TCRLA_Public/060807.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, August 7, 2006, Vol. 7, Issue 155

                            Headlines

A R G E N T I N A

BANCO HIPOTECARIO: Fitch Upgrades Currency Issuer Ratings to B
CABANA DON: Trustee to Present Individual Reports on Aug. 15
DINATECH SH: Reorganization Proceeding Concluded
EL GAUCHO: Trustee to Deliver Individual Reports on Aug. 14
GASTRONOA SRL: Individual Reports Due in Court Tomorrow

PREVENT ARC: Trustee to Submit Individual Reports on Aug. 23
SERVICIOS INTEGRALES: Individual Reports Due in Court on Aug. 24
SIRKAM SRL: Trustee to Submit Individual Reports on Aug. 23
TARJETA NARANJA: Fitch Upgrades Currency Issuer Ratings to B

B A H A M A S

COMPLETE RETREATS: Can File Schedules Until September 21
COMPLETE RETREATS: Wants to Honor Existing Destination Bookings
KERZNER INT'L: Launches Offering to Redeem 6-3/4% Senior Notes
WINN-DIXIE: Ten More Parties Object to Disclosure Statement

B E L I Z E

* BELIZE: S&P May See Foreign Debt Restructuring as Default

B E R M U D A

FOSTER WHEELER: Units to Proceed with Shell's Initial EPC Phase
FOSTER WHEELER: Units Secure Design Contract from Chevron
REFCO INC: Chapter 7 Trustee Wants to Wind Down Refco Trading
REFCO: Wants Stipulation Resolving Intercompany Debts Approved
SCOTTISH RE: Scott E. Willkomm Resigns as President & CEO

SCOTTISH RE: Reports Net Loss of USUS$123.9MM in Second Quarter
SCOTTISH RE: Faces Securities Fraud Suit from Shareholders

B O L I V I A

* BOLIVIA: Plans Subsidies for Lower Income Fixed Line Users

B R A Z I L

BANCO ITAU: Holding Extraordinary General Meeting on Aug. 25
BRASKEM SA: Registers 14% Growth in First Half of 2006
COMPANHIA DE BEBIDAS: Issues BRL2.065 Billion in Debentures
COMPANHIA SIDERURGICA: Forms Alliance with Wheeling-Pittsburgh
GOL LINHAS: Releases Preliminary Passenger Statistics for July

NOVELIS INC: Obtains US$2.8-Bil. Financing Pledge from Citigroup
ST. MARYS: Refinancing Prompts S&P to Upgrade Rating to BB+
ULTRAPAR: Posts BRL145 Mil. Net Profits in First Half of 2006
VARIG SA: Files Restated In-Court Reorganization Plan
VARIG: Judge Ayoub Slams Labor Court Order Freezing Volo Deposit

* BRAZIL: To Issue US$500 Million in Global Bonds Due 2037

C A Y M A N   I S L A N D S

CAMBIUM CAPITAL: Final Shareholders Meeting Is Moved to Aug. 24
CASCADIA LIMITED: Fitch Upgrades US$300-Mil Notes' Rating to BB+
CBPF DOCTOR: Deadline for Proofs of Claim Filing Is on Aug. 25
CEDRO CORP: Will Hold Final Shareholders Meeting on Aug. 24
GLENDALE INVESTMENTS: Final Shareholders Meeting Is on Aug. 24

MOGNO CORP: Shareholders Gather for a Final Meeting on Aug. 24
NIELVAL LIMITED: Last Day for Proofs of Claim Filing Is Aug. 28
RIGHT CO: Final Shareholders Meeting Is Scheduled for Aug. 24
SUNFISH INVESTMENTS: Last Shareholders Meeting Is on Aug. 24
THEOREMA E&M: Final Shareholders Meeting Is Set for Aug. 24

WALDEN CHINA: Last Day to File Proofs of Claim Is on Aug. 25

C H I L E

GLOBAL CROSSING: Extends IP Convergence Contract With Agrosuper
GLOBAL CROSSING: To Provide IP Services to Transit Telecom
SHAW GROUP: Unit Secures EPC Scrubber Contract from Mirant

C O L O M B I A

BANCOLOMBIA: Raises 2006 Forecast on Loan Growth to 20%

* COLOMBIA: Ministry Posts 27.9 Million Mobile Users in June

C O S T A   R I C A

* COSTA RICA: State Firm to Bill Verizon for 113 Service Losses

C U B A

* CUBA: US Firms Eye Nation for Investments While President Ails

D O M I N I C A N   R E P U B L I C

AES CORP: Local Unit Proposes Resolution on Electricity Crisis
BANCO INTERCONTINENTAL: Central Bank Identified as Plaintiff
FALCONBRIDGE LTD: Bid Changes Prompts S&P's Positive Watch

* DOMINICAN REPUBLIC: Fines 56 Firms for Electricity Theft

E C U A D O R

* ECUADOR: Congress Holds Final Debate on Power Sector Reform

E L   S A L V A D O R

* EL SALVADOR: Will Probe Electricity Market for Monopoly

H A I T I

DIGICEL LTD: Using New US$150-Mil. Capital to Continue Expansion

J A M A I C A

DIGICEL: Plans Listing in New York Stock Exchange, Rumors Say
KAISER ALUMINUM: US Court of Appeals Affirms Dist. Court Ruling
KAISER ALUMINUM: Law Debenture Removes 97 Objection Affidavits
NATIONAL COMMERCIAL: Posts US$863.32MM Second Quarter Earnings
NATIONAL WATER: Sees US$8MM Billing Revenue Increase Next Year

SUGAR COMPANY: Richard Harrison Will Head Firm for Three Months

M E X I C O

BERRY PLASTICS: Moody's Assigns Low B Ratings on Senior Notes
BERRY PASTICS: S&P Maintains B+ Corp. Credit Rating on NegWatch
ENESCO GROUP: Inks 12th Amendment to U.S. Credit Facility
ENESCO GROUP: Posts US$24.9 Mil. Net Loss in Second Quarter 2006
FORD MOTOR: Revises Quarter Results, Net Loss Rises to US$254MM

FORD MOTOR: Hires Keneth Leet as Strategic Advisor to Bill Ford
GRUPO TMM: Schedules Shareholders Meeting on Aug. 18
SATELITES MEXICANOS: Gov't Will Hand Firm to Nacional Financiera

P A N A M A

KANSAS CITY SOUTHERN: Posts US$19.2MM Second Quarter Net Income

P E R U

BANCO DE CREDITO: Moody's Affirms D Financial Strength Rating
SIDERPERU: Posts PEN11.6 Million Second Quarter 2006 Net Profit

* PERU: Free Trade Accord Awaits US Congress' Approval

P U E R T O   R I C O

ADELPHIA COMMS: Files Asset Sale & Units' Plan Documents
ADELPHIA COMMS: Can Settle EPA's Environmental Claims
KMART: Gets Final Court OK on US$13 Mil. Disability Settlement
KMART CORP: Court Okays Reversion of 142,308 Unclaimed Shares
RENT-A-CENTER: Earns US$39.8 Million in Quarter Ended June 30

SUNCOM WIRELESS: June 30 Balance Sheet Upside-Down by US$338MM
SUNCOM WIRELESS: S&P Affirms Ratings & Removes Negative Watch

T R I N I D A D   &   T O B A G O

MIRANT CORP: Fifth Circuit Rules on Pepco APSA-Related Dispute
MIRANT CORP: Bowline Unit Wants 2006 Consent Order Approved

U R U G U A Y

* URUGUAY: State Oil Company Raises Fuel Prices by 3.6%

V E N E Z U E L A

BRASKEM SA: Will Focus on Petrochemicals Projects in Venezuela
CITGO PETROLEUM: Talks on Sale of Houston Plant Stake Continues
PETROLEOS DE VENEZUELA: Unit Owes Seniat VEB163MM in Back Taxes
PETROZUATA FINANCE: S&P Removes B+ Rating from Negative Watch

* VENEZUELA: Forges Closer Energy Cooperation Ties With Iran


                         - - - - -



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


BANCO HIPOTECARIO: Fitch Upgrades Currency Issuer Ratings to B
--------------------------------------------------------------
Fitch Ratings Services upgraded these ratings of Banco
Hipotecario:

   -- Foreign and local currency long term IDRs upgraded: to B
      from B-, with a Stable Outlook;

   -- Short-term IDR affirmed at 'B';

   -- Individual rating affirmed at 'D'; and

   -- Support rating affirmed at '5'.

The rating of its US$1.2 billion Global Medium Term Notes
Programme and US$250 million 10-year unsubordinated fixed-rate
note are both upgraded to 'B/RR4' from 'B-/RR4.

Fitch upgraded the ratings of affecting Argentinian banks in the
wake of the upgrade of the sovereign long-term local currency
Issuer Default Rating to 'B'.

Banco Hipotecario was the seventh-largest bank in Argentina by
total assets and the second-largest by equity at the end of
2005. It is the largest mortgage lender with a 30% share and
since 2003 has sought to diversify its businesses.  The
Argentine state owns 54% and IRSA Inversiones y Representaciones
S.A., a domestic real estate company, 28% (although it has the
majority of the voting rights); the balance is widely held.


CABANA DON: Trustee to Present Individual Reports on Aug. 15
------------------------------------------------------------
Alberto Javier Samsolo, the court-appointed trustee for Cabana
Don Joaquin S.A.'s insolvency case will submit individual
reports in court on Aug. 15, 2006.

The individual reports are based on creditors' claims that Mr.
Samsolo verified until June 20, 2006.   Court No. 11 in Buenos
Aires will determine if the verified claims are admissible,
taking into account the trustee's opinion and the objections and
challenges raised by Caban Don Joaquin and its creditors.

Inadmissible claims may be subject for appeal in a separate
proceeding known as an appeal for reversal.

A general report that contains an audit of Cabana Don Joaquin's
accounting and banking records will follow on Sept. 27, 2006.

On March 29, 2007, Cabana Don Joaquin's creditors will vote on a
settlement plan that the company will lay on the table.

Clerk No. 21 assists the court on the case.

The debtor can be reached at:

         Cabana Don Joaquin S.A.
         Inclan 3302
         Buenos Aires, Argentina

The trustee can be reached at:

         Alberto Samsolo
         Paraguay 1225
         Buenos Aires, Argentina


DINATECH SH: Reorganization Proceeding Concluded
------------------------------------------------
Dinatech S.H.'s reorganization proceeding has ended.  Data
published by Infobae on its Web site indicated that the process
was concluded after a court in La Matanza, Buenos Aires,
approved the debt agreement signed between the company and its
creditors.


EL GAUCHO: Trustee to Deliver Individual Reports on Aug. 14
-----------------------------------------------------------
The court-appointed trustee for El Gaucho Costero S.R.L.'s
bankruptcy proceeding will submit individual reports in court on
Aug. 14, 2006.

The individual reports are based on creditors' claims that the
trustee verified until June 16, 2006.  A court in Santa Fe will
then determine if the verified claims are admissible, taking
into account the trustee's opinion and the objections and
challenges raised by El Gaucho and its creditors.

Inadmissible claims may be subject for appeal in a separate
proceeding known as an appeal for reversal.

A general report that contains an audit of El Gaucho's
accounting and banking records will follow on Sept. 26, 2006.


GASTRONOA SRL: Individual Reports Due in Court Tomorrow
-------------------------------------------------------
The court-appointed trustee for Gastronoa S.R.L.'s
reorganization proceeding will submit individual reports in
court tomorrow.

The individual reports are based on creditors' claims that the
trustee verified until June 12, 2006.   A court in Buenos Aires
will determine if the verified claims are admissible, taking
into account the trustee's opinion and the objections and
challenges raised by Gastronoa and its creditors.

Inadmissible claims may be subject for appeal in a separate
proceeding known as an appeal for reversal.

A general report that contains an audit of Gastronoa's
accounting and banking records will follow on Sept. 20, 2006.

On March 15, 2007, Gastronoa's creditors will vote on a
settlement plan that the company will lay on the table.

The trustee can be reached at:

    25 de Mayo 885 San Fernando del Valle de Catamarca
    Catamarca, Argetina


PREVENT ARC: Trustee to Submit Individual Reports on Aug. 23
------------------------------------------------------------
Jorge Guillermo Podesta, the court-appointed trustee for Prevent
Arc S.R.L.'s bankruptcy case, will submit individual reports in
court on Aug. 23, 2006.

The individual reports are based on creditors' claims that Mr.
Podesta verified until June 27, 2006.   Court No. 2 in Buenos
Aires will determine if the verified claims are admissible,
taking into account the trustee's opinion and the objections and
challenges raised by Prevent Arc and its creditors.

Inadmissible claims may be subject for appeal in a separate
proceeding known as an appeal for reversal.

A general report that contains an audit of Prevent Arc's
accounting and banking records will follow on Oct. 4, 2006.

Court No. 2 declared Prevent Arc bankrupt at the behest of Obra
Social de los Empleados de Comercio y Actividades Civiles, which
it owes US$5,835.77.

Clerk No. 3 assists the court in this case.

The debtor can be reached at:

         Prevent Arc S.R.L.
         Tapalque 7450
         Buenos Aires, Argentina

The trustee can be reached at:

         Jorge Podesta
         Reconquista 336
         Buenos Aires, Argentina


SERVICIOS INTEGRALES: Individual Reports Due in Court on Aug. 24
----------------------------------------------------------------
Jose Eduardo Preve, the court-appointed trustee for Servicios
Integrales Inter S.A.'s bankruptcy proceeding, will submit
individual reports in court on Aug. 24, 2006.

The individual reports are based on creditors' claims that Mr.
Preve verified until June 28, 2006.   Court No. 5 in Buenos
Aires will determine if the verified claims are admissible,
taking into account the trustee's opinion and the objections and
challenges raised by Servicios Integrales and its creditors.

Inadmissible claims may be subject for appeal in a separate
proceeding known as an appeal for reversal.

A general report that contains an audit of Servicios Integrales'
accounting and banking records will follow on Oct. 5, 2006.

Court No. 5 declared Servicios Integrales bankrupt at the behest
of Carmelo Giogno, whom it owes US$81,720.

Clerk No. 9 assists the court with the proceedings.

The debtor can be reached at:

         Servicios Integrales Inter S.A.
         Junin 546
         Buenos Aires, Argentina

The trustee can be reached at:

         Jose Eduardo Preve
         Avenida Presidente Roque Saenz Pena 651
         Buenos Aires, Argentina


SIRKAM SRL: Trustee to Submit Individual Reports on Aug. 23
-----------------------------------------------------------
Amalia Mild, the court-appointed trustee for Sirkam S.R.L.'s
bankruptcy case, will submit individual reports in court on
Aug. 23, 2006.

The individual reports are based on creditors' claims that the
trustee verified until June 27, 2006.   Court No. 10 in Buenos
Aires will determine if the verified claims are admissible,
taking into account the trustee's opinion and the objections and
challenges raised by Sirkam and its creditors.

Inadmissible claims may be subject for appeal in a separate
proceeding known as an appeal for reversal.

A general report that contains an audit of Sirkam's accounting
and banking records will follow on Oct. 4, 2006.

Court No. 10 declared Sirkam bankrupt at the request of Mauricio
Vargas, whom it owes US$24,563.85.

Clerk No. 20 assists the court in this case.

The debtor can be reached at:

         Sirkam S.R.L.
         11 de Septiembre 4847
         Buenos Aires, Argentina

The trustee can be reached at:

         Analia Mild
         Lavalle 2024
         Buenos Aires, Argentina


TARJETA NARANJA: Fitch Upgrades Currency Issuer Ratings to B
------------------------------------------------------------
Fitch Ratings Services upgraded these ratings of Tarjeta
Naranja:

   -- Local currency long-term IDR upgraded to 'B' from 'B-',
      with a Stable Outlook; and

   -- Short-term IDR affirmed at 'B'.

The rating of TN's US$26 million unsubordinated fixed-rate note
is upgraded to 'B/RR4' from 'B-/RR4'.

Fitch upgraded the ratings of affecting Argentinian banks in the
wake of the upgrade of the sovereign long-term local currency
Issuer Default Rating to 'B'.

Tarjeta Naranja was created in 1985 in the Province of Cordoba
and since 1996 has expanded geographically and currently
operates in most of the country.  At end-2005 TN had 78% of the
credit card market in Cordoba and was the third largest card
issuer nationally. TN is 80% owned by Banco de Galicia y Buenos
Aires, the second-largest bank in Argentina by assets.




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


COMPLETE RETREATS: Can File Schedules Until September 21
--------------------------------------------------------
The U.S. Bankruptcy Court for the District of Connecticut gave
Complete Retreats LLC and its debtor-affiliates until
Sept. 21, 2006, within which to file their Schedules of Assets
and Liabilities, Schedules of Executory Contracts and Unexpired
Leases, and Statements of Financial Affairs.

Nicholas H. Mancuso, Esq., at Dechert LLP, in Hartford,
Connecticut, tells the Court that the Debtors have not yet had
sufficient time to collect and assemble all of the requisite
financial data and other information for their Schedules and
Statements.

"The Debtors must gather information from various documents and
locations and complete the posting of their books and records as
of the Petition Date or other dates, as appropriate," Mr.
Mancuso says.  "Then the Debtors must review the information and
prepare and verify the Schedules and Statements."

According to Mr. Mancuso, the Debtors have already begun and
will continue to work diligently to compile the information
necessary to complete their Schedules and Statements.

                  About Complete Retreats

Headquartered in Westport, Connecticut, Complete Retreats LLC
operates five-star hospitality and real estate management
businesses.  In addition to its mainline destination club
business, the Debtor also operates an air travel program for
destination club members, a villa business, luxury car rental
services, wine sales services, fine art sales program, and other
amenity programs for members.  Complete Retreats and its debtor-
affiliates filed for chapter 11 protection on July 23, 2006
(Bankr. D. Conn. Case No. 06-50245).  Nicholas H. Mancuso, Esq.
and Jeffrey K. Daman, Esq. at Dechert LLP represent the Debtors
in their restructuring efforts.  No estimated assets have been
listed in the Debtors' schedules, however, the Debtors disclosed
US$308,000,000 in total debts.  (Complete Retreats Bankruptcy
News, Issue No. 3; Bankruptcy Creditors' Service, Inc., 215/945-
7000).


COMPLETE RETREATS: Wants to Honor Existing Destination Bookings
---------------------------------------------------------------
Complete Retreats LLC and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of Connecticut for permission
to continue to the honor existing reservations of their
destination clubs members.

The Debtors also seek authority to accept new reservations, and
provide services through use of the Visa credit card in the
ordinary course of their business, under the terms and
conditions as they may require in their discretion.

Members of the Debtors' destination clubs pay annual dues and
daily usage fees.  Annual dues are paid semi-annually, at the
end of either the first and third quarters or the second and
fourth quarters, while daily usage fees are paid upon completion
of a member's retreat.

Nicholas H. Mancuso, Esq., at Dechert LLP, in Hartford,
Connecticut, tells the Court that thus far, the Debtors have
received approximately US$15,400,000 in annual dues from members
during 2006.  The next installment of dues, totaling
approximately US$2,200,000, is due at the end of September.

Currently, Mr. Mancuso says, members have pending reservations
for an aggregate of more than 10,000 room nights, which would
translate into an estimated US$1,700,000 in daily usage fees.

In the past, the Debtors have made every effort to honor
members' travel requests, including, if necessary, entering into
costly short-term leases with third parties.  The Debtors have
recently discontinued this practice since it is one of the major
causes of their financial difficulties.

According to Mr. Mancuso, the Debtors are in the process of re-
evaluating their business model.

The Debtors have determined that it may not be economical for
them to honor each and every pending reservation or to accept
each new reservation, especially in light of the relatively low
annual fees and daily usage fees that certain members currently
enjoy.  In some instances, Mr. Mancuso notes, even the marginal
daily costs of accommodating a member significantly exceed the
associated daily usage fees.

"The Debtors also recognize, however, that if they fail to honor
pending reservations and routinely decline new ones during the
course of these [Chapter 11] cases, their members will likely
cease paying annual dues and/or attempt to resign from the
destination clubs, which could be disastrous to their business,"
Mr. Mancuso says.

Thus, Mr. Mancuso contends, while the Debtors ultimately may not
honor 100% of existing reservations, or accept every new
reservation going forward, especially with respect to popular
winter weeks, they need to have the discretion to do so, should
circumstances warrant.

The Debtors typically provide their members with certain
amenities during their retreats, including fine wine, ski
passes, and personal chefs.  The Debtors pay for these amenities
with a Visa corporate credit card.  The credit card has a
US$400,000 limit, and the Debtors' obligations to Visa are
secured by a US$300,000 bond posted by Bank of America.  The
Debtors make frequent payments on the credit card.  Upon
completion of a member's retreat, the Debtors are reimbursed by
that member for expenses incurred during the retreat.

As of July 22, 2006, the Debtors had incurred but not yet paid
approximately US$267,000 to Visa.

Mr. Mancuso clarifies that the Debtors are not yet seeking to
assume any executory contracts or unexpired leases to which any
of the Debtors may be a party.

                   About Complete Retreats

Headquartered in Westport, Connecticut, Complete Retreats LLC
operates five-star hospitality and real estate management
businesses.  In addition to its mainline destination club
business, the Debtor also operates an air travel program for
destination club members, a villa business, luxury car rental
services, wine sales services, fine art sales program, and other
amenity programs for members.  Complete Retreats and its debtor-
affiliates filed for chapter 11 protection on July 23, 2006
(Bankr. D. Conn. Case No. 06-50245).  Nicholas H. Mancuso, Esq.
and Jeffrey K. Daman, Esq. at Dechert LLP represent the Debtors
in their restructuring efforts.  No estimated assets have been
listed in the Debtors' schedules, however, the Debtors disclosed
US$308,000,000 in total debts.  (Complete Retreats Bankruptcy
News, Issue No. 2; Bankruptcy Creditors' Service, Inc., 215/945-
7000).


KERZNER INT'L: Launches Offering to Redeem 6-3/4% Senior Notes
--------------------------------------------------------------
Kerzner International Limited commenced a cash tender offer to
purchase any and all of their outstanding 6-3/4% Senior
Subordinated Notes due 2015.  The tender offer is being made
pursuant to an Offer to Purchase and Consent Solicitation
Statement and a related Letter of Transmittal and Consent, each
dated Aug. 1, 2006.  The tender offer is scheduled to expire at
12:01 a.m., New York City time, on Aug. 29, 2006, unless
extended to a later date or time or earlier terminated.

In conjunction with the tender offer, the Company and KINA will
be soliciting consents to proposed amendments to the indenture
governing the notes that would eliminate substantially all of
the restrictive covenants and certain events of default and
related provisions contained in the indenture governing the
notes.  Holders that tender their notes will be required to
consent to the proposed amendments, and holders that consent to
the proposed amendments will be required to tender their notes.

Subject to the terms and conditions set forth in the Statement,
the total consideration to be paid for each properly delivered
consent and validly tendered note accepted for payment on or
prior to 5:00 p.m., New York City time, on Aug. 15, 2006, and
accepted for payment will be US$1,071.67 per US$1,000 of
principal amount, plus accrued and unpaid interest.

The total consideration for each note tendered includes an early
consent premium of US$20 per US$1,000 of principal amount of
notes payable only to those holders that tender their Notes on
or prior to 5:00 p.m., New York City time, on the Consent Date.
Holders that properly deliver consents and validly tender notes
after that time but prior to the expiration of the tender offer
will receive US$1,051.67 per US$1,000 of principal amount, plus
accrued and unpaid interest.  Holders will receive payment
promptly after the expiration date for the tender offer, which
is currently scheduled to be Aug. 29, 2006.

Tenders of notes and deliveries of consents made on or prior
to 5:00 p.m., New York City time, on the Consent Date, may be
withdrawn or revoked at any time on or before the Consent Date.
Tenders of notes made after 5:00 p.m., New York City time, on
the Consent Date, may be withdrawn at any time until 12:01 a.m.,
New York City time, on the expiration date for the tender offer.

The tender offer is conditioned upon consummation of the
acquisition of the Company by an investor group and a minimum
tender condition, as well as other general conditions.

Copies of the tender offer and consent solicitation documents
can be obtained by contacting MacKenzie Partners, Inc., the
Information Agent for the tender offer and consent solicitation,
at 800-322-2885 and 212-929-5500.

Deutsche Bank Securities Inc. is acting as Dealer Manager for
the tender offer and Solicitation Agent for the consent
solicitation.  Questions concerning the tender offer and consent
solicitation may be directed to Deutsche Bank Securities Inc.,
High Yield Capital Markets, at 800-553-2826.

                 About Kerzner International

Kerzner International Limited (NYSE: KZL) --
http://www.kerzner.com/-- through its subsidiaries, is a
leading international developer and operator of destination
resorts, casinos and luxury hotels.  The Company is also a 37.5%
owner of BLB Investors, L.L.C., which owns Lincoln Park in Rhode
Island and pari-mutuel racing facilities in Colorado.  In the
U.K., the Company is currently developing a casino in
Northampton and received a Certificate of Consent from the U.K.
Gaming Board in 2004.  In its luxury resort hotel business, the
Company manages ten resort hotels primarily under the One&Only
brand.  The resorts, featuring some of the top-rated properties
in the world, are located in The Bahamas, Mexico, Mauritius, the
Maldives and Dubai.  An additional One&Only property is
currently in the planning stages in South Africa.

                        *    *    *

As reported in the Troubled Company Reporter on Mar. 22, 2006,
Moody's Investors Service placed the ratings on review for
downgrade on Kerzner International Limited's Ba3 Corporate
Family Rating and B2 Guaranteed Senior Subordinate Ratings; and
Kerzner International North America, Inc.'s (P) B2 Guaranteed
Senior Subordinate shelf.

As reported in the Troubled Company Reporter on Mar. 22, 2006,
Standard & Poor's Ratings Services placed its ratings on the
hotels and a casino owner and operator Kerzner International
Ltd., including its 'BB-' corporate credit rating, on
CreditWatch with negative implications.


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

   -- the U.S. Trustee for Region 21;
   -- the U.S. Internal Revenue Services;
   -- Florida Tax Collectors;
   -- Hamilton County, Tennessee
   -- Henrico County, Virginia;
   -- ACE American Insurance Company;
   -- Prudential Insurance Company of America
   -- Nina Gonzalez, et al.;
   -- F.R.O. LLC VII and F.R.O. LLC VIII; and
   -- Catamount Landlords.

                        U.S. Trustee

Felicia S. Turner, the United States Trustee for Region 21,
objects to the Debtors' Disclosure Statement on grounds that it
does not contain adequate information that would allow claimants
to make fully informed judgment on whether to vote to accept or
reject the Debtors' Joint Plan of Reorganization.

William Porter III, Esq., trial attorney of the U.S. Trustee,
says that the Disclosure Statement fails to provide adequate
information regarding:

   (1) the actual value of the Debtors' remaining assets and the
       avoidable transfers and potential recovery in other
       litigation, including non-bankruptcy litigation, that
       could generate funds for the estates;

   (2) the Debtors' condition and performance while in
       bankruptcy;

   (3) the methods or underlying data used to produce the
       financial projections and liquidation analysis;

   (4) each of the Debtors' independent obligation to pay
       quarterly fees to the U.S. Trustee and to continue
       reporting disbursements post-confirmation until each of
       their respective cases is converted, dismissed or a final
       decree is entered;

   (5) payments the Debtors intend to make to professionals
       whose employment was not authorized by the U.S.
       Bankruptcy Court for the Middle District of Florida;

   (6) the factual and legal bases for the Debtors' intention to
       grant broad releases of liability to various officers,
       professionals, insiders and similar parties; and

   (7) the factual and legal bases for exculpation provisions
       intended to benefit various non-debtor entities.

The Plan and its accompanying Disclosure Statement are
misleading in that they improperly suggest some authorization
under the Bankruptcy Code for multiple Debtors to be absolved of
all liabilities as of the effective date of the Plan without
presenting any factual basis or legal authority for the actions
contemplated, Mr. Porter asserts.

Mr. Porter also says that the Plan and Disclosure Statement not
only fail to articulate a basis for the non-debtor releases but
also fail to address certain factors to support the necessity
for the extraordinary act of releasing non-debtors.

                 Internal Revenue Services

The U.S. Internal Revenue Services hold claims of approximately
US$82,000,000 to US$84,000,000 arising from the Debtors'
consolidated federal income tax liabilities.

The IRS holds a priority tax claim that is unclassified under
the Debtors' Joint Plan of Reorganization, a secured tax claim
classified under Class 10, and a general unsecured claim the
classification of which is unclear, Deborah M. Morris, Esq.,
trial attorney of the U.S. Department of Justice, relates.

The IRS cannot determine the classification of its general
unsecured claim because the Disclosure Statement contains
unclear and overlapping definitions of classes, Ms. Morris
explains.

In addition, the Disclosure Statement does not contain adequate
information that will allow the IRS to make an informed judgment
about the Plan, Ms. Morris says.  She notes that the Disclosure
Statement is deficient in a number of areas, including:

    -- the description of assets and value;

    -- condition and performance of the Debtors while in
       bankruptcy protection; and

    -- accounting and valuation methods used to produce the
       financial information in the Disclosure Statement.

Accordingly, the IRS suggests that the Plan be amended to
include sufficient information that will enable it to decide
whether:

   (i) the substantive consolidation compromise is in its best
       interest;

  (ii) it would receive as much under the Plan as it would in a
       Chapter 7 liquidation; and

(iii) the Plan appears feasible.

                    Florida Tax Collectors

Tax collectors from 57 counties within Florida collect ad
valorem property taxes assessed against both real estate and
tangible personal property located within their respective
counties.  The taxes are secured by a statutory first lien on
the assessed property.

Brian T. FitzGerald, Esq., of the Hillsborough County Attorney's
Office, in Tampa, Florida, relates that the Debtors currently
have outstanding ad valorem Florida property taxes for years
2004 to 2006.

Mr. Fitzgerald asserts that the Disclosure Statement fails to
adequately address the treatment of the Debtors' property tax
obligations.  Accordingly, the Florida Tax Collectors suggest
that the Debtors' representation of their payment obligations
with respect to secured tax claims be expanded to include the
tax years, a general description of the type of tax and the
amounts due within each state.

Mr. FitzGerald explains that the Debtors' intention to contest
postpetition ad valorem Florida property taxes needs to be
clarified given the language used in the Disclosure Statement
and the fact that there are pending omnibus tax claim objections
within other states.

The Florida Tax Collectors ask the Court to direct the Debtors
to clearly disclose their intended treatment of the 2004-2006 ad
valorem Florida property taxes in their Disclosure Statement.

                  Hamilton County, Tennessee

Hamilton County, Tennessee, objects to the proposed treatment of
Class 10 secured tax claims on grounds that it is only
authorized under the Bankruptcy Code for general unsecured
priority tax claimants, but not for secured tax claimants.

Pursuant to the Plan and Disclosure Statement, Class 10 secured
tax claims will be paid in full over a period of six years, with
interest at 6% per annum.  The secured tax claims are impaired.

Hamilton County filed Claim No. 4206 for US$15,431, plus
interest, representing the Debtors' ad valorem taxes for 2005,
and had a valid first lien on the Debtors' assets at four stores
located in the County.

According to Scott N. Brown, Jr., Esq., at Spears, Moore, Rebman
& Williams P.C., in Chattanooga, Tennessee, the Debtors sold the
assets with Hamilton County's lien attached to the proceeds.
Though the county has not received any report on the sale, it
believes that the proceeds exceeded the amounts owed by the
Debtors.

Hamilton County wants the Plan and Disclosure Statement amended
to provide for the full payment in cash of the Debtors' taxes
plus delinquent interest at a fixed date.

                   Henrico County, Virginia

Henrico County, Virginia, objects to the proposed treatment of
Class 10 secured tax claims under the Disclosure Statement.

Henrico County filed Claim No. 7447 for US$11,610, excluding
interest, to secure payment of the Debtors' ad valorem taxes for
2005.  The Claim constitutes a valid first lien on the Debtors'
tangible property assets located at the stores the Debtors'
previously operated in the county.

Rhysa Griffith South, Esq., Henrico County's assistant county
attorney, relates that the Debtors sold the assets with the
county's lien attaching to the proceeds and that Henrico County
has not received any report of the results of the sale.

Henrico County believes that the proceeds of the sale
substantially exceeded its tax claim and that it is entitled to
immediate payment of the taxes plus interest.

In addition, Ms. South asserts, the treatment proposed for
secured tax claims under Class 10 is not authorized under the
Bankruptcy Code.

Accordingly, Henrico County asks the Court to require the
amendment of the Disclosure Statement to provide for the full
payment of Claim No. 7447 in cash on the confirmation or
effective date of the Plan.

           ACE American Insurance Company, et al.

ACE American Insurance Company, Indemnity Insurance Company of
North America, and the Illinois Union Insurance Company provide
insurance coverage to the Debtors for general liability,
workers' compensation, automobile liability and other casualty
or risk policies.

The ACE Companies complain that the Disclosure Statement lacks
information that would enable them as creditors to understand
and assess the Debtors Joint Plan of Reorganization and its
impact on their interests.

The ACE Companies ask the Court to direct the Debtors to modify
the Disclosure Statement so that:

   (1) the reorganized Debtors will assume all of the Debtors'
       ACE Companies-issued insurance policies, and on or before
       the effective date of the Plan:

       (a) cure any default under the Insurance Program;

       (b) compensate the ACE Companies for any actual pecuniary
           loss resulting from the defaults; and

       (c) provide adequate assurance of future performance
           under the Insurance Program;

   (2) any claim filed by the ACE Companies arising under the
       Insurance Program will not be discharged but allowed as
       administrative claims that will be paid in full in the
       ordinary course of the reorganized Debtors' business; and

   (3) nothing in the Plan or any order confirming the Plan will
       modify the terms and conditions of the Insurance Policies
       or Agreements or release the Debtors or their respective
       successors from any liability under the Insurance
       Program.

          Prudential Insurance Company of America

The Prudential Insurance Company of America owns three shopping
centers in Florida wherein the Debtors remain tenants pursuant
to three unexpired leases.

Prudential says that the Joint Plan of Reorganization and its
accompanying Disclosure Statement fail to disclose adequate
information concerning the assumption of the Leases and the
payment of the cure claims.

Moreover, the Disclosure Statement describes a Plan that
improperly seeks authority to reject nonresidential real
property leases after the voting deadline, potentially impacting
Prudential's recovery of cures and disenfranchising Prudential
from the voting process, Kimberly Held Israel, Esq., in
Jacksonville, Florida, contends.

Ms. Israel also asserts that the injunction provision in the
Plan should be revised so that landlords like Prudential will
not be deprived of their right to assert set-offs or exercise
recoupment if claim objections or preference actions are
prosecuted against the landlords or if the Reorganized Debtors
breached an assumed lease following confirmation of the Plan.

Prudential asks Judge Funk not to approve the Disclosure
Statement unless and until it is amended to provide adequate
information concerning the assumption of the Leases.

                   Nina Gonzalez, et al.

In a letter filed with the Clerk of the Bankruptcy Court, Nina
Gonzalez relates that she has been a stockholder of Winn-Dixie
Stores for nearly 70 years and that she objects to the treatment
of old stockholders.

Ms. Gonzalez says that if the Debtors continue to use the Winn-
Dixie Stores name, then old stockholders who have supported the
company for a long time should be given an opportunity to be a
part of the reorganized Winn-Dixie and "not cast aside with
nothing more than a write off."

Ronnie Wilson, a long-time employee of Winn-Dixie Stores who
also bought the company's stocks, objects to the Debtors'
Disclosure Statement accompanying the Joint Plan of
Reorganization.  Mr. Wilson proposes that the equity allocated
to certain company associates when the company emerges from
bankruptcy protection be divided among the current shareholders
so they could recoup some of their investment.

Sarah and William Box each held 12,896 shares of Winn-Dixie
common stock as of August 2003.  Ms. Box asserts that if Winn-
Dixie Stores' board of directors or the bankruptcy trustee is
"unable to make at least a gesture of settlement with the
stockholders, then the best and most honorable move would be to
sell the Winn-Dixie stores, its lands and other holdings and
simply get out of the grocery business."

The Boxes object to any reorganization plan that fails to
penalize the officers, directors and other insiders for the sale
of their personal Winn-Dixie stocks prior to the bankruptcy
filing.

Rodney Butler, a minor, sustained injuries due to a slip and
fall accident at one of the Debtors' stores.  The Debtors have
not paid the third-party insurance companies for his medical
bills.

Ethel Butler, on behalf of Mr. Butler, objects to the Disclosure
Statement.

                    F.R.O. Joins Objection

Before the Debtors filed for bankruptcy, F.R.O. LLC VII and
F.R.O. LLC VIII leased to the Debtors certain real property
located in Wake Forest, North Carolina and Daphne, Alabama.

F.R.O. filed claims for rejection damages against Winn-Dixie,
Inc., and Winn-Dixie Raleigh, Inc., in October 2005 after the
Debtors rejected the Wake Forest Lease.  The Debtors' request to
assume the Daphne Lease as of the effective date of their
reorganization plan is still pending.

F.R.O. joins in the Terranova Landlords' objection that the
Disclosure Statement accompanying the Joint Plan of
Reorganization fails to provide adequate information regarding:

   -- the treatment of landlords' cure and rejection claims
      under the proposed Plan; and

   -- the effect of substantive consolidation on the rights of
      the landlords.

                 Catamount Landlords' Joinder

Catamount Rockingham LLC, Catamount Atlanta LLC, and Catamount
LS-KY LLC leased to Winn-Dixie Montgomery, Inc., and Winn-Dixie
Raleigh, Inc., Store No. 2045, in Rockingham, North Carolina;
Store No. 2712, in Atlanta, Georgia; Store NO. 1676, in
Louisville, Kentucky, and Store No. 1673, in Shelbyville,
Kentucky.  Winn-Dixie Stores, Inc., guaranteed its subsidiaries'
obligations under the Leases.

The Catamount Landlords filed proofs of claim against the
Debtors for damages arising from the rejection of the Leases.
They also hold administrative claims with respect to the Leases.

The Catamount Landlords join the E&A Landlords' objection to the
Disclosure Statement.  Like the E&A Landlords, the Catamount
Landlords want more information on how the proposed deemed
substantive consolidation would affect their claims.

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. 46; Bankruptcy Creditors' Service, Inc., 215/945-
7000).




===========
B E L I Z E
===========


* BELIZE: S&P May See Foreign Debt Restructuring as Default
-----------------------------------------------------------
An analyst at Standard & Poor's Ratings Services told Reuters
that the agency will likely deem Belize's foreign debt
restructuring as a sovereign default.

Reuters relates that the government of Belize disclosed on
Wednesday that the country plans to restructure a US$960 million
external debt load, including international bond debt, as it has
become unsustainable.

"They are likely to take debt relief from the creditors and if
you hold a bond you will get less than face value.  To us, that
is a default," Richard Francis, an S&P credit analyst for
Belize, was quoted by Reuters as saying.

                        *    *    *

Moody's Investor Service assigned these ratings to Belize:

        -- CC LT Foreign Bank Depst Caa3
        -- CC LT Foreign Curr Debt  Caa3
        -- CC ST Foreign Bank Depst NP
        -- CC ST Foreign Curr Debt  NP
        -- LC Curr Issuer Rating    Caa3
        -- FC Curr Issuer Rating    Caa3
        -- Foreign Currency LT Debt Caa3
        -- Local Currency LT Debt   Caa3




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


FOSTER WHEELER: Units to Proceed with Shell's Initial EPC Phase
---------------------------------------------------------------
Foster Wheeler Ltd. disclosed that its UK subsidiary, Foster
Wheeler Energy Limited, and its Singapore subsidiary, Foster
Wheeler Asia Pacific Pte. Ltd., both of which are part of its
Global Engineering and Construction Group, have been instructed
by Shell Eastern Petroleum (Pte.) Ltd. to proceed with the
initial engineering, procurement and construction management or
EPC for a world-scale ethylene oxide/mono-ethylene glycol
(EO/MEG) plant and a significant refinery modification project
in Singapore.

The Foster Wheeler contract values for this initial work, which
were not disclosed, will be included in the company's third-
quarter 2006 bookings.  The company expects to make further
bookings in 2006 upon signature of the contracts for the full
EPC scope.

Foster Wheeler Energy has already completed the basic design and
engineering package or BDEP for the new EO/MEG plant, which
utilizes Shell's proprietary "Omega" technology.  Foster
Wheeler's Asia Pacific operations have completed the BDEP for
the modifications to the Bukom Refinery and project
specification for the sulfur recovery and high vacuum unit.
Foster Wheeler will now carry this work through into the
implementation phase of the project.

"We are pleased to have appointed Foster Wheeler as our EPC
contractor and look forward to the successful outcome we
expect," said Pieter Eijsberg of Shell, general manager for the
project.

"As one of the leading engineering, procurement and construction
contractors in Singapore, Foster Wheeler has a 30-year track
record of delivering safe and successful projects," said Umberto
della Sala, chief executive officer, Foster Wheeler Global
Engineering and Construction Group.  "We are proud to assist
Shell in realizing their investment objectives and intend to
build on our own demanding high standards and our excellent
working relationship with Shell to deliver this new EO/MEG plant
and the refinery modifications safely and successfully."

The new 750,000 tons per annum EO/MEG plant, to be located on
Jurong Island, will use feedstock from an ethylene cracker to be
built by others on Bukom Island, Singapore.  Both the cracker
and the EO/MEG plant are part of a project known as the Shell
Eastern Petrochemicals Complex, which includes in its scope the
construction and integration of the new facilities with Shell's
existing refinery at Bukom to capture the benefits of oil-
chemicals integration.

                    About Foster Wheeler

Headquartered in Hamilton, Bermuda, Foster Wheeler Ltd.
-- http://www.fwc.com/-- is a global company offering, through
its subsidiaries, a broad range of engineering, procurement,
construction, manufacturing, project development and management,
research and plant operation services.  Foster Wheeler serves
the refining, upstream oil and gas, LNG and gas-to-liquids,
petrochemical, chemicals, power, pharmaceuticals, biotechnology
and healthcare industries.

At Dec. 31, 2005, Foster Wheeler's balance sheet showed a
US$341,796,000 equity deficit compared to a US$525,565,000
equity deficit on Dec. 31, 2004.

                        *    *    *

As reported in the Troubled Company Reporter on May 25, 2006,
Standard & Poor's Ratings Services raised Foster Wheeler's
corporate credit rating to to B+ from B- and its senior secured
notes rating to B+ from CCC+.  At the same time, Standard &
Poor's assigned its 'BB-' bank loan rating and '1' recovery
rating to the company's five-year, US$250 million credit
facility due 2010.

                        *    *    *

On May 26, 2006, Moody's Investors Service upgraded Foster
Wheeler's corporate family rating to B1 from B3 and assigned
a Ba3 rating to FWC's US$250 million senior secured bank
revolving credit facility.  The rating outlook is changed to
Positive.


FOSTER WHEELER: Units Secure Design Contract from Chevron
---------------------------------------------------------
Foster Wheeler Ltd. disclosed that two subsidiaries in its
Global Engineering and Construction Group, Foster Wheeler Energy
Limited and Foster Wheeler (Nigeria) Limited, in a joint venture
with National Engineering & Technical Company Limited aka NETCO,
have been awarded the front-end engineering design by Chevron
Nigeria Limited or CNL for the non-associated gas wellhead
platforms and pipelines portion of CNL's Olokola Gas Supply
Project or OKGS.  CNL is a joint venture partner of the Nigerian
National Petroleum Corporation or NNPC.  NETCO is a wholly owned
subsidiary of NNPC.

The contract, to be executed in Nigeria, is the first work
authorization received from CNL under the existing Foster
Wheeler/NETCO three-year term services contract with CNL, which
was announced at the end of last year.  The value of the
contract, which will be included in the company's second-quarter
2006 bookings, was not disclosed.

"Foster Wheeler is delighted to strengthen its commitment in
Nigeria through this award," said Anita Omoile, director of
Foster Wheeler (Nigeria) Limited.  "The upstream oil and gas
sector is a strategically important market for Foster Wheeler
and is one in which we have a long and successful track record.
We are committed to working very closely with CNL and with NETCO
to deliver a high quality FEED which fully meets the project's
objectives."

The OKGS project is located offshore Nigeria and will provide
2,300 million standard cubic feet per day of natural gas and
associated liquids to the proposed Olokola LNG liquefaction
plant.  The new facilities are located approximately 10 to 40
kilometers offshore and will include one 15,000 ton topsides
production platform, one 14,000 ton topsides production
platform, two living quarters platforms, each to accommodate
approximately 60 people, nine wellhead platforms, flares,
bridges and approximately 400 miles of sub-sea pipelines for
gathering and delivering the gas to shore.

The Foster Wheeler/NETCO team will execute the FEED, scheduled
to be completed by the end of 2006, for the nine wellhead
platforms and the pipelines.

"This is an important project for us, especially from the
standpoint of developing local capacity and competence through
the promotion of alliances between local engineering companies
and their foreign counterparts.  We are confident that Foster
Wheeler and NETCO will deliver on time and within budget,"
commented Fred Nelson, chairman and managing director of Chevron
Nigeria Limited.

                    About Foster Wheeler

Headquartered in Hamilton, Bermuda, Foster Wheeler Ltd.
-- http://www.fwc.com/-- is a global company offering, through
its subsidiaries, a broad range of engineering, procurement,
construction, manufacturing, project development and management,
research and plant operation services.  Foster Wheeler serves
the refining, upstream oil and gas, LNG and gas-to-liquids,
petrochemical, chemicals, power, pharmaceuticals, biotechnology
and healthcare industries.

At Dec. 31, 2005, Foster Wheeler's balance sheet showed a
US$341,796,000 equity deficit compared to a US$525,565,000
equity deficit on Dec. 31, 2004.

                        *    *    *

As reported in the Troubled Company Reporter on May 25, 2006,
Standard & Poor's Ratings Services raised Foster Wheeler's
corporate credit rating to to B+ from B- and its senior secured
notes rating to B+ from CCC+.  At the same time, Standard &
Poor's assigned its 'BB-' bank loan rating and '1' recovery
rating to the company's five-year, US$250 million credit
facility due 2010.

                        *    *    *

On May 26, 2006, Moody's Investors Service upgraded Foster
Wheeler's corporate family rating to B1 from B3 and assigned
a Ba3 rating to FWC's US$250 million senior secured bank
revolving credit facility.  The rating outlook is changed to
Positive.


REFCO INC: Chapter 7 Trustee Wants to Wind Down Refco Trading
-------------------------------------------------------------
Albert Togut, the Court-appointed Chapter 7 trustee for Refco,
LLC's estate, seeks the U.S. Bankruptcy Court for the Southern
District of New York's authority to complete a wind-down and
dissolution of Refco Trading Services, LLC's business operations
in accordance with Delaware laws.

Refco Trading was formed in 2003 when Refco, Inc., acquired
United Kingdom-based MacFutures, a day-trading business engaging
in commodity futures and options.

Refco Trading followed a similar model to MacFutures and became
Refco LLC's proprietary trading subsidiary.  Most Refco Trading
employees traded using accounts funded by Refco LLC, and only a
few workers had any customer accounts.

Like the Refco Trading proprietary accounts, any third-party
customer accounts were settled on a daily basis to the extent
that the business day would rarely, if ever, end with Refco
Trading having any open trade positions, Scott E. Ratner, Esq.,
at Togut, Segal & Segal LLP, in New York, relates.

Before the Petition Date, Refco Trading had over 100 employees
and business operations in Montreal, Canada; Chicago, Illinois;
and Miami, Florida.  Refco Trading hired employees, trained them
using a proprietary training system, and provided an account
with which to trade. Most of the employees were paid a flat
salary and traded on an account that was settled on a daily
basis.

The traders also received profit percentages of successful
trades as additional remuneration.  Consistent with their
Acquisition Agreement, Man Financial, Inc., has hired most or
all of Refco Trading's former employees.

Refco Trading ceased all trading operations after the Petition
Date.

Refco Trading currently holds approximately US$1,600,000 in
cash.  The company's liabilities are uncertain, but Mr. Togut
believes that there may be intercompany obligations.  Refco
Trading participated in an intercompany cash management system
that paid the company's obligations to outside sources and
repaid the obligations with intercompany receivables.  Mr. Togut
also believes that there may be liabilities to Canadian taxing
authorities.

Specifically, Mr. Togut proposes to direct certain actions as
are necessary and appropriate to Refco Trading's dissolution and
wind-down, including:

   (a) preparation of accounting reports, statements of receipts
       and disbursements and income statements;

   (b) preparation, signing, and filing of any tax returns in
       the United States or Canada;

   (c) appearances before any governmental authority as may be
       necessary to effectuate a legal wind-down;

   (d) adjudication and resolution of any claims asserted
       against Refco Trading and authorization for payment of
       any allowed claims from Refco Trading's assets to the
       extent required by law; and

   (e) performing any other related tasks as may be necessary to
       effectuate a proper and legal wind-down and dissolution.

Mr. Togut also seeks to pay, without further Court order, all
necessary costs and expenses incurred in connection with the
wind-down, provided that any payments will be made from Refco
Trading's assets, and not those of Refco LLC's estate.

Furthermore, Mr. Togut asks Judge Drain for qualified immunity
from personal liability for his actions in furtherance of Refco
Trading's wind-down.

According to Mr. Togut, Refco LLC's ownership interest in Refco
Trading is an asset of its Chapter 7 estate.  To the extent that
Refco Trading is solvent, its remaining assets will inure to
Refco LLC's benefit.  Therefore, Refco Trading's wind-down and
dissolution pursuant to Delaware laws is consistent with Mr.
Togut's duty to "collect and reduce to money the property of the
estate" under Section 704(a)(1) of the Bankruptcy Code.

Considering that the scope of Refco Trading's assets and
liabilities are unknown, Mr. Togut insists that he must wind
down Refco Trading to determine whether there are any residual
assets that will flow to Refco LLC's estate.

                       About Refco Inc.

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

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

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

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

Three more affiliates of Refco, Westminster-Refco Management
LLC, Refco Managed Futures LLC, and Lind-Waldock Securities LLC,
filed for chapter 11 protection on June 6, 2006 (Bankr. S.D.N.Y.
Case Nos. 06-11260 through 06-11262).  (Refco Bankruptcy News,
Issue No. 36; Bankruptcy Creditors' Service, Inc., 215/945-
7000).


REFCO: Wants Stipulation Resolving Intercompany Debts Approved
--------------------------------------------------------------
Refco, Inc., and its debtor-affiliates, ask the U.S. Bankruptcy
Court for the Southern District of New York to approve a
Stipulation entered into by the Debtors, Refco Securities, LLC,
Refco Capital Markets, Ltd., Marc Kirschner, the Court-appointed
trustee for RCM, and the Official Committee of Unsecured
Creditors, pursuant to Rule 9019 of the Federal Rules of
Bankruptcy Procedure.

Refco Securities, is a non-debtor subsidiary of Refco Regulated
Companies LLC and a registered broker-dealer.  According to its
books and records, RSL -- which is currently undergoing an
orderly out-of-court wind-down -- owes Refco Capital LLC (RCC)
an aggregate of US$127,459,910, on account of a series of
transactions between them that occurred before the Petition
Date.

Mr. Kirschner asserts that RCM has an ownership interest in the
RCC Debt and that RCM has additional claims against Refco
Capital.  Refco Capital contests the RCM Trustee's assertions.

The Official Committee of Unsecured Creditors has stated that it
is prepared to take action in the Court to obtain the right to
act on Refco Capital's behalf and to collect the RCC Debt.

To avert potential litigation, Refco Capital is willing to
accept full payment of the RCC Debt over time.

         RSL Segregated Funds and Sberbank Judgment

As of May 31, 2006, RSL maintained approximately US$7,000,000 in
segregated funds under Rule 15c3-3 of the Securities Exchange
Act of 1934 on account of claims or potential claims of
unaffiliated third-party customers.

As an RSL customer, RCM asserts that it is owed not less than
US$42,900,000 -- RCM-RSL Claim -- from RSL, which currently
maintains approximately US$45,900,000 in additional segregated
funds on account of claims or potential claims asserted by RCM
against RSL.

The SEC has informally requested that RSL segregate funds for
protection of unknown RSL customers.  RSL does not currently
have sufficient available liquid assets to satisfy the non-
customer claims against it and to segregate additional funds
requested by the SEC.

Moreover, the Savings Bank of the Russian Federation has a
judgment against RSL for US$123,733,733, plus interest from
June 2, 2006, and costs.  RSL and Sberbank have entered into a
separate agreement under which RSL will pay the Sberbank
Judgment, but on a basis that is pari passu with the RCC Debt.

         Intercompany Obligations Between RSL and RCM

RSL asserts that it is owed approximately US$92,000,000 -- RSL-
RCM Claim -- from RCM, but that amount remains subject to
further review.

RSL has asked the RCM Trustee to consent to a set-off of
intercompany debts between RSL and RCM, including the debt
related to the RCM-Related Segregated Funds.

However, the RCM Trustee has not consented to a set-off of the
RCM-RSL Claim, but has agreed to other accommodations to permit
the pari passu payment of the RCC Debt with the Sberbank
Judgment, on terms and conditions similar to that agreed to by
Sberbank.

                     Parties Stipulate

Recognizing that RSL lacks current liquidity sufficient to
satisfy all of the outstanding claims against it and to meet all
segregation requirements and requests, and to avoid possible
litigation costs, RSL, Refco Capital, the RCM Trustee, and the
Creditors Committee entered into a stipulation dated July 20,
2006.  The parties agree that:

   (1) RSL will pay the US$127,459,910 RCC Debt through pro rata
       distributions to Refco Capital based on available cash
       amount within two business days after any date on which
       available cash exceeds US$2,000,000.  The Stipulation
       recognizes RSL's obligation to segregate funds for the
       customers' benefit and accounts for RSL's obligation to
       pay Refco Capital over time.

   (2) In any event, RSL is unconditionally obligated to pay
       Refco Capital at least certain aggregate percentage
       amounts of the RCC Debt on or before these dates:

          * within two business days after the execution of the
            Stipulation, 80% of the RCC Debt equal to
            US$101,967,928; and

          * by December 22, 2006, 100% of the RCC Debt, plus a
            4.98% interest accruing from and after April 30,
            2006, on a sum of the unpaid portion of the RCC
            Debt.

   (3) All payments made by RSL to Refco Capital are to be held
       in a separate segregated account designated by Refco
       Capital until the Stipulation becomes final and no longer
       subject to review.  At that time, 60% of any payments
       made from RSL to Refco Capital are to be held in a
       segregated account until disputes related to ownership of
       the RCC Debt have been determined by Court order.  Refco
       Capital will be free to use the remaining 40% of funds in
       the ordinary course of administering its estate.  All
       liens and encumbrances on the RCC Debt will attach to all
       payments made by RSL in respect of the RCC Debt.  This
       provision makes significant assets available to Refco
       Capital's estate, at the same time preserving disputes
       related to the ownership of the RCC Debt for a later
       date.

   (4) RCC and the Creditors Committee will forebear from taking
       any and all actions to obtain a judgment or collect on
       the RCC Debt unless and until approval of the Stipulation
       is denied by the Court or a defined event of default
       occurs under the Stipulation.

   (5) On the occurrence of a defined event of default:

          -- the entirety of the RCC Debt becomes immediately
             due and payable;

          -- Refco Capital and the Creditors Committee are
             entitled to seek a judgment and otherwise pursue
             collection on the RCC Debt against RSL's assets;

          -- certain provisions of the Stipulation terminate
             without further Court order; and

          -- Refco Capital and the Creditors Committee reserve
             all rights to enforce the entirety of the RCC Debt,
             and all rights reserved by any party under the
             Stipulation remain reserved.

   (6) RSL is prohibited from paying or reserving for or
       granting a lien on collateral to secure any RSL Creditor
       Claim or any other non-customer claims that may become
       known to RSL following July 20, 2006, unless RSL
       contemporaneously makes a pro rata payment or grant of
       collateral to Refco Capital on the RCC Debt, or unless
       Refco Capital consents in writing.  This provision
       protects Refco Capital if additional non-customers are
       asserted against RSL.

   (7) Pending further Court order, the RCM Trustee is not to
       seek payment of or from the RCM-Related Segregated Funds,
       which are to be placed in a separate escrow account
       bearing interest.  RSL, Refco Capital, and the RCM
       Trustee also reserve their rights with respect to
       entitlement to the RCM-Related Segregated Funds.
       In addition, RSL is not to offset the RCM-RSL Claim
       against the RSL-RCM claim.

   (8) If RSL's Third-Party Customer Claims exceed the amounts
       held as Third Party Segregated Funds, the Third-Party
       Segregated Claims are to be paid first from the Excess
       Customer Segregated Funds and second from the RCM-Related
       Segregated Funds.  To the extent that any Third-Party
       Customer Claims are paid from RCM-Related Segregated
       Funds, RCM's claim will be treated as a non-customer
       claim.

            Approval of Stipulation Is Necessary

J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, in New York, tells Judge Drain that the Stipulation
harmonizes the payments to be made to Refco Capital with those
made to Sberbank pursuant to a similar payment agreement.

Although RSL lacks currently available liquid assets sufficient
to meet SEC segregation requirements and to satisfy both
Sberbank's claim and the RCC Debt in full, Mr. Milmoe asserts
that the payment schedules in the Sberbank agreement and the
Stipulation facilitate immediate payment to the extent of RSL's
currently available liquid assets.

Mr. Milmoe also notes that the proposed agreement was negotiated
whereby the RCC Debt is to be satisfied in full by the end of
2006, and in the event of non-payment, Refco Capital's remedies
are preserved.  RCM's claims against RSL and Refco Capital are
fully preserved for future resolution and distribution.

In addition, Mr. Milmoe asserts, the Debtors' consent to the
authority of the Creditors Committee to bring any action
necessary to enforce the RCC Debt if there is an Event of
Default under the Stipulation is necessary and beneficial for
the efficient administration of Refco Capital's estate.

Mr. Milmoe explains that the Creditors Committee's advisors have
significant involvement in investigating Refco Capital's claims
against RSL and have played a key role in negotiating payment
terms under the Stipulation on Refco Capital's behalf.
Moreover, Refco Capital and RSL, which are related companies,
are represented by the same counsel.  It would maximize
efficiency and expedience to authorize other professional to
undertake litigation on Refco Capital's behalf against RSL.

                       About Refco Inc.

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

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

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

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

Three more affiliates of Refco, Westminster-Refco Management
LLC, Refco Managed Futures LLC, and Lind-Waldock Securities LLC,
filed for chapter 11 protection on June 6, 2006 (Bankr. S.D.N.Y.
Case Nos. 06-11260 through 06-11262).  (Refco Bankruptcy News,
Issue No. 36; Bankruptcy Creditors' Service, Inc., 215/945-
7000).


SCOTTISH RE: Scott E. Willkomm Resigns as President & CEO
---------------------------------------------------------
Scott E. Willkomm has resigned his position as President and
Chief Executive Officer for global life reinsurance specialist
Scottish Re Group Limited.

The Board of Directors appointed Paul Goldean, Executive Vice
President and General Counsel, to the position of interim Chief
Executive Officer, effective immediately.

Glenn Schafer, Chairman of the Board of Directors, said the
Board has appointed a special committee, The Office of the
Chairman, to assist executive management in directing the
company in the near term.  The committee will include two
longtime insurance industry executives, Bill Caulfeild-Browne
and Mr. Schafer, as well as Mr. Goldean.

"I am looking forward to working with the Office of the Chairman
and tapping the long-term experience, knowledge and insights of
both Glenn and Bill," said Mr. Goldean.

Mr. Schafer retired as Vice Chairman of Pacific Life Insurance
Company at the end of 2005, having joined the company in 1986.
During his tenure, Mr. Schafer served as Chief Financial Officer
and President and added the Vice Chairman role for the last ten
months of his career at Pacific Life.

Mr. Caulfeild-Browne was the Chief Operating Officer (U.S.) for
Swiss Re Life and Health North America from 1996 to 1998.  He
was Chief Operating Officer and a director of The Mercantile and
General Life Reassurance Company, U.S., from 1990 to 1996.

Mr. Goldean joined the Company in February 2002 as its Senior
Vice President and General Counsel. Prior to joining the
company, Mr. Goldean worked at Jones, Day, Reavis & Pogue where,
among other things, he acted as outside counsel to the Company.

                     About Scottish Re

Scottish Re Group Limited -- http://www.scottishre.com/-- is a
global life reinsurance specialist.  Scottish Re has operating
companies in Bermuda, Charlotte, North Carolina, Dublin,
Ireland, Grand Cayman, and Windsor, England.  At March 31, 2006,
the reinsurer's balance sheet showed US$12.2 billion assets and
US$10.8 billion in liabilities

                        *    *    *

Following Scottish Re Group Limited's profit warning, Moody's
Investors Service downgraded on July 31,2006, to Ba2 from Baa2
the senior unsecured debt rating of Scottish Re; the rating
agency also downgraded to Baa2 from A3 the insurance financial
strength ratings of the company's core insurance subsidiaries,
Scottish Annuity & Life Insurance Company (Cayman) Ltd. and
Scottish Re (U.S.), Inc. All debt and IFS ratings of Scottish Re
remain on negative outlook.

A.M. Best Co. also downgraded on July 31, 2006, the financial
strength rating to B++ from A- and the issuer credit ratings to
"bbb+" from "a-" of the primary operating insurance subsidiaries
of Scottish Re Group Limited (Scottish Re) (Cayman Islands).
A.M. Best has also downgraded the ICR of Scottish Re to "bb+"
from "bbb-".  All FSR and debt ratings have been placed under
review with negative implications.


SCOTTISH RE: Reports Net Loss of USUS$123.9MM in Second Quarter
---------------------------------------------------------------
Scottish Re Group Limited incurred US$123.9 million of net loss
for the three months ended June 30, 2006, or a loss of US$2.31
per diluted ordinary share, as compared to net income available
to ordinary shareholders of US$1.6 million, or US$0.03 per
diluted ordinary share for the prior year period.  The net loss
for the six months ended June 30, 2006, was US$112.3 million, or
a loss of US$2.10 per diluted ordinary share, as compared to net
income available to ordinary shareholders of US$35.0 million, or
US$0.76 per diluted ordinary share for the prior year period.

The net operating loss was US$130.3 million, or a loss of
US$2.43 per diluted ordinary share for the three months ended
June 30, 2006, as compared to net operating earnings of US$19.7
million or US$0.42 per diluted ordinary share for the prior year
period.  The net operating was US$116.0 million, or a loss of
US$2.17 per diluted ordinary share for the six months ended June
30, 2006, as compared to net operating earnings of US$46.6
million or US$1.01 per diluted ordinary share for the prior year
period.

"The results for the quarter are a sharp departure from our
original projections and estimates provided to our stakeholders"
said Paul Goldean, Interim Chief Executive Officer.  "While we
are very disappointed with the results, we believe that the core
fundamentals of the business are sound.  In fact, our mortality
experience for the quarter was in line with expectations."

The net operating loss for the second quarter was primarily
attributable to five factors:

   i. Tax expense of US$89.0 million principally related to
      a US$112.4 million valuation allowance established on
      deferred tax assets.  The valuation allowance resulted
      from revised statutory and tax projections of the
      Company combined with a reassessment of certain tax
      planning strategies;

  ii. An approximate US$8.0 million reduction in premium
      accruals in North America resulting from a revision of
      estimates relating to prior periods;

iii. A deferred acquisition cost adjustment of approximately
      US$13.0 million due to higher than expected lapses on
      certain fixed annuity treaties;

  iv. External retrocession and reserve adjustments of
      approximately US$21.0 million due to revisions in
      estimates resulting from improved data and systems
      which administer retrocession accounts; and

   v. Severance and retirement and other non-recurring
      operating expenses of approximately US$9.0 million.

"It is important, however, to keep the loss in perspective and
to note that Scottish Re continues to have sufficient sources of
liquidity, collateral and capital to meet the near-term needs of
the business." said Dean Miller, Chief Financial Officer.  "Of
particular note is that all operating subsidiaries remain
capitalized well in excess of their minimum required levels as
prescribed by their respective Regulators. We look forward to
sharing additional information at our scheduled earnings call
and additionally, have posted to our web-site,
www.scottishre.com, a Financial Supplement to add further
clarification to our financial results for the quarter."

Total revenues for the three months ended June 30, 2006,
increased to US$593.6 million from US$502.0 million for the
prior year period, an increase of 18%.  Excluding realized gains
and losses and the change in value of the embedded derivatives,
total revenues for the three months ended June 30, 2006,
increased to US$597.6 million from US$523.2 million for the
prior year period, an increase of 14%.  Total revenues for the
six months ended June 30, 2006, increased to US$1,171.9 million
from US$1,058.6 million for the prior year period, an increase
of 11%. Excluding realized gains and losses and the change in
value of the embedded derivatives, total revenues for the six
months ended June 30, 2006, increased to US$1,179.3 million from
US$1,071.0 million for the prior year period, an increase of
10%.  Premiums earned in the three months ended June 30, 2006,
were negatively impacted by revisions to previous premium
accrual estimates of approximately US$8 million (pre-tax) and
adjustments related to retro premiums of approximately US$13
million (pre-tax).  The investment portfolio, which increased by
US$1.74 billion from the closing of the Ballantyne Re
transaction in May, continued to perform well with an average
yield of 5.5% compared to an average yield for the first quarter
2006 of 5.3%.

Total benefits and expenses increased to US$626.0 million for
the three months ended June 30, 2006, from US$508.8 million for
the prior year period, an increase of 23%.  Total benefits and
expenses increased to US$1,197.8 million for the six months
ended June 30, 2006, from US$1,032.0 million for the prior year
period, an increase of 16%.  Total benefits and expenses
exceeded estimates due to refinements in our external
retrocession reserves of approximately US$7 million (pre-tax).
In addition, an adjustment of approximately US$13 million (pre-
tax) to write-down deferred acquisition costs was made to
reflect the Company's current best estimate of lapses on certain
fixed annuity treaties.

The Company's operating expense ratio (which is the ratio of
operating expenses to total revenue excluding realized gains and
losses and the change in value of embedded derivatives) for the
six months ended June 30, 2006, was 6.0%, as compared to an
operating expense ratio of 5.0% for the year ended
Dec. 31, 2005.  Operating expenses for the quarter were
negatively impacted by severance and retirement expenses of
approximately US$5.0 million, expenses related to the
International segment expansion and various professional fees
that on a combined basis amounted to an additional US$3.0
million.

For the three months ended June 30, 2006, the Company had a pre-
tax loss of US$32.4 million before Minority Interest and
recorded an initial tax benefit of US$23.4 million on those
losses.  In addition, the Company recorded a US$112.4 million
valuation allowance resulting in a total tax charge of US$89.0
million for the period.

The Company's book value per share was US$17.73 at June 30,
2006, as compared to US$21.48 per share at December 31, 2005.
Fully converted book value per share was US$19.27 at June 30,
2006, as compared to US$21.17 at December 31, 2005.


                       Scottish Re Group Limited
                         Financial Highlights
            (Stated in Thousands of United States Dollars,
                        Except Share Data)
                              (Unaudited)

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



Total revenue      $593,626    $502,046  $1,171,947  $1,058,609
Net operating
earnings
(loss)
available to
ordinary
shareholders*     (130,313)     19,715    (116,038)     46,645
Net income
(loss)            (121,590)      1,591    (107,741)     35,011
Net income
(loss)
available to
ordinary
shareholders      (123,927)      1,591    (112,344)     35,011

Net operating
earnings
(loss) per
ordinary
share
Basic                $(2.43)      $0.45      $(2.17)      $1.12
Diluted              $(2.43)      $0.42      $(2.17)      $1.01

Earnings (loss)
per
ordinary
share
Basic                $(2.31)      $0.04      $(2.10)      $0.84
Diluted              $(2.31)      $0.03      $(2.10)      $0.76

Dividends
declared
per
ordinary
share                $0.00       $0.05       $0.05       $0.10

Weighted average
ordinary shares
  Outstanding
  Basic          53,720,242  43,462,385  53,578,152  41,726,320
  Diluted        53,720,242  47,136,889  53,578,152  46,179,275


                              June 30,               December,
                                2006                    2005
Book value per
ordinary share              US$17.73                  US$21.48

Basic book value per
ordinary share -
excluding other
comprehensive income
and  value of
embedded derivatives        US$19.45                 US$ 21.89

Fully diluted book
value per ordinary
share - excluding
other comprehensive
income and  value of
embedded derivatives        US$19.27                  US$21.17



                       Scottish Re Group Limited
                      Consolidated Balance Sheets
           (Stated in Thousands of United States Dollars,
                             Except Share Data)

                                June 30,    December 31,
                                  2006          2005
                                     (Unaudited)
Assets
Fixed maturity
investments                  $8,126,980     $5,292,595
Preferred stock                  128,137        133,804
Cash and cash
equivalents                   1,563,341      1,420,205
Other investments                 64,701         54,619
Funds withheld at interest     2,175,141      2,597,416
                             ------------ --------------
Total investments             12,058,300      9,498,639
Accrued interest receivable       71,411         44,012
Reinsurance balances and
risk fees receivable            306,454        325,372
Deferred acquisition costs       643,211        594,583
Amounts recoverable from
reinsurers                      532,000        551,288
Present value of in-force
business                         52,924         54,743
Goodwill                          34,125         34,125
Other assets                     124,349         87,198
Deferred tax benefit               5,901         55,453
Segregated assets                776,048        760,707
                             ------------ --------------
Total assets                US$14,604,723    US$12,006,120
                              ============ ==============

Liabilities
Reserves for future
policy benefits            US$4,101,799     US$3,477,222
Interest sensitive
contract liabilities          4,089,373      3,907,573
Collateral finance
facilities                    3,725,161      1,985,681
Loans payable                     64,856              -
Accounts payable and
other liabilities                71,528         83,130
Reinsurance balances
payable                         187,438        114,078
Current income tax
payable                           3,487          9,155
Long term debt                   244,500        244,500
Segregated liabilities           776,048        760,707
                              ------------ --------------
Total liabilities             13,264,190     10,582,046
                              ------------ --------------

Minority interest                  9,284          9,305
Mezzanine equity                 143,359        143,057

Shareholders' equity
Ordinary shares, par value
US$0.01 per share:
  Issued: 53,745,156 shares
  (2005 - 53,391,939)                537            534
Preferred shares, par value
US$0.01 per share:
  Issued: 5,000,000 shares
  (2005 - 5,000,000)             125,000        125,000
Additional paid- in capital      903,422        893,767
Prepaid variable share
forward contract                110,031              -
Accumulated other
comprehensive income            (95,799)        (9,991)
Retained earnings                144,699        262,402
                              ------------ --------------
Total shareholders' equity     1,187,890      1,271,712
                              ------------ --------------
Total liabilities,
minority interest,
mezzanine equity and
shareholders' equity       US$14,604,723    US$12,006,120
                             ============ ==============


                     About Scottish Re

Scottish Re Group Limited -- http://www.scottishre.com/-- is a
global life reinsurance specialist.  Scottish Re has operating
companies in Bermuda, Charlotte, North Carolina, Dublin,
Ireland, Grand Cayman, and Windsor, England.  At March 31, 2006,
the reinsurer's balance sheet showed US$12.2 billion assets and
US$10.8 billion in liabilities.

                        *    *    *

Following Scottish Re Group Limited's loss warning, Moody's
Investors Service downgraded on July 31, 2006, to Ba2 from Baa2
the senior unsecured debt rating of Scottish Re; the rating
agency also downgraded to Baa2 from A3 the insurance financial
strength ratings of the company's core insurance subsidiaries,
Scottish Annuity & Life Insurance Company (Cayman) Ltd. and
Scottish Re (U.S.), Inc. All debt and IFS ratings of Scottish Re
remain on negative outlook.

A.M. Best Co. also downgraded on July 31, 2006, the financial
strength rating to B++ from A- and the issuer credit ratings to
"bbb+" from "a-" of the primary operating insurance subsidiaries
of Scottish Re Group Limited (Scottish Re) (Cayman Islands).
A.M. Best has also downgraded the ICR of Scottish Re to "bb+"
from "bbb-".  All FSR and debt ratings have been placed under
review with negative implications.


SCOTTISH RE: Faces Securities Fraud Suit from Shareholders
----------------------------------------------------------
Kahn Gauthier Swick, LLC or KGS discloses that a class action
lawsuit has been filed in the United States District Court for
the Southern District of New York on behalf of shareholders who
purchased, exchanged or otherwise acquired the common stock and
other securities of Scottish Re Group Ltd. between
Dec. 16, 2005, and July 28, 2006.

No class has yet been certified in this action.

The action against Scottish Re and certain of the company's
executive officers charges violations of federal securities
laws.  On July 28, 2006, the company's Chief Executive resigned
in the face of a shocking second quarter loss of US$130 million.
Scottish Re now states that it has suspended its dividends and
hired investment bankers to track down additional capital.  On
this news, share prices have declined from US$16.00 to US$6.50
-- erasing millions of dollars in shareholder value.  These
revelations were also in stark contrast to statements made by
Scottish Re in February 2006, that the company was operating at
or above plan, and to statements made in early-May 2006, when
the company reported reduced earnings for the first quarter of
2006, yet failed to make any adjustments to its earnings or
revenue forecasts.

If a discussion of legal rights is desired, inquiries may be
directed to:

            Kahn Gauthier Swick, LLC
            Managing Partner Lewis Kahn of KGS direct
            Tel: 1-866-467-1400, ext., 100 (toll free)
                   504-648-1850,
            E-mail: lewis.kahn@kglg.com

KGS encourages investors to act immediately, as they have until
October 2, 2006, to move the court to serve as lead plaintiff.

                      About Scottish Re

Scottish Re Group Limited -- http://www.scottishre.com/-- is a
global life reinsurance specialist.  Scottish Re has operating
companies in Bermuda, Charlotte, North Carolina, Dublin,
Ireland, Grand Cayman, and Windsor, England.  At March 31, 2006,
the reinsurer's balance sheet showed US$12.2 billion assets and
US$10.8 billion in liabilities.

                        *    *    *

Following Scottish Re Group Limited's loss warning, Moody's
Investors Service downgraded on July 31, 2006, to Ba2 from Baa2
the senior unsecured debt rating of Scottish Re; the rating
agency also downgraded to Baa2 from A3 the insurance financial
strength ratings of the company's core insurance subsidiaries,
Scottish Annuity & Life Insurance Company (Cayman) Ltd. and
Scottish Re (U.S.), Inc. All debt and IFS ratings of Scottish Re
remain on negative outlook.

A.M. Best Co. also downgraded on July 31, 2006, the financial
strength rating to B++ from A- and the issuer credit ratings to
"bbb+" from "a-" of the primary operating insurance subsidiaries
of Scottish Re Group Limited (Scottish Re) (Cayman Islands).
A.M. Best has also downgraded the ICR of Scottish Re to "bb+"
from "bbb-".  All FSR and debt ratings have been placed under
review with negative implications.




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


* BOLIVIA: Plans Subsidies for Lower Income Fixed Line Users
------------------------------------------------------------
Roque Roy Mendez Soleto, Bolivia's telecoms undersecretary, told
La Prensa that the government has plans to make a "social
tariff" with operators offering subsidies for fixed line users
with lower income.

Business News Americas relates that Mr. Mendez said, "We are
analyzing the operators' unused capacities and based on that
they could focus on lower income users that can receive the
benefit of a reduced tariff."

Though the amount of the subsidy and service charge are yet to
be confirmed, Bolivia's telecoms ministry planned to present the
project to the services and public works ministry last week,
BNamericas reports.

The report underscores that some telephony operators in Bolivia
have already announced plans to decrease tariffs.

The project is included in Bolivia's national development
program, which will offer benefits to 100,000 low-income users.
The program looks on a universal access service for the
expansion of telecoms coverage to places with up to 10,000
residents.  The program also includes the installation of 2,000
public Internet access centers and 8,500 public phones,
BNamericas 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 ITAU: Holding Extraordinary General Meeting on Aug. 25
------------------------------------------------------------
Banco Itau Holding Financeira S.A. invites Stockholders to
attend an Extraordinary General Meeting on August 25, 2006, at
3:00 p.m. in the auditorium of the company's head office at:

          Praca Alfredo Egydio de Souza Aranha, 100
          Sao Paulo, Brazil

The meeting is called for examining the proposal of the Board of
Directors with respect to the acquisition of the Brazilian
operations of BankBoston Banco Multiplo S.A.

These agenda will be taken up during the meeting:

   -- incorporate the total shares representing the capital
      stock of the corporations, BankBoston and Libero Trading
      International Ltd., converting them into to become Banco
      Itau's wholly owned subsidiaries;

   -- ratify the appointment of the appraising company,
      Hirashima & Associados Consultoria em Transacoes e
      Reestruturacoes Societarias Ltda., enrolled in the
      corporate taxpayers' register (CNPJ) under number
      05.534.178/0001-36, for the preparation of the
      appropriate valuation reports;

   -- increase the capital stock from BRL8,300,000,000.00 to
      BRL12,881,120,000.00, through the issue of 68,518,094
      preferred book entry shares, with no par value, to be
      subscribed in the name of the stockholders of BankBoston
      and Libero, in substitution of their rights as partners
      which will be extinguished in the light of the
      incorporation of shares;

   -- change the wording in the caption sentence to Article 3
      of the corporate bylaws to register the new value of the
      capital stock and its division into shares; and

   -- establish two vacant seats on the Board of Directors,
      one of which must be indicated by Bank of America
      Corporation; under the CVM Instructions 165 of
      Dec. 11, 1991, and 282 of June 26, 1998, notice is hereby
      given that the eligibility for multiple voting rights in
      the election of members of the Board of Directors is
      contingent on those stockholders requesting the said
      rights representing at least 5% of the voting capital.

Under Article 4 of CVM Instruction 319 of December 3, 1999,
Banco Itau notifies Stockholders that the final valuation
reports, which form the basis for the incorporation of shares,
to be examined and decided by the Extraordinary General Meeting
on August 25, 2006, are available at the head offices at the
company's head office.

                      About Banco Itau

Banco Itau currently has 51 thousand employees serving more than
16 million clients, through its network of 2,391 branches and 22
thousand ATMs.

                        *    *    *

Fitch Ratings upgraded on July 2, 2006, these ratings of Banco
Itau Holding Financeira S.A.:

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

Standard & Poor's Ratings Services raised on May 20, 2006, its
long-term counterparty credit rating on Banco Itau S.A. to 'BB+'
from 'BB'.  The outlook is stable.


BRASKEM SA: Registers 14% Growth in First Half of 2006
------------------------------------------------------
Braskem S.A. experienced a growth of more than 14% in the first
semester of 2006 compared with the same period in 2005.  This is
proof of the more vigorous growth of the Brazilian economy and
the resumption of the historical consumption elasticity of these
resins in relation to GDP.  In this context, Braskem presented a
6% increase in net revenues this semester when expressed in
dollars, totaling US$2.5 billion -- or BRL5.6 billion.

With this result, Braskem maintained the leadership in the
regional market in all of its strategic operation segments.
This performance marks the company's correct decision in
acquiring Politeno, which was announced in the beginning of
April and approved unanimously and without restrictions in July
by the Administrative Council of Economic Defense or CADE.  The
administrative council reaffirmed that the relevant market for
the petrochemical sector has a global scope.  The acquisition
represented an immediate 360,000 tons/year increase in Braskem's
polyethylene productive capacity.

Despite this growth in revenue, Braskem's results were affected
by the exchange rate and the increase in international prices of
oil and energy, which represented an additional US$204 million
in costs to the company in the first semester.  The impact
affected the company's EBITDA performance, which reached the sum
of BRL653 million in the semester and BRL253 million in the
second quarter.

By the end of June, the Braskem + program had provided
improvements in productivity and competitiveness worth BRL297
million, in annualized and recurrent bases, making it possible
for Braskem to partially compensate for the effects of a
challenging scenario.  The acceleration of this project should
make it possible to capture BRL420 million in projected earnings
for the entire program by the end of this year, thus
anticipating its conclusion by almost one year.  Furthermore,
the new integrated management system that will be put into
operation next October as part of the Formula Braskem project,
will create new opportunities for gains in efficiency, which
should have full impact on the company's results starting in
2007.

In the international market, the prices for petrochemical
products demonstrated an important recovery starting in May,
which has yet to be reflected in the domestic market due to the
momentary excess capacity caused by the entry of new competitors
in the market and the increase in imports, facilitated by the
depreciation of the dollar.  "The combination of a strong demand
for thermoplastic resins and petrochemical products in the
domestic market with the difference in prices being practiced
internally compared to international reality creates excellent
opportunities to recover profitability in the sector," says Jose
Carlos Grubisich, president of Braskem.

Braskem exports totaled US$613 million in the semester, a growth
of 12% over the same period last year.  The good performance
reflects the improved profitability in the international
petrochemical market and it demonstrates the company's long-term
commitment with its strategic clients outside Brazil, as well as
its flexibility to minimize the impact of Rio Polímeros having
fully entered the market.

Braskem revealed net profits of BRL68 million in the first
semester, whereas it recorded a loss of BRL54 million in the
second quarter.

With the incorporation of Polialden at the end of May, Braskem
successfully concluded the corporate integration process that
gave rise to the formation of the company.

Braskem also obtained the certification of compliance with the
demands of the Sarbanes-Oxley Law in the second quarter, one
year before the deadline conceded to non-American companies with
shares negotiated in that country.

The investments made by the company in the first semester
totaled BRL377 million, including projects with a high return,
such as the Braskem + and the Formula Braskem programs, compared
to the BRL244 million in the same period of 2005.  "We are
investing to accompany the growth of the Brazilian economy and
the petrochemical market, maintaining the commitment with
financial discipline and aiming to ensure the creation of value
for our shareholders in every phase of the sector," Mr.
Grubisich affirms.

                       About Braskem

Braskem -- http://www.braskem.com.br/-- is a thermoplastic
resins producer in Latin American, and is among the three
largest Brazilian-owned private industrial companies.  The
company operates 13 manufacturing plants located throughout
Brazil, and has an annual production capacity of 5.8 million
tons of resins and other petrochemical products.

                        *    *    *

Fitch Ratings upgraded these ratings of Braskem S.A. on
July 1, 2006:

   -- Foreign Currency IDR: To BB+ Rating with Stable Outlook,
      from BB Rating with Positive Outlook;

   -- US$525 million Sr. Unsecured notes due 2008, 2014: To BB+,
      from BB;

   -- US$350 million Perpetual Bonds: To BB+, from BB;

   -- National Long-term Rating: To 'AA(bra)' from 'AA-(bra)';
      and

   -- BRL600 million 12th and 13th Debenture Issuances due 2009
      and 2010: To 'AA(bra)' from 'AA-(bra)'.

These rating actions followed 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.


COMPANHIA DE BEBIDAS: Issues BRL2.065 Billion in Debentures
-----------------------------------------------------------
Companhia de Bebidas das Americas aka AmBev has issued BRL2.065
billion non-convertible, registered book debentures on July 28,
Latinlawyer Online reports.

According to Latinlawyer, it was the first issuance AmBev made
in Brazil.  The debentures, which were sold to qualified
institutional buyers and individuals, were issued in two
tranches:

    -- BRL820 million three-year tranche priced at 101.75% of
       interbank rate CDI, and

    -- BRL1.24 billion six-year tranche priced at 102.5% of CDI.

Latinlawyer relates that high demand increased the initial offer
of BRL2 billion.  AmBev will use the proceeds to buy shares in
Quilmes Industrial aka Quinsa, which is owned by Beverage
Associates.

The report underscores that AmBev disclosed in April plans to
increase its stake in Quinsa to 91% from 57%.

Latinlawyer states that the underwriters were:

     -- Uniao de Bancos Brasileiros,
     -- Citibank, and
     -- Banco do Brasil.

Based in Sao Paulo, Brazil, AmBev -- http://www.ambev.com.br/--  
is the largest brewer in Latin America and the fifth largest
brewer in the world.

                        *    *    *

As reported in the Troubled Company Reporter-Latin America on
Aug. 3, 2006, Moody's Investors Service placed the Ba2 foreign
currency issuer rating of Companhia de Bebidas das Americas aka
AmBev under review for a possible upgrade to reflect the placing
of Brazil's key ratings under review for possible upgrade.
Ambev's global local currency issuer rating of Baa3 and the
foreign currency rating of Baa3 for its debt issues remained
unchanged with a stable outlook.


COMPANHIA SIDERURGICA: Forms Alliance with Wheeling-Pittsburgh
--------------------------------------------------------------
Wheeling-Pittsburgh Corp. has negotiated the material points of
an arrangement that, when completed, would combine the North
American assets of Companhia Siderurgica Nacional or CSN with
the company to create a strong, well-capitalized steel producer
with a more flexible cost structure, broader value-added product
offering, access to CSN's product and process technology, and
significant incremental earnings potential.

Wheeling-Pittsburgh expects to complete and file definitive
documentation upon expiration of the "right to bid" period set
forth in the United Steelworkers' bargaining agreement unless
the USW or its assignee files a competing bid for consideration
by the company's Board of Directors prior to the expiration of
that period.

James G. Bradley, Chairman and Chief Executive Officer of
Wheeling-Pittsburgh stated, "Since emerging from bankruptcy in
2003, our Board of Directors has evaluated a broad range of
options for maximizing value for our shareholders.  The proposed
transaction with CSN is the culmination of an extensive and
rigorous process, which included exploratory discussions with a
broad range of potential partners. CSN is a world-class, low-
cost Brazilian producer of 5.6 million metric tons of steel, and
this transaction presents Wheeling-Pittsburgh with a unique
opportunity to improve scale and production, generate
significant operating efficiencies and broaden our product
portfolio. Our Board strongly believes that the proposed
transaction with CSN offers our shareholders the most compelling
value proposition over the long term and, in particular, will
deliver significantly more value than the most recent proposal
by Esmark."

CSN's Marcos Lutz, executive vice president, Infrastructure
& Energy, said, "We are very pleased by the significant progress
we are making with Wheeling-Pittsburgh's board and management
toward combining the North American steel producing assets of
our respective companies and creating a much stronger
competitor.  Together with Wheeling-Pittsburgh, we have looked
at this combination from the bottom-up, and through our rigorous
analysis we know that this transaction has enormous industrial
and economic logic.  Not only will this transaction provide
Wheeling-Pittsburgh's shareholders the best value for their
investment, short and long-term, but equally important we
believe it is the best choice for Wheeling-Pittsburgh's
employees and union.

"Furthermore, CSN provides Wheeling-Pittsburgh with a long-term
slab agreement, capital infusion and realizable synergies that
enhances the attractiveness of this transaction.  CSN is a long
term investor in the steel industry, and it is our goal to
evolve the combined entities into a truly world class, low-cost
steel producing enterprise that will compete successfully on
both a regional and global basis," concluded Mr. Lutz.

              Transaction Terms and Structure

Under the terms of the proposed arrangement, CSN will contribute
its modern, independent steel processing facility in Terre
Haute, Indiana with annual capacity of 900,000 tons, make a cash
investment of US$225 million through financing that would be
convertible into approximately 11.8 million shares of the new
Wheeling-Pittsburgh within a three-year period, subject to
approval from the USW.  The arrangement provides exclusive
distribution rights for CSN flat rolled steel products in the
United States and Canada, and a commitment to a long-term slab
supply agreement.  In exchange for this contribution, CSN will
receive 49.5% ownership in a new holding company, Wheeling-
Pittsburgh Corporation, the remaining 50.5% of which will be
owned by the current Wheeling-Pittsburgh shareholders.  These
percentages do not reflect conversion of the aforementioned
financing.

Upon completion, the existing Wheeling-Pittsburgh Corporation as
well as CSN's operating subsidiary in Terre Haute, IN will
become wholly owned subsidiaries of the new Wheeling-Pittsburgh
Corporation.  The new holding company intends to seek listing on
NASDAQ.

Approximately US$150 million of CSN's US$225 million cash
investment will be used for transformative capital improvements,
including upgrading and expanding the capacity of Wheeling-
Pittsburgh's hot strip mill to approximately 4.0 million tons
and the addition of a second, 350,000-ton galvanizing line at
the Terre Haute facility. The remainder of the proceeds will be
used to strengthen the company's liquidity position.

                   A Strong New Company

The combination of CSN and Wheeling-Pittsburgh will create a
company with an improved, flexible cost structure and broader
value-added product offering with increased downstream
capabilities. Specifically, the transaction adds 900,000 tons of
annual high-quality cold-rolling capacity, including, after
capital investments, 700,000 tons of hot-dip galvanized
capacity.  Finally, the long-term slab supply agreement will
provide a long-term guaranteed source of supply on favorable
payment terms and allow for a more variable cost structure.

The companies expect that the key economic drivers of the new
Wheeling-Pittsburgh will be the addition of CSN's Terre Haute,
IN facility and operating efficiencies - including fixed cost
absorption, natural gas savings, and purchasing savings -
generated by the additional volumes resulting from upgrades to
Wheeling-Pittsburgh's hot strip mill and the expansion of the
Terre Haute facility.

The company will also benefit from a significantly improved
capital structure and liquidity position.

An investor presentation providing additional detail, including
assumptions concerning operating income, has also been made
available on http://www.wpsc.comand will be filed with the SEC.

        The Next Step In Wheeling-Pittsburgh's Strategic Plan

Mr. Bradley commented, "The proposed arrangement with CSN is
consistent with the next step in our clearly articulated
strategic plan - which includes increasing hot strip mill
capacity, increasing downstream value-added product
capabilities, addressing capital needs, making our cost
structure more variable and aligning interests with a long-term
slab supplier.

"The Terre Haute facility is world-class, having been
constructed in 1998.  Combining this modern processing facility,
which is located in the heart of the Midwest region where more
than two-thirds of US produced steel is consumed, with our
existing facilities will create a highly attractive, integrated
network of North American mills and processing operations.

"In addition, the proposed slab supply agreement with CSN is not
easily replicated.  We'll gain a guaranteed long-term supply of
high quality slabs with a supplier whose economic interests are
aligned with ours and favorable payment terms that would include
a six-week, on-site slab inventory supported by CSN.

"Furthermore, we'll have the resources to immediately fund
several key strategic capital investments while having a much
stronger liquidity position and the ability to more aggressively
negotiate with suppliers and other third parties.  And most
importantly, we'll build on our recent improved operating and
financial performance with significantly enhanced earnings
potential."

Mr. Bradley concluded, "This transaction will enable us to
deliver significant value to our shareholders, enhance our
ability to serve our customers and position us well for the
future.  It also demonstrates to all our employees and the
communities of the Ohio and Monongahela river valleys that this
company is not only planning to be successful tomorrow, or next
year, but has a vision to build a company that will be
successful for the next generation of Wheeling-Pittsburgh
steelworkers."

                   Leadership and Timetable

Upon completion, a new Wheeling-Pittsburgh Board of Directors
will be created, which will include Mr. Bradley as Chairman, two
USW directors, five independent directors, and three directors
designated by CSN.

The proposed arrangement is subject to execution of definitive
documentation, which is expected to occur within the next few
weeks, subject to the aforementioned USW provision.  As of
today, the USW has not exercised its right to bid.  The Company
expects to file preliminary proxy materials with the SEC in
September.

The Company has set Nov. 17, 2006, as the date for its Annual
Meeting of Stockholders to be held at:

         Hyatt Regency Pittsburgh International Airport
         1111 Airport Boulevard
         Pittsburgh, Pennsylvania, 15231

The purpose of the meeting is to elect eleven persons to the
Board of Directors for a term expiring on the date of the
Company's 2007 Annual Meeting of Stockholders and to vote on the
proposed transaction with CSN.  Only record holders of Wheeling-
Pittsburgh Corporation common stock at the close of business on
Sept. 18, 2006, will be entitled to vote on the foregoing
matters at the annual meeting.

                   About Wheeling-Pittsburgh

Headquartered in Wheeling, WV, Wheeling-Pittsburgh was organized
as a Delaware corporation on June 27, 1920, under the name
Wheeling Steel Corp.  It has major production facilities in the
Upper Ohio and Monongahela valleys.  Wheeling-Pittsburgh is a
holding company that, together with its several subsidiaries and
joint ventures, produces steel and steel products using both
integrated and electric arc furnace technology.

                         About CSN

Companhia Siderurgica Nacional aka CSN produces, sells, exports
and distributes steel products, like hot-dip galvanized sheets,
tin mill products and tinplate.  The company also runs its own
iron ore, manganese, limestone and dolomite mines and has
strategic investments in railroad companies and power supply
projects.

                        *    *    *

On Jan. 26, 2006, Standard and Poor's Rating Services assigned a
'BB' corporate credit rating on Brazilian flat carbon steelmaker
Companhia Siderurgica Nacional.

The 'BB' corporate credit rating on CSN reflects the company's
exposure to volatile demand and price cycles, increasing
competition in its home and predominant market of Brazil,
aggressive dividend policy and capital investment plan, and
sizable gross-debt position.  These risks are partly offset by
CSN's privileged cost position and sound operating profile,
favorable market position in Brazil, strong export capabilities
to offset occasional domestic demand sluggishness, and
increasing business diversification.


GOL LINHAS: Releases Preliminary Passenger Statistics for July
--------------------------------------------------------------
GOL Linhas Aereas Inteligentes released preliminary passenger
statistics for the month of July 2006.  System-wide passenger
traffic increased 52%, while capacity increased 45% y-o-y.
GOL's system load factor for the month of July 2006 was 84%.

Domestic passenger traffic for July increased 44%, and capacity
increased 37%. GOL's domestic load factor for the month of July
2006 was 84%.  International passenger traffic (RPK) for July
increased 197%, while capacity increased 205%.  International
load factor for the month of July 2006 was 82%.  Yield per
passenger kilometer increased 4% vs. July 2005, while average
stage length (passenger trip) increased 12%.

Operating Data      July 2006 *     July 2005 *     Change (%)

Total System

ASK (mm) (1)         1,736.0         1,199.1        44.8 %
RPK (mm) (2)         1,459.2           958.1        52.3 %
Load Factor (3)         84.1 %          79.9 %      +4.2 p.p.

Domestic Market

ASK (mm) (1)         1,557.2         1,140.5        36.5 %
RPK (mm) (2)         1,312.3           908.6        44.4 %
Load Factor (3)         84.3 %          79.7 %      +4.6 p.p.

International Market

ASK (mm) (1)           178.8            58.6       205.1 %
RPK (mm) (2)           146.9            49.5       196.8 %
Load Factor (3)         82.2 %          84.5 %      -2.3 p.p.

                      About Gol Linhas

Headquartered in Sao Paulo, Brazil, Gol Linhas Areas
Inteligentes S.A. -- http://www.voegol.com.br-- through its
subsidiary, Gol Transportes Aereos S.A., provides airline
services in Brazil, Argentina, Bolivia, Uruguay, and Paraguay.
The company's services include passenger, cargo, and charter
services.  As of March 20, 2006, Gol Linhas provided 440 daily
flights to 49 destinations and operated a fleet of 45 Boeing 737
aircraft.  The company was founded in 2001.

                        *    *    *

On March 21, 2006, Moody's Rating Services assigned a Ba2 rating
on Gol's Long-Term Corporate Family Rating.

On June 14, 2006, Fitch Ratings assigned a rating of 'BB' to GOL
Linhas' outstanding US$200 million 8.75% perpetual
bond.  In addition, Fitch assigned:

   -- National Scale Rating of 'AA-(bra)' with Stable Outlook,
      and

   -- Local Currency Issuer Default Rating of 'BB+'- with
      Stable Outlook.


NOVELIS INC: Obtains US$2.8-Bil. Financing Pledge from Citigroup
----------------------------------------------------------------
Novelis Inc. obtained commitments for backstop financing
facilities totaling US$2.855 billion from Citigroup Global
Markets Inc.

As reported in the Troubled Company Reporter on July 27, 2006,
Novelis received a notice of default from the trustee for its
7-1/4% Senior Notes due 2015.  This action resulted from the
financial restatement and review by Novelis and the subsequent
delay in filing its financial statements, which created a breach
of its bond covenants.  The notice of default triggers a 60-day
period within which the Company can cure the default by filing
the delayed reports.  Novelis stated that it is working towards
this goal; however, there can be no assurance of achievement
and, therefore, the Company has taken the step of securing
commitments for the backstop agreement from Citigroup.

As previously disclosed, the notice of default also accelerates
the deadlines for filing the delayed reports under the Company's
existing Credit Agreement waiver to 30 days from the date of
receipt of the notice.  Novelis will request a waiver from its
Credit Agreement lenders to extend the deadline for filing these
financial reports.

In the event that Novelis is not able to file its delayed
reports by the deadlines defined in the notice of default and in
its Credit Agreement waiver, the backstop financing facilities
would provide the funding necessary to retire the Senior Notes
and, if needed, replace the Company's existing term loan and
revolving credit facility.  The commitments by Citigroup under
the commitment letter are subject to the satisfaction of
customary conditions precedent for financings of this type.

                       About Novelis

Based in Atlanta, Georgia, Novelis Inc. (NYSE: NVL) (TSX: NVL)
-- http://www.novelis.com/-- provides customers with a regional
supply of technologically sophisticated rolled aluminum products
throughout Asia, Europe, North America, and South America.  The
company operates in 11 countries and has approximately 13,000
employees.  Through its advanced production capabilities, the
company supplies aluminum sheet and foil to the automotive and
transportation, beverage and food packaging, construction and
industrial, and printing markets.

Novelis South America operates two rolling plants and primary
production facilities in Brazil.  The company's Pindamonhangaba
rolling and recycling facility in Brazil is the largest aluminum
rolling and recycling facility in South America and the only one
capable of producing can body and end stock.  The plant recycles
primarily used beverage cans, and is engaged in tolling recycled
metal for our customers.

                        *    *    *

As reported in the Troubled Company Reporter on May 18, 2006,
Moody's Investors Service placed the ratings of Novelis Inc.,
and its subsidiary, Novelis Corp., under review for possible
downgrade.  In a related rating action, Moody's changed Novelis
Inc's speculative grade liquidity rating to SGL-3 from SGL-2.
Novelis Corporation's Ba2 senior secured bank credit facility
rating was placed on review for possible downgrade.

Novelis Inc.'s Ba3 corporate family rating; Ba2 senior secured
bank credit facility and B1 senior unsecured regular
bond/debenture were placed on review for possible downgrade.


ST. MARYS: Refinancing Prompts S&P to Upgrade Rating to BB+
-----------------------------------------------------------
Standard & Poor's Ratings Services raised its long-term
corporate credit rating on Toronto-based cement producer St.
Marys Cement Inc. to 'BB+' from 'BB-'.

At the same time, Standard & Poor's assigned a 'BBB-' bank loan
rating with a recovery rating of '1', indicating a high
expectation of full recovery of principal in the event of
default, to the group's proposed new senior secured credit
facility.  The existing debt ratings on St. Marys will be
withdrawn at the close of the refinancing in the next month, and
Standard & Poor's will assign a 'BB+' long-term corporate credit
rating to Votorantim Cimentos North America, a new holding
company that will own 100% of St. Marys Cement.  All current
ratings on St. Marys were removed from CreditWatch, where they
were placed with positive implications on June 16, 2006.  The
outlook is stable.

The upgrade reflects a proposed restructuring and refinancing
that will result in the formation of VCNA, which will own St.
Marys, St. Barbara Cement Inc., and several joint venture
interests in Florida.  All of the North American cement assets
of ultimate parent Votorantim Participacoes S.A.
(BBB-/Stable/--), will be held through VCNA.

"Standard & Poor's imputes some credit support from the ultimate
parent, as the Brazilian conglomerate has provided additional
equity to support strategic and operating needs in the past,"
said Standard & Poor's credit analyst Daniel Parker.

"The ratings on VCNA and St. Marys, however, will not
necessarily move in lockstep with those on Votorantim, as there
are no formal guarantees of support," Mr. Parker added.

The ratings on VCNA will reflect its regional geographic focus
and its position as a midsize North American cement producer
competing against much larger, diversified competitors.  The
addition of Votorantim's joint-venture assets in Florida
improves the limited operational and geographic diversity, but
does not completely mitigate this risk.

St. Marys does not publicly disclose its financial statements.
Profitability, cash flow, and credit metrics have materially
improved in the past two years, due to strong demand and
improved pricing for cement and cost synergies.  The company
does not expect to generate free cash flow in the next two
years, however, as it undertakes projects in Florida, including
the construction of a new cement plant.  The company will be
unable to materially reduce debt in the near term because of the
high capital expenditures.

The outlook is stable.  The strong cement-pricing environment
may not remain as robust, as residential construction is slowing
and economic activity could slow down with rising interest
rates.  Nevertheless, VCNA will benefit from the reorganization
and refinancing, and Standard & Poor's expects the company will
improve its credit metrics.  Large debt-financed acquisitions or
significant deterioration in operating margins and cash
generation would result in the ratings being reevaluated.


ULTRAPAR: Posts BRL145 Mil. Net Profits in First Half of 2006
-------------------------------------------------------------
Ultrapar Participacoes S.A. said in a statement that its net
profits decreased 24% to BRL145 million in the first half of
2006, compared with the BRL190 million recorded in the same
period in 2005.

Ultrapar posted these results in the first six months of 2006:

      -- net revenue dropped 2% to BRL2.30 billion in the first
         half of 2006 from BRL2.34 billion in the same period
         last year;

      -- sales costs grew BRL1.86 billion from the BRL1.83
         billion recorded in the same period in 2005;

      -- Ebitda decreased 27% to BRL243 million from the BRL333
         million in the same period in 2005;

      -- net revenues of the Ultrapar's GLP distribution unit,
         Ultragaz, increased 5% to BRL1.48 billion in the first
         six months of the year, compared with the BRL1.41
         billion recorded in the same period of 2005;

      -- Oxiteno, the group's specialty petrochemicals group,
         reported net revenues of BRL728 million in the first
         six months of 2006, decreasing 15% from BRL847 million
         in the same period a year earlier; and

      -- Ultrapar's third operational and cargo and logistics
         wing, Ultracargo, reported a net revenue of BRL117
         million reais in the first six months of 2006,
         increasing 4% from the same period a year earlier.

Business News Americas relates that a decline in Oxiteno's sales
and stable prices of products caused the decrease in net
revenues, and higher raw material costs reduced gross profits.

Ultragaz told BNamericas that higher revenues were due to
increased sales resulting from improvements in distribution
systems and greater demand.

Ultrapar invested BRL135 million in the first half of 2006,
buying new LPG canisters, constructing a fatty acids plant and
expanding ethylene oxide and petrochemicals specialties in Maua,
Sao Paulo, BNamericas states.

                        *    *    *

As reported in the Troubled Company Reporter-Latin America on
March 9, 2006, Standard & Poor's Ratings Services assigned a
'BB+' corporate credit rating to Ultrapar Participacoes S.A.
The outlook is Stable.


VARIG SA: Files Restated In-Court Reorganization Plan
-----------------------------------------------------
Eduardo Zerwes, the Foreign Representative of VARIG, S.A., and
its debtor-affiliates, delivered a restated In-Court
Reorganization Plan for the Debtors and a certified English
translation of the Plan with the U.S. Bankruptcy Court for the
Southern District of New York on July 27, 2006.

The Foreign Debtors filed the Plan with the Eighth Commercial
Bankruptcy and Reorganization Court in Rio de Janeiro, Brazil,
on July 17, 2006.  The Plan won creditor approval at a general
assembly that same day.

                  Summary of Restated Plan

The In-Court Reorganization Plan, as restated, provides for the
judicial disposal of VARIG's production unit to Volo do Brasil,
the new owner of the airline.

As previously reported, Volo acquired VARIG's production unit at
a July 20 auction.  Volo also purchased VARIG's cargo unit,
VARIG Logistica S.A., early this year.

The VARIG Production Unit comprises all of VARIG's and Rio Sul
Linhas Aereas S.A.'s regular air-carriage operations, including
commercial operations, and the Smiles Program.  The Unit
excludes Nordeste Linhas Aereas S.A.'s regular air-carriage
operations, all real properties and the VARIG Flight Training
Center.

The Reorganization Plan also proposes:

   -- the utilization of proceeds from, among others, judicial
      disposal and non-operating assets to equalize the Foreign
      Debtors' liabilities; and

   -- that the Foreign Debtors stay operational with a market-
      niche profile.

                       Means of Payment

The Plan contemplates paying the Foreign Debtors' liabilities
from funds derived from Volo's offer, the Foreign Debtors' fixed
assets, their contingency assets, and revenue from operations.

For the Production Unit, Volo offered:

   1) US$20,000,000 in cash;

   2) Debenture for Class I Creditors:

         -- face value of BRL50,000,000 maturing in 10 years;

         -- fixed interest of BRL4,200,000 per annum;

         -- convertible into 5% of the total voting capital of
            the corporation that absorbs the Unit; and

         -- Volo may opt to replace the issuance of debenture by
            payment of BRL41,481,000 in cash;

   3) Debenture for Class II Creditors and bankruptcy creditors:

         -- holders of credits arising during in-court
            reorganization:

         -- face value of BRL50,000,000 maturing in 10 years;

         -- interest of BRL4,200,000 per annum;

         -- convertible to 5% in the total voting capital of the
            corporation that absorbs the Unit;

         -- Volo may opt to replace the issuance of debenture by
            payment of BRL41,481,000 in cash; and

         -- may be replaced with a BRL41,481,000 cash;

   4) charter of selected aircraft on an Aircraft, Crew,
      Maintenance and Insurance basis, assuring a BRL5,000,000
      minimum remuneration per annum for at least three years;

   5) a BRL1,000,000 per annum contract for the use of the Varig
      Flight Training Center for 10 years;

   6) US$75,000,000 advance deposit;

   7) assumption of all obligations relating to the SMILES
      program estimated at around BRL70,000,000;

   8) lease of real properties at 0.8% of the properties' market
      value; and

   9) assumption of the carriage obligations to be performed,
      estimated at around BRL245,000,000.

The Foreign Debtors' fixed assets are appraised at
BRL120,000,000.

The Foreign Debtors will also look into funds -- Contingency
Assets -- from settlement of these proceedings:

   1) A court proceeding where the Foreign Debtors seek
      compensation amounts due to lagging tariffs;

   2) Court or out-of-court proceedings where the Debtors seek
      Value-Added Sales and Service Tax refunds -- ICMS; and

   3) Other court proceedings in which the Debtors seek
      compensation amounts, offsets or any relevant credits or
      rights.

                   Recovery Under the Plan

The Foreign Debtors group claims in three classes:

        Class     Creditors
        -----     ---------
           I      Employee and Former Employees

          II      Creditors with Real Guarantee

                  * Holders of credits arising during
                    in-court reorganization and other
                    secured creditors

                  * Instituto Aerus De Seguridade Social

                  * Brazilian American Merchant Bank

         III      Lessors and Other Creditors

The Plan provides for this treatment of claims:

A. Class I

   Class I creditors will receive the Class I Debentures with
   par value totaling BRL92,000,000.  The Debentures will be
   deposited with the Reorganization Court.  The creditors may
   also receive payments if certain of the Foreign Debtors'
   assets are realized.

B. Class II General

   Creditors will receive the Class II Debentures with par value
   totaling BRL92,000,000.  Payments are conditioned on the
   realization of certain of the Foreign Debtors' assets.  These
   creditors have secured priority over proceeds from disposal
   of asset encumbered in their favor.

C. Class II Aerus

   Aerus is a closed supplemental pension fund created in 1982
   to institute and administer private plans for the granting of
   pensions and income to employees of the sponsoring companies,
   including VARIG.

   Aerus will receive shares issued by:

   -- VarigLog, subject to a lien in Aerus' favor, for
      BRL24,000,000; and

   -- VEM Manutencao e Engenharia S.A., for the pro-rated amount
      equivalent to the purchase price per share.

   Aerus will also participate in the Class II Debentures.
   Payments are conditioned on the realization of certain of the
   Debtors' assets.

   Aerus will have priority to receive proceeds from realized
   credits on Lagging Tariffs up to the lien amount.

D. Class II BAMB

   BAMB will receive gift in payment of free and clear real
   properties already carried out and Class II Debentures.  BAMB
   may also receive payments upon the realization of certain
   of the Debtors' assets.  The Bank will have priority to
   receive proceeds from realized ICMS credits up to the value
   of the real properties given in payment but not yet
   delivered, which is approximately BRL17,000,000.

E. Class III

   Distribution from Class III will come from 70% of the
   Debtors' net operating flow for 20 years.

                       New Corporation

Pursuant to the In-Court Reorganization Plan, the Foreign
Debtors will incorporate a special purpose entity, which will
remain jointly liable for their tax obligations and operate
their facilities.

The Foreign Debtors will transfer these assets to the SPE:

   -- rights to the Contingency Assets; and

   -- the Debtors' fixed assets.

Furthermore, the Foreign Debtors will issue profit-sharing
debentures in favor of the SPE.  The securities will give their
holders earnings equivalent to 70% of the Debtors' net operating
flow.

During the In-Court Reorganization period, the Foreign Debtors
will be managed by a Judicial Manager elected by the creditors.
In addition, the creditors may, at any time, exercise the right
to separately elect a majority of the Debtors' Board of
Directors' members, until the time as the full settlement of the
SPE Debentures has been verified.  Creditors will also have the
right to veto:

   -- any capital increases, issuance of debentures, founder's
      shares or subscription bonuses by the Debtors;

   -- the approval of any legal acts which give rise to an
      encumbrance or obligations for the Debtors in an amount
      higher than that established in the deed of SPE
      Debentures;

   -- the election of any member of the Debtors' executive
      officers' board whom they deem unsuitable for the job; and

   -- any disposal of assets in an amount higher than the amount
      stipulated in the Deed.

                        SPE Debentures

Under the Reorganization Plan, the SPE will issue debentures,
which will give their holders credit rights against the SPE,
equal to the Foreign Debtors' total current debt amount,
maturing on July 17, 2026, and repayments on June 30th and
December 31st of each year, each with a face value equal to
BRL0.01.

The SPE Debentures will be issued in 16 different series, each
for an amount equivalent to the debt of the group to which each
Series will be earmarked.

                   Conditions to Effectivity

The Reorganization Plan contemplates that a Collective Labor
Bargaining Agreement will be entered into governing the
severance of the Debtors' employees and dealing with the system
for settling the non-bankruptcy and bankruptcy credits derived
from labor and occupational accidents legislation, including
severance amounts.

The conditions precedent for the effectiveness of the
Reorganization Plan also include:

   a. The agreement between the Debtors and Volo regarding the
      solution for transferring or terminating the employees
      abroad; and

   b. The approval of the Reorganization Plan by the Debtors'
      corporate bodies;

A full-text copy of the Certified English Translation of the
Debtors' In-Court Reorganization Plan is available for free at:

   http://bankrupt.com/misc/VarigInCourtReorgPlan.pdf

VARIG's Foreign Representative also filed with the U.S.
Bankruptcy Court a Certified English Translation of the Foreign
Debtors' Projected Cash Flows until the year 2022.

A full-text copy of the Certified English Translation of the
Projected Cash Flows is available for free at:

   http://bankrupt.com/misc/VarigProjectedCashFlows.pdf

                         About VARIG

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

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

Each of the Debtors' Boards of Directors authorized Vicente
Cervo as foreign representative.  In this capacity, Mr. Cervo
filed a Sec. 304 petition on June 17, 2005 (Bankr. S.D.N.Y. Case
Nos. 05-14400 and 05-14402).  Rick B. Antonoff, Esq., at
Pillsbury Winthrop Shaw Pittman LLP represents Mr. Cervo in the
United States.  As of March 31, 2005, the Debtors reported
BRL2,979,309,000 in total assets and BRL9,474,930,000 in total
debts.  (VARIG Bankruptcy News, Issue No. 29; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


VARIG: Judge Ayoub Slams Labor Court Order Freezing Volo Deposit
----------------------------------------------------------------
Judge Luiz Roberto Ayoub of the 8th District Bankruptcy Court in
Brazil overturned a preliminary injunction imposed by a Rio de
Janeiro labor court on the US$75,000,000 advanced for the
purchase of VARIG, S.A.'s assets, The Associated Press reports.

At the request of the airline workers' unions, the 33rd section
of the Rio de Janeiro Labor Court issued an order on Tuesday
freezing Volo do Brasil's deposit to VARIG's account.

The amount was Volo's first installment toward buying VARIG's
assets and had been allocated to pay operating costs.  Pursuant
to the Preliminary Injunction Order, the Labor Court directed
VARIG to use the money to settle the airline's labor debts for
canceling work contracts.

The funds were earmarked to pay a series of operating debts in
order to stop the crumbling of Varig's operations.  The company
was only flying 10 planes out of a former fleet of 65 planes as
of Friday.  Varig is currently only flying between seven
domestic cities and limited international flights to Frankfurt,
Buenos Aires, New York and Miami.

Fortunately for Varig, Judge Ayoub ruled that the Labor Court
has no jurisdiction over the case, AP says.

                         About VARIG

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

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

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


* BRAZIL: To Issue US$500 Million in Global Bonds Due 2037
----------------------------------------------------------
The Federative Republic of Brazil, in accordance with the
schedule of its invitation to owners of the outstanding bonds
listed below to submit one or more offers to exchange Old Bonds
for 7.125% Global Bonds due 2037, discloses that it expects to
issue approximately US$500 million aggregate principal amount of
new 2037 Global Bonds pursuant to its invitation to exchange.
The definitive amount of 2037 Global Bonds to be issued is
subject to final confirmation by the exchange agent.

The 2037 Global Bonds will be a further issuance of, and will be
consolidated to form a single series with, the US$1,500,000,000
aggregate principal amount of Brazil's outstanding 7.125% Global
Bonds due 2037.  Capitalized terms used but not defined in this
notice are defined in the Prospectus Supplement dated July 27,
2006, to the Prospectus dated October 24, 2005 attached thereto,
describing the Invitation and the terms of the 2037 Global
Bonds.

The Invitation expired on August 2, 2006, at 3:00 P.M., New York
City time.

Series of Old Bonds            ISIN           Common Code

12.75% U.S.
Dollar-Denominated
Global Bonds due 2020        US105756AK66      010616123

8 - 7/8% U.S.
Dollar-Denominated
Global Bonds due 2024        US105756AR10      012631375

8 - 7/8% U.S.
Dollar-Denominated
Global Bonds due 2024,
Series B                     US105756AZ36      017244388

10 - 1/8% U.S.
Dollar-Denominated
Unsecured Global Bonds
due 2027                     US105756AE07      007687117

12 - 1/4% U.S.
Dollar-Denominated
Global Bonds due 2030        US105756AL40      010862957

The clearing spread differential for each series of the Old
Bonds accepted in exchange for 2037 Global Bonds and the
resulting Old Bond exchange price for each series of the Old
Bonds accepted in exchange for 2037 Global Bonds, and the
approximate aggregate principal amount of each series of Old
Bonds accepted in exchange for 2037 Global Bonds are as follows:


Series of   Clearing Spread   Old Bond Exchange   Approximate
Old Bonds    Differential     Price (per US$1,000  Aggregate
                              principal amount)    Principal
                                                    Amount
                                                  Accepted in
                                                  Exchange for
                                                   2037 Global
                                                     Bonds

12.75%
Bonds
Due 2020  -14 basis points     US$1,493.73        US$8,720,000

8-7/8%
Bonds
due 2024    0 basis points     US$1,171.33       US$44,334,000

8-7/8%
Bonds
due 2024,
Series B    0 basis points     US$1,171.33       US$62,893,000

10-1/8%
Bonds
due 2027    4 basis points    US$1,313.71       US$48,578,000

12-1/4%
Bonds
due 2030    0 basis points    US$1,576.85      US$335,818,000


The UST Benchmark Rate is 5.10%.  The 2037 Global Bond re-offer
spread is 205 basis points.  The 2037 Global Bond re-offer price
is US$996.84 per US$1,000 principal amount.  There was no
proration of the amount of Old Bonds accepted for exchange.

Copies of the Invitation materials may be obtained from either
of the joint dealers at:

      Citigroup
      Tel: 800-558-3745 (toll free inside the United States)
           +1 212-723-6106 (collect outside the United States)

      Deutsche Bank Securities Inc.
      Tel: 866-627-0391 (toll free inside the United States)
           +1 212-250-2955 (collect outside the United States)

                 -- or --

      Global Bondholder Services Corporation
      Information Agent
      65 Broadway, Suite 723, 7th Floor
      New York, New York 10006
      Tel: +1 (212) 430-3774
              (866) 736-2200 (U.S. toll free)

                 -- or --

      Deutsche Bank Luxembourg SA
      Luxembourg Exchange Agent
      2 Boulevard Konrad Adenauer, L-1115
      Luxembourg, Luxembourg
      Tel: +35-2-421 22460

                        *    *    *

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


CAMBIUM CAPITAL: Final Shareholders Meeting Is Moved to Aug. 24
---------------------------------------------------------------
Cambium Capital Offshore, Ltd.'s final shareholders meeting is
moved at 3:00 p.m., on Aug. 24, 2006, at:

         dms Corporate Services Ltd.
         Ansbacher House, Second Floor
         20 Genesis Close, George Town
         P.O. Box 31910 SMB
         Grand Cayman, Cayman Islands

The final meeting was previously set for June 29, 2006.

These agenda will be taken during the meeting:

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

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

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

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

The liquidator can be reached at:

         Alric Lindsay
         Ogier
         Tel: (345) 949 9876
         Fax: (345) 949 1986


CASCADIA LIMITED: Fitch Upgrades US$300-Mil Notes' Rating to BB+
----------------------------------------------------------------
Fitch Ratings upgraded the rating of Cascadia Limited's
variable-rate notes due 2008 to 'BB+' from 'BB'.  The upgrade
affects US$300 million of variable-rate notes due 2008.

The rating action reflects refinements in Fitch's catastrophe
bond rating methodology and changes in modeled loss statistics.
Fitch has updated its proprietary model stress factors to
consider actual catastrophe bond losses experienced over the
past ten years and updates in catastrophe modeling.  Fitch
continues to believe some perils are more readily modeled and
some models are more robust.  Thus, Fitch's stress factors
continue to vary by peril and location.

Additionally, Cascadia's loss statistics were originally modeled
by EQECAT Inc.  based on its USQUAKE(R) Version 5.3 model.  EQE
has subsequently released USQUAKE(R) Version 6.1.  The
combination of these changes was sufficient to warrant a change
in the notes' ratings.

Cascadia is a Cayman Islands-domiciled company formed solely to
issue variable-rate notes, enter into a counterparty contract
with Factory Mutual Insurance Company (FM Global) -- a U.S.
domiciled insurer, and to conduct activities related to the
notes' issuance.  FM Global and its subsidiaries write
commercial property insurance worldwide.  Fitch rates FM
Global's insurer financial strength 'AA'.

Under the counterparty contract, Cascadia will make specified
payments to FM Global if, during the notes' risk period,
earthquakes of various magnitudes occur in the Pacific Northwest
portion of the U.S. or in portions of British Columbia.

Fitch upgrades this rating:

  Cascadia Limited:

    -- Variable-rate notes due 2008 to 'BB+' from 'BB'


CBPF DOCTOR: Deadline for Proofs of Claim Filing Is on Aug. 25
--------------------------------------------------------------
CBPF Doctor Bird, Ltd.'s creditors are required to submit proofs
of claim by Aug. 25, 2006, to the company's liquidator:

         LP-III Jamaica, LLC
         c/o Maples and Calder, Attorneys-at-law
         P.O. Box 309GT, Ugland House
         South Church Street, George Town
         Grand Cayman, Cayman Islands

Creditors who are not able to comply with the Aug. 25 deadline
won't receive any distribution that the liquidator will make.
Creditors are required to present proofs of claim personally or
through their solicitors.

CBPF Doctor's shareholders agreed on July 12, 2006, for the
company's voluntary liquidation under Section 135 of the
Companies Law (2004 Revision) of the Cayman Islands.


CEDRO CORP: Will Hold Final Shareholders Meeting on Aug. 24
-----------------------------------------------------------
Cedro Corp.'s final shareholders meeting will be at 4:00 p.m.,
on Aug. 24, 2006, at:

         Avenida Nacoes Unidas, 7221
         Sao Paulo, Brazil 05425-902

These agenda will be taken during the meeting:

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

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

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

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

The liquidator can be reached at:

         Manoel Bizarria Guilherme Neto
         Avenida Nacoes Unidas, 7221
         Sao Paulo, Brazil 05425-902


GLENDALE INVESTMENTS: Final Shareholders Meeting Is on Aug. 24
--------------------------------------------------------------
Glendale Investments Limited's shareholders will convene for a
final meeting on Aug. 24, 2006, at:

         Smith Barney Private Trust Company (Cayman) Limited
         CIBC Financial Centre, George Town
         Grand Cayman, Cayman Islands

Accounts on the company's liquidation process will be presented
during the meeting.

The liquidator can be reached at:

         Buchanan Limited
         Attn: Timothy Haddleon
         P.O. Box 1170, George Town
         Grand Cayman, Cayman Islands
         Tel: (345) 949-0355
         Fax: (345) 949-0360


MOGNO CORP: Shareholders Gather for a Final Meeting on Aug. 24
--------------------------------------------------------------
Mogno Corp.'s final shareholders meeting will be at 4:00 p.m.,
on Aug. 245, 2006, at:

         Avenida Nacoes Unidas, 7221
         Sao Paulo, Brazil 05425-902

These agenda will be taken during the meeting:

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

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

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

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

The liquidator can be reached at:

         Manoel Bizarria Guilherme Neto
         Avenida Nacoes Unidas, 7221
         Sao Paulo, Brazil 05425-902


NIELVAL LIMITED: Last Day for Proofs of Claim Filing Is Aug. 28
---------------------------------------------------------------
Nielval Limited's creditors are required to submit proofs of
claim by Aug. 28, 2006, to the company's liquidator:

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

Creditors who are not able to comply with the Aug. 28 deadline
won't receive any distribution that the liquidator will make.
Creditors are required to present proofs of claim personally or
through their solicitors.

Nielval Limited'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.


RIGHT CO: Final Shareholders Meeting Is Scheduled for Aug. 24
-------------------------------------------------------------
Right Co. Limited's shareholders will convene for a final
meeting on Aug. 24, 2006, at:

           Deutsche Bank (Cayman) Limited
           Elizabethan Square, George Town
           Grand Cayman, Cayman Islands

Accounts on the company's liquidation process will be presented
during the meeting.

The liquidator can be reached at:

           David Dyer
           P.O. Box 1984, George Town
           Grand Cayman, Cayman Islands
           Tel: (345) 949-8244
           Fax: (345) 949-5223


SUNFISH INVESTMENTS: Last Shareholders Meeting Is on Aug. 24
------------------------------------------------------------
Sunfish Investments Limited's shareholders will convene for a
final meeting on Aug. 24, 2006, at:

         Smith Barney Private Trust Company (Cayman) Limited
         CIBC Financial Centre, George Town
         Grand Cayman, Cayman Islands

Accounts on the company's liquidation process will be presented
during the meeting.

The liquidator can be reached at:

         Buchanan Limited
         Attn: Timothy Haddleon
         P.O. Box 1170, George Town
         Grand Cayman, Cayman Islands
         Tel: (345) 949-0355
         Fax: (345) 949-0360


THEOREMA E&M: Final Shareholders Meeting Is Set for Aug. 24
-----------------------------------------------------------
Theorema E&M Fund, Ltd.'s final shareholders will be at 10:00
a.m., on Aug. 24, 2006, at:

   13 Hanover Square London
   W1S 1HW

These agenda will be taken during the meeting:

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

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

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

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

The liquidators can be reached at:

         Giovanni Govi
         Emanuele Antonaci
         Attn: Robert Gardner
         P.O. Box 265GT, George Town
         Grand Cayman, Cayman Islands
         Tel: (345) 914-4267
         Fax: (345) 814-8268


WALDEN CHINA: Last Day to File Proofs of Claim Is on Aug. 25
------------------------------------------------------------
Walden China Investment Ltd.'s creditors are required to submit
proofs of claim by Aug. 25, 2006, to the company's liquidator:

         Lip-Bu Tan
         c/o Maples and Calder, Attorneys-at-law
         P.O. Box 309GT, Ugland House
         South Church Street, George Town
         Grand Cayman, Cayman Islands

Creditors who are not able to comply with the Aug. 25 deadline
won't receive any distribution that the liquidator will make.
Creditors are required to present proofs of claim personally or
through their solicitors.

Walden China's shareholders agreed on July 5, 2006, for the
company's voluntary liquidation under Section 135 of the
Companies Law (2004 Revision) of the Cayman Islands.




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C H I L E
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GLOBAL CROSSING: Extends IP Convergence Contract With Agrosuper
---------------------------------------------------------------
Global Crossing Ltd. has extended its relationship with
Agrosuper.  Last year, the Chilean company implemented Global
Crossing Managed IP VPN Service(TM) to support the company's
continued global expansion.  As part of a multi-year agreement,
Agrosuper is using Global Crossing's Managed IP VPN Service to
enhance employee productivity, centralize business applications
and streamline operations by connecting its offices in Chile,
Mexico, the United States, Italy and Japan.  Most recently,
Agrosuper has extended the contract to incorporate
interconnectivity in Spain, which is planned for completion in
September 2006.

By deploying Global Crossing's IP VPN connection, Agrosuper is
able to integrate voice, data and videoconferencing applications
over a single, seamless connection.  The convergence of data,
voice and video onto a single IP-based platform yields
simplicity in network design and administration, as well as
connectivity, billing and customer care. Agrosuper also benefits
from "any distance," flat-rate pricing for connecting
international sites, regardless of their office location.  In
addition, Global Crossing is providing the holding company with
managed solutions, full end-to-end lifecycle support for IP VPN
to ensure 24x7 availability.  These IP VPN services are expected
to yield a 70-percent reduction in certain overhead expenses, in
addition to the significant savings in operational and capital
expenses resulting from the managed services component.  In
addition, having Global Crossing manage its converged IP network
enables Agrosuper to focus on managing its core business.

"As we continue to expand globally, it is essential that we rely
on a partner like Global Crossing that delivers service in
telecommunications on a global scale with top-notch local
support," said Rodrigo Echeverria, Agrosuper's chief information
officer.  "Having our offices around the world linked
seamlessly, securely and cost effectively enables us to focus on
continuing to be the leading Chilean company in the agribusiness
sector."

This agreement with Agrosuper is one example of the explosive
growth of IP VPN demand.  Global Crossing is seeing such growth
both in the region and around the world.  In the first quarter
of 2006, the number of Global Crossing's IP VPN customers grew
by 160 percent in Latin America, compared with the first quarter
of 2005.  Global Crossing's IP VPN traffic increased by 280
percent in the same period, demonstrating the company's
continued execution of its plan to provide converged IP services
to global enterprises.

"We are pleased that our IP solutions can bring leading
companies like Agrosuper closer to their customers," said Jose
Antonio Rios, international president of Global Crossing.  "We
are confident that Agrosuper's strategy of relying on world-
class technology to drive their business will set the trend for
other Chilean and Latin American companies seeking to expand
globally."

Designed to run over the company's extensive global fiber-optic
network, Global Crossing IP VPN Service(TM) links global
businesses and delivers content-rich multimedia services through
a single connection. Global Crossing's IP VPN offering supports
multiple classes of service. In addition to secure data
transport, the IP VPN service provides access to VoIP, IP Video
and other IP services, offering a complete platform for managing
the transition to IP convergence.

"Global Crossing provides the scalability, reliability and
security that leading Latin American companies like Agrosuper
need to continue expansion beyond their domestic markets," said
Jose Luis Kruyff, vice president of South Florida and Latin
America enterprise sales.  "Our network was built to support the
ever-increasing demand for converged IP services, helping
companies migrate to IP based technologies at their own pace."

Global Crossing has recently enhanced its IP VPN service, making
it one of the most powerful and versatile managed IP VPN
solutions available today.  Upgrades included the preservation
of routing protocols, IPv6 support, a multicast feature, managed
VoIP services and dynamic routing for remote VPN.  Companies
with offices in different continents can readily employ a proven
global network application, using technology as a driver for
cost reduction, improved efficiency, unprecedented network
security and simplified network design.

                       About Agrosuper

The companies that belong to the Agrosuper holding have become
the largest meat and fresh products producer in Chile.  Their
total sales amount to more than US$700 million, and their
employees exceed 9,000 people.  The company delivers to over 20
countries such as the United States, Japan, Hong Kong, Taiwan,
Great Britain, France, Spain, Austria, Mexico, Brazil,
Venezuela, Argentina, Ecuador and Colombia.

Headquartered in Florham Park, New Jersey, Global Crossing
Ltd. -- http://www.globalcrossing.com/-- provides
telecommunication services over the world's first integrated
global IP-based network, which reaches 27 countries and more
than 200 major cities around the globe including Bermuda,
Argentina, Brazil, Chile, Mexico, Panama, Peru and Venezuela.
Global Crossing serves many of the world's largest corporations,
providing a full range of managed data and voice products and
services.  The company filed for chapter 11 protection on
Jan. 28, 2002 (Bankr. S.D.N.Y. Case No. 02-40188).  When the
Debtors filed for protection from their creditors, they listed
US$25,511,000,000 in total assets and US$15,467,000,000 in total
debts.  Global Crossing emerged from chapter 11 on Dec. 9, 2003.

As of Dec. 31, 2005, Global Crossing's balance sheet reflected a
US$173 million equity deficit compared to US$51 million of
positive equity at Dec. 31, 2004.


GLOBAL CROSSING: To Provide IP Services to Transit Telecom
----------------------------------------------------------
Global Crossing disclosed a one-year contract to provide
Brazilian carrier Transit Telecom with IP transit and colocation
services.  By selecting Global Crossing's IP services, Transit
Telecom, which offers services to the residential and corporate
markets, will be able to expand its current telecom
infrastructure to meet the company's accelerated growth,
especially with the increase of its network in Brazil.  Transit
Telecom will also enhance the services provided to its broadband
IP and Voice over IP customers.

"This contract with Global Crossing supports our goal of
providing the most advanced and reliable technologies to our
customers," said Alexandre Alves, Transit Telecom's vice
president of technology. "Global Crossing's IP-based MPLS fiber-
optic network provides high performance, security and simple
network management for our services offer."

Under the terms of the agreement, Global Crossing has
implemented IP Transit and colocation services in Sao Paulo and
in the Global Crossing colocation facility at the Network Access
Point of the Americas, where it is an anchor carrier tenant.
Located in Miami, the NAP of the Americas is one of the world's
five largest network access points and represents an Internet
gateway for Latin America.

Global Crossing will support Transit Telecom's international
expansion by providing them with colocation space at the NAP of
the Americas, facilitating the termination of traffic both in
the United States and worldwide.  Transit Telecom also will
benefit from the expansion of its interconnections.

Global Crossing Colocation Service offers customers access to
highly secure and reliable space, power and technical resources,
providing a cost-efficient way for customers to expand their
network infrastructure in key metropolitan centers without
having to establish traditional real estate arrangements of
their own.

Additionally, by using Global Crossing's IP transit service,
Transit Telecom will take advantage of Global Crossing's single
Autonomous System number, which guarantees the same Service
Level Agreement and quality of service in both Brazil and the
United States.  As a result, Transit Telecom will be able to
more easily configure its backbone, while reducing latency and
enhancing security.

"This agreement reinforces Global Crossing's strong presence in
the Latin American market, as we continue to provide the most
advanced IP solutions with high performance, reliability and
security," said Dale Miller, Global Crossing's managing director
for Latin America.  "By partnering with Global Crossing, Transit
Telecom can count on a premier global provider as they
continuously grow their infrastructure."

Transit Telecom's experience with rapidly growing customer
demand mirrors the explosive growth for converged IP services
that Global Crossing is seeing around the globe, particularly in
Latin America.  In 2005, the number of Global Crossing's
converged IP customers tripled, while IP VPN traffic grew more
than 300%.  The number of Global Crossing's IP customers in
Latin America grew by 80% in 2005.

Global Crossing IP Transit Service leverages Global Crossing's
worldwide network and extensive private peering relationships to
provide high-performance, always-on, direct high-speed
connectivity to the Internet at speeds ranging from T1/E1 to
OC48/STM16.  Connection to Global Crossing's IP network is
available though a variety of access options, including TCP/IP,
Dedicated Internet Access, IP VPN, Frame Relay, Asynchronous
Transfer Mode, metro rings and Ethernet.  Other access options
may be obtained based on location and availability.

Global Crossing has significant presence in Latin America and
the Caribbean with offices and operational facilities in 12 of
the region's major cities.  Through its sub-sea and terrestrial
cable systems, Global Crossing seamlessly connects South
America, Mexico, Central America and the Caribbean to the rest
of its global network, delivering services to customers around
the world.  With its regional network officially completed in
2001, Global Crossing now serves virtually all of Latin
America's major carriers, as well as many prestigious Latin
American companies, research and educational networks, and
global companies operating in the region.  Those customers
include Latin America's largest construction and engineering
firm Odebrecht, Mexicana Airlines and Banco Santander
International.

                     About Transit Telecom

Transit Telecom was created when the telecom sector was
privatized in Brazil.  As a company with an innovative profile,
Transit Telecom stands out in the market for its strong
investment in technology and services highly focused on its
customers.  The company's products include Via VoIP, based in
voice over IP technology, and Transit Line, a dedicated voice
link.

Headquartered in Florham Park, New Jersey, Global Crossing
Ltd. -- http://www.globalcrossing.com/-- provides
telecommunication services over the world's first integrated
global IP-based network, which reaches 27 countries and more
than 200 major cities around the globe including Bermuda,
Argentina, Brazil, Chile, Mexico, Panama, Peru and Venezuela.
Global Crossing serves many of the world's largest corporations,
providing a full range of managed data and voice products and
services.  The company filed for chapter 11 protection on
Jan. 28, 2002 (Bankr. S.D.N.Y. Case No. 02-40188).  When the
Debtors filed for protection from their creditors, they listed
US$25,511,000,000 in total assets and US$15,467,000,000 in total
debts.  Global Crossing emerged from chapter 11 on Dec. 9, 2003.

As of Dec. 31, 2005, Global Crossing's balance sheet reflected a
US$173 million equity deficit compared to US$51 million of
positive equity at Dec. 31, 2004.


SHAW GROUP: Unit Secures EPC Scrubber Contract from Mirant
----------------------------------------------------------
The Shaw Group Inc. disclosed that its Shaw Stone & Webster unit
has been awarded an engineering, procurement and construction or
EPC contract by Mirant Corp., to retrofit emissions controls at
its three power generation facilities in Maryland.

The flue gas desulphurization units or "scrubbers," which are
expected to reduce sulphur dioxide emissions by approximately
95% will be installed at the Chalk Point, Dickerson, and
Morgantown Generating Stations. Additionally, Shaw will install
a selective catalytic reduction (SCR) system that is expected to
reduce the nitrogen oxide emissions by approximately 92% at the
Chalk Point Generating Station. The newly installed equipment is
expected reduce the ionic mercury emissions by approximately
90%.  The value of the EPC contract is approximately US$900
million.

J.M. Bernhard, Jr., Chairman and Chief Executive Officer of
Shaw, said, "We are very excited to have been selected by Mirant
to assist them in these very important plant improvements that
will improve air quality while maintaining system reliability
and economical power generation to its customers.  This new
award and previously announced awards, are the result of our
continued focus on providing comprehensive air emissions
solutions for our clients.  Shaw continues to build its
leadership position in the emissions controls market with over
US$2.0 billion in projects currently in progress."

                     About Mirant Corp.

Headquartered in Atlanta, Georgia, Mirant Corporation (NYSE:
MIR) -- http://www.mirant.com/-- is an energy company that
produces and sells electricity in North America, the Caribbean,
and the Philippines.  Mirant owns or leases more than 18,000
megawatts of electric generating capacity globally.  Mirant
Corporation filed for chapter 11 protection on July 14, 2003
(Bankr. N.D. Tex. 03-46590), and emerged under the terms of a
confirmed Second Amended Plan on Jan. 3, 2006.  Thomas E.
Lauria, Esq., at White & Case LLP, represented the Debtors in
their successful restructuring.  When the Debtors filed for
protection from their creditors, they listed US$20,574,000,000
in assets and US$11,401,000,000 in debts.

                      About Shaw Group

The Shaw Group Inc. -- http://www.shawgrp.com/-- is a leading
global provider of technology, engineering, procurement,
construction, maintenance, fabrication, manufacturing,
consulting, remediation, and facilities management services for
government and private sector clients in the energy, chemical,
environmental, infrastructure and emergency response markets.
Headquartered in Baton Rouge, Louisiana, with over US$3 billion
in annual revenues, Shaw employs approximately 20,000 people at
its offices and operations in Venezuela, Chile, North America,
Europe, the Middle East and the Asia-Pacific region.

On July 27, 2005, Shaw Group was assigned a BB rating by
Standard & Poor's.




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


BANCOLOMBIA: Raises 2006 Forecast on Loan Growth to 20%
-------------------------------------------------------
Jorge Londono, the chief executive officer of Bancolombia, said
in a conference call that the company has increased its loan
growth forecast for 2006 to 20%, Business News Americas reports.

Mr. Londono told BNamericas, "Right now, we are more on the 20%
than the 15% we forecast at the beginning of the year.  We are a
little bit more bullish now and believe that growth of about 20%
could be reasonable."

As reported in the Troubled Company Reporter-Latin America on
July 14, 2006, Bancolombia's unconsolidated level of past due
loans as a percentage of total loans was 2.79% as of June 30,
2006, and the level of allowance for past due loans was 127.12%.
The company's accumulated unconsolidated net income was
COP290.933 billion at June 30, 2006.  For the first six months
of 2006, total net interest income, including investment
securities amounted to COP453.303 billion.  Total net fees and
income from services amounted to COP277.434 million.
Bancolombia's total assets amounted to COP25.33 trillion in June
2006, total deposits totaled COP15.72 trillion and total
shareholders' equity amounted to COP3.00 trillion.

Mr. Londono told BNamericas, "Corporate demand for credit has
been picking up.  Over the last quarters, we experienced a very
low demand from the corporate area, except for leasing
operations, but now we are very clearly seeing an increase in
demand from the corporate sector thanks to a stronger economy
and good growth prospects."

According to BNamericas, Mr. Londono said that the trend is
likely to continue for the rest of the year.

Mario Pierry, an analyst at Deutsche Bank, said in a report, "We
believe that 2Q06 represented the bottom in earnings and are
encouraged by the solid operating trends posted in 2Q06.  Main
risks include earnings volatility from movements in the local
bond market and better-than-expected merger synergies."

                        *    *    *

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

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

                        *    *    *

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

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


* COLOMBIA: Ministry Posts 27.9 Million Mobile Users in June
------------------------------------------------------------
Mincomunicaciones, the communications ministry in Colombia, said
in a statement that mobile users at the end of June reached 27.9
million.

Business News Americas reports that Superservicios, the public
services ministry, had questioned the figure earlier.  After
conducting a survey in 25 departments, Superservicios claimed
that the number of users was actually 18.8 million.
Superservicios believes that initial figures the operators sent
to Mincomunicaciones included deactivated lines.

However, Mincomunicaciones rejected the claim, saying that its
figure breaks down into 23.3 million users with a prepaid line
and 4.68 million postpaid clients, BNamericas relates.  There
were 4.36 million new lines sold with 1.42 million users
abandoning mobile telephony in the second quarter of 2006.

BNamericas underscores that Superservicios' survey was related
mainly to the level of satisfaction among clients.  There were
1.1 fixed lines and two mobile lines per household in Colombia.

"[This survey] included for the first time an indicator about
mobile telephony users and Mincomunicaciones will analyze the
figures, but they cannot be considered the official figures for
mobile users in the country," Maria del Rosario Guerra, the
communications minister, told BNamericas.

                        *    *    *

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


* COSTA RICA: State Firm to Bill Verizon for 113 Service Losses
---------------------------------------------------------------
Instituto Costarricense de Electricidad aka ICE, the state
telecommunications firm of Costa Rica, will send bill to US
company Verizon for losses incurred to the 113 directory
information service, Inside Costa Rica reports.

Inside Costa Rica quoted ICE saying that Verizon would be
responsible for the compensation.

No figures were given regarding the losses ICE incurred.
However, Claudio Bermudez, an ICE manager, told Inside Costa
Rica that during the last six months, the 113 service has been
receiving 3.9 millions calls monthly and that in April 2006, ICE
installed a US$17-million platform for its directory information
service as the old system had become antiquated.

Inside Costa Rica underscores that ICE got into a disagreement
with Verizon, which had been publishing telephone directory for
a number of years, over the publication of the regional
directory.  ICE insisted on one directory containing all
provinces.  However, Verizon, saying it had obtained the
approval of ICE officials, decided to publish one directory for
San Jose and one for the provinces.  All officials at ICE denied
giving Verizon approval.

The report emphasizes that ICE cancelled its contract with
Verizon and Costa Rica was left with no telephone directory.
ICE then was forced to offer the 113 service free of charge,
under the order of the Autoridad Reguladora de los Servicios
Publicos or Aresep -- the regulator of public prices and
services.  The free service was launched on Aug. 5, 2005.

ICE will start charging for the 113 service on Sept. 1, 2006,
after the Aresep order expires on Aug. 21, 2006, Inside Costa
Rica relates.

                        *    *    *

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, and
      -- Local Currency LT Debt   Ba1.

Fitch assigned these ratings to Costa Rica:

      -- Foreign currency long-term debt, BB,
      -- Local currency long-term debt, BB, and
      -- 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, and
      -- Local Currency ST Debt   B.




=======
C U B A
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* CUBA: US Firms Eye Nation for Investments While President Ails
----------------------------------------------------------------
Leisure-related firms in the United States have shown interest
in investing in Cuba after the nation's ailing President Fidel
Castro handed over power to Raul Castro, his brother, to have a
surgery, Reuters reports.

According to Reuters, Cuba was once an attractive US tourist
destination.

However, major firms are not ready to disclose any investment
plans as Cuba's political future is yet uncertain and there is
no sign the US trade ban would end soon, Reuters relates.  Cuba
also has rundown infrastructure.

Teo Babun -- a Miami-based Cuban business consultant on Cuba and
the Caribbean -- told Reuters that Cuba is not an easy market,
even for firms with extensive experience in Latin America.  He
said that the right business model would need to be found, and a
knowledge base about opportunities would need to be built.

Stephen Holmes, the chief executive of Wyndham Worldwide Corp.,
told Reuters this week, "The Cuban market has been a great
market for many of the Spanish hotel companies.  When the
barriers fall down and there is trade between the US and Cuba,
(it) will be an attractive market for us to enter into."

"It (Cuba) would be a great market.  We'd certainly look at it,"
Pauline Yoshihashi, a spokesperson of Pinnacle Entertainment
Inc., told Reuters, adding that Pinnacle would be interested in
a Cuban resort for its location, including its proximity to
South America.  However, she said that there are so many
unknowns there.

Jenny Dervin, the spokesperson of JetBlue Airways Corp., told
Reuters that the company would be interested in providing
service from South Florida to New York if US-based carriers were
allowed to serve Cuba.

"We have an ongoing interest in attractive travel destinations
around the globe, which certainly would include Cuba," John
Wolf, the spokesperson of Marriott International Inc., told
Reuters.

Michael Sheehan, a spokesperson of Royal Caribbean Cruises Ltd.,
told Reuters, "Would our company or the cruise industry be
interested in stopping in Cuba?  In general, the answer to the
question would be, 'Yes.'  However, it is not as simple as just
that.  The issue is getting beyond the embargo and having an
infrastructure in place that could deal with ships and the
guests on them."

Reuters underscores that Cuba's tourism has grown into the
nation's biggest foreign exchange earner, partly due to Spanish,
Italian and Canadian hotel operators.   However, the Canadian
Association of Tour Operators told the Cuban authorities in
January that the Cuban airline industry has become uncompetitive
with other Caribbean destinations.

Cuba could launch new revenue streams for airlines, hoteliers
and cruise lines with its proximity to the US, but the Helms-
Burton law passed in 1996 ensures that the US sanctions enforced
against Cuba would remain as long as the Castros are still in
power, Reuters states.

                        *    *    *

Moody's assigned these ratings to Cuba:

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




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


AES CORP: Local Unit Proposes Resolution on Electricity Crisis
--------------------------------------------------------------
AES Dominicana, a unit of AES Corp. in the Dominican Republic,
disclosed a proposal to resolve the crisis in the country's
electricity problems, Dominican Today reports.

As reported in the Troubled Company Reporter-Latin America on
July 27, 2006, the Dominican Republic was experiencing power
outages of up to 12 hours long, in the areas of the National
District, Santo Domingo Province, El Cibao, and the southern
region.  There had been problems in the Cibao transmission lines
and Santo Domingo Province.  Some cities were also experiencing
an overload in the urban transmission system.  The deficit was
approximately 600 megawatts, the Superintendence of Electricity
said.

AES Dominicana said that it is aware of the need to help to
resolve the structural problems caused by the recurrent crisis
in the electrical sector.

AES Dominicana proposed to resolve the crisis in the electrical
sector via the document "Sustainable development of the
Dominican electrical sector, 2006."

The company published in March 2004 the "Sustainable development
of the Dominican electrical sector," which covers the most
important subjects and encouraged integration and dialogue among
the agents in the industry as a key element to achieve the
definitive recuperation of the system.  Since then, progress has
been made in these aspects:

    -- improvement the "Pass Through" formula of the tariff,

    -- elimination of losses due to the exchange rate,

    -- consciousness-raising campaigns on energy savings and
       electrical fraud,

    -- better focusing of subsidy,

    -- reduction of the intra-sectorial debt, and

    -- proposal for redesign of the PRA.

Specific objectives for a plan to normalize electrical service:

    -- guarantee the providing of electrical service to all
       users of the system, including self-generators and
       isolated systems;

    -- adjust the technical and economic parameters proper to
       the electrical distribution service in the area, so that
       they achieve values close to those that are standard for
       services of similar characteristics;

    -- design and implement methods for measuring and control of
       service, within the scope of the Regulatory Agency, that
       will permit evaluation of the distributors' performance;
       and

    -- ensure that the economic resources contributed by the
       users and the Government, in payment for service
       received, are used in a manner that does not deviate from
       the objectives of the companies and the development of
       the sector.

In order to improve the condition of the national electrical
industry, AES Dominicana pointed out the need to identify and
implement an integral program.  To do this, it is necessary to
adopt a global focus of all the variables, due to the
interrelationships among the many problems that the sector is
facing.

The tactics adopted to confront the electricity sector's
difficulties have been short-term responses to emergencies
presented in day-to-day management by the different agents,
which has no result in the definitive solution of the industry's
real problems.

In the Sustainable development of the Dominican electrical
sector, 2006", AES Dominicana identified the primary causes of
the chronic situation, and proposed solutions intended to
achieve long-term sector sustainability.  The company said it is
also necessary to adopt short- and long-term measures that will
be applied simultaneously and immediately.

Joint application of the measures proposed will generate gradual
improvement in the sector's situation, whose expected effects
are:

    -- Levels of non-technical losses will be reduced
       significantly, and collection indices will increase to
       normal levels through:

       * institutional support,
       * appropriate penalties for non payment, theft and fraud,
       * design of tariff structure and efficient prices
         signals,
       * mitigation of generation cost,
       * investment plan to adjust and normalize transmission
         and distribution grids,
       * improvements in commercial management and grid
         operation, and
       * approaching the community.

    -- The cost to provide electrical service will be
       significantly reduced as a result of:

       * reduction in the cost of generation,

       * appropriate price signals, to discourage connections of
         new substations and private grids (physical by-passes)
         and to reincorporate of those existing onto the public
         grid, and

      * incentives to incorporate self-generators onto the
        public grid.

   -- The distributors' operating balance will improve until
      they reach their financial equilibrium.

Distribution companies, begin to regularize payments to the
generation companies, and to normalize the handling of the
demand due to financial problems.  Subsidies by the government
for PRA and the coverage of the deficit of the distribution
companies will be significantly reduced.  These effects will be
produced as a consequence of:

   -- reduction of non-technical losses,
   -- improvement in collection,
   -- reduction in the cost of service, and
   -- redesigning of the PRA program.

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

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

                        *    *    *

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

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

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


BANCO INTERCONTINENTAL: Central Bank Identified as Plaintiff
------------------------------------------------------------
The Penal Chamber of the Dominican Republic's Supreme Court
ruled that the country's Central Bank be admitted in court as a
plaintiff in the embezzlement case of Banco Intercontinental aka
Baninter, Dominican Today reports.

As reported in the Troubled Company Reporter-Latin America on
July 13, 2006, Mr. Malkun filed inadmissibility recourse against
the allegations of Ramon Baez -- the former head of Baninter
-- before the District Attorney's Department.  Mr. Figueroa had
filed charges against Mr. Malkun before Jose Manuel Hernandez
-- the National District prosecutor -- accusing Mr. Malkun of
violation of the Monetary and Financial Law 183-02 of the
Dominican Republic when the former Central Bank executive
transferred more than DOP40 billion from Baninter under his
safekeeping without complying with the due process.  Mr.
Figueroa's lawyers -- Marino Vinicio Castillo (Vincho), Juarez
Castillo, and Vinicio Castillo -- had said that Mr. Malkun
ordered paying all deposits in Baninter and the Baninter
Trust, in excess of the DOP500,000 limit that the law
established.  Mr. Malkun presented a document at the District
Attorney's office saying that he had not violated the Monetary
and Finance Law.  The law states that no personal action, civil
or criminal, can be presented against staff serving the Monetary
and Financial Administration for acts carried out while
performing their duties.  A complainant must first obtain a
definite and irrevocable judicial resolution declaring the
nullity of the specific administrative act in which the person
has involved.  Mr. Baez's allegation was on Mr. Malkun's being
unable to follow the legal framework when reimbursing the
deposits of Baninter.

Dominican Today relates that the Chamber rejected a challenge by
the lawyers of Jose Enrique Lois Malkun, the former governor of
the Central Bank, against the decision from the National
District Collegiate Court, whose Resolution No. 49-2006 had
rejected the request to declare nonexistent the legal empowering
of that court of the accusation against Mr. Figueroa.

According to Dominican Today, the Supreme Court rejected Mr.
Figueroa's request of declaring article 425 of the Penal
Procedural Code unconstitutional, and dismissed the motion
against the Collegiate Court's Resolution no. 49-2006, dated
May 9, 2006.

Justices Hugo Alvarez Valencia, Julio Ibarra Rios, Edgar
Hernandez Mejia, Dulce Rodriguez de Goris, and Víctor Jose
Castellano signed the ruling, Dominican Today states.

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


FALCONBRIDGE LTD: Bid Changes Prompts S&P's Positive Watch
----------------------------------------------------------
Standard & Poor's Ratings Services revised the CreditWatch
implications on Inco Ltd. and Falconbridge Ltd. to positive from
developing, where they were placed July 18, 2006.  This action
stems from the lower probability under all current takeover
scenarios that ratings will be lowered into the speculative-
grade category.

The ratings on Falconbridge will likely be raised or affirmed at
'BBB-', assuming that Xstrata PLC (parent of Xstrata Queensland
Ltd. (BBB+/Watch Neg/--)) is successful in acquiring
Falconbridge on Aug. 14, 2006, which now appears highly probable
after Inco dropped its bid last week.

Falconbridge Ltd.'s CDNUS$0.9 Million Cumulative Preffered
Shares Series 1, CDNUS$119.7 Million Cumulative Preferred Shares
Series 2, and CDNUS$150 Million Preferred Shares Series H, all
carry Standar & Poor's BB rating.

"The most important factor in resolving the CreditWatch will be
an assessment of Xstrata's post-acquisition financing plan,"
(details of which have yet to be disclosed) said Standard &
Poor's credit analyst Donald Marleau.  Xstrata has publicly
stated its commitment to an investment-grade rating.
"Furthermore, to determine the ultimate rating for each debt
issue, Standard & Poor's will evaluate the ownership structure
and the relative positioning of obligations within the enlarged
Xstrata group that could contribute to structural
subordination," he added.

The ratings on Inco will also probably be raised or affirmed at
'BBB-'.  With a friendly bid from Phelps Dodge Corp. (BBB/Watch
Neg/A-2) and a hostile bid from Teck Cominco Ltd. (BBB/Watch
Neg/--) outstanding, the ultimate ownership of Inco will be
determined only after Aug. 16, 2006, at the earliest.  "In both
cases, however, the corporate credit ratings will likely remain
investment-grade, notwithstanding the more aggressive capital
structures currently being contemplated," said Mr. Marleau.  The
uncomplicated ownership structure in both cases should also
shield the eventual issue-level ratings from the negative
effects of structural subordination.

Teck Cominco's increased bid of July 31, 2006, would result in a
decidedly more aggressive capital structure.  Standard & Poor's
estimates that the combined entity's total debt would be more
than US$9.5 billion, resulting in pro forma debt to last 12
months EBITDA of about 2.25x.  After accounting for US$2.8
billion of combined unfunded pensions and other postemployment
benefits and asset retirement obligations, the combined entity's
fully adjusted debt would exceed US$12 billion.  As such, total
debt to LTM EBITDA of 2.8x would be aggressive, especially
considering that metals prices are at a cyclical peak.


* DOMINICAN REPUBLIC: Fines 56 Firms for Electricity Theft
----------------------------------------------------------
Coroner Delis del Pilar Hernandez, the director of the Electric
Fraud Prevention Department, told the DR1 Newsletter that 56
companies in the Dominican Republic were fined and others
charged in July for electricity theft that caused losses to
electrical firms.

Clave Digital relates that some of the penalized companies are:

   -- La Inmobiliaria Pais SA,
   -- Servicio de Correo Express,
   -- Asociacion de Empresas Industriales de Herrera,
   -- Cabanas los Almendros,
   -- Tejas del Rey,
   -- Agencia Navieras B Y R,
   -- Vivienda Campestre Gigengo C.x.A.,
   -- Banca Deportiva la Poderosa Sport,
   -- Empresa Vidal,
   -- Club de Villar Ozama,
   -- Ciclo Discoteca,
   -- Supermercado Milagros,
   -- Hormigones Moya,
   -- Talleres Elite,
   -- Colmado Baez,
   -- Supercolmado Tejeda,
   -- Calzado Ecco,
   -- Bordados Real,
   -- Casa Chavon,
   -- Leidsa S.A. (Loto Pool),
   -- Oleica S.A.,
   -- Edificio Coplan C.x.A.,
   -- Lavanderia la Imperial,
   -- KX Dominicana,
   -- Casa Teresa (allegedly a brothel),
   -- Compania Operplast,
   -- VIP Clinic, and
   -- Discoteca Next y Plaza Embajador.

About 27 fraudulent connections were also detected in homes in
the National District and Santo Domingo, DR1 reports.

                        *    *    *

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

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

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

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

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

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

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

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

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

Fitch also affirmed these ratings:

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

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

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

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




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


* ECUADOR: Congress Holds Final Debate on Power Sector Reform
-------------------------------------------------------------
The Ecuadorean congress started the final debate on a reform in
the power sector on Wednesday, Dow Jones Newswires reports.

According to Dow Jones, the congress has four days to ratify,
alter or reject the proposal.  If the congress fails to do so,
the bill will automatically become a law upon being published in
the official newspaper.

The proposal has enough support to be ratified, Dow Jones
relates, citing Rafael Davila -- a member of the congressional
economic commission that issued a report on the bill.

Dow Jones underscores that the executive branch drafted the
legislation, which proposes that the government cover a fiscal
gap amounting to US$1.23 billion among 19 state-run distributors
through the end of the year.

The report says that the state distributors have been obliged
since 1999 to charge tariffs that do not cover their operating
costs.  The distributors have failed meet the demands from
generators, causing investments to be suspended.

Dow Jones emphasizes that the reform proposes that the
government make bond issuances in the local market and draw on a
credit line from the Andean Development Corp. of US$250 million.

The state will pay the generators using the money raised in the
issuance, according to Dow Jones.  The generators must clear
obligations -- which Mr. Davila says amounted to around US$1
billion -- to Petroecuador, which has provided the generators
with fuel.

Dow Jones reports that the congressional economic commission
suggested to the congress the state be prohibited from taking on
any distributors' debt resulting from mismanagement or
corruption.

The creation of a fund was also proposed to guarantee payment to
the generators that supply low-cost energy and to state-run
generators that replace their current management through open,
transparent selections based on technical skills and merit, 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




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


* EL SALVADOR: Will Probe Electricity Market for Monopoly
---------------------------------------------------------
Ricardo Tablas, the legal head of El Salvador's anti-trust
regulator, told El Diario, that the agency will examine the
nation's electricity market to see if there are any monopolistic
practices.

Mario Cruz, the economic officer of the regulator, told Business
News Americas that there will also be an evaluation of
distributors' production costs, and price policies and
calculations.

BNamericas underscores that Siget -- the electricity and telecom
regulator -- will participate in the study.

Studies into other high-use sectors, like fuels and
pharmaceuticals, have also been conducted, BNamericas reports,
citing Mr. Tablas.  The official assured that the investigation
is not due to knowledge that there are sector irregularities.

The study on the power sector will last 20 weeks, BNamericas
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




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


DIGICEL LTD: Using New US$150-Mil. Capital to Continue Expansion
----------------------------------------------------------------
Digicel Group has raised US$150 million in capital through a
corporate bond offering to further support its continued growth
strategy and rapid expansion efforts in key markets of Trinidad
& Tobago and Haiti.  Led by investment banks Citigroup and J.P.
Morgan Chase, the bond financing priced at a yield of 8.625% and
represents continued confidence from the investment community
following the inaugural US$300 million bond offering initiated
last July.

Since launching in Trinidad & Tobago and Haiti, Digicel has
quickly gained market share in both countries and mobile
customers have embraced the company's innovative mobile
technology and accessible telecommunications services.  In
Haiti, a country with a population of 8.5 million and combined
fixed and cellular penetration of 5.7%, Digicel has brought an
unprecedented inward investment of US$130 million to the
developing nation.

"We will continue to aggressively expand our services in
Trinidad & Tobago and Haiti, as we have seen tremendous
acceptance by our mobile customers in these markets which, in
turn, has led us to significantly increase our investment in
both of these countries.  We are delighted that, yet again, the
international investment community has demonstrated its strong
confidence in our growth strategy and current expansion
efforts," said Colm Delves, Digicel Group CEO.

In conjunction with the successful high yield initiative and as
a result of the continued confidence of the international
financing community in the company's dynamic business strategy,
Digicel has further enhanced the terms of its US$600 million
debt facility.

"The market has spoken and again we've seen unprecedented
demand, as when we led Digicel's inaugural bond in 2005," said
Blake Haider, Director, Latin & Caribbean Debt Capital Markets
at Citigroup. "Citigroup is proud to have a long-standing
relationship with this world-class management team, and the
company's substantial growth, new market penetration, and
operational and marketing expertise have all been attractive to
potential investors since its inception."

"We are pleased to continue our relationship with the Digicel
Group and we believe that the company's technology and solid
performance have had a significant impact on customers
throughout the Caribbean," said James Seagrave of JP Morgan.
"We look forward to seeing Digicel further its global expansion
efforts in key markets."

Digicel has encountered a significant period of strategic growth
and acquisitions since its 2001 inception in Jamaica.  With a
unique combination of bold deal making, intense customer focus,
attention to detail and speed to market, the company has quickly
become the largest GSM provider in the region with operations in
20 Caribbean markets.

Almost one year ago, Digicel announced the acquisition of the
Cingular Wireless assets in the Caribbean and Bermuda, which
quickly accelerated the expansion of its operations to several
new markets.

In April 2006, Digicel closed its US$192 million acquisition of
Bouygues Telecom Caraibe, which extended Digicel's operations to
Martinique, Guadeloupe and French Guiana.  That same month, the
company launched its Trinidad & Tobago operations followed by
Haiti in early May.

Earlier this month, the company launched services in Turks &
Caicos and Bonaire, increasing mobile competition in both of
these markets. Digicel's total investment in the Caribbean
stands at US$1.2 billion and the company directly employs 2,000
people, having doubled its employee base in the space of just
one year.

"These materials are not an offer for sale of the [Securities]
in the United States.  The [Securities] have not been registered
under the U.S. Securities Act of 1933, as amended and may not be
sold in the United States absent registration or an exemption
from registration under the Securities Act."

                   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.




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


DIGICEL: Plans Listing in New York Stock Exchange, Rumors Say
-------------------------------------------------------------
Digicel Limited is reportedly planning to list in the New York
Stock Exchange, the Jamaica Observer reports.

Digicel has raised US$150 million in capital through a corporate
bond offering to further support its continued growth strategy
and rapid expansion efforts in key markets of Trinidad & Tobago
and Haiti.  Led by investment banks Citigroup and J.P. Morgan
Chase, the bond financing priced at a yield of 8.625% and
represents continued confidence from the investment community
following the inaugural US$300 million bond offering initiated
last July.

The Observer relates that some believe that the bond -- which
had a coupon of 9.25%, paid semi-annually, and matures in 2012
-- would lead to Digicel's becoming a publicly listed firm.

Gary Peart, the president of Mayberry Investments Limited, told
The Observer, "Digicel has always intended to list on the New
York Stock Exchange.  What they didn't want to do was list
before they achieved critical mass in at least four markets.
They didn't just want to be in Jamaica."

Digicel's financial statements for the year ending March 31,
2006, show that the company has achieved market share at or
above 50% in five of its 20 markets, including a 74% market
share in Jamaica, its largest market.

Digicel said in its financial statement that its share of all
mobile telephone traffic is above 50% in some markets with a
high proportion of high margin on net traffic or calls between
subscribers.  Despite recording a US$26.1 million net loss in
2006 -- 81% higher compared to a loss of US$4.7 million in the
corresponding period of 2005 -- Digicel's revenues increased 31%
to US$623.3 million in March 2006, compared with the same month
in 2005, which recorded US$477.5 million.  Digicel acquired
US$27 per month from their 2.6 million Caribbean clients.

"Now it makes sense for Digicel to become a listed company
because the reality is that they are making good money," Mr.
Peart told The Observer.

The Observer states that Mr. Peart, however, said, "Based on how
the business is set up, Digicel needs a lot of capital.  They
burn through cash fast, especially during the launch in a new
market like Haiti."

According to The Observer, Digicel's financial statements say,
"In April 2006, we launched services in Trinidad & Tobago and in
May 2006, we launched services in Haiti.  Early subscriber
numbers have been strong. In Trinidad & Tobago, we have
approximately 300,000 subscribers in less than two months.
In Haiti, we achieved approximately 325,000 subscribers by
June 30, 2006."

Mr. Peart thinks that the Digicel listing will be well received
internationally.  However, he told The Observer that there must
be good timing.

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.


KAISER ALUMINUM: US Court of Appeals Affirms Dist. Court Ruling
---------------------------------------------------------------
The U.S. Court of Appeals for the Third Circuit affirms the
District Court's decision to uphold the U.S. Bankruptcy Court
for the District of Delaware's ruling that Kaiser Aluminum Corp.
and its affiliates had satisfied the reorganization test with
respect to six pension plans that they sought to terminate.

Judge Joseph Farnan of the U.S. District Court for the District
of Delaware affirms the Bankruptcy Court's February 5, 2004
order assessing and approving the distress termination of the
Debtors' plans and authorizing implementation of a replacement
plan.

The Bankruptcy Court previously applied the reorganization test
required by the Employee Retirement Income Security Act of 1974
to six plans in the aggregate and concluded that their
termination was required by Kaiser to emerge from bankruptcy
protection.

The Pension Benefit Guaranty Corp., which is responsible
under ERISA to provide benefits to participants in terminated
plans, appealed the Bankruptcy Court's decision arguing that it
should have applied the reorganization test on a plan-by-plan
basis to each of Kaiser's pension plans.

Under their suggested approach, the PBGC maintains that some of
Kaiser's plans would not fulfill the reorganization test, and
therefore could not be terminated.

The District Court upheld the Bankruptcy Court's decision and
the PBGC appealed to the Court of Appeals for the Third Circuit.

In a 41-page opinion, Judge Marjorie O. Rendell, of the Third
Circuit Court of Appeals, concludes that the Bankruptcy Court
correctly applied the reorganization test to multiple plans in
the aggregate.

According to Judge Rendell, applying the reorganization test to
multiple plans in the aggregate is straightforward.  On the
other hand, she says, the PBGC's suggested plan-by-plan approach
is "unworkable" and would result in unfair and inequitable
consequences in that it would require bankruptcy courts to give
preference to some similarly situated constituents over others.

The PBGC has leveled several arguments against the Court of
Appeal's reading of ERISA contending that legislative history,
its administrative interpretation, and public policy support its
analysis of ERISA.  Judge Rendell does not find the PBGC's
arguments persuasive.

The PBGC contends that the Single-Employer Pension Plan
Amendments Act and the Pension Protection Act of 1997, taken
together, reflect a clear congressional purpose to limit
terminations of pension plans and reduce financial burden on the
PBGC.

Judge Rendell acknowledges that legislative history demonstrates
Congress' intent to make it more difficult for employers to
terminate pension plans, but she stresses that legislative
history is not determinative of whether, or how, the
reorganization test should be applied in the multi-plan context.

"We view the absence of any guidance in the text of ERISA as
more indicative of congressional intent than anything the PBGC
has cited in the legislative record," Judge Rendell says.

In addition, Judge Rendell disagrees with the PBGC's contention
that the Court of Appeals should defer to its interpretation of
the reorganization test under Chevron USA Inc. v. Natural
Resources Defense Council, Inc., 467 U.S.837 (1984).

Although Congress has delegated to the PBGC the power to adopt
rules and regulations necessary to carry out the purposes of
Title IV of ERISA and the Supreme Court has accorded Chevron
deference to the PBGC's interpretation on other occasions, Judge
Rendell holds that deference to the PBGC in this matter is
improper because the agency has neither the expertise nor the
authority to determine when a plan should be terminated under
the reorganization test.

Judge Rendell adds that to merit deference, the PBGC's
interpretation of the statute must be supported by regulations,
rulings, or administrative practice.

The PBGC has contended repeatedly that an aggregate approach to
the reorganization test harms American workers who participate
in ERISA plans because it subjects them to plan terminations
that are economically unnecessary.

The PBGC also claims that, interpreting ERISA in a way that
triggers more plan terminations, and thereby increases the
burdens on the PBGC, could undermine the PBGC's already shaky
financial position and "pose a considerable risk to the single-
employer termination insurance program."

There is no question that this case implicates significant
policy concerns that potentially affect millions of American
workers and hundreds of businesses, Judge Rendell says.

"Nevertheless, we do not sit here as a policy-making or
legislative body," Judge Rendell avers, citing DiGiacomo, 420
F.3d at 228.

Judge Rendell rules that there are no clear answers to the
difficult policy issues involved in this case, and in any event,
their resolution is better left to Congress than the courts.

"We have taken Congress' failure to provide a shred of guidance
on how to apply a plan-by-plan approach as indicative of its
intent.  If Congress perceives our holding to be in error, the
cure is to amend ERISA," Judge Rendell states.

Headquartered in Foothill Ranch, California, Kaiser Aluminum
Corporation -- http://www.kaiseraluminum.com/-- is a leading
producer of fabricated aluminum products for aerospace and high-
strength, general engineering, automotive, and custom industrial
applications.  The Company, along with its Jamaican subsidiaries
-- Alpart Jamaica Inc. and Kaiser Jamaica Corporation -- filed
for chapter 11 protection on Feb. 12, 2002 (Bankr. Del. Case No.
02-10429), and has sold off a number of its commodity businesses
during course of its cases.  Corinne Ball, Esq., at Jones Day,
represents the Debtors in their restructuring efforts. Lazard
Freres & Co. serves as the Debtors' financial advisor.  Lisa G.
Beckerman, Esq., H. Rey Stroube, III, Esq., and Henry J. Kaim,
Esq., at Akin, Gump, Strauss, Hauer & Feld, LLP, and William P.
Bowden, Esq., at Ashby & Geddes represent the Debtors' Official
Committee of Unsecured Creditors.  The Debtors' Chapter 11 Plan
became effective on July 6, 2006.  On June 30, 2004, the Debtors
listed US$1.619 billion in assets and US$3.396 billion in debts.
(Kaiser Bankruptcy News, Issue No. 102; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


KAISER ALUMINUM: Law Debenture Removes 97 Objection Affidavits
--------------------------------------------------------------
Creditors Law Debenture Trust Company of New York and Liverpool
Limited Partnership withdraw their objection to the affidavits
submitted by 97 holders of the Liquidating Debtors' 9-7/8%
Notes.

The noteholders include:

      Holder Name                      Amount
      -----------                      ------
      Mariner LDC                  US$767,000
      TCM Spectrum Fund               815,000
      TCM Select Opportunities      1,670,000
      Morgan Stanley                1,470,000
      Locker & Co.                  1,100,000
      Credit Suisse Securities     24,870,000
      Mason Capital Ltd.            1,816,000
      Camulos Master Fund LP       19,000,000

A list of the 97 Holder Affidavits is available for free at:

                http://researcharchives.com/t/s?ee9

The objection to other Holder Affidavits remains pending and
unaffected.

As reported in the Troubled Company Reporter on June 7, 2006,
Law Debenture objected to approximately 400 Holder Affidavits
submitted.

Mr. Bodnar said, several of the Holder Affidavits are defective
because of holders' failure to:

    (1) sign the affidavit or sign on behalf of the correct
        noteholder;

    (2) sign the verification or identify the signer of the
        verification;

    (3) obtain the NYSE Medallion Stamp Signature;

    (4) indicate the dollar amount of the noteholder's holdings;

    (5) include all pages of the Holder Affidavit;

    (6) state the noteholder's net worth or the net worth stated
        was insufficient under the terms of the Holder
        Affidavit; or

    (7) provide the noteholder's address, tax identification
        number, and complete broker information.

Law Debenture supplied the Senior Indenture Trustees with a list
detailing the specific defects.  Mr. Bodnar noted that no party
disputed that the Holder Affidavits are, in fact, defective.

Headquartered in Foothill Ranch, California, Kaiser Aluminum
Corporation -- http://www.kaiseraluminum.com/-- is a leading
producer of fabricated aluminum products for aerospace and high-
strength, general engineering, automotive, and custom industrial
applications.  The Company, along with its Jamaican subsidiaries
-- Alpart Jamaica Inc. and Kaiser Jamaica Corporation -- filed
for chapter 11 protection on Feb. 12, 2002 (Bankr. Del. Case No.
02-10429), and has sold off a number of its commodity businesses
during course of its cases.  Corinne Ball, Esq., at Jones Day,
represents the Debtors in their restructuring efforts. Lazard
Freres & Co. serves as the Debtors' financial advisor.  Lisa G.
Beckerman, Esq., H. Rey Stroube, III, Esq., and Henry J. Kaim,
Esq., at Akin, Gump, Strauss, Hauer & Feld, LLP, and William P.
Bowden, Esq., at Ashby & Geddes represent the Debtors' Official
Committee of Unsecured Creditors.  The Debtors' Chapter 11 Plan
became effective on July 6, 2006.  On June 30, 2004, the Debtors
listed US$1.619 billion in assets and US$3.396 billion in debts.
(Kaiser Bankruptcy News, Issue No. 102; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


NATIONAL COMMERCIAL: Posts US$863.32MM Second Quarter Earnings
--------------------------------------------------------------
The National Commercial Bank reported that its earnings in the
second quarter of 2006 increased 80% to US$863.32 million,
compared with the amount recorded in the same quarter last year,
the Jamaica Gleaner reports.

According to The Gleaner, National Commercial did not respond to
requests for comment on its numbers.  However, the company's
performance is in sharp contrast to the majority of Jamaica's
leading listed companies.

National Commercial posted these results in the second quarter
ending June 2006:

      -- total interest income increased 12.6% to US$5.78
         billion, with the US$5.13 billion recorded in the same
         quarter of 2005;

      -- 19.1% increase in interest income from loans of
         US$297.72 million to just under US$1.86 billion;

      -- US$351.13 million or 9.8% increase in interest income
         from securities to US$3.92 billion;

      -- interest expenses increased by US$347.07 million to
         US$2.96 billion;

      -- net interest income or total interest income minus
         interest expenses rose US$301.77 million to US$2.82
         billion;

      -- non-interest income that consist of net trading income,
         net fee and commission income, other operating income
         and dividends, increased 44% to US$1.88 billion;

      -- net trading income rose 78.3% or US$379.4 million to
         US$864.02 million in June of 2006, from US$484.62
         million in June of 2005;

      -- 34.1% growth in fee and commission income to US$854.4
         million;

      -- operating income increased to US$149.39 million from
         US$114.89 million; and

      -- dividend income dropped to US$10.83 million from
         US$72.7 million.

                        *    *    *

As reported in the Troubled Company Reporter-Latin America on
Feb. 13, 2006, Fitch initiated rating coverage on Jamaica's
National Commercial Bank Jamaica, Ltd., by assigning 'B+'
ratings on the bank's long-term foreign currency.  Other ratings
assigned by Fitch include:

   -- Long-term local currency 'B+';
   -- Short-term foreign currency 'B';
   -- Short-term local currency 'B';
   -- Individual 'D';
   -- Support '4'.

Fitch said the ratings have a stable rating outlook.


NATIONAL WATER: Sees US$8MM Billing Revenue Increase Next Year
--------------------------------------------------------------
Jamaica's National Water Commission predicts a US$8 million
yearly increase in billing revenue, after works on the Martha
Brae project in Trelawny are concluded next year, the Jamaica
Observer reports.

E.G. Hunter, the National Water head, told The Observer that the
National Water saw a boost in billing of US$8 million per year
-- sustained for three years -- at the end of the improvements.
Mr. Hunter said that the contractors have reported a US$2.5
million bond, refundable if the target is achieved.

Mr. Hunter said that Westmoreland, Hanover, St James and
Trelawny will see more than 30,000 domestic and commercial water
meters being changed and new pipes installed under the Martha
Brae development project, The Observer relates.  About 20km of
new pipeline have been completed and 7,000 of the new meters
already installed at homes in the parishes.

The Observer relates that the National Water has an extensive
US$40 million audit and infrastructure development in four
western parishes.  The audit and development are aimed at
boosting water supply and reducing the level of unaccounted for
water that -- according to the National Water -- is 61% of the
total produced.

Mr. Hunter told The Observer, "The level of accounted-for water
is unacceptably high and half of it is water which is consumed
that we do not collect for."

The Observer underscores that Mr. Hunter said all commercial
properties will be provided with special meters.

"Every drop of water used there will be accounted for," Mr.
Hunter told The Observer.

The Observer states that the project has two phases:

    -- phase one involves the upgrade of the physical
       infrastructure that started in May 2005, and will be
       completed in 2007; and

    -- phase two is on the installation of the water meters and
       monitoring of the usage.

                        *    *    *

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


SUGAR COMPANY: Richard Harrison Will Head Firm for Three Months
---------------------------------------------------------------
Dr. Richard Harrison, the director-general in the ministry of
agriculture, will head the Sugar Company of Jamaica for three
months, Radio Jamaica reports, citing Roger Clarke -- the
agriculture minister of Jamaica.

Radio Jamaica relates that Livingston Morrison will be leaving
his post as the head of the Sugar Company at the end of
September.

Minister Clarke also said that Derrick Latibeaudiere -- the
chairperson of the Sugar Company -- will also be leaving the
firm, according to Radio Jamaica.

The report underscores that commitments were made during a
meeting held on Wednesday to rejuvenate factories the government
controls.

Money will be found to repair and rehabilitate fields and
factories to enable the start of the crop season in December,
Mr. Clarke told Radio Jamaica.

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: Moody's Assigns Low B Ratings on Senior Notes
-------------------------------------------------------------
Moody's assigned ratings to Berry Plastics Holding Corp., the
entity that is to be the new parent of Berry Plastics
Corporation or BPC, and took the following rating actions that
concluded the review for possible downgrade of BPC initiated on
June 29, 2006.

Moody's assigned the following ratings to Berry:

   -- US$200 million senior secured first lien revolver due
       2012: Ba2;

   -- US$675 million senior secured first lien term loan B
      due 2013: Ba2;

   -- US$750 million senior secured second lien notes due
      2014, B2;

   -- Speculative Grade Liquidity Rating: SGL-2; and

   -- Corporate Family Rating, B1

Moody's confirmed these ratings of existing BPC notes:

   -- US$335 million 10.75% senior subordinated notes,
      due July 15, 2012: B3

The ratings outlook is stable.

Moody's withdrew these ratings for BPC:

   -- US$150 million senior secured revolver maturing
      March 31, 2010: B1;

   -- US$789 million (original US$795 million) senior secured
      term loan due Dec 2, 2011: B1; and

   -- Corporate Family Rating: B1.

Upon tender of the existing US$335 million 10.75% senior
subordinated notes, due July 15, 2012, the rating will be
withdrawn.

All ratings are subject to review of final documentation.

Private equity funds affiliated with Goldman, Sachs & Co. and
J.P. Morgan Chase & Co. are selling BPC to private equity firms
Apollo Management, L.P. and Graham Partners.  The aggregate
purchase price of US$2.3 billion (including US$1.1 billion of
repurchases and repayment of existing debt) is being funded with
a cash common equity contribution of approximately US$486
million and new borrowings of about US$1.9 billion, including
US$425 million of subordinated notes that are not rated at this
time.  BPC's existing credit facilities and subordinated notes
are being repaid as part of the transaction.  Moody's expects
that the fundamental operations and management of the company
will remain unchanged.

Although the transaction results in a material increase in
financial leverage, Moody's assigned a B1 corporate family
rating to Berry, the same rating as at BPC before the proposed
change in ownership.  EBIT coverage of pro forma interest
expense, while tight in the near term, should remain at
acceptable levels throughout the intermediate term.
Historically, the company has temporarily stretched its credit
profile to the limit of the ratings category and successfully
managed back to acceptable metrics.

Moody's estimates that pro forma for the transaction, Berry's
total debt to EBITDA, adjusted for operating leases and
pensions, would be over 6.5 times, while free cash flow to debt
would be in the low single digits and EBIT interest coverage
would be just above 1.0 times. Moody's expects Berry to maintain
EBIT margins in the low double digits and EBIT to gross
property, plant, and equipment in the high teens to low
twenties.

Strengths in Berry's competitive profile include annual revenue
of US$1.4 billion and a 15-year track record of sequential
growth in operating cash flow.  Moody's views Berry's
substantial market shares in drink cups, plastic tubes, and
prescription vials, which together account for about 30% of
total revenue, and leading market positions for dairy and pry-
off containers as supplying an element of structural stability
in Berry's revenue base.

The stable ratings outlook anticipates that Berry will
meaningfully reduce financial leverage in the intermediate term
and maintain strong operating and competitive profiles that
offset the significant financial leverage and low interest
coverage that are weak for the current corporate family rating.
The stability of the outlook is highly sensitive to any
acquisitions, even if they were to be moderately sized.

Any sustained increase in adjusted total debt to EBITDA, or
annual free cash flow becoming negative, or interest coverage
falling below 1.0 times is likely to result in a lowering of the
outlook or ratings. Similarly, evidence of deterioration in
Berry's operating margin or competitive position could put
downward pressure on the outlook or ratings.  Should adjusted
total debt to EBITDA move toward the 5.0 times area and free
cash flow to debt move up on a sustained basis to the mid to
high single digit range, there could be positive movement in the
ratings outlook.

The first time assignment of an SGL-2 Speculative Grade
Liquidity rating reflects Moody's expectations of good liquidity
throughout the next twelve months as cash from operations should
fund working capital requirements and capital expenditures.
Mandatory debt maturities during the period should be minimal
and access to the committed revolver should remain satisfactory.

Berry Plastics Holdings Corp., headquartered in Evansville,
Indiana, is a leading supplier of plastic packaging products,
serving over 12,000 customers in the food and beverage,
healthcare, household chemicals, personal care, home
improvement, and other industries.  Net sales for the twelve
months ended July 1, 2006 were approximately US$1.4 billion.


BERRY PASTICS: S&P Maintains B+ Corp. Credit Rating on NegWatch
---------------------------------------------------------------
Standard & Poor's Ratings Services said that its 'B+' corporate
credit rating and other ratings on Berry Plastics Corp. remain
on CreditWatch with negative implications, where they were
placed April 4, 2006.

"We will resolve the CreditWatch listing and will likely lower
the corporate credit rating on Berry to 'B' from 'B+' upon
successful completion of the acquisition of the company by
private equity firms, Apollo Management L.P. and Graham
Partners," said Standard & Poor's credit analyst Liley Mehta.
"The downgrade will reflect the substantial increase in debt
following completion of the transaction."

The outlook will be stable.  After completion of the
transaction, the company will be very aggressively leveraged
with pro forma total debt (adjusted for capitalized operating
leases) to EBITDA at above 7x for the 12 months ended
July 1, 2006.

At the same time, Standard & Poor's assigned its 'B+' rating and
its recovery rating of '1' to Berry Plastics Holding Corp.'s
proposed US$875 million senior secured credit facilities, based
on preliminary terms and conditions.   The ratings on the credit
facilities will be one notch above the corporate credit rating
(we expect to lower Berry's corporate credit rating upon closing
of the transaction); this and the '1' recovery rating indicate
the high expectation of full recovery of principal in the event
of a payment default.

Standard & Poor's also assigned its 'CCC+' rating and a '4'
recovery rating to Berry's proposed US$750 million second-
priority senior secured notes due 2014, which are to be issued
under Rule 144A with registration rights.  The '4' recovery
rating indicates an expectation of marginal (25% to 50%)
recovery of principal in the event of a payment default. The
notes will be guaranteed by substantially all of its domestic
subsidiaries.

Standard & Poor's assigned a 'B+' corporate credit rating to
Berry Plastics Holding Corp., the parent of Berry Plastics
Corp., and placed the rating on CreditWatch with negative
implications.  Berry Plastics Holding Corp. will be the issuer
of the credit facilities, and the proposed second-priority
notes.

Proceeds from the financing will be used to finance the
acquisition and to repay Berry's existing debt.  Pro forma for
the transaction, Evansville, Ind.-based Berry had total debt
outstanding of about US$1.9 billion at July 1, 2006.

The ratings on Berry reflect its highly leveraged financial
profile that is partially offset by the company's fair business
profile with large market shares in its niche segments, a well-
diversified customer base, and strong customer relationships.
With annual sales of about US$1.4 billion, privately held Berry
is a leading manufacturer and supplier of 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.


ENESCO GROUP: Inks 12th Amendment to U.S. Credit Facility
---------------------------------------------------------
Enesco Group, Inc., signed a twelfth amendment to its current
U.S. credit facility with Bank of America, N.A. and LaSalle Bank
N.A., effective as of July 20, 2006, to increase its borrowing
availability in amounts from US$9 million to US$15 million.
With the signing of the twelfth amendment, the facility now has
a termination date of Sept. 15, 2006.

The amendment replaces most of the previous financial covenants
with covenants requiring compliance (subject to permitted
variances) with budgeted cash receipts, cash disbursements and
loan formulas.  The amendment also provides for a waiver of
existing events of default under the credit agreement as of the
date of the twelfth amendment and requires that the Company
obtain commitments for new financing.

"The twelfth amendment to our current credit facility provides
Enesco with the appropriate financing to meet the Company's
seasonal needs, as well as allows us to pursue and complete new
long-term financing," stated Marie Meisenbach Graul, Executive
Vice President and Chief Financial Officer.  "The amendment
maintains the US$70 million ceiling on our credit facility while
providing us with expanded financial flexibility over the next
two months.  We remain focused on implementing initiatives to
improve and better manage the Company's cash flow.  Managing our
expenses remains our critical priority and we continue to
evaluate additional opportunities for operating expense
reductions."

                 About Enesco Group, Inc.

Enesco Group, Inc. --- http://www.enesco.com/-- is a world
leader in the giftware, and home and garden decor industries.
Serving more than 44,000 customers worldwide, Enesco distributes
products to a wide variety of specialty card and gift retailers,
home decor boutiques, as well as mass-market chains and direct
mail retailers.  Internationally, Enesco serves markets
operating in the United Kingdom, Canada, Europe, Mexico,
Australia and Asia.  With subsidiaries located in Europe and
Canada, and a business unit in Hong Kong, Enesco's international
distribution network is a leader in the industry.  Enesco's
product lines include some of the world's most recognizable
brands, including Border Fine Arts, Bratz, Circle of Love,
Foundations, Halcyon Days, Jim Shore Designs, Lilliput Lane,
Pooh & Friends, Walt Disney Classics Collection, and Walt Disney
Company, among others.

           What Happened to Precious Moments?

On May 17, 2005, the Company terminated its license agreement
with Precious Moments, Inc., to sell Precious Moments(R)
products in the U.S.  On July 1, 2005, the Company we began
operating under an agreement with PMI where Enesco provided PMI
transitional services related to its licensed inventory through
December 31, 2005.  In conjunction with the PMI agreement, in
June 2005 the Company incurred a loss of US$7.7 million equal to
the cost of inventory transferred to PMI.  The Company has not
recorded any revenues for transition services in 2006, as PMI
has exercised its option to perform the services in-house
beginning January 1, 2006.

During the transition period, Enesco maintained inventories of
PMI products on a consignment basis and processed sales orders
on PMI's behalf.  Enesco recorded the gross sale and cost of
sale of PMI products and, additionally, recorded a charge to
cost of sales for the sale amounts to be remitted to PMI, net of
the amounts due from PMI for inventory purchases.  Enesco also
earned sales commissions and service fees from PMI for product
fulfillment, selling and marketing costs.  In the three months
ended June 30, 2006, Enesco and PMI reconciled the amounts owed
to each other and, as a result, the Company recorded an
additional charge of US$355,000 to cost of sales to properly
reflect amounts due to PMI.  At June 30, 2006, the net amount
owed PMI was US$1 million, payable in three equal installments
in July, August and September.


ENESCO GROUP: Posts US$24.9 Mil. Net Loss in Second Quarter 2006
----------------------------------------------------------------
Enesco Group, Inc., reported financial results for the second
quarter ended June 30, 2006.

Net revenues were US$37.8 million compared to US$45.7 million in
the second quarter of 2005.  Second quarter 2006 revenues do not
include U.S. Precious Moments sales while second quarter 2005
included US$8.0 million in U.S. Precious Moments sales.
Excluding U.S. sales of Precious Moments from the second quarter
of 2005, net revenues in the second quarter of 2006 have
remained unchanged at US$37.8 million.  Flat revenue primarily
reflects the impact from slower ramp-up of product shipments at
the new third-party distribution center, lost sales due to
manufacturing capacity losses and lost sales of replenishment
product due to the U.S. warehouse shipping delays.  Enesco also
experienced lower sales from collectibles and Gregg Gift.

Gross profit was US$11.0 million compared to US$9.7 million in
the second quarter of 2005.  Gross profit margin expanded 7.9
percentage points to 29% from 21.1% in the second quarter of
2005, which included the loss on the Precious Moments license
termination.  The second quarter 2006 gross margin includes a
US$4.2 million increase in our inventory reserves, made
necessary by the Company's accelerated initiatives to sell slow-
moving inventory in order to help expedite resolving its
distribution issues and clear out the Elk Grove Village facility
that most likely will be vacated by year end.  Gross profit
margin in the second quarter 2005 was significantly impacted by
the US$7.7 million loss recognized on the Precious Moments
license termination in the U.S., the guaranteed minimum royalty
costs and generally lower margins on the product line.
Excluding the effects of Precious Moments from the second
quarter of 2005, gross margin in the second quarter of 2006
would have decreased 7.3% points to 29% from 36.3% in the second
quarter of 2005.  This decline is due primarily to the US$4.2
million increase in the lower of cost or market reserves
established as of June 30, 2006.

Second quarter net loss was US$24.9 million compared to a net
loss of US$22.0 million in the second quarter of 2005.  Net loss
for the quarter includes a US$2.2 million charge after-tax,
related the sale of the Dartington operation, as well as a
charge of US$4.6 million resulting from the impairment of
goodwill related to Gregg Gift.  Excluding the losses related to
Dartington and Gregg Gift, the net loss for the quarter improved
to US$17.4 million.

Basil Elliott, President and Chief Executive Officer at Enesco,
stated, "Despite the challenges Enesco is currently facing, we
continue to make progress in implementing our Operating
Improvement Plan.  Our sales in the second quarter were
negatively impacted in large part by the rationalization of our
product lines at the end of last year, as well as a shipping
disruption which resulted when we transitioned to a third-party
warehouse.  However, our exit from the U.S. Precious Moments
business and our product rationalization are benefiting our
operating margin.  In addition, while the ramp-up at the new
distribution center was slower than anticipated, we have reached
targeted shipping levels as of the last week of the second
quarter.  We are continuing to work with our third-party
logistics provider to improve performance and also plan to
utilize additional distribution resources to fulfill orders for
the remainder of the year.

"Our near-term top priority is to obtain the new long-term
financing to replace our current U.S. credit facility.  Other
priorities for the upcoming months include improving our
distribution processes and continuing to decrease corporate
expenses.  Our manufacturing relationships are also being
strengthened and new sourcing opportunities are being explored.
We remain committed to completing our Operating Improvement Plan
and returning to profitability."

Mr. Elliott added, "We will continue to focus on positioning
Enesco as a leader in our industry once more.  We took steps
toward this goal with the successful launch of new products
developed within our four merchandise categories at the summer
gift shows, including a new baby line from the Land of Milk &
Honey license and a new everyday product statement for Heartwood
Creek. We also are delighted to have received several top honors
from NALED 10 days ago at their Industry Achievement Awards.
Jim Shore was named Artist of the Year for an unprecedented
third consecutive year, and Enesco received the Collectible of
the Year award for the Heartwood Creek 'A Star Shall Guide Us'
angel figurine.  We are proud to be honored by the industry and
the customers we serve."

Cash and cash equivalents as of June 30, 2006 were US$7.3
million, versus US$12.9 million as of December 31, 2005.  Cash
and cash equivalents are a function of cash flows from
operating, investing and financing activities.  Historically,
the Company says it has satisfied capital requirements with
borrowings.  Cash balances and working capital requirements
fluctuate due to operating results, shipping cycles, accounts
receivable collections, inventory management and timing of
payments, among other factors.  Working capital requirements
fluctuate during the year and generally are greatest early in
the fourth quarter and lowest early in the first quarter.
Enesco has been extending payables in order to conserve cash
since May 15, 2006.

                      Financial Advisor

During the quarter, Enesco appointed Jefferies & Company as its
new financial advisor and Mesirow Financial, LLC as its new
restructuring consultant.

                          Defaults

For the week ended June 4, 2006, Enesco's actual borrowings
exceeded the allowable maximum borrowing capacity under the
terms of the current credit agreement by approximately US$1.0
million, which constituted a default under the agreement.  The
Company has been working with its vendors to extend payment
terms and as a result have unfortunately slowed down some
inventory shipments.

Enesco says that if it is not successful in extending payment
terms with its suppliers, or otherwise unable to pay its
suppliers promptly, the suppliers may be unwilling to ship
products, and its business, financial condition and results of
operations would be materially and adversely impacted.

Enesco disclosed that on June 14, 2006, it was in technical
default of its existing U.S. credit facility as the Company had
exceeded the maximum allowable borrowing capacity under the
credit facility without immediate repayment of the excess
amount.

Enesco disclosed that it entered into a twelfth amendment to our
existing U.S. credit facility, which increased its borrowing
availability, provided a waiver to our defaults under the credit
agreement and set a new facility termination date of September
15, 2006.  Under the twelfth amendment to its credit facility
the Company will be required to pay significant usage and credit
facility extension fees (ranging from US$1.4 million to US$2.1
million) to its lenders on or prior to the facility termination
date.  The Company relates that these payments may have a
material adverse effect on its available cash position.

                   Notes and Loans Payable

At June 30, 2006, Enesco had total lines of credit providing for
maximum borrowings of US$73.3 million, US$70.0 million of which
is available under the Company's existing U.S. credit facility.
Actual borrowings of US$42.6 million and letters of credit and a
customs bond totaling US$4.0 million were outstanding at
June 30, 2006.  The net available borrowing capacity under our
existing U.S. credit facility based on eligible collateral as of
June 30, 2006, was US$1.7 million.

Full-text copies of Enesco's financial statements for the
quarter ended June 30, 2006, is available for free at:

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

                  About Enesco Group, Inc.

Enesco Group, Inc. --- http://www.enesco.com/-- is a world
leader in the giftware, and home and garden decor industries.
Serving more than 44,000 customers worldwide, Enesco distributes
products to a wide variety of specialty card and gift retailers,
home decor boutiques, as well as mass-market chains and direct
mail retailers.  Internationally, Enesco serves markets
operating in the United Kingdom, Canada, Europe, Mexico,
Australia and Asia.  With subsidiaries located in Europe and
Canada, and a business unit in Hong Kong, Enesco's international
distribution network is a leader in the industry.  Enesco's
product lines include some of the world's most recognizable
brands, including Border Fine Arts, Bratz, Circle of Love,
Foundations, Halcyon Days, Jim Shore Designs, Lilliput Lane,
Pooh & Friends, Walt Disney Classics Collection, and Walt Disney
Company, among others.

             What Happened to Precious Moments?

On May 17, 2005, the Company terminated its license agreement
with Precious Moments, Inc., to sell Precious Moments(R)
products in the U.S.  On July 1, 2005, the Company we began
operating under an agreement with PMI where Enesco provided PMI
transitional services related to its licensed inventory through
December 31, 2005.  In conjunction with the PMI agreement, in
June 2005 the Company incurred a loss of US$7.7 million equal to
the cost of inventory transferred to PMI.  The Company has not
recorded any revenues for transition services in 2006, as PMI
has exercised its option to perform the services in-house
beginning January 1, 2006.

During the transition period, Enesco maintained inventories of
PMI products on a consignment basis and processed sales orders
on PMI's behalf.  Enesco recorded the gross sale and cost of
sale of PMI products and, additionally, recorded a charge to
cost of sales for the sale amounts to be remitted to PMI, net of
the amounts due from PMI for inventory purchases.  Enesco also
earned sales commissions and service fees from PMI for product
fulfillment, selling and marketing costs.  In the three months
ended June 30, 2006, Enesco and PMI reconciled the amounts owed
to each other and, as a result, the Company recorded an
additional charge of US$355,000 to cost of sales to properly
reflect amounts due to PMI.  At June 30, 2006, the net amount
owed PMI was US$1.0 million, payable in three equal installments
in July, August and September.


FORD MOTOR: Revises Quarter Results, Net Loss Rises to US$254MM
---------------------------------------------------------------
Ford Motor Company revised its results for the second quarter of
2006 to reflect a US$131 million increase in net loss.

From a reported net loss of US$123 million on July 20, 2006,
Ford's net loss for the second quarter of 2006 has been
increased to US$254 million to reflect the increase in estimates
of its pension curtailment loss, as well as subsequent events
that existed as of the date of its balance sheet.

Ford also projects its full-year 2006 pension curtailment
expense to be US$1.2 billion and full-year 2006 special items to
be US$3.8 billion.

At June 30, 2006, its retiree Voluntary Employee Beneficiary
Association trust contained US$6.2 billion, invested on a long-
term basis.  Ford plans to invest about US$3 billion of the
total VEBA amount in shorter-duration fixed income investments
to facilitate retiree benefits payment.

Ford further disclosed that it expects its Premier Automotive
Group operating segment to be unprofitable for 2006.

Headquartered in Dearborn, Michigan, Ford Motor Company
(NYSE: F) -- http://www.ford.com/-- manufactures and
distributes automobiles in 200 markets across six continents.
Ford Motor has two assembly plants and an engine plant in
Mexico.  With about 300,000 employees and more than 100 plants
worldwide, the company's core and affiliated automotive brands
include Aston Martin, Ford, Jaguar, Land Rover, Lincoln, Mazda,
Mercury and Volvo.  Its automotive-related services include Ford
Motor Credit Company.

                        *    *    *

As reported in the Troubled Company Reporter on July 24, 2006,
Moody's Investors Service lowered the Corporate Family and
senior unsecured ratings of Ford Motor Company to B2 from Ba3
and the senior unsecured rating of Ford Motor Credit Company to
Ba3 from Ba2.  The Speculative Grade Liquidity rating of Ford
has been confirmed at SGL-1, indicating very good liquidity over
the coming 12 month period.  The outlook for the ratings is
negative.


FORD MOTOR: Hires Keneth Leet as Strategic Advisor to Bill Ford
---------------------------------------------------------------
Ford Motor Company hired Kenneth H.M. Leet as a strategic
advisor to Bill Ford, the company's chairman and chief executive
officer.

Mr. Leet is an 18-year veteran of Goldman Sachs, serving the
firm in its London and New York offices as a partner and was
responsible for its investment banking activities with
industrial companies, including Ford Motor.  Mr. Leet has also
led European banking operations for Bank of America.  Mr. Leet
will report directly to Bill Ford and work closely with senior
management in exploring strategic alternatives for the company.

Headquartered in Dearborn, Michigan, Ford Motor Company
(NYSE: F) -- http://www.ford.com/-- manufactures and
distributes automobiles in 200 markets across six continents.
Ford Motor has two assembly plants and an engine plant in
Mexico.  With about 300,000 employees and more than 100 plants
worldwide, the company's core and affiliated automotive brands
include Aston Martin, Ford, Jaguar, Land Rover, Lincoln, Mazda,
Mercury and Volvo.  Its automotive-related services include Ford
Motor Credit Company.

                        *    *    *

As reported in the Troubled Company Reporter on July 24, 2006,
Moody's Investors Service lowered the Corporate Family and
senior unsecured ratings of Ford Motor Company to B2 from Ba3
and the senior unsecured rating of Ford Motor Credit Company to
Ba3 from Ba2.  The Speculative Grade Liquidity rating of Ford
has been confirmed at SGL-1, indicating very good liquidity over
the coming12 month period.  The outlook for the ratings is
negative.


GRUPO TMM: Schedules Shareholders Meeting on Aug. 18
----------------------------------------------------
Grupo TMM, S.A. called for a Shareholders Meeting on
Aug. 18, 2006, to propose the approval of the purported
securitization of US$200 million with Deutsche Bank.  The
proceeds from this transaction will be used to redeem our
outstanding 2007 Senior Notes and to fund capital projects.

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.


SATELITES MEXICANOS: Gov't Will Hand Firm to Nacional Financiera
----------------------------------------------------------------
The Mexican government will hand over control of Satelites
Mexicanos S.A. de C.V. aka Satmex to Nacional Financiera, a
state-run development bank, El Informador reports, citing Jorge
Alvarez -- the telecoms secretary in Mexico.

Mr. Alvarez told El Informador that Satmex is ready to be sold
before the change of administration in December.  The next
government won't be able to change the auction process or call
it off.

Business News Americas relates that the sale of the government's
23.6% Satmex stake depends on the conclusion of a debt and
ownership restructuring process that Mr. Alvarez expects to
occur in October or November.

As reported in the Troubled Company Reporter-Latin America on
June 30, 2006, Secretaria de Comunicaciones y Transporte, the
Mexican transport and communications ministry, said that the
financial restructuring agreement reached by Satmex, the
creditors and the shareholders in March received its approval.
The restructuring proposal now requires authorization from the
local civil courts before it would be presented to a US
bankruptcy court.  The restructuring agreement would allow
Satmex to cut its US$800 million debt by US$300 million, of
which US$100 million is interest.  The company defaulted on
US$523 million of its total debt.  Creditors of Satmex would
acquire 80% of the company while the Mexican government would
hold 20%.  Much of the foreign ownership, however, would be
identified as "neutral investment" and the government would have
55% of the voting rights.  The Mexican government negotiated
with the US creditors of Satmex to make sure that bankruptcy
proceedings would be held locally.

BNamericas underscores that Mr. Alvarez expects a final
consensus among all creditors in September.

Mr. Alvarez told BNamericas that only upon the sale of its stake
can the government expect to recover the money loaned to
Servicios Corporativos, Satmex's local shareholder.

The Mexican government had loaned US$188 million, but can only
expect to recover US$40 million, BNamericas states.

Headquartered in Mexico, Satelites Mexicanos, S.A. de C.V.
-- http://www.satmex.com/-- is the leading provider of fixed
satellite services in Mexico and is expanding its services to
become a leading provider of fixed satellite services throughout
Latin America.  Satmex provides transponder capacity to
customers for distribution of network and cable television
programming and on-site transmission of live news reports,
sporting events and other video feeds.  Satmex also provides
satellite transmission capacity to telecommunications service
providers for public telephone networks in Mexico and elsewhere
and to corporate customers for their private business networks
with data, voice and video applications, as well as satellite
internet services.  The Debtor is an affiliate of Loral Space &
Communications Ltd., which filed for chapter 11 protection on
July 15, 2003 (Bankr. S.D.N.Y. Case No. 03-41710).  Some holders
of prepetition debt securities filed an involuntary chapter 11
petition against the Debtor on May 25, 2005 (Bankr. S.D.N.Y.
Case No. 05-13862).  The Debtor, through Sergio Autrey Maza, the
Foreign Representative, Chief Executive Officer and Chairman of
the Board of Directors of Satmex filed an ancillary proceeding
on Aug. 4, 2005 (S.D.N.Y. Case No. 05-16103).

Matthew Scott Barr, Esq., Luc A. Despins, Esq., Paul D. Malek,
Esq., and Jeffrey K. Milton, Esq., at Milbank, Tweed, Hadley &
McCloy LLP represent the Debtor.  When the Debtor filed an
ancillary proceeding, it listed US$900,000,000 in assets and
US$688,000,000 in debts.




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


KANSAS CITY SOUTHERN: Posts US$19.2MM Second Quarter Net Income
---------------------------------------------------------------
Kansas City Southern Railway reported US$19.2 million net income
in the second quarter of 2006.

Business News Americas relates that Kansas City Southern said
the amount was a significant turnaround compared to last year,
which incurred US$27.3 million loss.

According to BNamericas, Kansas City Southern's profit in the
April-June period was equivalent to US$0.26 per share.  The
company had incurred a loss equivalent to US$0.33/share in the
second quarter of 2005.

Patrick Ottensmeyer, the CFO of Kansas City Southern, told
BNamericas, "Our recent earnings growth has been strong, driven
by growth in revenues, yield management and cost controls as we
really gain momentum in getting the benefit of running a longer-
haul system."

The report underscores that Kansas City Southern's consolidated
revenues in the second quarter of 2006 increased 8.4% to US$413
million, compared with US$381 million recorded in the same
quarter of 2005.  The growth was mainly driven by:

  -- pricing,
  -- increased fuel surcharges consistent with increases in the
     cost of fuel, and

  -- volume increases in coal and chemical and petroleum
     products.

Arthur Schoener, the COO of Kansas City, told BNamericas, "On
the operating side we're very pleased with our results in the
second quarter.  I can tell you that operations in both the US
and Mexico are running very well as a result of capacity
improvements... and the execution of transportation plans and
new processes."

Kansas City Southern's operating costs, according to BNamericas,
decreased 13.8% or US$53.8 million to US$336 million in the
second quarter of 2006, compared with the same period in 2005.
Expenses include:

   -- a non-cash, pre-tax charge of US$35.6 million related to
      the accounting for deferred profit sharing in Mexico, and

   -- US$15.8 million in charges related to the acquisition of
      Kansas City Southern de Mexico.

Mr. Ottensmeyer told BNamericas, "In the second quarter of 2005
our costs included some acquisition-related costs for the
acquisition of KCSM as well as a charge for deferred profit
sharing in Mexico."

BNamericas underscores that Kansas City Southern's operating
profits increased 79.8% to US$77.5 million in the second quarter
of 2006, compared with the US$43.1 million recorded in 2005,
excluding one-time charges in the second quarter of 2005.  The
improvement in the operating income was due to higher revenues,
and operating expense reductions including:

    -- casualties (US$7.4 million),
    -- purchased services (US$5.6 million), and
    -- equipment (US$0.6 million).

Headquartered in Kansas City, Missouri, Kansas City Southern
(NYSE: KSU) - http://www.kcsi.com/-- is a transportation
holding company that has railroad investments in the U.S.,
Mexico and Panama.  Its primary U.S. holding is The Kansas City
Southern Railway Company, serving the central and south central
U.S.  Its international holdings include KCSM, serving
northeastern and central Mexico and the port cities of L zaro
Cardenas, Tampico and Veracruz, and a 50 percent interest in
Panama Canal Railway Company, providing ocean-to-ocean freight
and passenger service along the Panama Canal.  KCS' North
American rail holdings and strategic alliances are primary
components of a NAFTA Railway system, linking the commercial and
industrial centers of the U.S., Canada and Mexico.

                        *    *    *

As reported in the Troubled Company Reporter on May 22, 2006,
Standard & Poor's Ratings Services lowered its preferred stock
ratings on Kansas City Southern to 'D' from 'C' and removed the
ratings from CreditWatch where they were initially placed on
March 23, 2006; ratings were previously lowered on April 4 and
May 1 and maintained on CreditWatch with negative implications.

Standard & Poor's other ratings on Kansas City Southern,
including its 'B' corporate credit rating, remain on CreditWatch
with negative implications, where they were initially placed
April 4, 2006.  Ratings were lowered on April 10 and maintained
on CreditWatch.




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


BANCO DE CREDITO: Moody's Affirms D Financial Strength Rating
-------------------------------------------------------------
Moody's Investors Service assigned long- and short-term global
local currency deposit ratings of Baa2 and Prime-2,
respectively, to Banco de Credito del Peru or BCP.  At the same
time, Moody's affirmed BCP's D bank financial strength rating
and B1 and Not Prime long- and short-term foreign currency
deposit ratings.  All the ratings have a stable outlook.

According to Moody's, BCP's Baa2 long term global local currency
deposit rating is supported by the bank's leading retail deposit
market share in Peru and the view that consequently it would
potentially have high access to institutional support for local
currency deposits in situations of high stress.  The rating was
therefore assigned at one notch below Peru's Baa1 long-term
local currency deposit ceiling.

BCP's B1 long term foreign currency deposit rating remains
constrained by Peru's country ceiling for deposits, which
includes foreign exchange transfer and convertibility risk,
given the higher local currency rating.

Moody's also noted that BCP's D bank financial strength rating
and stable outlook reflect the bank's solid franchise and
improving financial fundamentals within a challenging operating
environment, including a high level of financial dollarization.

BCP is headquartered in Lima, Peru, and is the oldest and
largest bank in the country.  As of June 30, 2006, the bank
reported assets of US$9 billion and equity of US$780 million,
with a total deposit market share of 36%.

These ratings were assigned to Banco de Credito del Peru:

   -- Long Term Global Local Currency Deposit Rating: Baa2,
      with stable outlook; and

   -- Short Term Global Local Currency Deposit Rating: Prime 2.

These ratings were affirmed:

   -- Bank Financial Strength Rating: D, with stable outlook;

   -- Long Term Foreign Currency Deposit Rating: B1, with
      stable outlook; and

   -- Short Term Foreign Currency Deposit Rating: Not Prime.


SIDERPERU: Posts PEN11.6 Million Second Quarter 2006 Net Profit
---------------------------------------------------------------
Siderperu said in its quarterly financial report that it
reversed a PEN1 million loss incurred in the second quarter of
2005 with PEN11.6 million net profit in this year's second
quarter.

Siderperu posted these results in the second quarter of 2006:

      -- net sales in the second quarter increased to PEN214
         million from the PEN177 million recorded in the same
         quarter last year;

      -- total operational costs grew PEN181 million in the
         second quarter of this year from PEN162 million in the
         same period last year;

      -- shipments rose 27% in the second quarter of 2006,
         compared with the first quarter in the same year due to
         an increase in construction iron and other long
         steelmaking products;

Headquartered in Chimbote, Peru, Siderperu SA has steel
production capacity of 400,000 tons per year.  The company
reported a net loss of 5.99 million soles (US$1.82 million) in
2005, compared to a net profit of 28.8 million soles in 2004.


* PERU: Free Trade Accord Awaits US Congress' Approval
------------------------------------------------------
The US congress is yet to approve its country's free trade
agreement with Peru, Latin Business Chronicle reports.

As reported in the Troubled Company Reporter-Latin America on
Aug. 3, 2006, the free trade accord received the approval of the
US senate finance committee, who voted 12-7 for the Peru FTA
bill.  On July 20, the House Ways and Means Committee voted
23-13 for the bill.

Latin Business relates that the resulting votes implied that in
general, Republicans support the free trade accord while
Democrats were against it.

A full senate vote on the free trade agreement is expected in
September, Latin Business states.

                        *    *    *

Fitch Ratings assigned these ratings on Peru:

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




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


ADELPHIA COMMS: Files Asset Sale & Units' Plan Documents
--------------------------------------------------------
Adelphia Communications Corp. and its debtor-affiliates filed
certain documents with the U.S. Bankruptcy Court for the
Southern District of New York in connection with the Court's
order approving the sale of their assets to Time Warner Cable
and Comcast Corp. and the Court's confirmation of the Third
Modified Fourth Amended Plan of Reorganization for the Century-
TCI and Parnassos Debtors:

    a. Amendment No. 4 To Asset Purchase Agreement Between
       ACOM and Time Warner NY, a full-text copy of which is
       available for free at:

       http://ResearchArchives.com/t/s?ed8

    b. Escrow Agreement Between ACOM and Time Warner NY.

       A full-text copy of the Escrow Agreement is available for
       free at:

       http://ResearchArchives.com/t/s?ed9

    c. Letter agreements between ACOM and Time Warner NY
       regarding:

        * cost center changes,
        * bonus payments,
        * lock boxes;

       A full-text copy of the three Time Warner letter
       agreements is available for free at:

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

    d. Assumption Agreement between ACOM and Time Warner NY, a
       full-text copy of which is available for free at:

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

    e. Amendment No. 4 to Asset Purchase Agreement between ACOM
       and Comcast.

       A full-text copy of the Amended Comcast Asset Purchase
       Agreement is available for free at:

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

    f. Escrow Agreement between ACOM and Comcast, a full-text
       copy of which is available for free at:

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

    g. Letter agreements between ACOM and Comcast regarding:

        * cost center changes,
        * bonus payments,
        * lock boxes;

       A full-text copy of the three Comcast Letter Agreements
       is available for free at:

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

    h. Assumption Agreement between ACOM and Comcast, a full-
       text copy of which is available for free at:

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

    i. Letter Agreement between ACOM and Comcast regarding
       Ordinary Course of Business Contracts pursuant to which
       ACOM agrees that with respect to any OCB Contract that
       Comcast has rejected and ACOM does not terminate at
       Closing, Comcast's liability will not exceed the
       liability it would have been had that OCB Contract been
       terminated at Closing.

The Century-TCI Debtors and the Parnassos Debtors are debtor-
affiliates of Adelphia Communications Corp.  As defined in the
Plan for Century-TCI and Parnassos Debtors, Adelphia sits as the
interim Plan Administrator.

The Century-TCI Debtors are comprised of:

   * Century-TCI California, L.P.,
   * Century-TCI California Communications, L.P.,
   * Century-TCI Distribution Company, LLC, and
   * Century-TCI Holdings, LLC,

The Parnassos Debtors are comprised of:

   * Parnassos Communications, L.P.,
   * Parnassos Distribution Company I, LLC,
   * Parnassos Distribution Company II, LLC,
   * Parnassos, L.P.,
   * Parnassos Holdings, LLC, and
   * Western NY Cablevision, L.P.

               About Adelphia Communications

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

Adelphia Cablevision Associates of Radnor, L.P., and 20 of its
affiliates, collectively known as Rigas Manged Entities, are
entities that were previously held or controlled by members of
the Rigas family.  In March 2006, the rights and titles to these
entities were transferred to certain subsidiaries of Adelphia
Cablevision, LLC.  The RME Debtors filed for chapter 11
protection on March 31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622
through 06-10642).  Their cases are jointly adminsitered under
Adelphia Communications and its debtor-affiliates chapter 11
cases.  (Adelphia Bankruptcy News, Issue No. 143; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


ADELPHIA COMMS: Can Settle EPA's Environmental Claims
-----------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
allowed Adelphia Communications Corp. and its debtor-affiliates
to enter into a Settlement Agreement with the United States of
America, on behalf of the Environmental Protection Agency for
the Debtors to avoid civil and administrative claims,
including potentially significant civil penalty claims.

Paul V. Shalhoub, Esq., at Willkie Farr & Gallagher LLP, in New
York, said that the ACOM Debtors own and operate approximately
4,000 facilities located in 31 States and majority of these
facilities consist of cable television operating plants and
equipment, which may have stand-by electric power generating
equipment, including diesel generators and sulfuric acid
batteries.  Many of the facilities are subject to federal and
state environmental laws.

To resolve potential violations of the relevant federal
environmental statutes, rules and regulations at its facilities,
the ACOM Debtors voluntarily initiated an environmental self-
audit of their facilities.

The ACOM Debtors and the EPA sought to ensure that the ACOM
Debtors come into and remain in compliance with the
Environmental Requirements.  Based upon preliminary results of
the Audit, the EPA believes that it has claims against the ACOM
Debtors for violations of Environmental Requirements at some of
their facilities.

The ACOM Debtors have completed the Audit and have agreed to
submit to the EPA a final and a supplemental report disclosing
violations and certifying that all disclosed violations were
corrected.

Mr. Shalhoub informed the Court that the ACOM Debtors already
have taken corrective actions to resolve the EPA Claims.

The principal terms of the Settlement Agreement are:

    a. For violations of Environmental Requirements discovered
       pursuant to the Audit and corrected by the ACOM Debtors
       as provided for in the Settlement Agreement, the ACOM
       Debtors will pay civil penalties of:

        * US$800 per facility in violation of the Clean Air Act
          Sections 110 and 113(a)(1);

        * US$1,150 per facility in violation of Emergency
          Planning and Community Right-to-Know Sections 311 and
          312;

        * US$1,500 per facility in violation of Clean Water Act
          Section 311 for failure to have a Spill Prevention,
          Control and Countermeasures plan; and

        * US$2,600 per facility in violation of CWA Section 311
          for both failure to have a SPCC plan and failure to
          have adequate secondary containment.

       Additionally, the ACOM Debtors will pay US$20,000 for
       South Coast Air Quality Management District violations
       for which compliance with best available control
       technology is necessary.

    b. The ACOM Debtors will be liable to pay penalties up to
       a maximum aggregate cap of US$233,000, provided that any
       violation disclosed in the Final Audit Report in excess
       of category-specific totals are not included in the
       Settlement Agreement;

    c. The ACOM Debtors will submit a Final Audit Report in the
       two days after the Court approves the Settlement
       Agreement;

    d. The ACOM Debtors will submit a Supplemental Report upon
       completing all required corrective actions with respect
       to the SCAQMD Violations;

    e. Upon receipt of the Final Audit Report, the United States
       will determine the consistency of the disclosures in the
       Final Audit Report with the requirements of the
       Settlement Agreement.  If the United States accepts the
       ACOM Debtors' disclosures, the United States will present
       them with a draft Final Settlement Agreement that
       specifies those violations for which they must pay civil
       penalties;

    f. Upon the United States' receipt of the ACOM Debtors'
       certified Final Audit Report and Supplemental Report and
       upon the ACOM Debtor's payment in full of civil
       penalties, the Settlement Agreement will resolve the
       United States' civil and administrative claims for the
       violations for which corrections are made and penalties
       paid;

    g. The Unites States' agreement to the terms of the
       Settlement Agreement is expressly conditioned on the
       completeness, truth and accuracy of all certifications
       made by the ACOM Debtors in its Audit Reports;

    h. The civil penalties will be treated as allowed
       administrative expenses.  The United States will not
       required to file an application for administrative
       expenses in order to receive payment from the Debtors;
       and

    i. In the event that the Court has not approved the
       Settlement Agreement before the effective date of the
       Company Sale, Adelphia will not oppose any request by the
       United States for an extension of the deadline for filing
       its administrative expense claims against the ACOM
       Debtors up to 60 days after the date of the Court's
       approval or denial of the Settlement Agreement.

               About Adelphia Communications

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

Adelphia Cablevision Associates of Radnor, L.P., and 20 of its
affiliates, collectively known as Rigas Manged Entities, are
entities that were previously held or controlled by members of
the Rigas family.  In March 2006, the rights and titles to these
entities were transferred to certain subsidiaries of Adelphia
Cablevision, LLC.  The RME Debtors filed for chapter 11
protection on March 31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622
through 06-10642).  Their cases are jointly adminsitered under
Adelphia Communications and its debtor-affiliates chapter 11
cases.  (Adelphia Bankruptcy News, Issue No. 143; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


KMART: Gets Final Court OK on US$13 Mil. Disability Settlement
--------------------------------------------------------------
Following the Fairness Hearing held on July 27, 2006, the
Honorable John Kane, Jr., of the U.S. District Court for the
District of Colorado, entered a final order approving the
Settlement Agreement between Kmart Corp. and Carrie Ann Lucas,
Debbie Lane, Julie Reiskin, Edward Muegge, Robert Geyer, Stacy
Berloff, Jean Ryan and Jan Campbell.

Judge Kane declared that:

    -- the Damages Settlement Sub-Class is certified under Rules
       23(a), (b)(2), and (b)(3) of the Federal Rules of Civil
       Procedure;

    -- the notice program implemented by the parties was the
       best notice practicable under the circumstances and
       satisfied the requirements of due process and Rule 23;
       and

    -- the members of the Nationwide Class and the Damages Sub-
       Class are permanently enjoined from bringing any claims
       seeking injunctive relief or for Statutory Minimum
       Damages relating in any way to the accessibility of Kmart
       stores to persons who use wheelchairs or scooters.

                     Miller's Objection

The District Court received only one objection to the Settlement
Agreement, which was filed by Marc Miller -- an individual who
does not use a wheelchair or scooter.

Mr. Miller asked that the class definition of the Nationwide
Class be rewritten to exclude individuals who become disabled in
the future.  Mr. Miller also complained that he "cannot
determine with certainty if [he is] a member of the subclass
entitled to a monetary award."

Judge Kane overruled Mr. Miller's objection, holding that it is
common and proper to include future class members in a class
definition where the predominant relief is injunctive.

Judge Kane opined that because Mr. Miller is not currently using
a wheelchair or scooter, he is not entitled to a monetary award
under the Settlement Agreement.

A full-text copy of the Colorado District Court's Final Order
granting approval of the Settlement is available for free at:

             http://researcharchives.com/t/s?ecb

                     Disability Lawsuit

In July 2005, Carrie Ann Lucas, Debbie Lane, Julie Reiskin,
Edward Muegge, Robert Geyer, Stacy Berloff, Jean Ryan and Jan
Campbell obtained certification from the District Court as a
nationwide class of individuals who use wheelchairs or scooters
and who shop at Kmart stores.

Under the Certification, the Plaintiffs were able to file claims
as a class against Kmart for alleged architectural and policy
barriers to accessibility for people with disabilities.

                    Settlement Agreement

In August 2005, the Nationwide Class and Kmart initiated
settlement negotiations, and agreed, among others, that:

   (a) Kmart will survey and, with few exceptions, bring all of
       its stores into compliance with the Department of Justice
       Standards for Accessible Design, and all of its stores in
       California into compliance with Title 24 of the
       California Code of Regulations within seven and a half
       years;

   (b) Kmart will ensure that all merchandise on "fixed
       displays" as well as large appliances, drive aisle
       displays and sidewalk displays will be on an accessible
       route of at least 36 inches;

   (c) Kmart will ensure that all accessible restrooms and
       fitting rooms will be on an accessible route and
       maintained free and clear of obstructions;

   (d) Kmart will ensure that one accessible check-out lane is
       open at all times the store is open;

   (e) Kmart will, in all but 10% of its stores, provide a path
       of at least 32 inches to at least one side of moveable
       apparel displays in 80% of floor space occupied by
       moveable displays as well as a distance of 32 inches
       between some types of moveable apparel displays when
       they are placed next to one another;

   (f) Kmart will implement a customer service system for access
       to moveable apparel displays and furniture displays under
       which customers with disabilities who use wheelchairs or
       scooters for mobility will have the option of requesting
       assistance or requesting that Kmart provide them with a
       two-way communications device so that they may summon
       assistance when they need it;

   (g) Kmart will amend its policy and training materials to
       implement the new policies;

   (h) Compliance will be monitored using "mystery shoppers," as
       well as customer feedback through the Internet, a toll-
       free phone line, and in-store forms;

   (i) The Nationwide Class will release claims for injunctive
       relief under Title III of the ADA, under state statutes
       that incorporate or are equivalent to Title III, and
       under California law through the end of the term of the
       settlement;

   (j) Kmart will establish a US$13,000,000 fund -- consisting
       of US$8,000,000 in cash and US$5,000,000 in gift cards
       redeemable at face value -- from which members of a
       "Damages Sub-Class" -- that the Plaintiffs have requested
       the Colorado Court to preliminarily certify for
       settlement purposes concurrently with the requested
       preliminary approval of the settlement -- are eligible to
       recover;

   (k) The Damages Sub-Class Fund will be allocated among
       California, Colorado, Hawaii, Massachusetts, New York,
       Oregon and Texas -- the Sub-Class States -- based on a
       formula that reflects the number of Kmart Stores in each
       Sub-Class State, and the Statutory Minimum Damages
       recoverable in each State;

   (l) For each qualifying visit to a Kmart store, a member of
       the Sub-Class may recover up to the Statutory Minimum
       Damages recoverable in the Sub-Class State in which he or
       she shopped, and the maximum number of qualifying visits
       for which a Sub-Class member may recover is two;

   (m) Kmart will pay damages of US$10,000 each to the three
       original named Plaintiffs, and US$1,000 each to the six
       named Plaintiffs of the proposed Damages Sub-Class;

   (n) The majority of any funds remaining in the Damages Sub-
       Class Fund after the claims period will be given to
       specified non-profit entities that advocate for the
       rights of persons with disabilities;

   (o) Members of the Sub-Class have the right to opt out of the
       damages provisions of the Settlement Agreement, but
       members of the Nationwide Class and Sub-Class cannot opt
       out of the injunctive provisions;

   (p) In addition to releasing claims for injunctive relief
       under Title III, equivalent state statutes, and
       California law, Sub-Class members will release claims for
       Statutory Minimum Damages under the laws of the seven
       Sub-Class States through the end of the term of the
       Agreement, but will not release claims for any other
       damages;

   (q) No member of the Nationwide Class will release damages
       claims with respect to the laws of any state other than
       in the Sub-Class States;

   (r) Notice will be provided to the Nationwide Class;

   (s) Kmart will pay attorneys' fees up to the date of final
       approval of US$3,250,000, subject to Court approval, and
       will pay class counsel additional reasonable fees in the
       future for work that they do during the term of the
       Agreement, implementing and assuring compliance; and

   (t) The Colorado Court would retain continuing jurisdiction
       throughout the term of the Agreement to interpret and
       enforce the Agreement.

                      About Kmart Corp.

Headquartered in Troy, Michigan, Kmart Corp. nka KMART Holding
Corp. -- http://www.bluelight.com/-- operates approximately
2,114 stores, primarily under the Big Kmart or Kmart Supercenter
format, in all 50 United States, Puerto Rico, the U.S. Virgin
Islands and Guam.  The Company filed for chapter 11 protection
on January 22, 2002 (Bankr. N.D. Ill. Case No. 02-02474).  Kmart
emerged from chapter 11 protection on May 6, 2003.  John Wm.
"Jack" Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher &
Flom, LLP, represented the retailer in its restructuring
efforts.  The Company's balance sheet showed US$16,287,000,000
in assets and US$10,348,000,000 in debts when it sought chapter
11 protection.  Kmart bought Sears, Roebuck & Co., for US$11
billion to create the third-largest U.S. retailer, behind Wal-
Mart and Target, and generate US$55 billion in annual revenues.
The waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act expired on Jan. 27, without complaint by the
Department of Justice.  (Kmart Bankruptcy News, Issue No. 114;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


KMART CORP: Court Okays Reversion of 142,308 Unclaimed Shares
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois
granted Kmart Corp.'s request for reversion of the 142,308
Unclaimed Shares, which have not been claimed.

The Court deemed all Unclaimed Shares held by claimholders who
have not completed transfer or sale of their Unclaimed Shares by
close of business on July 17, 2006, reverted to the Reorganized
Debtors for redistribution to other holders of allowed Class 5
claims.

The Redistribution is part of the final distribution to be made
at the conclusion of the claims reconciliation process pursuant
to Kmart's confirmed Plan of Reorganization.

A full-text copy of the list of Unclaimed Distribution
Claimholders is available for free at:

             http://researcharchives.com/t/s?ece

Computershare is authorized to take any actions as directed by
Kmart Corporation to effectuate the transfer of the Unclaimed
Shares that remain in the Registered Accounts of Unclaimed
Distribution Claimholders.

                      About Kmart Corp.

Headquartered in Troy, Michigan, Kmart Corp. nka KMART
Holding Corp. -- http://www.bluelight.com/-- operates
approximately 2,114 stores, primarily under the Big Kmart or
Kmart Supercenter format, in all 50 United States, Puerto Rico,
the U.S. Virgin Islands and Guam.  The Company filed for chapter
11 protection on January 22, 2002 (Bankr. N.D. Ill. Case No.
02-02474).  Kmart emerged from chapter 11 protection on May 6,
2003.  John Wm. "Jack" Butler, Jr., Esq., at Skadden, Arps,
Slate, Meagher & Flom, LLP, represented the retailer in its
restructuring efforts.  The Company's balance sheet showed
US$16,287,000,000 in assets and US$10,348,000,000 in debts when
it sought chapter 11 protection.  Kmart bought Sears, Roebuck &
Co., for US$11 billion to create the third-largest U.S.
retailer, behind Wal-Mart and Target, and generate US$55 billion
in annual revenues.  The waiting period under the Hart-Scott-
Rodino Antitrust Improvements Act expired on Jan. 27, without
complaint by the Department of Justice.  (Kmart Bankruptcy News,
Issue No. 114; Bankruptcy Creditors' Service, Inc., 215/945-
7000)


RENT-A-CENTER: Earns US$39.8 Million in Quarter Ended June 30
-------------------------------------------------------------
Rent-A-Center, Inc., reported total revenues for the quarter
ended June 30, 2006, of US$583.6 million, a US$3 million
increase from US$580.6 million for the same period in the prior
year.  This increase of 0.5% in revenues was primarily driven by
a 1.1% increase in same store sales plus an increase in
incremental revenues generated in new and acquired stores,
offset by the revenue lost from stores that were closed or sold
during the previous twelve months.

For the three months ended June 30, 2006, the Company's net
earnings were US$39.8 million representing an increase of 7.7%
from the net earnings of US$39.6 million for the same period in
the prior year, when excluding the benefit of the 2005 tax audit
reserve credit.  The increase in reported net earnings per
diluted share is primarily attributable to the increase in same
store sales, as well as the reduction in the number of the
Company's outstanding shares, offset by increases in normal
operating costs, such as utility and fuel costs, and expenses
related to stock options.  When including the 2005 tax audit
reserve credit, reported net earnings per diluted share for the
quarter increased 1.8% from the reported net earnings of US$41.7
million for the same period in the prior year.

Reported net earnings per diluted share also increased as a
result of a US$2.0 million insurance reserve credit resulting
from the use of certain company specific loss development
factors developed by independent actuaries, rather than the
general industry loss development factors previously used by the
Company.

"Our second quarter same store sales continued a positive trend
in 2006," commented Mark E. Speese, the Company's Chairman and
Chief Executive Officer. "Our same store sales increased 1.1%
for the quarter, which is primarily related to changes in our
promotional activities as well as an increase in the number of
units on rent," Mr. Speese continued. "In addition, we believe
our customer has adjusted to the current level of fuel costs.

                   Operations Highlights

During the second quarter of 2006, the Company opened 9 new
rent-to-own store locations, acquired 16 stores as well as
accounts from 15 additional locations, consolidated 19 stores
into existing locations, and sold 12 stores, for a net reduction
of six stores and an ending balance of 2,749 stores.  During the
second quarter of 2006, the Company added financial services to
21 existing rent-to-own store locations and ended the quarter
with a total of 77 stores providing these services.

Through the six month period ending June 30, 2006, the Company
opened 19 new rent-to-own store locations, acquired 18 stores as
well as accounts from 20 additional locations, consolidated 33
stores into existing locations, and sold 15 stores, for a net
reduction of 11 stores.  Through the six-month period ending
June 30, 2006, the Company added financial services to 38
existing rent-to-own store locations and consolidated one store
with financial services into an existing location, for a net
addition of 37 stores providing these services.

Since June 30, 2006, the Company has opened 1 new rent-to-own
store location and acquired 1 store, as well as accounts from 4
additional locations. The Company has added financial services
to 4 existing rent-to-own store locations since June 30, 2006.

A full-text copy of the Company's Quarterly Report is available
for free at http://researcharchives.com/t/s?ed2

Based in Plano, Texas, Rent-A-Center, Inc. (Nasdaq:RCII) --
http://www.rentacenter.com/-- operates the largest chain of
consumer rent-to-own stores in the U.S. with 2,751 company
operated stores located in the U.S., Canada, and Puerto Rico.
The company also franchises 297 rent-to-own stores that operate
under the "ColorTyme" and "Rent-A-Center" banners.

                        *    *    *

As reported in the Troubled Company Reporter on June 29, 2006,
Standard & Poor's Ratings Services assigned its 'BB+' rating to
Rent-A-Center Inc.'s US$725 million credit facility.  It also
assigned a recovery rating of '4' to the facility, indicating
the expectation for marginal recovery of principal in the event
of a payment default.  The loan comprised a US$400 million
revolving credit facility due in 2011, a US$200 million term
loan A due in 2011, and a US$125 million term loan B due in
2012.  The corporate credit rating on Rent-A-Center Inc. is
'BB+' with a negative outlook.

As reported in the Troubled Company Reporter on June 23, 2006,
Moody's Investors Service assigned a Ba2 rating to the bank loan
of Rent-A-Center, Inc., and affirmed the Ba2 corporate family as
well as the senior subordinated note issue at Ba3.  The
continuation of the positive outlook reflected Moody's opinion
that ratings could be upgraded over the medium-term once the
company establishes a lengthier track record of sales
improvement and Moody's becomes more comfortable with the
company's financial policy.


SUNCOM WIRELESS: June 30 Balance Sheet Upside-Down by US$338MM
--------------------------------------------------------------
SunCom Wireless Holdings, Inc., reported 2006 second quarter
financial results, which reflected a continuation of the
Company's improving operating and cash flow profile.

At June 30, 2006, the company's stockholders' deficit widened to
US$338,223,000 from an US$83,266,000 deficit at Dec. 31, 2005.

During the second quarter, the Company generated Adjusted EBITDA
of US$24.5 million compared with US$7.4 million in the first
quarter 2006, while net cash used in operating activities was
US$21.2 million compared with US$21.6 million in the first
quarter.

During the quarter, the company added a net 24,329 subscribers
on gross additions of 92,131.  Monthly churn continued to
improve as operations further stabilized, declining to 2.2% from
2.5% in the first quarter 2006 and 3.2% a year ago.  SunCom
Wireless ended the quarter with 1,031,443 subscribers.

The increased subscriber count during the quarter, along with
higher average revenues per user led to a 5.8% increase in
service revenues as compared to the first quarter of 2006.  ARPU
rose to US$52.89 from US$51.55 in the first quarter 2006, which
reflected adjustments to SunCom's rate plan offerings that began
in March of this year as well as seasonally higher usage.
Roaming revenues were US$19.5 million compared to US$21.5
million in the first quarter.

"SunCom's second quarter results reflect the continued
stabilization of our business and demonstrate the company's
opportunity to grow cash flows", said Interim Chief Executive
Officer, Eric Haskell.  He added, "The Company has made solid
strides in improving its operating metrics while at the same
time addressing our need to grow revenues and leverage our
existing cost structure."

Second quarter financial results also reflect a full quarter's
benefit of initiatives taken in the first quarter to reduce off-
network roaming expenses as well as lower retention spending and
bad debt expense.

Bill Robinson, Executive Vice President of Operations added,
"Both our domestic and Puerto Rico operations contributed to the
significant improvement experienced in the quarter and we
believe that the business has reached a state of normalcy
following the integration and transition activities that we
completed over the past 18 months."

Based in Berwyn, Pennsylvania, SunCom Wireless Holdings Inc.
(NYSE: TPC) -- http://www.suncom.com/-- offers digital wireless
communications services to more than one million subscribers in
the southeastern United States, Puerto Rico and the U.S. Virgin
Islands.  SunCom is committed to delivering Truth in Wireless by
treating customers with respect, offering simple,
straightforward plans and by providing access to the largest GSM
network and the latest technology choices.


SUNCOM WIRELESS: S&P Affirms Ratings & Removes Negative Watch
-------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings on
Berwyn, Pennsylvania-based SunCom Wireless Holdings Inc. and its
operating subsidiaries, including the 'CCC+' corporate credit
rating, and removed the ratings from CreditWatch.  The outlook
is negative.

The ratings were placed on CreditWatch with negative
implications Jan. 23, 2006, after the company announced the
hiring of financial and legal advisers to consider alternatives
to improve its financial position.  Debt outstanding as of
June 30, 2006, was about US$1.7 billion, including US$244
million of secured bank debt.

"The affirmation reflects our belief that a bankruptcy filing or
restructuring announcement by the parent company or its
operating subsidiaries, while still possible, is less imminent,"
said Standard & Poor's credit analyst Susan Madison.

Although the company continues to retain advisers, it is not
currently engaged in formal discussions with bondholders
regarding potential restructurings.  The decision by parent
SunCom Wireless Holdings in May to contribute US$194 million to
its operating company, SunCom Wireless Inc., eliminated a
substantial point of contention between management and
bondholders.

Additionally, SunCom's operating trends appear to have
stabilized during the first half of 2006, after a year of rapid
decline following the acquisition of its primary roaming partner
AT&T Wireless Inc.  Nevertheless, the outlook for SunCom remains
negative since the company continues to face significant
operational challenges as it transitions to a stand-alone
wireless provider.  SunCom is an independent regional wireless
service provider in two regional territories.  SunCom's
southeast region includes all of North and South Carolina, and
portions of northern Georgia and eastern Tennessee.  SunCom also
operates in Puerto Rico and the U.S. Virgin Islands.




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


MIRANT CORP: Fifth Circuit Rules on Pepco APSA-Related Dispute
--------------------------------------------------------------
As previously reported, the U.S. District Court for the Northern
District of Texas issued rulings in 2004 and 2005 relating to
the contractual dispute between Mirant Corp. and its debtor-
affiliates and Potomac Electric Power Company arising from their
Asset Purchase and Sale Agreement.

The District Court denied Mirant's motion to reject a Back-to-
Back Agreement under the APSA in December 2004.  The District
Court ruled that the BTB Agreement was not severable from the
APSA and thus, was not eligible for rejection under Section 365
of the Bankruptcy Code.

Mirant took an appeal from the District Court's December 2004
Order to the U.S. Court of Appeals for the Fifth Circuit.

After the District Court's ruling on the Rejection Motion,
Mirant also filed with the Bankruptcy Court another motion to
reject.  But the District Court withdrew the Second Rejection
Motion and related pleadings from the Bankruptcy Court.

In March 2005, the District Court directed Mirant to perform
under the BTB until:

    * either rejection was approved; or

    * the Debtors demonstrated that discontinuing performance
      pending rejection was within the public interest.

Mirant brought the March 2005 Orders to the Fifth Circuit for a
review.  Mirant also asked for a stay of the order to perform
under the BTB Agreement pending ruling on the merits of the
Second Rejection Motion.

On July 19, 2006, a three-judge Fifth Circuit panel ruled in
favor of PEPCO and affirmed the District Court's December 2004
and March 2005 decisions.

In a 23-page Opinion, the Fifth Circuit says the District Court
was correct to refuse Mirant's motion to reject its obligations
under the BTB Agreement under Section 365 of the Bankruptcy
Code.  The BTB Agreement is not separate or severable from the
remaining portions of the APSA since the parties themselves did
not intend it to be severable from the purchase agreement as a
whole.

The Fifth Circuit rules that it has no appellate jurisdiction to
review the District Court's withdrawal of Mirant's Second
Rejection Motion because the Order is not a final appealable
order.

According to the Fifth Circuit, the District Court didn't err in
directing Mirant to perform under the BTB Agreement pending
resolution of the Second Rejection Motion.  By the time the
District Court issued the March 2005 Orders, the Debtors have
been directly or indirectly ordered to perform under the BTB at
least four times.

"This is not the first time that Mirant and PEPCO have been
before us, and we recognize that it may not be the last," the
Circuit Judges note.

Hence, the Fifth Circuit cautions Mirant that, while the Fifth
Circuit Court welcomes legitimate appeals, any future appeals
that continue the pattern of attempts to reject the BTB
Agreement or efforts to refuse payment pending rejection will
face the most severe sanctions available.

A full-text copy of the Fifth Circuit's Opinion dated July 19,
2006, is available for free at:

               http://researcharchives.com/t/s?ee3

The Fifth Circuit Panel comprises of Circuit Judges Emilio M.
Garza, E. Grady Jolly, and Jerry E. Smith.

Prior to the Fifth Circuit's ruling, Mirant and its affiliates,
and PEPCO, et al., have entered into a settlement agreement to
resolve their disputes, including those with respect to the BTB
Agreement and withdrawal of the reference.

PEPCO spokeswoman Mary-Beth Hutchinson told Bloomberg News that
the Circuit Court's decision will have no effect on the
Settlement Agreement, which is now waiting for the Bankruptcy
Court's approval.

                     About Mirant Corp.

Headquartered in Atlanta, Georgia, Mirant Corp. (NYSE: MIR) --
http://www.mirant.com/-- is an energy company that produces and
sells electricity in North America, the Caribbean, and the
Philippines.  Mirant's investments in the Caribbean include
three integrated utilities and assets in Jamaica, Grand Bahama,
Trinidad and Tobago and Curacao.  Mirant owns or leases more
than 18,000 megawatts of electric generating capacity globally.
Mirant Corporation filed for chapter 11 protection on July 14,
2003 (Bankr. N.D. Tex. 03-46590), and emerged under the terms of
a confirmed Second Amended Plan on Jan. 3, 2006.  Thomas E.
Lauria, Esq., at White & Case LLP, represented the Debtors in
their successful restructuring.  When the Debtors filed for
protection from their creditors, they listed US$20,574,000,000
in assets and US$11,401,000,000 in debts.

                        *    *    *

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

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

As reported in the Troubled Company Reporter on July 13, 2006,
Fitch Ratings placed the ratings of Mirant Corp., including the
Issuer Default Rating of 'B+', and its subsidiaries on Rating
Watch Negative following its announced plans to buy back stock
and sell its Philippine and Caribbean assets.

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

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

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


MIRANT CORP: Bowline Unit Wants 2006 Consent Order Approved
-----------------------------------------------------------
Mirant Bowline, LLC, a Mirant Corp. debtor-affiliate asks the
U.S. Bankruptcy Court for the Northern District of Texas to
approve the 2006 Consent Order extending Mirant Corporation and
its debtor-affiliates' license to operate under a Major
Petroleum Facility License.

Mirant Bowline, owns and operates a generating station located
in West Haverstraw, New York.  As an Onshore Major Oil Storage
Facility, Mirant Bowline is subject to extensive environmental
regulations by federal, state, and local authorities, which
require continuous compliance with conditions established by
licensing.

The New York Department of Environmental Conservation has the
authority to enforce the state's environmental laws including
Parts 612-614 of Chapter V of the New York Environmental
Conservation Rules and Regulations.  The DEC is responsible for
the regulation of the storage and handling of petroleum as well
as licensing a MOSF in New York.

The DEC issued to Mirant Bowline a Major Petroleum Facility
License for its Haverstraw generation station, which expired on
March 31, 2006.

On January 4, 2006, the DEC issued a Notice of Violation to
Mirant Bowline alleging that the Debtor:

   -- violated various provisions of 6 NYCRR Parts 612 through
      614; and

   -- was not in complete compliance with the terms and
      conditions of its MPFL.

Mirant Bowline responded to the alleged violations and presented
a proposal to demonstrate its compliance.

Mirant Bowline also submitted an application for the renewal of
its MPFL.  The DEC is currently reviewing Mirant Bowline's
renewal application.  The DEC is also reviewing Mirant Bowline's
Compliance Proposal and has reserved its rights to accept or
reject the Compliance Proposal.

Before the March 31 expiry of the MPFL, Mirant Bowline and the
DEC executed an Order on Consent, which authorizes the Debtor to
continue to operate the Facility under the terms and conditions
of its MPFL until May 30, 2006, pending the DEC's review of the
Debtor's renewal application.  The DEC further extended that
authority until August 1, 2006.

Under the 2006 Consent Order, the DEC assessed a US$20,000 civil
penalty against Mirant Bowline.

A full-text copy of the July 2006 Consent Order is available for
free at http://bankrupt.com/misc/bowline2006consentorder.pdf

                      About Mirant Corp.

Headquartered in Atlanta, Georgia, Mirant Corp. (NYSE: MIR) --
http://www.mirant.com/-- is an energy company that produces and
sells electricity in North America, the Caribbean, and the
Philippines.  Mirant's investments in the Caribbean include
three integrated utilities and assets in Jamaica, Grand Bahama,
Trinidad and Tobago and Curacao.  Mirant owns or leases more
than 18,000 megawatts of electric generating capacity globally.
Mirant Corporation filed for chapter 11 protection on July 14,
2003 (Bankr. N.D. Tex. 03-46590), and emerged under the terms of
a confirmed Second Amended Plan on Jan. 3, 2006.  Thomas E.
Lauria, Esq., at White & Case LLP, represented the Debtors in
their successful restructuring.  When the Debtors filed for
protection from their creditors, they listed US$20,574,000,000
in assets and US$11,401,000,000 in debts.

                        *    *    *

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

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

As reported in the Troubled Company Reporter on July 13, 2006,
Fitch Ratings placed the ratings of Mirant Corp., including the
Issuer Default Rating of 'B+', and its subsidiaries on Rating
Watch Negative following its announced plans to buy back stock
and sell its Philippine and Caribbean assets.

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

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

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




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


* URUGUAY: State Oil Company Raises Fuel Prices by 3.6%
-------------------------------------------------------
The Uruguayan government said in a statement that Ancap, the
country's state-run oil firm, increased fuel prices an average
3.6% late last week.

Daniel Martinez, the head of Ancap, said in a statement that oil
prices, currently US$75.40 a barrel, represent 60% of final fuel
prices in Uruguay.

Business News Americas reports that the price hike corresponded
to:

     -- a 4.4% increase in diesel prices, and
     -- an average 2.7% growth in naphtha prices.

However, prices of kerosene and liquefied petroleum gas were
unaffected, BNamericas states.

                        *    *    *

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


BRASKEM SA: Will Focus on Petrochemicals Projects in Venezuela
--------------------------------------------------------------
Jose Carlos Grubisich, the chief executive officer of Braskem
SA, told reporters late last week that while it waits for
Bolivia to define its hydrocarbons policy, the firm will
concentrate on two Venezuelan petrochemicals projects it is
studying with Petroleos de Venezuela, the state-run oil company
of Venezuela, Business News Americas reports.

Mr. Grubisich told BNamericas, "We have put our Bolivian project
on hold until we have a picture of what is going to happen
there.  Our main international production projects are the two
in Venezuela for which we are speeding up studies."

Braskem has decided to conduct a study for a joint venture with
Petroleos de Venezuela to construct an El Tablazo polypropylene
plant with a yearly capacity of 450,000 tons, and a natural gas
cracker in Jose with an annual capacity of up to 1.5 million
tones, BNamericas relates, citing Mr. Grubisich.

Mr. Grubisich told BNamericas, "We are sending top people to
work full time in Venezuela to speed up the projects."

According to BNamericas, the two projects are estimated to have
a combined investment of US$3 billion.

The report underscores that Mr. Grubisich said studies for the
El Tablazo project will conclude at the end of 2006 and that
construction works will start in the second half of next year.

Meanwhile, studies for the Jose project will close at the end of
2007.  Investments will begin in 2008 and operations in 2011,
Mr. Grubisich told BNamericas.

BNamericas says that Mr. Grubisich would not commit to new price
levels needed to make all the projects feasible.  However, he
said the reference price had to be the price of natural gas
supplied to petrochemicals projects in the Middle East that
could be around or lesser than US$1/MBTU.

"The two projects will take advantage of competitive gas
prices," BNamericas states, citing Mr. Grubisich.

Braskem -- http://www.braskem.com.br/-- is a thermoplastic
resins producer in Latin American, and is among the three
largest Brazilian-owned private industrial companies.  The
company operates 13 manufacturing plants located throughout
Brazil, and has an annual production capacity of 5.8 million
tons of resins and other petrochemical products.

                        *    *    *

Fitch Ratings upgraded these ratings of Braskem S.A. on
July 1, 2006:

   -- Foreign Currency IDR: To BB+ Rating with Stable Outlook,
      from BB Rating with Positive Outlook;

   -- US$525 million Sr. Unsecured notes due 2008, 2014: To BB+,
      from BB;

   -- US$350 million Perpetual Bonds: To BB+, from BB;

   -- National Long-term Rating: To 'AA(bra)' from 'AA-(bra)';
      and

   -- BRL600 million 12th and 13th Debenture Issuances due 2009
      and 2010: To 'AA(bra)' from 'AA-(bra)'.

These rating actions followed 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.


CITGO PETROLEUM: Talks on Sale of Houston Plant Stake Continues
---------------------------------------------------------------
Fernando Garay, the public affairs manager of Citgo Petroleum
Corp., denied to El Universal that the company has reached a
final agreement on the sale of its 41.25% stake in Lyondell-
Citgo Refining L.P. to partner Lyondell Chemical.

It was widely reported that the partners have reached a final
agreement on the sale of the refinery to Lyondell.

However, Mr. Garay told El Universal that Citgo and Lyondell
have not concluded negotiations.  He said that any accord
between the two companies would be disclosed once accomplished.

El Universal reports that negotiations on the sale of Citgo's
stake are moving forward.  A bidding round was held to hear each
of the owners' offers to buy the refinery.

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

El Universal states that Alejandro Granado, the president of
Citgo's board of directors, had said two weeks ago that Lyondell
stopped selling the plant because of tax considerations.

"The tax burden would render the sale inconvenient for
Lyondell," Mr. Grandado told El Universal.

                       About Lyondell

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

                        About CITGO

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

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

                        *    *    *

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


PETROLEOS DE VENEZUELA: Unit Owes Seniat VEB163MM in Back Taxes
---------------------------------------------------------------
PDVSA Gas -- a unit of Petroleos de Venezuela, the Venezuelan
state-run oil company -- owes VEB163 million in back taxes,
Business News Americas reports, citing Seniat -- the tax
authority in Venezuela.

Seniat told BNamericas that PDVSA Gas has not paid taxis from
January 2004 to December 2005.

"Officials from the hydrocarbons and related activities auditing
division... have notified PDVSA Gas," Seniat said in a
statement.

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

                        *    *    *

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


PETROZUATA FINANCE: S&P Removes B+ Rating from Negative Watch
-------------------------------------------------------------
Standard & Poor's Ratings Services removed its 'B+' ratings on
Petrozuata Finance Inc.'s US$287.2 million bonds due 2009,
US$625 million bonds due 2017, and US$75 million bonds due 2022
from CreditWatch with negative implications.  The ratings were
placed on CreditWatch with negative implications on July 19,
2005.  The outlook is now negative.

Petrozuata Finance's bonds are guaranteed by Petrolera Zuata,
Petrozuata C.A.  Petrozuata is a heavy oil production and
upgrading project in Venezuela owned by Conoco Orinoco (50.1%),
a subsidiary of ConocoPhillips (A-/Positive/A-2), and PDVSA
Petroleo Y Gas (49.9%), a subsidiary of Petroleos de Venezuela
S.A. (PDVSA; B+/Watch Dev/--).

"The negative outlook reflects the potential for the government
to apply a potentially large tax bill, for what it may view as
Petrozuata's overproduction of heavy oil from contractual limits
and Petrozuata's unauthorized use of natural gas associated with
heavy oil production, increase the project's tax rate to 50%
from 34%, increase the royalty rate, and increase PDVSA's
ownership share in the project," said Standard & Poor's credit
analyst Terry A. Pratt.  Given Petrozuata's strong financial
performance, it could probably absorb the additional expected
rise in the corporate tax rate at its current rating level.
"However, attendant increases in operating costs would
materially increase Petrozuata's break-even price of Maya crude
oil, which would erode its competitive position and make a
higher rating more difficult to achieve, even if the threat of
government intervention in the project wanes and the country's
creditworthiness improves," he continued.

A movement back to a stable outlook would require a resolution
of the tax and ownership changes such that the project's long-
term operation and financial performance is sufficient for a
'B+' rating.


* VENEZUELA: Forges Closer Energy Cooperation Ties With Iran
------------------------------------------------------------
The Bolivarian Republic of Venezuela and the Islamic Republic of
Iran have forged closer energy cooperation ties through the
signing of a number of new agreements on the occasion of the
visit of Venezuelan President Hugo Chavez to the Iranian
capital.

The agreements, which were signed by Rafael Ramirez, Venezuela's
minister of Energy and Petroleum and president of Petroleos de
Venezuela; Gholamreza Manouchehri, executive president of
PETROPARS, the Iranian national oil company, and Manssur
Moazami, deputy minister of the Iranian Ministry of Petroleum's
Human Resources department, cover the development of activities
such as personnel training in the areas of hydrocarbon
exploration and production on dry land and offshore.

                        *    *    *

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



                         ***********


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

Troubled Company Reporter - Latin America is a daily newsletter
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Copyright 2006.  All rights reserved.  ISSN 1529-2746.

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