830)
                      ========  ========  ========  ========

Net (decrease) increase
in cash              (35.209)    6.308  (329.406)   (2.199)
                      --------  --------  --------  --------
Cash at beginning of
period               106.612    44.641   400.809    53.148
                      --------  --------  --------  --------
Cash at end of period  71.403    50.949    71.403    50.949
                      ========  ========  ========  ========

Headquartered in Mexico City, Grupo TMM S.A. --
http://www.grupotmm.com/-- is a Latin American multimodal
transportation and logistics company.  Through its branch
offices and network of subsidiary companies, TMM provides a
dynamic combination of ocean and land transportation services.

                        *    *    *

As reported in the Troubled Company Reporter on Dec. 20, 2005,
Standard & Poor's Ratings Services raised its corporate credit
rating on Grupo TMM S.A. to 'B-' from 'CCC.'  The rating was
removed from Creditwatch, where it was placed on Dec. 15,
2004.  S&P said the outlook is positive.


TV AZTECA: Posts MXN2,653 Million Second Quarter 2006 Net Sales
---------------------------------------------------------------
TV Azteca, S.A. de C.V., reported net sales of MXN2,653 million,
up 17% from the same period of 2005.  Second quarter Earnings
before Interest, Taxes, Depreciation, and Amortization was
MXN1,147 million, about 7% above the same period a year ago.
EBITDA margin for the quarter was 43%.

Mario San Roman, Chief Executive Officer of TV Azteca, said,
"Outstanding revenue this quarter reflects solid sales in the
domestic and in the US Hispanic markets, where we generate top
quality content and increasingly competitive programming grids.
On the strategic front, we made further progress on our cash-
usage plan, with a distribution to shareholders of US$68 million
this period, accumulating distributions of US$473 million in
three years."

As has been previously detailed, the company's plan for uses of
cash entails distributions to shareholders above US$500 million
within a six-year period that began in 2003.

Net sales grew 17% to a record high of MXN2,653 million, up from
MXN2,271 million for the same quarter of 2005.  Total costs and
expenses rose 25% to MXN1,506 million, from MXN1,202 million in
the same period last year.  As a result, the company reported
EBITDA of MXN1,147 million, 7% above MXN1,069 million for the
second quarter of 2005.  Net income was MXN655 million, 28%
higher than MXN513 million in the same period of 2005.

Mr. San Roman said, "The popularity of our content was
remarkable during the quarter, which translated into a 41% share
of the commercial audience in the full day.  Our programming
grid was complemented with transmissions related to the World
Cup during the period, which attracted quality audiences, and
translated into higher domestic sales."

Second quarter revenue includes net sales from Azteca America
-- the company's wholly owned broadcasting network focused on
the US Hispanic market -- of MXN106 million, a 22% increase from
MXN87 million for the same period a year ago.

TV Azteca also reported programming sales to other countries of
MXN24 million, compared with MXN35 million in the same period a
year ago.  This quarter's programming exports were driven by the
company's novelas Amor sin Condiciones and Amor en Custodia,
sold in Latin America and Europe.

Barter sales were MXN111 million, compared with MXN70 million in
the same period of last year.  Inflation adjustment of
advertising advances was MXN31 million, compared with MXN39
million for the second quarter of 2005.

The 25% increase in costs and expenses during the second
quarter, resulted from the combined effect of a 36% rise in
programming, production and transmission costs to MXN1,235
million, from MXN911 million in the prior year period, and a 7%
decrease in administrative and selling expenses to MXN271
million, from MXN291 million in the same quarter a year ago.

"The cost increase primarily reflects extraordinary outlays from
exhibition rights and production costs associated with
programming related to the World Cup.  Higher costs were
congruent with incremental revenue related to the World Cup;
however, sales of non-sports programming decreased, which
moderated income and EBITDA growth in the quarter," Mr. San
Roman said.

The 7% decrease in administrative and selling expense reflects
reductions in operating, services and travel expenses, despite
increased operations in Mexico and the US Hispanic market.

The net sales increase during the quarter, combined with the
rise in costs and expenses, resulted in EBITDA of MXN1,147
million, 7% above MXN1,069 million a year ago.  The EBITDA
margin this quarter was 43%.

Below EBITDA, the company recorded depreciation and amortization
of MXN95 million from MXN111 million a year ago.  The decrease
mainly reflects a reduction of MXN11 million in the company's
amortization account, due to the implementation of accounting
Bulletin B-7, which allows making impairment tests in the
company's goodwill, instead of periodic amortizations.

The company recorded other expense of MXN130 million, compared
with MXN143 million a year ago.  Other expense this period was
primarily comprised of charitable donations of MXN57 million,
legal fees of MXN28 million, pre-operating expense of Azteca
America of MXN10 million.  TV Azteca also recorded MXN35 million
from the net effect of the recognition of participation, through
the equity method, of the losses of Proyecto 40, net income from
Todito Card and losses from Monarcas-TV Azteca's soccer team-
among other items.

Net comprehensive financing cost during the quarter was MXN159
million compared with MXN263 million a year ago.  There was a
MXN41 million decrease in paid interests resulting from lower
interest rates from the debt with cost.  Other financial expense
increased MXN10 million due to payments of interest rate
hedging. Interest income decreased MXN3 million due to
reductions in the yield obtained by the company's cash position.
TV Azteca recorded foreign exchange gain of MXN19 million,
compared with a MXN50 million loss a year ago.  The exchange
gain this quarter resulted from the combination of a 4%
depreciation of the peso against the US dollar in the quarter,
and a net asset US dollar monetary position of the company.
There was a MXN2 million gain in monetary position, compared
with a MXN5 million loss in the prior year.  The gain this
quarter is due to a liability monetary position in TV Azteca
this quarter.

Provision for income tax was MXN93 million, compared with MXN38
million in the same period of the prior year, reflecting a
larger taxable base this quarter.

Net income was MXN655 million, 28% higher than MXN513 million
for the same period of 2005.

During the quarter, Azteca America Network began its national
upfront campaign for the term that goes from October 2006 to
September 2007.  For the first time, Azteca America began the
campaign as an official national network, under Nielsen
standards.

At the launch of the up-fronts, Azteca America announced that
full day audiences, composed of adults between 18 and 49 years,
grew 150% in the past year, to a 5% share among US Hispanic
viewerships; during the weekends, between 12:00 noon and 7:00
p.m., audience share grew to 12% for the same target audiences.
Azteca America highlighted that its programming attracts
superior quality viewers compared with its competitors.

In terms of advertising options, Azteca America produces the
vast majority of its programming-either through TV Azteca or its
facilities in Los Angeles-which allows for product integration
opportunities like no other Spanish-language network in the US.
This translates into increased product recall among audiences,
an essential element for a well-rounded media plan.

"Our extensive coverage together with the increasingly solid
programming, as well as unparalleled advertising options offered
by our network, substantially strengthens Azteca America's
position in the market and enhance income and profitability
going forward," Mr. San Roman said.

As was previously announced, the shareholders' meetings held on
Feb. 20 and April 28 approved distributions for an aggregate
amount of US$90 million to be paid during 2006, under the
company's cash-usage plan.  During this quarter, US$68 million
were paid, and another payment of US$22 million is scheduled for
Nov. 22.

The distributions under the cash plan made to date since June
2003, represent an aggregate amount of US$473 million,
equivalent to a 24% yield based on the July 21, 2006 CPO closing
price.

Prior distributions include:

      -- US$125 million made on June 30, 2003;
      -- US$15 million on Dec. 5, 2003;
      -- US$33 million on May 13, 2004;
      -- US$22 million on Nov. 11, 2004;
      -- US$130 million on Dec. 14, 2004;
      -- US$59 million on June 9, 2005;
      -- US$21 million on Dec. 1, 2005; and
      -- US$68 million on May 23, 2006.

As of June 30, 2006, the company's total outstanding debt was
MXN7,412 million.  TV Azteca's cash balance was MXN1,142
million, resulting in net debt of MXN6,270 million.  The total
debt to last twelve months (LTM) EBITDA ratio was 1.9 times, and
net debt to EBITDA was 1.6 times.  LTM EBITDA to net interest
expense ratio was 5.5 times.

Excluding the MXN1,365 million debt due 2069, total debt was
MXN6,047 million (US$539 million), and total debt to EBITDA
ratio was 1.5 times.

TV Azteca is one of the two largest producers of Spanish-
language television programming in the world, operating two
national television networks in Mexico -- Azteca 13 and Azteca 7
-- through more than 300 owned and operated stations across the
country.  TV Azteca affiliates include Azteca America Network, a
new broadcast television network focused on the rapidly growing
US Hispanic market, and Todito, an Internet portal for North
American Spanish speakers.

                        *    *    *

Moody's Investor Services rated TV Azteca's senior unsecured
debt at B1 since Apr. 17, 2003.


* MEXICO: Posts US$21.2 Billion Export Revenues in June
-------------------------------------------------------
Mexico's exports rise 16% to US$21.2 billion for the month of
June, compared with US$18.3 billion a year earlier, Bloomberg
News reports.

Bloomberg says the increase in the country's exports is largely
contributed by the automobile sector.

Mexico's automobile sector saw an increase in car exports as
more manufacturers like Ford Motor Co. and Volkswagen AG step up
investments in the country in response to rising costs in the
United States and Europe.

Deputy finance minister Alonso Garcia Tames told Bloomberg that
Mexico remains competitive against China.

"The geographic location of Mexico is an advantage that can't be
taken away," minister Garcia Tames noted to Bloomberg in an
interview in Mexico City.  "We have certainly been displaced
from some markets by the Chinese, but in other areas such as
autos, we remain very competitive."

According to Bloomberg, Mexico's auto industry accounts for 15%
of the nation's manufacturing and about 10% of total industrial
production. The country sold 801,809 vehicles overseas in the
first half, up 52% from the same period last year, compared with
an 8% rise for all of 2005.

Mexico's share in the US market hit its lowest in 2005, when
China's exports surged 24% while Mexico only grew 9.2%.

However, the trend was reversed during the first half of this
year.  U.S. imports from Mexico have risen 19% compared with 17%
growth for China.

                        *    *    *

As reported in the Troubled Company Reporter on April 17, 2006,
Standard & Poor's Ratings Services placed an mxBB+ long-term
rating with stable outlook on the state of Mexico.




=================
N I C A R A G U A
=================


* NICARAGUA: IDB & Bancentro Close First Transaction Under TFFP
---------------------------------------------------------------
The Inter-American Development Bank closed on July 24, 2006, the
first transaction in Central America under the Trade Finance
Facilitation Program or TFFP, with Nicaraguan bank Banco de
Credito Centroamericano aka Bancentro.  Under this transaction,
IDB has extended its guarantee to cover a promissory note used
to finance the import of gas from Ecuador to El Salvador by a
local gas company.

The IDB issued this guarantee in favor of Wachovia Bank, thus
sharing the risk assumed on the transaction with Bancentro.

"By joining the TFFP, we are expanding our relationship with 60
major correspondent banks in 20 countries around the world and
gaining access to funding terms that enable Bancentro to offer
longer-term trade financing to our customers", said Maritza C.
Arellano, International Executive Manager of Bancentro.

The approximately US$2 million deal has a tenor of one year and
will help support intra-regional trade in Latin America.

The Trade Finance Facilitation Program was launched by the IDB
in April 2005 and is designed to promote economic reactivation
and growth throughout Latin America and the Caribbean by
increasing the availability of funding for international trade.
Under the program the IDB issues guarantees to confirming banks
to mitigate the risk from eligible issuing banks in export and
import contracts with tenors of up to three years.

Bancentro is the second largest bank in Nicaragua and the core
entity of Miami-based Central American financial conglomerate
Latin American Financial Services Group or Lafise Group.  With
trade financing activities representing 12% of assets and a
focus on serving the non-traditional exports sector, the TFFP
provides Bancentro to broaden its international funding base
among existing and new international correspondent banks.

                        *    *    *

Moody's Investor Service assigned these ratings to Nicaragua:

                     Rating     Rating Date
                     ------     -----------
   Long Term          Caa1     June 30, 2003
   Senior Unsecured
   Debt                B3      June 30, 2003


* NICARAGUA: Seeks Private Aid on Hydroelectric Generation
----------------------------------------------------------
An official from the national energy commission of Nicaragua
told Business News Americas that the government is soliciting
aid from the private sector on the development of the nation's
hydroelectric generation potential.

"The government wants to attract investors to develop the
country's hydroelectric potential to take advantage of renewable
energy sources in light of growing fuel prices, which are
impacting thermo generation," the official told BNamericas.

The official told BNamericas that the commission has 12 projects
that reach 150 megawatts at different stages of development,
like:

      -- design,
      -- pre-feasibility, and
      -- feasibility.

According to BNamericas, the official said the commission will
present the projects in a presentation in Managua on Aug. 3,
which would be attended by:

      -- Inter-American Development Bank,
      -- Central American Bank for Economic Integration,
      -- World Bank,
      -- INE, the energy regulator in Nicaragua, and
      -- other government agencies.

The official told BNamericas that interested firms must first
approach INE to secure the necessary forms to conduct the
remaining studies.

BNamericas relates that if the projects proceed, the firm would
have to obtain environmental and water use right permits and the
ensuing generation licenses.

Some firms have already expressed interest, BNamericas states.

                        *    *    *

Moody's Investor Service assigned these ratings to Nicaragua:

                     Rating     Rating Date
                     ------     -----------
   Long Term          Caa1     June 30, 2003
   Senior Unsecured
   Debt                B3      June 30, 2003




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


* PANAMA: Launches Energy Projects with Venezuela
-------------------------------------------------
Elixandro Ballesteros, the ambassador of Panama, told El
Universal that the implementation of the nation's energy
projects with Venezuela has started.

According to El Universal, the principal project foresees the
extension of the trans-Caribbean gas pipeline to Panama.  The
first stage of the construction will reach Colombia.

As reported in the Troubled Company Reporter-Latin America on
July 18, 2006, Venezuela's President Hugo Chavez, Colombia's
Alvaro Uribe and Panama's Martin Torrijos formally inaugurated
the construction of the US$335-million natural gas pipeline
connecting Venezuela, Colombia and Panama.  The pipeline would
include a fiber optic cable to help improve communications among
the three nations.  Venezuela's state-run oil firm, Petroleos de
Venezuela would fund the construction of the pipeline.  The 225
km, 150 million cubic feet gas pipeline would become operational
in 2007.  Petroleos de Venezuela said that 10% of the pipeline's
total investment would be used to fund social projects in areas
where the pipeline would be laid.

                        *    *    *

Fitch Ratings assigned these ratings on Panama:

                     Rating     Rating Date
                     ------     -----------
   Country Ceiling    BBB      Apr.  8, 2005
   Long Term IDR      BB+      Dec. 14, 2005
   Short Term IDR       B      Dec. 14, 2005
   Local Currency
   Long Term Issuer
   Default Rating     BB+      Dec. 14, 2005




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


PETROLEO BRASILEIRO: Launches First Service Station in Paraguay
---------------------------------------------------------------
Brazil's Petroleo Brasileiro SA aka Petrobras has launched its
first service station in Paraguay, Petrolworld reports.

According to Petrolworld, the launching in Asuncion was attended
by:

     -- Jose Sergio Gabrielli de Azevedo, the head of Petrobras,
     -- Nestor Cervero, Petrobras international director, and
     -- Erio Mathias, Petrobras Paraguay's general manager.

Mr. Gabrielli told Petrolworld, "This service station is the
first of 129 stations we will inaugurate in Paraguay in the next
18 months.  Petrobras is here, initially in the distribution
sector, but we are trying to increase our presence, increasing
the synergy of the Company's activities here and throughout
Latin America."

The report underscores that the Ciclovia service station on
Asuncion's main avenue is the first of the stations Petrobras
purchased in 2005, in an asset purchase process.  It offers
several facilities to the consumer in its modern installations
like:

     -- the first Spacio 1 convenience store,
     -- a Lubrax lube center,
     -- a drugstore, and
     -- ATMs.

Petrobras, says Petrolworld, is also launching its corporate
brand at the remaining 128 service stations in Paraguay.

Petrolworld relates that Mr. Mathias said that Petrobras will
invest US$5 million in Paraguay.

The investments are part of the company's goal to strengthen its
leadership in Latin America, Petrolworld states.

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.




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


* PERU: Applies for US$400M Loan from IDB to Develop LNG Project
----------------------------------------------------------------
The Inter-American Development Bank will formally review Peru
LNG's request for a direct loan of US$400 million for the
development of a liquefied natural gas export project in Peru.

Using natural gas in excess of local demand, the project will
provide Peru with a usable and sustainable export commodity for
future economic growth.  This significant investment opportunity
will facilitate construction of a marine loading terminal and
breakwater, liquefaction plant, and gas pipeline expansion that
will join the already existing Camisea gas pipeline outside the
rainforest area.  Once operational in 2010, the project will
help diversify foreign sources of energy for North and South
America while creating new economic benefits and development
opportunities for Peru and its people.

"We are very pleased that the IDB has agreed to consider
financing this important development project," said Jeanne
Phillips, Senior Vice-President for Corporate Affairs and
International Relations at Hunt Oil Company, the majority
shareholder in the Peru LNG consortium.  "We have already been
working with the IADB for over a year to obtain their counsel in
the development of Peru LNG.  The Bank's participation in the
project will add important value and greatly enhance our goal of
assuring Peru LNG meets the highest standards for a project of
this kind, especially on the environmental and social aspects."

Peru LNG represents a significant opportunity for sustained
economic growth in one of the United States' strongest
democratic allies in Latin America, adding one percent per year
to Peru's total GDP.  It is estimated that the project will
bring US$4.8 billion in cumulative economic benefits to Peru in
the form of:

   -- direct and indirect investment,
   -- taxes,
   -- royalties, and
   -- economic growth,

including 35,000 direct and indirect jobs during construction.
It will also create an important new source of energy in our
hemisphere.

The signing of the mandate letter initiates an intensive review
and due diligence process where the IADB will evaluate project
technical and financial documentation, economic studies,
contractual agreements, and various environmental impact
assessments and environmental and social management plans.

"We are working with communities and residents throughout the
region in a pro-active manner to ensure they are aware of the
project and find ways to benefit from it," added Ms. Phillips.
"We plan to work closely with reputable environmental
institutions, local organizations, and others to ensure this
project meets the highest social and environmental standards."

Peru LNG is a Peruvian registered company created in 2003 for
the purpose of developing a liquefaction natural gas facility
utilizing the excess supply of Peru's abundant natural gas
reserves for export to the west coast of North America.  In
addition to Hunt Oil Company of Dallas, Texas, the consortium
includes partners SK Corporation of South Korea, and Repsol YPF
of Spain.


                        *    *    *

Fitch Ratings assigned these ratings on Peru:

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




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


ADELPHIA COMMS: Names JPMorgan as Custodian Under DIP Facility
--------------------------------------------------------------
Adelphia Communications Corporation and its debtor-affiliates
have selected JPMorgan Chase Bank, N.A., to serve as custodian
and as safekeeping agent, with regards to its US$1.3 billion
debtor-in-possession financing.

As reported in the Troubled Company Reporter on July 21, 2006,
the Debtors asked 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, told 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

Ms. Chapman discloses that the ACOM Debtors will seek the
Court's approval of the Custodian Agreement and Safekeeping
Agreement at the hearing on the DIP Financing Motion today,
July 28, 2006.

The Domestic Custody Agreement governs the custodial, settlement
and certain other associated services offered by JPMorgan to
ACOM.  JPMorgan will be responsible for the performance of those
Securities custody duties related to Securities that are:

    -- issued in the United States by an issuer that is
       organized under the laws of the U.S. or any state
       thereof; or

    -- both traded in the U.S. and eligible for deposit in a
       U.S. Securities Depository.

A full-text copy of the Domestic Custody Agreement is available
for free at http://ResearchArchives.com/t/s?e74

Pursuant to the Safekeeping Agreement, JPMorgan will hold and
safe-keep certain of ACOM's securities certificates separately
from those securities certificates belonging to JPMorgan and its
other customers.  JPMorgan will return the Certificates to, or
upon the written instruction of, ACOM or an authorized person.

A full-text copy of the Safekeeping Agreement is available for
free at http://ResearchArchives.com/t/s?e75

                  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 Managed 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 administered under
Adelphia Communications and its debtor-affiliates chapter 11
cases.  (Adelphia Bankruptcy News, Issue No. 143; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


ADELPHIA COMMUNICATIONS: Discloses Terms of Plan Agreement
----------------------------------------------------------
In a regulatory filing with the Securities and Exchange
Commission, Brad M. Sonnenberg, Adelphia Communications
Corporation's executive vice president, general counsel and
secretary, discloses that effective July 21, 2006, Adelphia
entered into an amended and restated agreement concerning terms
and conditions of a modified Chapter 11 plan with:

    -- the representatives of the ad hoc committee of holders of
       ACC Senior Notes represented by Hennigan, Bennett &
       Dorman LLP,

    -- the ad hoc committee of holders of ACC Senior Notes and
       Arahova Notes represented by Pachulski Stang Ziehl Young
       Jones & Weintraub LLP,

    -- the Ad Hoc Committee of Arahova Noteholders,

    -- the Ad Hoc Committee of holders of FrontierVision Opco
       Notes Claims and FrontierVision Holdco Notes Claims;

    -- W.R. Huff Asset Management Co., L.L.C.;

    -- the ad hoc committee of ACC Trade Claimants;

    -- the ad hoc committee of Subsidiary Trade Claimants; and

    -- representatives of the Official Committee of Unsecured
       Creditors.

A full-text copy of the Second Amended and Restated Agreement
Concerning Terms and Conditions of a Modified Chapter 11 Plan is
available for free at http://ResearchArchives.com/t/s?e4e

As reported in the Troubled Company Reporter on July 25, 2006,
the Debtors, the different Committees in their chapter 11 cases,
and significant individual creditors agreed upon the framework
for a plan of reorganization intended to result in a fourth
quarter 2006 emergence from Chapter 11 bankruptcy.

                        Plan Agreement

Mr. Sonnenberg explains that the Plan Agreement will form the
basis of an amended plan of reorganization for the ACOM Debtors,
including a proposed global compromise and settlement of all
disputes among all creditors, whether parties to the Plan
Agreement or not.

The Plan Agreement does not apply to the Parnassos and Century-
TCI Joint Venture Debtors.

The Plan Agreement contemplates that the ACOM Debtors and the
Creditors Committee will file the Modified Plan under which all
unsecured creditors will receive payment in full of all
principal and accrued interest through the Modified Plan's
effective date, subject to specified "give-ups" in varying
amounts of Plan Consideration, aggregating to $1,080,000,000,
and would be transferred to the creditors.

The "give-ups" are:

    (i) US$750,000,000 from amounts otherwise allocable to the
        Arahova notes;

   (ii) US$85,000,000 from amounts otherwise allocable to the
        FrontierVision operating company and holding company
        notes;

  (iii) US$30,000,000 from amounts otherwise allocable to the
        Olympus bonds and the FPL note;

   (iv) US$39,200,000 million from amounts otherwise allocable
        to subsidiary trade claims; and

    (v) US$6,800,000 from amounts otherwise allocable to other
        subsidiary unsecured creditors.

The creditors will also receive:

    -- the residual sale of consideration after funding all
       other distributions and reserves; and

    -- interests in the Contingent Value Vehicle.

                   Treatment of Bank Claims

Pursuant to the Plan Agreement, the Creditors Committee will be
the sole proponent of the Modified Plan with respect to the
treatment of the prepetition lenders' claims.  Under the Plan
Agreement, all Bank claims would be disputed claims under the
Modified Plan, and would be subject to disallowance in whole or
in part.

The Plan Agreement proposes that, unless allowed, the Banks will
not receive any distributions under the Modified Plan.  The
liens and security interests securing the claims would be
transferred to Comcast Corporation and Time Warner NY Cable,
LLC, in an amount sufficient to pay in full the maximum amount
of the disputed Bank claims as determined by the Bankruptcy
Court.

Pending resolution of the disputed Bank claims, the Plan
Agreement contemplates that the Debtors will retain the sale
transaction proceeds subject to the liens.

The Plan Agreement proposes that under the Modified Plan, the
Banks would have the right to elect to receive payment in full
in cash on the Effective Date of all outstanding principal and
all accrued interest at the non-default interest rate in effect
at the Petition Date, subject to disgorgement upon the entry of
a final order directing the return of some or all of the
distribution.

Pending allowance of the Bank claims, the Plan Agreement
contemplates that the ACOM Debtors or the Creditors Committee
will pursue objections to all claims under all applicable
provisions of the Bankruptcy Code.

Mr. Sonnenberg notes that the Banks are not party to the Plan
Agreement.  The parties will continue their good faith
negotiations with the Banks regarding the Banks' plan treatment.

                       True-Up Reserve

A true-up reserve of Class A Common Stock of Time Warner Cable
Inc., or cash to the extent there is not sufficient stock
available, will be created by withholding amounts otherwise
payable in respect of initial Effective Date distributions
pending a market valuation of that stock.

Subject to certain limitations, the True-Up Reserve is intended
to be sufficient to permit the upward or downward adjustment of
the total number of shares received by creditors based upon a
Market Value of the TWC Class A Common Stock that is up to 15%
higher or lower than the deemed value used for initial
distributions.

                        Effective Date

The Plan Agreement is conditioned upon the Modified Plan's
Effective Date occurring before the later of September 15, 2006,
and 15 days after the closing of the TWC Sale, but in no event
later than October 31, 2006.

Conditions to the Effective Date of the Modified Plan would also
include:

    -- material completion of the distribution of TWC Class A
       Common Stock to creditors prior to October 31, 2006; and

    -- the distribution to Adelphia's creditors of the Plan
       Consideration of at least US$1,080,000,000.

               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 Managed 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 administered under
Adelphia Communications and its debtor-affiliates chapter 11
cases.  (Adelphia Bankruptcy News, Issue No. 143; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


AVALON RE: Fitch Removes Junk Ratings from Negative Watch
---------------------------------------------------------
Fitch downgraded the ratings of the Class A and B variable-rate
notes of Avalon Re Ltd., affirmed the ratings of the class C
notes and removed all of the notes from Rating Watch Negative.

In addition, Fitch assigned distressed recovery ratings to the
class B and C notes.  The class A variable rate notes were
downgraded to 'BB-' from 'BBB+'.  The class B variable rate
notes were downgraded to 'CCC' from 'BB' and were assigned a
distressed recovery rating of 'DR4'.  The class C variable rate
notes were affirmed at 'CCC-' and assigned a distressed recovery
rating of 'DR5'.  The rating actions affect $405 million of
Avalon Re variable-rate notes.

Avalon Re provides coverage to Oil Casualty Insurance, Ltd., a
Bermuda-based insurer, on a three-year excess of loss
reinsurance contract that attaches at US$300 million.  The
rating actions reflect substantially increased expected loss
statistics for each of the classes of variable rate notes.  The
expected loss statistics have increased primarily because OCIL
has already incurred US$290 million of losses in the first year
of the three-year transaction.

The losses recorded by OCIL have not been ceded to Avalon Re and
have not resulted in a current loss of principal or interest to
note holders.  The class C, class B and class A note holders are
exposed to the third, fourth and fifth $150 million loss, (or
any portion thereof), respectively, occurring within the three-
year risk period.

Fitch expects to continue to monitor OCIL's insurance losses as
they develop.  If insurance losses develop such that they
generate a loss to holders of the variable-rate notes, Fitch may
further downgrade the notes.  Due to the indemnity risk
structure of the notes and the long-term nature of liability
claims, Fitch expects that it may be several months before
OCIL's losses, if any, can be quantified.

Avalon Re is a Cayman Islands-domiciled insurance company formed
solely to issue the variable-rate notes, enter into a
reinsurance contract with OCIL, and to conduct activities
related to the notes' issuance.  The variable-rate notes are
insurance-linked collateralized securities that will suffer a
loss of principal if OCIL's aggregate insured losses exceed a
specified threshold that varies by note class.

Fitch removes these ratings from Rating Watch Negative:

Avalon Re, Ltd.

    -- US$135 million Class A Variable Rate Notes due
       June 6, 2008, downgraded to 'BB-' from 'BBB+';

    -- US$135 million Class B Variable Rate Notes due
       June 6, 2008, downgraded to 'CCC' from 'BB/DR4',
       distressed recovery rating assigned;

    -- US$135 million Class C Variable Rate Notes due
       June 6, 2008, affirmed at 'CCC-/DR5', distressed recovery
       rating assigned.


CROWN HOLDINGS: S&P Affirms BB- Rating on US$1.5 Bil. Facilities
----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB-' rating and
its '2' recovery rating on Crown Holdings Inc.'s existing
US$1.5 billion credit facilities including its proposed $200
million add-on senior secured term loan B due 2012.

The bank loan rating is the same as the corporate credit rating;
this and the recovery rating of '2' indicate that lenders can
expect substantial (80% to 100%) recovery of principal in the
event of a payment default.  The ratings on the add-on term loan
B are based on preliminary terms and are subject to review of
final documentation.

The borrower for the add-on term loan B is Crown Americas LLC
and proceeds from the term loan B, which is being added through
an amendment to Crown's existing credit facilities, will be
initially used to pay down the revolving credit facility, and
subsequently to fund share repurchases and meet pension
payments.

The corporate credit rating on Crown is 'BB-'.  The rating
outlook is stable.  Philadelphia, Pennsylvania-based Crown's
total debt was US$3.6 billion at March 31, 2006.

"The ratings reflect Crown's satisfactory business risk profile,
characterized by market leadership, global operations, and
relative earnings stability.  Nevertheless, the financial
profile remains highly leveraged, and the company continues to
face risks associated with asbestos litigation," said Standard &
Poor's credit analyst Liley Mehta.

Ratings List:

  Crown Holdings Inc.:

    * Corporate credit rating: BB-/Stable/B-1
    * Senior unsecured debt: B

  Crown Americas LLC and Crown Americas Capital Corp.:

    * $410 million revolving credit facility due 2011: BB-
      (Recovery rtg: 2)

    * $365 million term loan B due 2012: BB- (Recovery rtg: 2)

    * $500 million senior unsecured notes due 2013: B

    * $600 million senior unsecured notes due 2015: B

  Crown European Holdings S.A.:

    * $350 million revolving credit facility due 2011: BB-
      (Recovery rtg: 2)

    * $350 million term loan B due 2012: BB- (Recovery rtg: 2)

    * EUR460 mil. first-priority sr. secured notes due 2011: BB-

    * Recovery rating: 2

  Crown Metal Packaging Canada L.P.:

    * $40 million revolving credit facility due 2011: BB-
      (Recovery rtg: 2)

  Crown Cork & Seal Finance PLC:

    * Senior unsecured debt: B


LA REINA: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------
Debtor: La Reina Management, Inc.
        1 Ponce de Leon Street
        Esq. Georgetti
        Caguas, Puerto Rico 00725
        Tel: (787) 743-4445

Bankruptcy Case No.: 06-02477

Debtor-affiliates filing separate chapter 11 petitions:

      Entity                               Case No.
      ------                               --------
      La Reina De Humacao, Inc.            06-02478
      La Reina De Caguas, Inc.             06-02479
      La Reina De Peuelas, Inc.           06-02480
      La Reina De Vega Baja, Inc.          06-02481
      La Reina De Comerio, Inc.            06-02482
      La Reina De Cidra, Inc.              06-02483
      La Reina De Barrio Obrero, Inc.      06-02484
      La Reina De Juana Diaz, Inc.         06-02485
      La Reina De Manati, Inc.             06-02486
      Menos De $1 y Mas, Inc.              06-02487
      La Reina De Fajardo, Inc.            06-02488
      La Reina De Turabo, Inc.             06-02489

Type of Business: La Reina Management, Inc., is engaged in the
                  administration of its affiliated companies'
                  funds through the performance of functions
                  such as merchandise purchases, payment to
                  suppliers and employees, record keeping of
                  expenses allocation, and other miscellaneous
                  management services.  The Debtor's revenues
                  consist of fees charged to the affiliates for
                  these services.

Chapter 11 Petition Date: July 26, 2006

Court: District of Puerto Rico (Old San Juan)

Debtor's Counsel: Jose Raul Cancio Bigas, Esq.
                  134 Mayaguez Street
                  Hato Rey, Puerto Rico 00917
                  Tel: (787) 763-1940
                  Fax: (787) 758-9238

Debtors' Total Assets and Liabilities as of January 31, 2006:

                                    Total Assets   Total Debts
                                    ------------   -----------
   La Reina Management, Inc.         US$14,166,830 US$13,810,411
   La Reina De Humacao, Inc.            US$686,484    US$640,624
   La Reina De Caguas, Inc.             US$660,076    US$431,535
   La Reina De Peuelas, Inc.           US$636,769    US$477,711
   La Reina De Vega Baja, Inc.          US$762,773    US$810,578
   La Reina De Comerio, Inc.            US$498,769    US$152,940
   La Reina De Cidra, Inc.              US$669,023    US$738,553
   La Reina De Barrio Obrero, Inc.      US$709,185    US$506,749
   La Reina De Juana Diaz, Inc.         US$701,556    US$424,023
   La Reina De Manati, Inc.             US$672,681    US$820,537
   Menos De $1 y Mas, Inc.              US$516,960    US$612,792
   La Reina De Fajardo, Inc.            US$626,436    US$726,860
   La Reina De Turabo, Inc.             US$554,371    US$502,475

La Reina Management, Inc.'s 20 Largest Unsecured Creditors:

Entity                          Nature of Claim   Claim Amount
------                          ---------------   ------------
Kimberly Clark PR, Inc.            Supplies          US$476,033
P.O. Box 191859
San Juan, PR 00919-1859

Unilever de Puerto Rico            Supplies          US$291,496
P.O. Box 70129
San Juan, PR 00936-7129

Wyeth Consumer Healthcare          Supplies          US$239,096
P.O. Box 70124
San Juan, PR 00936-7124

Howland Caribbean Corp.            Supplies          US$159,792
P.O. Box 1895
San Juan, PR 00919

The Clorox Commercial              Supplies          US$101,524
P.O. Box 2133
San Juan, PR 00922-2133

Colgate-Palmolive                  Supplies          US$101,300

Mattel Latin America Ex            Supplies           US$85,654

P&G Commercial Co.                 Supplies           US$84,266

Alberto Culver                     Supplies           US$66,392

Markwins Int. Corp.                Supplies           US$59,699

Four Seasons                       Supplies           US$57,201

Cadbury Adams PR                   Supplies           US$49,843

Glaxo Smith-Kline                  Supplies           US$39,642

Famosa America Inc.                Supplies           US$32,523

Insular Trading Co.                Supplies           US$31,564

Johnson Wax                        Supplies           US$29,304

Country Silk, Inc.                 Supplies           US$28,614

Johnson & Johnson                  Supplies           US$28,134

Pan Pepin                          Supplies           US$28,040

Lander Co., Inc.                   Supplies           US$27,297

La Reina Management's affiliates do not have any creditors who
are not insiders.


NEWPARK RESOURCES: Receives Default Notice from Noteholders
-----------------------------------------------------------
Newpark Resources Inc. discloses that on July 20, 2006, it
received a notice of default from the purported holders of more
than 25% in aggregate principal amount of Newpark's 8-5/8%
Senior Subordinated Notes due 2007.  The Notes were issued in
1997 under an indenture with U.S. Bank N.A., as trustee, in an
aggregate principal amount of US$125 million.

Under the indenture, Newpark is obligated to timely file its
periodic reports under federal securities law and to deliver
those reports to Noteholders.  As previously disclosed, Newpark
has not yet filed with the Securities and Exchange Commission
its Quarterly Report on Form 10-Q for the quarter ended
March 31, 2006.  If Newpark fails to cure these defaults within
30 days after receipt of the Notice, the trustee or the
Noteholders may declare the Notes, together with accrued
interest, to be immediately due and payable.

Although Newpark may be able to cure the default and file the
required Quarterly Report on Form 10-Q by August 19, 2006,
Newpark cannot predict with certainty that it will be able to do
so.

Newpark has received temporary waivers under all other material
obligations that may be affected as a result of the Notice.
These waivers terminate on various dates and are subject to
renewal or early termination under specified conditions.

The Notes may be redeemed by Newpark, at its election, at any
time at their original principal amount plus accrued unpaid
interest upon notice given at least 30 days and not more than 60
days before the redemption date.  To that end, JPMorgan Chase
Bank, N.A. has committed to provide to Newpark a US$150 million
collateralized term loan that can be used to retire the Notes.
The commitment is subject to customary terms, fees and
conditions.

Newpark Resources, Inc. provides integrated fluids management,
environmental and oilfield services to the exploration and
production industry.

Newpark Resources Inc. is headquartered in Metairie, Louisiana.
The company provides its products and services principally to
the oil and gas exploration and production industry in the
United States Gulf Coast, west Texas, the United States Mid-
continent, the United States Rocky Mountains, Canada, Mexico,
and areas of Europe and North Africa.




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


CUMMINS INC: Inks Agreement to Manufacture New Engines
------------------------------------------------------
Cummins Inc. has reached agreement with a major automotive
manufacturer serving the North American market to produce and
market a light-duty, diesel-powered engine.  For competitive
reasons, Cummins' original equipment manufacturer partner in the
venture has asked to remain confidential.

As part of the agreement, Cummins will develop and manufacture a
family of high-performance, light-duty diesel engines for a
variety of automotive applications in vehicles below 8,500
pounds gross vehicle weight, including standard pickup trucks
and sport utility vehicles.  Certain bus, marine and industrial
applications also will be served by this engine family.

The first vehicles with this engine are expected to be ready for
market by the end of the decade.  Cummins anticipates that this
diesel engine will provide an average of 30 percent fuel
savings, depending on the drive cycle, over gasoline-powered
engines for comparable vehicles.

The concept for this product is the result of a nine-year
partnership between Cummins and the U.S. Department of Energy.
The DOE contract began in 1997 because of the federal agency's
ongoing interest in energy efficiency in the automotive market.

"This agreement gives the driving public an even greater
opportunity to experience the benefits of a new class of
vehicles powered by a high-performance, fuel-efficient, clean
diesel engine made by Cummins," said Tim Solso, Cummins Chairman
and Chief Executive Officer.  "This line of diesel engines also
will fuel the growth of an exciting new market in which Cummins
does not currently participate."

Cummins has not yet selected a manufacturing site for the new
engine, but after an extensive search has narrowed the
candidates to a short list of states.

"Cummins is looking for a community that has a cost-competitive,
suitable facility and the right resources available," said Jim
Kelly, President of the Engine Business.  "We also will seek
state and local economic incentives from the states that are
candidates for this business."

Cummins expects to have added 600 new jobs approximately two
years after product launch.  Further growth will depend on
volumes.

                       About Cummins

Headquartered in Columbus, Indiana, Cummins Inc. --
http://www.cummins.com/-- is a corporation of complementary
business units that design, manufacture, distribute and service
engines and related technologies, including fuel systems,
controls, air handling, filtration, emission solutions and
electrical power generation systems.  Cummins serves customers
in more than 160 countries through its network of 550 Company-
owned and independent distributor facilities and more than 5,000
dealer locations.  In Latin America, Cummins operates in 33
countries including Argentina, Bolivia, Chile, Paraguay, Uruguay
and Venezuela.

                        *     *     *

Cummins' Junior Convertible Subordinated Debentures carry
Fitch's 'BB' rating with a stable outlook.

As reported in the Troubled Company Reporter on May 11, 2006,
Moody's Investors Service raised Cummins' convertible preferred
stock rating to Ba1 from Ba2 and withdrew the company's SGL-1
Speculative Grade Liquidity rating and its Ba1 Corporate Family
Rating.


* URUGUAY: Congress Ratifies Bill to Acquire 60% of Water Firm
--------------------------------------------------------------
The Uruguayan congress' lower chamber approved a bill that would
place 60% of Aguas de la Costa, a private water utility, under
state control, according to a report by La Republica.

Aguas de la Costa is responsible for providing water and
sewerage services to almost 17,000 residents in eastern Uruguay.

Daoiz Uriarte -- the manager of Obras Sanitarias del Estado aka
OSE, a state-run water firm -- told La Republica, "With this
scheme the main objective of the constitutional reform is being
fulfilled, which is that the state control all water and
sanitation services provided in the country."

Business News Americas relates that the state will take control
of Aguas de la Costa through OSE, which will pay the owner --
Spain's Aguas de Barcelona, US$3.4 million.

According to BNamericas, US$1.7 million of the US$3.4 million
will be paid to Aguas de Barcelona right away while the
remainder will be within the next year.

Service charges Aguas de la Costa made are going to fall to the
level of those charged by OSE and in some cases fixed charges
will disappear, the report states, citing Mr. Uriarte.

Congressman Luis Lacalle, who voted against the bill, told
BNamericas, "The approved bill is a legal contradiction and it
is also a lie that charges are going to be reduced... and those
people with the least resources are going to pay more."

The Herrerismo faction of the rightwing National Party --
currently in opposition -- told BNamericas that the law is
unconstitutional because it sets out the acquisition of the
stake in Aguas de la Costa.  According to the group, the
constitutional reform simply stops the services of private
firms.

                        *    *    *

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


ARVINMERITOR: Moody's Lowers Rating on US$10.9MM Remaining Notes
----------------------------------------------------------------
Action concludes review of specific notes post arrangement of
secured bank debt

Moody's Investors Service has downgraded approximately US$10.9
million of ArvinMeritor, Inc.'s remaining notes that were issued
under its 1990 indenture and affirmed ratings on all of the
company's other unsecured notes at Ba3.  The action follows
ArvinMeritor depositing approximately US$11.9 million of an
investment in a money market fund into an escrow account for the
benefit of note holders.  While the amounts were sufficient for
ArvinMeritor to be relieved of compliance with certain
restrictive terms of the indenture, the notes are not legally
defeased and will remain on the company's balance sheet.
Importantly, no independent legal opinion has been provided
which would attest to a perfected interest over the escrowed
assets in the event of an unanticipated bankruptcy filing by the
issuer.  Consequently, Moody's believes that there is
insufficient documentation to support a differentiated rating
for the affected instruments.  All other ArvinMeritor ratings
are unaffected by this action and have been affirmed.

Moody's downgraded these ratings:

   -- 6.625% notes maturing in 2008 (approximately US$4.7
      million remaining) to Ba3 from Ba2; and

   -- 7.125% notes maturing in 2009 (approximately US$6.1
      million remaining) to Ba3 from Ba2.

The notes were placed under review with direction uncertain on
June 7, 2006, to assess the impact of the company's plan to
pursue an affective defeasance of the notes.  Other actions
taken on that date included affirming ArvinMeritor's Corporate
Family rating of Ba2 and its Speculative Grade Liquidity rating
of SGL-2, assigning Ba1 ratings to its secured bank credit
facilities, and downgrading the ratings of its other unsecured
senior notes to Ba3.  The outlook remains negative.

In June, ArvinMeritor reset the terms of its bank revolving
credit facility and arranged a new US$170 million bank term
loan, both of which benefit from first priority liens against
certain company assets.  The extent of the assets pledged was
limited by provisions under the company's indentures for its
unsecured notes.  Language under the company's 1990 indenture
contained more protective features.  As the company had earlier
successfully tendered for a substantial portion of notes issued
under the 1990 indenture, only US$10.9 million of notes
remained.  ArvinMeritor has irrevocably placed into escrow an
US$11.9 million investment in a money market fund that
exclusively invests in U.S. treasury obligations.  The trustee
under the indenture also serves as escrow agent and holds said
funds in trust to pay and discharge the remaining indebtedness.
In doing so, the company has been relieved of compliance with
certain terms of the indenture, but all other terms remain in
force.  The notes will continue to be included on ArvinMeritor's
balance sheet as no assurance can be given that the amount
deposited and realized rates of return on the invested funds
will be sufficient to fully cover the remaining principal and
interest on the notes.  The current rate of return on the money
market fund is less than the fixed coupons on the notes.

Possession and control by the trustee/escrow agent and the
nature of the trust arrangement might provide some protection in
the event of an unanticipated bankruptcy filing by the issuer.
However, no definitive independent legal opinion addressing the
priority interest over the escrowed assets in the event of
bankruptcy is available.

ArvinMeritor, Inc., headquartered in Troy, MI, is a global
supplier of a broad range of integrated systems, modules and
components serving light vehicle, commercial truck, trailer and
specialty original equipment manufacturers and certain
aftermarkets.  Revenues in fiscal 2005 were approximately US$8.9
billion.


* VENEZUELA: Posts US$2.6 Bil. First Sem. Agricultural Portfolio
----------------------------------------------------------------
The agricultural portfolio in the Venezuelan banking system
increased 9.94% to US$2.6 billion at the end of the first half
of 2006, El Universal reports, citing data from Softline
Consultores.

Agencia Bolivariana de Noticias reported that over the last 12
months, lending to the agricultural sector amounted to US$927
million.
About 12.55% of the gross credit portfolio in June went to
agricultural loans in universal and commercial banks.

                        *    *    *

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


* VENEZUELA: Launches Energy Projects with Panama
-------------------------------------------------
The implementation of Venezuela's energy projects with Panama
has started, Elixandro Ballesteros, the ambassador of Panama,
told El Universal.

According to El Universal, the principal project foresees the
extension of the trans-Caribbean gas pipeline to Panama.  The
first stage of the construction will reach Colombia.

As reported in the Troubled Company Reporter-Latin America on
July 18, 2006, Venezuela's President Hugo Chavez, Colombia's
Alvaro Uribe and Panama's Martin Torrijos formally inaugurated
the construction of the US$335-million natural gas pipeline
connecting Venezuela, Colombia and Panama.  The pipeline would
include a fiber optic cable to help improve communications among
the three nations.  Venezuela's state-run oil firm, Petroleos de
Venezuela would fund the construction of the pipeline.  The 225
km, 150 million cubic feet gas pipeline would become operational
in 2007.  Petroleos de Venezuela said that 10% of the pipeline's
total investment would be used to fund social projects in areas
where the pipeline would be laid.

                        *    *    *

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


* VENEZUELA: Tax Unit Closes Firms on Bookkeeping Irregularities
----------------------------------------------------------------
Seniat -- Venezuela's tax unit -- told Dow Jones Newswires that
it has fined and temporarily closed several local foreign oil
firms for bookkeeping irregularities.

Seniat said in a statement that its officials ordered a two or
three-day closure of companies:

     -- Schlumberger Ltd.,
     -- Chevron Oronite Latin America,
     -- Diamant Drilling Services, and
     -- Baker Energy of Venezuela.

Dow Jones relates the President Hugo Chavez has ordered Seniat
to be hard on foreign oil firms violating tax laws.

Representatives of the companies could not be reached for
comments, Dow Jones states.

                        *    *    *

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


* BOOK REVIEW: The Titans of Takeover
-------------------------------------
Author:     Robert Slater
Publisher:  Beard Books
Softcover:  252 pages
List Price: US$34.95

Order your personal copy at
http://amazon.com/exec/obidos/ASIN/1893122506/internetbankrupt

Once upon a time -- and for a very long while -- corporate
behemoths decided for themselves when and if they would merge.
No doubt such decisions were reached the civilized way, in a
proper men's club with plenty of good brandy and better cigars.
Like giants, they strode Wall Street, fearing no one save the
odd trust-busting politico, mutton-chopped at the turn of the
twentieth century, perhaps mustachioed in the 1960s when the
word was no longer trust but monopoly.

Then came the decade of the 1980s.  Enter the corporate raiders,
men with cash in hand, shrewd business sense, and not a shred of
reverence for the Way Things Have Always Been Done.  These
businesspeople -- T. Boone Pickens, Carl Icahn, Saul Steinberg,
Ted Turner -- saw what others missed: that many of the corporate
giants were anomalies, possessed of assets well worth possessing
yet with stock market performances so unimpressive that they
could be had for bargain prices.

When the corporate raiders needed expert help, enter the
investment bankers (Joseph Perella and Bruce Wasserstein) and
the M&A attorneys (Joseph Flom and Martin Lipton).  And when the
merger went through, enter the arbitragers who took advantage of
stock run-ups, people like Ivan "Greed is Good" Boesky.

The takeover frenzy of the 1980s looked like a game of Monopoly
come to life, where billion-dollar companies seemed to change
ownership as quickly as Boardwalk or Park Place on a sweet roll
of dice.

By mid-decade, every industry had been affected: in 1985, 3,000
transactions took place, worth a record-breaking $200 billion.
The players caught the fancy of the media and began showing up
in the news until their faces were almost as familiar to the
public as the postman's.  As a result, Jane and John Q.
Citizen's in Wall Street began its climb from near zero to the
peak where (for different reasons) it is today.

What caused this avalanche of activity?  Three words: President
Ronald Reagan.  Perhaps his most firmly held conviction was that
Big Business was Being shackled by the antitrust laws, deprived
a fair fight against foreign competitors that has no equivalent
of the Clayton Act in their homelands.

Reagan took office on Jan. 20, 1981, and it wasn't long after
that that his Attorney General, William French Smith, trotted
before the D.C. Bar to opine that, "Bigness does not necessarily
mean badness.  Efficient firms should not be hobbled under the
guise of antitrust enforcement."  (This new approach may have
been a necessary corrective to the over-zealousness of earlier
years, exemplified by the Supreme Court's 1966 decision
upholding an enforcement action against the merger of two
supermarket chains because the Court felt their combined share
of 8% (yes, that's "eight percent") of the Los Angeles market
was potentially anticompetitive.)

Raiders, investment bankers, lawyers, and arbitragers, plus the
fun couple Bill Agee and Mary Cunningham --remember them? -- are
the personalities Profiled in Robert Slater's book, originally
published in 1987, Slater is a wonderful writer, and he's given
us a book no less readable for being absolutely stuffed with
facts, many of them based on exclusive behind-the-scenes
interviews.


                         ***********


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.


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