TCRLA_Public/060814.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 14, 2006, Vol. 7, Issue 160

                          Headlines

A R G E N T I N A

BANCO DE GALICIA: Posts ARS34.3 Mil. Second Quarter Net Income
BANCO MACRO: Net Income Up 62% to ARS99 Mil. in Second Quarter
CARVING COOPERATIVA: Individual Reports Due in Court on Aug. 21
CLINICA SALAS: Trustee to Submit Gen. Report in Court on Aug. 31
COMPANIA DE INVERSIONES: Comision Nacional Rates Debt at raD

EUROMAYOR SA: Buys Back Obligaciones Negociables for US$3.4 Mil.
FIDEICOMISOS BHN: S&P Arg Puts raD Ratings on US$180-Mil. Debts
FIDEICOMISOS EDIFICIO: Fitch Arg Rates US$54-Mil. Debts at CCC
FIDEICOMISOS HIPOTECARIO: S&P Argentina Rates Four Debts at raD
GAS ARGENTINO: Fitch Argentina Affirms D Rating on US$130M Notes

HILAL HECTOR: Marin Named as Trustee for Bankruptcy Proceeding
PETROBRAS ENERGIA: Inks Pact for Sale of Citilec Stake to Eton
PETROBRAS ENERGIA: Net Income Reaches ARS397MM in Second Quarter
RESINPOL S.A.I.C.: Individual Reports to be Submitted on Aug. 25
SANCOR: S&P Puts raCCC Ratings on US$394.8 Million in Notes

SENNIC SA: Seeks for Court Approval to Reorganize Business
TELEFONICA DE ARGENTINA: Revenues Up 9.6% in First Half of 2006
TRANSENER: Petrobras Inks Pact for Sale of Citilec Stake to Eton
VALUED SA: Individual Reports to be Filed in Court on Aug. 31

* ARGENTINA: Issuing US$2 Billion Joint Bond by September
* ARGENTINA: Uruguay Sues Nation Due to Road Blocks

B A H A M A S

COMPLETE RETREATS: Gets Interim OK for Utility Firm's Services
COMPLETE RETREATS: Paying US$140K of Foreign Creditors' Claims
WINN-DIXIE: Completes Sale of 12 Supermarkets in Bahamas

B A R B A D O S

ANDREW CORP: Bid Rejection Cues S&P to Put Ratings on NegWatch
ANDREW CORP: CommScope Responds to Bid Rejection

B E L I Z E

* BELIZE: Tries to Resolve City Council's Financial Crisis

B E R M U D A

REFCO: Davidson Kempner Offering to Buy Refco Capital Claims
REFCO INC: Eight Refco LLC Claimants Can File Consolidated Claim
SCOTTISH RE: Ratings Cut May Seriously Affect Future Earnings

B O L I V I A

INTERNATIONAL PAPER: Earns US$115 Mil. in Quarter Ended June 30

B R A Z I L

AES TIETE: Reports BRL305.5 Million Second Quarter Net Income
BANCO NACIONAL: IDB Grants Local Currency Payments for CCLIP
BUCKEYE TECHNOLOGIES: Earns US$1.2 Mil. in Quarter Ended June 30
CHEMTURA CORP: Earns US$420,000 in Second Quarter of 2006
COMPANHIA ENERGETICA: EDF Transfers Shares in Light S.A. to Unit

COMPANHIA SIDERURGICA: Earns BRL1.9 Billion in Second Quarter
ELETROPAULO: Posts EBITDA of BRL523.3 Million in Second Quarter
PETROLEO BRASILEIRO: In Talks with PDVSA to Form Company
PETROLEO BRASILEIRO: Investing US$22.1 Bil. to Expand Gas Output
VARIG: Variglog Faces Suit for Payment of Airline Workers' Wages

C A Y M A N   I S L A N D S

ATLAS TRADING: Creditors Must File Proofs of Claim by Sept. 7
AVENEL LIMITED: Proofs of Claim Filing Deadline Is on Sept. 7
CHARLOTTE LIMITED: Shareholders Vote to Liquidate Business
COBBLE (OVERSEAS): Last Day to File Proofs of Claim Is Sept. 7
COBBLE (SELECT): Filing of Proofs of Claim Is Until Sept. 7

COLESVILLE LIMITED: Proofs of Claim Must be Filed by Sept. 7
DEUTSCHE INT'L: Proofs of Claim Filing Deadline Is on Sept. 7
FAIRFIELD SAXO MASTER: Proofs of Claim Filing Ends Sept. 7
FAIRFIELD SAXO: Proofs of Claim Must be Submitted by Sept. 7
FLAGTOWN LIMITED: Last Day to File Proofs of Claim Is on Sept. 7

IBC INTERNATIONAL: Shareholders Place Company in Liquidation
PARAMUS LIMITED: Creditors Must File Proofs of Claim by Sept. 7
QUINTERO HOLDINGS: Proofs of Claim Filing Is Until Sept. 7
SEAGATE TECH: Discloses US$2.5 Bil. Share Repurchase Program
SEAGATE TECH: Moody's Comments on US$2.5 Bil. Buyback Program

TAG ABSOLUTE: Creditors Must File Proofs of Claim by Sept. 7
TELEOLOGIC LIMITED: Filing of Proofs of Claim Is Until Sept. 7
TSF-D1: Deadline for Proofs of Claim Filing Is Set for Sept. 7

C H I L E

ARAMARK SERVICES: Moody's Reviews Ratings for Possible Downgrade

C O L O M B I A

* COLOMBIA: FTA Won't Change Flower Sector's Tariff Exemptions

C O S T A   R I C A

DENNY'S CORP: June 30 Balance Sheet Upside-Down by US$257.9 Mil.

C U B A

* CUBA: Entities Await Talks on Payback for Confiscated Assets
* CUBA: US Forms Panel to Determine Economic Future with Country

D O M I N I C A N   R E P U B L I C

AES CORP: AES Andres Lessens Blackouts in Dominican Republic
BANCO INTERCONTINENTAL: Ex-Head Insists Lois Malkun Fraud Trial

E C U A D O R

PETROECUADOR: Delivers 450,000 Barrels of Napo Crude to Taurus

* ECUADOR: Banana Growers' Planned Strike Cancelled

G U A T E M A L A

GOODYEAR TIRE: Reports US$2 Million Net Income in Second Quarter

H A I T I

* HAITI: Will Receive US$17-Mil. Aid from Caribbean Development

H O N D U R A S

WARNACO GROUP: S&P Affirms BB- Corporate Credit Rating

* HONDURAS: Bus. Sector Says FTA Futile If Instability Continues

J A M A I C A

AIR JAMAICA: London Unit Says Flights Undisturbed by Terrorism

M E X I C O

CINEMARK INC: Century Buy Prompts Moody's to Affirm B1 Rating
CORPORACION GEO: S&P Assigns BB Foreign & Local Issuer Ratings
COTT CORP: Second Quarter Earnings Down to US$7.6 Million
CREDIT SUISSE: S&P's Rating on Class H Certificates Tumbles to D
DIRECTV GROUP: Second Quarter Revenues Up 10% to US$3.52 Billion

GRUPO MEXICO: La Caridad Mine Operations Resume After Strike
GRUPO MEXICO: Operations at Cananea Copper Mine Back to Normal
KANSAS CITY SOUTHERN: Investing US$101MM on Locomotive Import
KANSAS CITY SOUTHERN: Unit Will Sue Ferromex for Damages
NEWPARK RESOURCES: Moody's Rates US$150 Million Term Loan at B2

PROGRESS RAIL: S&P Withdraws B+ Corporate Credit Rating
SATELITES MEXICANOS: Files for Chapter 11 Protection in New York
SATELITES MEXICANOS: Case Summary & 9 Largest Unsecured Lenders

* MEXICO: Auto Exports Rise While Domestic Sales Drop in July

N I C A R A G U A

* NICARAGUA: State Firm Inks Supply Contract with Empresa Ventus

P A N A M A

CHIQUITA BRANDS: Closes Two Plantations in Bocal del Toro

* PANAMA: IDB Approves US$27MM Loan to Improve Chiriqui Province

P E R U

PETROLEO BRASILEIRO: Will Expand Operations in Peru
TELEFONICA DEL PERU: Access Grows 11.4% in First Semester 2006

* PERU: Railway System with Bolivia to Cut Transport Cost by 70%

P U E R T O   R I C O

CENTENNIAL COMM: Balance Sheet Upside Down by US$1.06B at May 31
NBTY INC: S&P Upgrades Bank Loan Rating to BB+ from BB
RENT-A-CENTER: Court Nixes Burdusis et al. Request for Review
RENT-A-CENTER: Declares Prospective Settlement of Burdusis Case

T R I N I D A D   &   T O B A G O

BRITISH WEST: Delays Heathrow-Piarco Flight for Three Hours

U R U G U A Y

BANCO ITAU: Slams Rumor on Selling BankBoston Uruguay After Buy

* URUGUAY: Sues Argentina Due to Road Blocks

V E N E Z U E L A

CITGO PETROLEUM: May be Fined for Oil Spill in Louisiana
ELECTRICIDAD DE CARACAS: Aims 9.4% Debt Reduction by Year-End
PETROLEOS DE VENEZUELA: Auctions Four Offshore Gas Blocks
YPF SA: Parent Firm to Vie for Venezuela Gas Contract

* VENEZUELA: Banking Regulator Balks at Service Charges
* VENEZUELA: President Bags Ten Investment Projects During Tour
* VENEZUELA: Tax Authority Imposing Levy on Electronic Commerce

* Airline & Airport Ratings Unaffected by Foiled Terrorist Plot
* US Mulls Withdrawal of Trade Benefits to Developing Nations


                         - - - - -


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


BANCO DE GALICIA: Posts ARS34.3 Mil. Second Quarter Net Income
--------------------------------------------------------------
Banco de Galicia y Buenos Aires S.A. disclosed its financial
results for the second quarter ended June 30, 2006.

The Bank's adjusted net income amounted to ARS34.3 million.
After the ARS31.2 million adjustment to the valuation of public-
sector assets, the Bank's net income was ARS3.1 million.

The Bank's operating income continued improving, along with a
consistent increase in the level of activity and the volume of
business, and an improvement in asset quality.

The Bank's exposure to the private sector continued to increase,
reaching ARS8,433 million, with a 40.1% increase during the last
twelve months and a 39.8% annualized increase during the
quarter.  The Bank's estimated market share of loans to the
private sector reached 7.23%, up 0.27 percentage points from
June 30, 2005.

The Bank's deposits in Argentina reached ARS9,411 million, with
a 31.3% increase in the last twelve months and a 40.9%
annualized increase during the quarter.  The Bank's estimated
market share of total private-sector deposits as of
June 30, 2006, reached 8.09%, up 0.48 percentage points from
June 30, 2005.

The Bank's non-accrual loan portfolio decreased to 4.08% of
total loans to the private sector, from 13.33% as of
June 30, 2005, and the coverage with allowances for loan losses
of the nonaccrual loan portfolio reached 118.01%.

                         Net Income

During the second quarter of 2006, the Bank recorded a ARS3.1
million net income, compared with a ARS138.8 million net income
in the same quarter of 2005.  In the second quarter of 2005 the
Bank recorded a ARS124.3 million profit as a result of the
forgiveness by Grupo Financiero Galicia S.A.  of the
subordinated negotiable obligations issued by Banco Galicia
Uruguay S.A.

Excluding the ARS31.2 million loss from the adjustment to the
valuation of public-sector assets, the Bank's adjusted net
income for the quarter amounted to ARS34.3 million.  Beginning
in December 2005, no losses have been recorded in connection
with the amortization of amparo claims, as such amortization was
deferred in accordance with Argentine Central Bank Communiqu,
"A" 4439.  In the second quarter of 2005, excluding the ARS69.8
million profit from the adjustment to the valuation of public-
sector assets, the ARS32.9 million loss from the amortization of
amparo claims and the aforementioned ARS124.3 million non-
recurrent profit, the Bank had recorded an adjusted net loss of
ARS22.4 million.

The higher adjusted net income for the quarter was the
consequence of increases in the adjusted net operating income of
ARS54.4 million and in the net other income of ARS56.5 million.
These profits were partially offset, mainly, by increases in
administrative expenses of ARS32.0 million and in provisions for
loan losses of ARS11.7 million and a decrease in income from
equity investments of ARS10.3 million.

The adjusted net operating income for the quarter reached
ARS285.2 million, with a 23.6% increase from ARS230.8 million
recorded in the same quarter of the prior year.  This increase
resulted from a higher adjusted net financial income (with an
increase of ARS30.5 million) and a higher net income from
services (with an increase of ARS23.9 million).

The quarter's net financial income amounted to ARS96.8 million,
ARS70.5 million lower than in the second quarter of the prior
year.  Excluding the results from the valuation of public-sector
assets (a ARS31.2 million loss in the second quarter of 2006 and
a ARS69.8 million profit in the second quarter of 2005), the
Bank's adjusted net financial income amounted to ARS128.0
million for the second quarter of 2006 and to ARS97.5 million
for the same quarter of the prior year.

The quarter's net financial income includes a profit from
quotation differences (net of the cost of forward foreign
exchange transactions) of ARS17.4 million, made of a ARS14.2
million gain from FX brokerage and a ARS3.2 million gain from
the valuation of the Bank's foreign-currency net position (net
of the above mentioned cost).  The profit from quotation
differences in the same quarter of the prior year was ARS12.7
million (made of a ARS0.1 million loss from the valuation of the
foreign-currency net position and a ARS12.8 million gain from FX
brokerage).  The variation of the profit from the valuation of
the foreign-currency net position was mainly due to the
differential variation of the exchange rate in the second
quarter of 2005 and 2006 (during the second quarter of 2005 the
exchange rate decreased 1.11% and in the second quarter of 2006
it recorded a slight increase of 0.13%) and to the increase in
the Bank's foreign-currency net position during the last twelve
months.

The adjusted net financial income, net of quotation differences,
amounted to ARS110.6 million.  This profit was mainly the
consequence of the profits associated with the peso-denominated
and the CER-adjusted matched portfolios and with the funding of
the CER-adjusted and dollar-denominated asset mismatches with
peso-denominated liabilities.  These profits were partially
offset by the loss from the dollar-denominated matched
portfolio.

The average yield on interest-earning assets decreased 35 basis
points to 9.53% in the second quarter of 2006, from 9.88% in the
second quarter of 2005.  The lower average yield on interest-
earning assets for the quarter was mainly due to the decrease in
the CER variation applied to Bogar, Secured Loans and CER-
adjusted loans to the private sector.  This decrease was
partially offset by the increase in the Libo rate during the
last twelve months, associated to the return on the Boden 2012
received and to be received as compensation for the asymmetric
pesification.  The interest rate in pesos did not record
significant changes between the two quarters.

The average rate of interest-bearing liabilities experienced a
50 b.p. decrease, due not only to the lower CER adjustment
associated with the cost of the financial assistance from the
Argentine Central Bank and the advance to purchase the Hedge
Bond, but also and mainly, to a non-recurrent adjustment that
was the consequence of:

   (i) a retroactive recalculation of the installments for which
       the Bank had advanced funds within the bidding system
       established by Argentine Central Bank's Communique "A"
       4268   to settle financial assistance from such Central
       Bank, which was the outcome of a mandatory change in the
       repayment schedule resulting from the payments made in
       advance on such financial assistance by the Bank; and

  (ii) the normalization of the interest accrued on the August
       2005 amortization installment of the advance to purchase
       the Hedge Bond, even though such advance has not been
       executed.

This decrease was partially offset by increases in:

   (i) the average rate of interest-bearing deposits to 5.61% in
       the second quarter of 2006 from 3.99% in the second
       quarter of 2005 and

  (ii) the cost of the debt denominated in foreign currency,
       associated among other to the increase of the Libo rate.

Provisions for loan losses for the quarter amounted to ARS34.5
million, ARS11.7 million higher than in the same quarter of the
prior year.  Net income from services amounted to ARS157.2
million, up 17.9% from the ARS133.3 million recorded in the
second quarter of 2005.  All of the income from services items
showed growth as compared with the same quarter of the prior
year, mainly as a consequence of a significant increase in the
volume of transactions.

Administrative expenses for the quarter totaled ARS217.3
million, up 17.3% from the same quarter of the prior year.
Personnel expenses increased 24.0% due to salary increases along
with a 14.8% increase in staff associated with the higher level
of activity.  The remaining administrative expenses, excluding
advertising and publicity, increased 21.6%, mainly as a
consequence of the higher level of activity, the geographical
expansion of the regional credit-card companies and the period's
inflation.  The item advertising and publicity decreased by
33.9% compared to the second quarter of the prior year.  A
ARS9.3 million loss from equity investments was recorded, mainly
as a consequence of the establishment of a reserve in order to
fully cover the investment in Aguas Argentinas S.A.

Net other income amounted to ARS30.7 million.  That amount does
not include any loss from the amortization of amparo claims.  In
the second quarter of 2005, net other income amounted to ARS65.6
million, which included:

   (i) a ARS124.3 million profit generated by Grupo Galicia's
       forgiveness of the subordinated negotiable obligations
       issued by Galicia Uruguay and

  (ii) a ARS32.9 million loss from the amortization of amparo
       claims.

Net of these amounts, the Bank recorded a ARS25.8 million net
other loss in the second quarter of 2005.  The variation between
this loss and the quarter's profit was mainly due to the
reversal of provisions for loan losses and other contingencies
during the quarter, as opposed to the establishment of such
provisions during the second quarter of 2005.  The income tax
charge was ARS15.0 million, up ARS1.2 million from the same
quarter of 2005.  This charge corresponds to the regional
credit-card companies.

                      Level Of Activity

Total gross loans amounted to ARS11,030 million at June 30 of
which ARS6,665 million corresponded to loans to the private
sector.  Total loans to the private sector granted by the Bank's
Argentine operation increased 49.1% between June 30, 2005, and
June 30, 2006, while the regional credit-card companies' total
loans increased 53.8% during the same period.

The Bank's estimated private-sector loan market share in the
Argentine financial system (excluding the regional credit-card
companies loans) increased from 6.96% to 7.23%, between June 30
and June 30, 2006.

The Bank's total exposure to the private sector reached ARS8,433
million, with a 40.1% increase from June 30, 2005, and a 39.8%
annualized increase during the quarter.

Private-sector loans growth, in the twelve-month period ended
June 30, 2006, was mainly concentrated in middle-market
companies (56.7%) and individuals (33.2%).  By economic sector,
the Bank increased its
exposure to:

   -- the retail & wholesale trade sector (73.8%),
   -- the agriculture and livestock sector (51.9%),
   -- to consumers (38.6%), and
   -- to the manufacturing industry (29.2%).

Total public-sector assets as of June 30, 2006 were ARS2,080
million lower than in the second quarter of 2005.  This was
mainly due to:

   (i) the sale of Bogar and Secured Loans for ARS2,287 million
       and

  (ii) a ARS600 million decrease in the Bank's net position in
       government securities held for trading.

These decreases were partially offset by the CER adjustment
during the period. The Bank's liabilities with the Argentine
Central Bank decreased by ARS2,438 million (28.0%), to ARS6,273
million as of June 30, 2006, from ARS8,711 million as of
June 30, 2005.  This reduction was due to a ARS2,853 million
decrease in the balance of the financial assistance from the
Argentine Central Bank, as a consequence of the payments made,
which was partially offset by a ARS414 million increase in the
balance of the advance to purchase the Hedge Bond, attributable
to the CER adjustment.

Equity investments amounted to ARS69 million, 20.8% lower than
ARS87.6 million recorded at the end of the second quarter of FY
2005, mainly as a consequence of the establishment of a
provision to fully cover the investment in Aguas Argentinas S.A.

"Bank Premises and Equipment, Miscellaneous and Intangible
Assets" includes ARS354 million of net deferred losses
associated to amparo claims.  This amount includes ARS80 million
of deferred amortization recorded since December 2005, in
accordance with applicable regulations.

The Bank's consolidated deposits amounted to ARS9,720 million,
of which ARS354 million were deposits in Galicia Uruguay.  As of
June 30, 2006, the Bank's deposits raised in Argentina reached
ARS9,411 million, representing a 31.3% and an 8.9% increase from
June 30, 2005, and March 31, 2006, respectively.

As of June 30, 2006, the Bank's estimated market share of
deposits in the Argentine financial system, considering deposits
raised in Argentina only, was 6.06%, compared with 6.05% at the
end of the prior quarter, and 5.67% a year before.

Considering only private-sector deposits, the Bank's estimated
deposit market share reached 8.09% as of June 30, 2006, compared
with 7.61% and 8.16% from June 30, 2005, and March 31, 2006,
respectively.

Regarding other financial liabilities, the decrease in the
negotiable obligations' balance, compared with that of the
second quarter of 2005, was due to:

   (i) the issuance by Tarjeta Naranja S.A. of negotiable
       obligations for ARS80 million; and

  (ii) the variation of exchange rate throughout the period.

Both effects were partially offset by the payment, during the
third quarter of 2005, of the first principal installment of the
debt instruments issued under the restructuring of the former
New York Branch.

As of June 30, 2006, the Bank had 1.1 million deposit accounts,
reflecting an increase of approximately 77 thousand accounts
from a year before. Likewise, the number of credit cards reached
3.6 million at the end of the quarter, 34.6% higher than the 2.7
million credit cards managed a year before.

                        Asset Quality

The Bank's non-accrual loan portfolio decreased by ARS338
million or 58.8% between June 30, 2005 and June 30, 2006.  The
decrease was mainly attributable to:

   (i) the sale of non-accrual loan portfolio classified in
       category 3 or higher risk categories, for ARS200
       million, which took place during the fourth quarter of
       2005, and

  (ii) the restructuring of certain commercial loan portfolio.

The non-accrual loan portfolio represented 2.47% of total loans
as of June 30, 2006, compared to 6.61% as of June 30, 2005.
Considering only the private-sector loan portfolio, the non-
accrual portfolio decreased to 4.08% of total loans to the
private sector as of June 30, 2006, from 13.33% a year before.

The allowance for loan losses represented 2.91% of total loans
and 4.82% of loans to the private sector, compared with 5.87%
and 11.84%, respectively, as of June 30, 2005.  The coverage of
the non-accrual loan portfolio with allowances for loan losses
reached 118.01% and the coverage with guarantees 23.90%.  The
combined coverage of non-accrual loans with allowances and
guarantees was 141.91%.  The coverage with allowances for loan
losses of the non-accrual loan portfolio plus the portfolio in
category "2.b" was 111.07% as of June 30, 2006.  Loans
classified under category "2.b" of the Argentine Central Bank's
loan classification (which comprises portfolios that not being
non-performing are in the process of being restructured)
amounted to ARS 17 million as of the same date.

During the quarter, ARS97 million were written off against the
allowance for loan losses and ARS1 million direct charges to the
income statement were made.

                Capitalization and Liquidity

As of June 30, 2006, the Bank's consolidated computable capital
exceeded by ARS859 million the ARS1,032 million minimum capital
required.  This excess was ARS887 million as of June 30, 2005.
The variations in the capital requirements between
June 30, 2006, and June 30, 2005, were mainly attributable to
the greater exposure to the private sector and to the increase
of the regulatory requirements on the exposure to the public
sector.  It should be noted that, beginning on Jan. 1, 2006, and
in accordance with the established schedule, the applicable
"Alfa 1" and "Alfa 2" coefficients increased.

The former increased from 0.15 to 0.30 and the latter from 0.40
to 0.70. "Alfa 1" is applied to the capital requirement on the
exposure to the public sector, while "Alfa 2" is applied to the
capital requirement to cover interest-rate risk.

As of June 30, 2006, the Bank's unconsolidated liquid assets
(held by the Bank's Argentine operation) represented 42.61% of
the Bank's transactional deposits and 18.09% of its total
deposits in Argentina.  Including government securities at their
market value, the last mentioned ratio was 28.58%.

                     Recent Developments

Galicia Movil

In July 2006, the Bank launched Galicia Movil, becoming the
first financial institution in Argentina to allow customers to
use their cell phones in order to operate with it, "wherever
they are", ordering payments through fund transfers, using the
Short Message Service.  Galicia Movil is an innovative, fast,
simple, easy and safe means of payment, which adds up to the
service already made available through cell phones (SMS alerts
of account balances and expiration dates of credit cards, time
deposits, automatic payments and bounced checks, among others)
that will continue adding new capabilities in the near future.

Bank Branch Network

During June 2006, the Bank opened new branches in the interior
of the country.  The branches were opened in the following
locations, were the Bank did not have a presence:

   -- Trenque Lauquen,
   -- Zarate,
   -- Jesus Maria,
   -- Reconquista,
   -- Ushuaia,
   -- Rio Grande,
   -- Trelew and
   -- Cipolletti.

Financial Trusts

During the quarter, the Bank publicly offered the securities
issued by these financial trusts:

                                  In millions of pesos

                          Tarjetas Cuyanas         Galicia
                              Trust II          Personales III

Issue date                    04/12/06             05/24/06
Due date                      02/15/08             03/15/11
Underlying assets              ARS37.7             ARS100.0
Debt Securities Issued           33.9                 92.5
Certificates of Participation     3.8                  7.5


Tarjeta Naranja: Negotiable Obligations

In June 2006, Tarjeta Naranja S.A. issued negotiable obligations
maturing in December 2008 for US$26 million.  The negotiable
obligations were rated "A+(arg)" by Fitch Argentina Calificadora
de Riesgo S.A. on its local scale.

          Financial System and Main Regulatory Changes

Minimum Cash Requirements

By means of Communique "A" 4549, effective August 1, 2006, the
Argentine Central Bank

   (i) increased from 17% to 19% the minimum cash requirement
       on deposits and other demand obligations in pesos and
       unused balances of current account advances granted, and

  (ii) eliminated the minimum cash requirements on time deposits
       and other obligations in pesos with terms of more than
       180 days.

In addition, this Communique excluded the possibility of
computing cash (in local and foreign currency) for compliance
with minimum cash requirements.  Such measure implies that cash
in vaults, in transportation and in armored truck companies,
ATMs and branches will not be computable for compliance with
minimum cash requirements.  This measure will be gradually
phased in, thus 100% of the mentioned items will be computable
until August 2006, 67% until September 2006, 34% until October
2006 and 0% as of November 2006.

Exposure to the Argentine Public Sector

By means of Communique "A" 4546, the Argentine Central Bank
reduced the cap to financial institutions permitted total
exposure to the public sector from the current 40% of total
assets to 35% of total assets, effective July 1, 2007.

                        *    *    *

As reported on Apr. 12, 2006, the Argentine arm of Standard &
Poor's assigned these ratings to Banco de Galicia y Buenos
Aires' debts:

   -- Obligaciones negociables, serie 6, emitted on July 19,
      2002 for US$73,000,000, emitted under the program for
      US$1000 million

      * Last due: Aug. 3, 2007
      * Rate: raA

   -- Obligaciones Negociables, clase 7 for US$43,000,000,
      included under the US$1000 million program

      * Last due: Aug. 3, 2007
      * Rate: raA

   -- Program of obligaciones negociables, media term, for
      US$2,000,000,000

      * Rate: raA

   -- Obligaciones Negociables simples 8-11-93, for
      US$21,400,000

      * Last due: Nov. 1, 2004
      * Rate: raD

   -- Obligaciones negociables simples for US$21,400,000

      * Last due: Nov. 1, 2004
      * Rate: raD

   -- Obligaciones Negociables emitted for US$9,000,000,
      included under the US$1000 million program.

      * Last due: Dec. 20, 2005
      * Rate: raD


BANCO MACRO: Net Income Up 62% to ARS99 Mil. in Second Quarter
--------------------------------------------------------------
Banco Macro Bansud, S.A., reported its results for the second
quarter period ended June 30, 2006.

                         Highlights

   -- 2Q06 net income totaled ARS99 million, climbing 62%
      compared with 2Q05 net income of ARS61 million and 36%
      compared with 1Q06 net income of ARS73 million. This
      profitability level keeps the Bank's 19.5% ROE as one of
      the most profitable banks in Argentina.

   -- The Bank's high liquidity level (62% of liquid assets to
      deposits) and its strong solvency position (ARS1,466
      million of excess capital) remain as one of the Bank's
      distinctive characteristics for the quarter.

   -- Loans to the private sector continued to climb at high
      rates.  "Core" credit to the private sector grew 18% for
      the quarter and 79% year over year. Consumer loans
      continued to be the most dynamic segment, with a 199%
      annual growth rate.

   -- The Bank's net interest margin rose to 7.4% compared to
      the 6.3% posted in the 1Q06.

   -- Banco Macro's asset quality remained on a favorable
      trend; the non-performing loan portfolio was 2.4% of the
      total portfolio at June 30, 2006, compared to 3.5% at
      1Q06.  Furthermore, the coverage ratio of provisions
      reached 154.2% in the quarter.

   -- On August 4, 2006, Argentina's Central Bank approved the
      acquisition of Nuevo Banco Bisel S.A. by Banco Macro.

                        *    *    *

On Dec. 13, 2005, Moody's Investors Service affirmed the credit
ratings of Banco Macro:

    -- Bank Financial Strength Rating: E -- Positive Outlook
    -- Long- Term Global Local Currency Deposits: Ba3
    -- Short -Term Global Local Currency Deposits: Not Prime
    -- National Scale Rating for Local Currency Deposits: Aa2.ar
    -- Long -Term Foreign Currency Deposits: Caa1
    -- Short -Term Foreign Currency Deposits: Not Prime
    -- National Scale Rating for Foreign Currency Deposits:
       Ba1.ar.


CARVING COOPERATIVA: Individual Reports Due in Court on Aug. 21
---------------------------------------------------------------
Mario Leizerow, the court-appointed trustee for Carving
Cooperativa de Credito Consumo y Vivienda Limitada's bankruptcy
case, will present individual reports in court on Aug. 21, 2006

The individual reports are based on the creditors' claims that
Mr. Leizerow verified until June 13, 2006.  A court in Buenos
Aires will determine if the claims are admissible, taking into
account the trustee's opinion and the challenges and objections
raised by Carving Cooperativa and its creditors.

A general report that contains an audit of Carving Cooperativa's
accounting and banking records will follow on Oct. 9, 2006.

Mr. Leizerow is also in charge of administering Carving
Cooperativa's assets under court supervision and will take part
in their disposal to the extent established by law.

The debtor can be reached at:

         Carving Cooperativa de Credito Consumo
         y Vivienda Limitada
         Reconquista 341
         Buenos Aires, Argentina

The trustee can be reached at:

         Mario Leizerow
         Bouchard 644
         Buenos Aires, Argentina


CLINICA SALAS: Trustee to Submit Gen. Report in Court on Aug. 31
----------------------------------------------------------------
Court-appointed trustee Juan Emilio Cavalieri will submit in
court a general report that contains an audit of Clinica Salas
S.A.'s financial records and a summary of events pertaining to
its liquidation on Aug. 31, 2006.

Mr. Cavalieri verified creditors' proofs of claim until
May 19, 2006.  He also presented individual reports based on the
verified claims on July 5, 2006.

The debtor can be reached at:

         Clinica Salas S.A.
         Moreno 825 Lujan
         Buenos Aires, Argentina

The trustee can be reached at:

         Juan Emilio Cavalieri
         Cavalle 28 Numero 524 Mercedes
         Buenos Aires, Argentina


COMPANIA DE INVERSIONES: Comision Nacional Rates Debt at raD
------------------------------------------------------------
Compania de Inversiones de Energia S.A.'s Obligaciones
Negociables issued on Dec. 13, 1996 for US$220,000,000 is rated
raD by the Comision Nacional Valores.  The rating action is
based on the company's financial status at June 30, 2006.


EUROMAYOR SA: Buys Back Obligaciones Negociables for US$3.4 Mil.
----------------------------------------------------------------
Euromayor has made an anticipated repurchase of Obligaciones
Negociables Pesos Class for US$3,366,487.  The company used the
funds received from the group that controls it (ECIPSA), and
according to the terms agreed on July 9, 2006.  The buy back
represents 30% of the total peso-denominated class.

The respurchase of the ONs Class pesos Serie I and II,
constitute an improvement for Euromayor SA as it helps to reduce
its financial commitments, nevertheless, the capacity of
generating funds in the future continues to be uncertain.

On June 2006, the amount of the ONs reached US$9,875,022, from
which US$5,983,824 belonged to ONs Serie I and US$3,891,198 to
ONs Serie II.  Once the total debt cancellation is done,
Euromayor will be able to apply for the cancellation of the
guarantees constituted through the Fidecomiso Financiero.

A C rating is mantained for the ONs Serie I Class Pesos for
US$6.8 million, ONs Serie I Dollars class for US$3.2 million,
ONs Serie II Pesos Class for US$4.4 million, ONs Serie II Dollar
class for US$3.1 million.  These ONs are the main component of
the total debt of the company, which on April 2006 reached
US$34.9 million, from which the 82% operated in the long term
and around the 50% was denominated in dollars.

Euromayor S.A de Inversiones is a holding company whose
activities involved the sale of houses through a vast number of
companies which all together constitute the ECIPSA Group.  The
company focuses its activities mainly in the Argentine province
of Cordoba.  Euromayor is controlled mainly by the Ecipsa
Holding Group (72.49%), the rest is traded in the Buenos Aires
stock market.


FIDEICOMISOS BHN: S&P Arg Puts raD Ratings on US$180-Mil. Debts
---------------------------------------------------------------
The Argentine arm of Standard and Poor's rated Fideicomisos
Financieros BHN IV's debts as:

  -- Certificado de Participacion for US$14,625,505, raC;
  -- Titulo de Deuda Serie B for US$24,375,000, raD; and
  -- Serie AV/AF for US$156,000,000.


FIDEICOMISOS EDIFICIO: Fitch Arg Rates US$54-Mil. Debts at CCC
--------------------------------------------------------------
Fitch Argentina Calificadora de Riesgo SA assigned these ratings
on Fideicomisos Financieros Edificio La Nacion:

  -- Certificados de Participacion Subordinados Clase 1 for
     US$17,720,000, CCC;

  -- Certificados de Participacion Subordinados Clase 2 for
     US$36,784,000, CCC;

  -- Titulos de Deuda Clase 1 for US$26,580,000, B; and

  -- Titulos de Deuda Clase 2 for US$3,216,000, B.


FIDEICOMISOS HIPOTECARIO: S&P Argentina Rates Four Debts at raD
---------------------------------------------------------------
The Argentine arm of Standard & Poor's assigned these ratings on
Fideicomisos Financieros Hipotecario BHN II:

  -- Titulo de Deuda Clase A1 for US$44,554,000, raD;
  -- Titulo de Deuda Clase A2 for US$51,363,000, raD; and
  -- Titulo de Deuda Clase B for US$3,730,000, raD.


GAS ARGENTINO: Fitch Argentina Affirms D Rating on US$130M Notes
----------------------------------------------------------------
Fitch Argentina Calificadora de Riesgo SA affirmed the D rating
on Gas Argentino SA's US$130 million Obligaciones Negociables.

GASA has been in default since April 2002.  Fitch considers as
positive the agreement reached between GASA and its creditors in
Dec. 2005 for the restructuring of its debt.  Despite that,
Fitch will still be mantaining the D ratin on the ONs.  The
agreement signed includes the capitalization of the total of its
debt through the exchange of shares of GASA and Metrogas.  The
restructuring structure responds to the investment feature of
GASA, whose only capital is the participation in Metrogas which
has recently closed the restructuring of its debt.  The
agreement on the capitalization of the debt of GASA depends on
the approval of ENARGAS and of the Comision Nacional de Defensa
de la Competencia.

The Obligaciones Negociables of GASA for US$85 million (capital
and interests) are in the hands of funds administered by Ashmore
Investment Management Liminted and Marathon Asset Management.
The restructuring agreement includes the issuance of shares of
GASA which representS a 30% of its capital in favor of the
Ashmore Funds and the transfer of the shares class B of Metrogas
to the hands of GASA representatives of the 19% of the capital
of Metrogas, 3.65% of Ashmore Funds and a 15.35% of Marathon.
GASA will keep the 51% of participation in Metrogas (shares
class A).  As a result, the British Gas and Repsol YPF Group,
both undirect controllers of Metrogas will have their
participation reduced.

Metrogas has concluded the restructuring of its debt on
May 12, 2006, through a combination of repurchase in cash and
the exchange of new ONs, reducing debt to US$300 million, from
US$564 million on March 2006.  The Company has reached a level
of acceptance of the 95% of the nominal value of the debt, which
allowed a voluntary exchange of debt whithout applying for an
APE.  The reestructuring of the debt gives Metrogas a better
flexibility on its finances from the extension of dues in the
long term, despite that the generation of funds still continues
to be restricted because of the freezing of the public rates.
The terms agreed for the new ONs of Metrogas allows distribution
of dividends.

Gas Argentino was created in Dec. 1992.  The latter is in charge
of the provition of the service and distribution of the gas for
35 years in the capital city of Buenos Aires.  GASA is a company
integrated by BG Inversiones Argentinas SA from the British Gas
group (54.7%), technical operator of Metrogas, and YPF Inversora
Energetica SA, property of Repsol YPF (45.3%).  GASA is
controlled by Metrogas with a 70% of participation, the 20% of
Metrogas has got price at the Buenos Aires stock market and New
York (6.84% in hands of British Gas), and the remaining 10%
belongs to the employers.


HILAL HECTOR: Marin Named as Trustee for Bankruptcy Proceeding
--------------------------------------------------------------
A court in Cordoba appointed Hector E. Marin to supervise the
bankruptcy proceeding of Hilal Hector Juan e Hijos S.R.L.  Under
bankruptcy protection, control of the company's assets is
transferred to Mr. Marin.

As trustee, Mr. Marin will:

   -- verify creditors' proofs of claim;

   -- prepare and present individual and general reports in
      court after the claims are verified; and

   -- administer Hilal Hector's assets under court supervision
      and take part in their disposal to the extent established
      by law.

The court set Aug. 11, 2006, as the last day for Mr. Marin to
verify creditors' proofs of claim.

The debtor can be reached at:

    Hilal Hector Juan e Hijos S.R.L.
    Chacabuco 467, Ciudad de Cordoba
    Cordoba, Argentina

The trustee can be reached at:

    Hector E. Marin
    Corro 472
    Cordoba, Argentina


PETROBRAS ENERGIA: Inks Pact for Sale of Citilec Stake to Eton
--------------------------------------------------------------
Argentine energy company Petrobras Energia SA said Thursday it
signed a contract to sell its 50% stake in Citilec SA, the
holding company of Argentine power transporter Transener, to
Eton Park Capital Management for US$54 million.

Petrobras Argentina announced in mid-June that it had accepted
Eton Park's offer.  The deal now needs approval by Argentine
regulatory authorities.

Citilec, whose other owner is rising Argentine investment fund
Grupo Dolphin, controls 52.67% of Transener.

Eton Park said in a separate statement that upon signing the
contract, due diligence will now begin on plans to buy a stake
in Yacylec SA, an affiliated company.  That sale will also face
regulatory approval.

In June, Petrobras Energia said it planned to sell its 22.22%
stake in Yacylec for US$6 million.

                      About Transener

Compania de Transporte de Energia Electrica en Alta Tension aka
Transener owns the national network of high-voltage power
transmission lines, which consist of nearly 8,800km of lines
together with the approximately 5,500km in its Transba
subsidiary's network.

                   About Petrobras Energia

Petrobras Energia Participaciones has natural gas and oil
operations in Argentina, Bolivia, Ecuador, Peru and Venezuela.
It is the second most heavily weighted company on Argentina's
Merval stocks index.

On Aug. 3, 2006, Fitch Ratings upgraded Petrobras Energia S.A.'s
foreign currency issuer default rating to B+ with stable outlook
from B.  This rating action follows Fitch's upgrade on
Argentina's long-term local currency Issuer Default Rating to
'B' from 'B-' and country ceiling to 'B+' from 'B' on
Aug. 2, 2006.


PETROBRAS ENERGIA: Net Income Reaches ARS397MM in Second Quarter
----------------------------------------------------------------
Petrobras Energia S.A. disclosed financial results for the
second quarter ended June 30, 2006.

Petrobras Energia S.A.'s net income for 2006 second quarter was
ARS397 million, compared with net income for 2005 second quarter
of ARS490 million.  It should be pointed out that net income for
2005 quarter was positively affected by a ARS127 million gain
from equity interest in Citelec, primarily attributable to
restructuring of the financial debt of its controlled company
Transener.

Operations for 2006 quarter developed within an international
context characterized by record oil prices that had an impact on
oil derivatives.

In Argentina, this effect, however, was significantly mitigated
by crude oil export taxes and restrictions in the refined
products domestic market to pass through this impact to consumer
sales prices.

As from April 1, 2006, conversion of operating agreements in
Venezuela into partially state-owned companies began to have
economic effects. Pursuant to the terms and conditions of the
memorandums of understanding executed with Petroleos de
Venezuela S.A. and Corporacion Venezolana del Petroleo S.A.
consolidation of the results of the above mentioned operations
on a line by line basis was discontinued as from Apr. 1, such
results being shown in net terms under Equity in Earnings of
Affiliates.

Net sales rose 13.2% to ARS2,869 million in 2006 quarter.  Net
sales for 2005 quarter reflect ARS284 million attributable to
the consolidation of operations in Venezuela.  Without
consolidation, net sales rose 27.5%, mainly boosted by the
significant rise in the price of WTI, gas, electricity and some
refined products.

Gross profit for 2006 quarter was ARS898 million, 2.7% higher
compared to 2005 quarter.

During the first six months of 2006 fiscal year the Company's
shareholders' equity increased 13% totaling ARS5,827 million as
of June 30, 2006.

Sales revenues increased 20.9% in 2006 quarter, mainly due to
higher prices of both gas and liquids.

Sales prices for gas produced by the Company and imported gas in
Argentina increased 25% mainly as a result of the deregulation
of the gas price for industries and electricity generation
companies due to the implementation of the price recovery
mechanism established by the Secretary of Energy and increased
export prices resulting from higher international reference
prices.

Liquids sales prices rose 15%, mainly as a consequence of higher
international reference prices.

Gas and LPG brokerage services accounted for sales revenues in
the amount of ARS19 million in both quarters.

Net sales of electricity generation increased 48.1% in 2006
quarter due to the combined effect of a 34.5% improvement in
generation prices and an 11.5% rise in energy sales, as a result
of the 6% increase in the demand for energy in Argentina which
was mainly supplied by hydroelectric plants.

The increase in energy sales prices was primarily attributable
to the gradual implementation of the price recovery mechanism
established as from 2004 fourth quarter by the Secretary of
Energy in line with the recovery of gas prices.

Petrobras Energia S.A., through its subsidiaries, explores,
produces, and refines oil and gas, as well as generates,
transmits, and distributes electricity.  It also offers
petrochemicals, as well as markets and transports hydrocarbons.
The company conducts oil and gas exploration and production
operations in Argentina, Venezuela, Peru, Ecuador, and Bolivia.

                        *    *    *

Fitch Ratings upgraded on Aug. 2, 2006, Petrobras Energia S.A.'s
foreign currency issuer default rating to B+ with stable outlook
from B.  This rating action follows Fitch's upgrade on
Argentina's long-term local currency Issuer Default Rating to
'B' from 'B-' and country ceiling to 'B+' from 'B' on
Aug. 2, 2006.

Standard & Poor's Ratings Services said on June 17, 2006, that
its rating on Petrobras Energia S.A. (FC: B/Stable/--) are not
affected by the announcement that the Petroleum Society of
Australia or PESA has reached an agreement to sell its 50%
equity stake in Citelec S.A. to Eton Park Capital Management for
about US$54 million plus a participation in the potential
earnings deriving from the future global renegotiation of
Transener's concession contract.

Moody's upgraded on May 27, 2006, this rating of Petrobras
Energia S.A. under the revised foreign currency ceilings:

   -- Corporate Family Rating (foreign currency): to B2 from
      B3 with stable outlook.

Moody's affirmed this rating:

   -- Senior Unsecured Rating (foreign currency): Ba2 with
      stable outlook.


RESINPOL S.A.I.C.: Individual Reports to be Submitted on Aug. 25
----------------------------------------------------------------
Graciela Elena Lisarrague, the court-appointed trustee for
Resinpol S.A.I.C.'s bankruptcy case, will present individual
reports in court on Aug. 25, 2006

The individual reports are based on the creditors' claims that
Ms. Lisarrague verified until June 30, 2006.  A court in Buenos
Aires will determine if the claims are admissible, taking into
account the trustee's opinion and the challenges and objections
raised by Resinpol and its creditors.

A general report that contains an audit of Resinpol's accounting
and banking records will follow on Oct. 6, 2006.

Ms. Lisarrague is also in charge of administering Resinpol's
assets under court supervision and will take part in their
disposal to the extent established by law.

The trustee can be reached at:

         Graciela Elena Lisarrague
         Tte. Gral. Juan D. Peron 1509
         Buenos Aires, Argentina


SANCOR: S&P Puts raCCC Ratings on US$394.8 Million in Notes
-----------------------------------------------------------
Sancor's debts rated raCCC by Standard & Poor's are:

  -- Obligaciones Negociables Serie 3 for US$75,800,000, issued
     under the program of ONs for US$300 million;

  -- Program of Obligaciones Negociables for US$300,000,000; and

  -- Serie 2, for US$19,000,000, included under the program of
     ONs for US$300 million.

The rating action was based on Sancor's financial status at
Mar. 31, 2006.


SENNIC SA: Seeks for Court Approval to Reorganize Business
----------------------------------------------------------
A court in Buenos Aires is studying the merits of Sennic S.A.'s
petition to reorganize its business after defaulting on its
obligations.

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

The debtor can be reached at:

         Sennic S.A.
         Chaco 145
         Buenos Aires, Argentina


TELEFONICA DE ARGENTINA: Revenues Up 9.6% in First Half of 2006
---------------------------------------------------------------
Telefonica de Argentina S.A. aka TASA reported its financial
results for the first half of 2006.

Throughout the first half of the year, the growth of the fixed
telephony and data businesses in Argentina continued to perform
well despite the fact that tariffs have not changed since 2002,
and also helped by a strong rise in revenue brought about by new
businesses, which meant a revenue growth of 9.6%.

At the end of June, TASA manages 5.6 million accesses (+4.6%
with respect to the same period of the previous year), thanks to
the yearly increase in fixed telephony accesses (+3.8%) reaching
4,6 million, as well as the strong growth of the retail Internet
broadband accesses (+70.8%), that climbed to 408,700, which
allows the company to continue as leader of the market of
broadband in its area of influence.

The total voice traffic remained stable at 2005 levels (-0.3%
year-on-year) thanks to a growth in local traffic (+2.3%) and
long distance traffic (+2.3%).  The good performance of access
and traffic operating variables as compared with 2005 allowed
revenues to reach EUR475.0 million with an overall year-on-year
increase of 9.6% in local currency.  By businesses, traditional
business grew 6.2% in local currency (+4.7% as of March).  As
for Internet business (narrowband and broadband), it maintained
a strong growth pattern (+31.2% compared to the previous year in
local currency) increasing its weight over total revenues to
10.8% (+1.8 p.p. year-on-year) thanks to the expansion of
broadband.

Similarly, data and information technology services maintained
high growth patterns (+15.7% and +159.5% in local currency,
respectively).  Operating expenses presented a growth of 19.2%
in local currency with respect to 2005.  The main rise was
recorded in personnel expenses (+22.8% in local currency) and by
service contracts.  These were affected by the rise in salaries
agreed at the end of 2005.  The major growth in revenues has
allowed TASA to reach an Operating Income Before Depreciation
and Amortization or OIBDA of EUR242.7 million, up 3.0% in local
currency compared with the first half of 2005, achieving a
margin (taking fixed-to-mobile interconnection into account) of
43.4%, 3.2 p.p. less than in 2005, due to the higher salary
costs and subcontracts.

For the first six months of 2006, CapEx has stood at EUR66.8
million, 33.0% up in local currency with respect to 2005, of
which approximately 50% was devoted to broadband and new
businesses.  TASA has registered an operating free cash flow or
OIBDA-CapEx of EUR175.9 million, 5.1% lower in local currency
than that generated during the same period in 2005, due to
higher investments.

Headquartered in Buenos Aires, Argentina, Telefonica de
Argentina S.A. -- http://www.telefonica.com.ar/-- provides
telecommunication services, which include telephony business
both in Spain and Latin America, mobile communications
businesses, directories and guides businesses, Internet, data
and corporate services, audiovisual production and broadcasting,
broadband and Business-to-Business e-commerce activities.

                        *    *    *

Moody's Investors Service upgraded on MAy 27, 2006, the ratings
on Telefonica de Argentina, S.A.'s Corporate Family Rating
(foreign currency) to B2 from B3 with stable outlook; Foreign
currency issuer rating to B2 from B3 with stable outlook; and
Senior Unsecured Rating (foreign currency) to B2 from B3 with
stable outlook.

                        *    *    *

Standard & Poor's Ratings Services affirmed on Aug. 10, 2006,
its 'B' long-term foreign currency corporate credit rating on
the Argentine telecom incumbent Telefonica de Argentina S.A.,
following the company's announcement of a proposal from its
Board of Directors of a capital reduction of ARS1,048 million
(equivalent to approximately US$340 million) to optimize its
capital structure.  This transaction is subject to the approval
of the Argentine Stock Exchange and the Securities Exchange
Commission (Comision Nacional de Valores).  S&P said the outlook
is stable.


TRANSENER: Petrobras Inks Pact for Sale of Citilec Stake to Eton
----------------------------------------------------------------
Argentine energy company Petrobras Energia SA said Thursday it
signed a contract to sell its 50% stake in Citilec SA, the
holding company of Argentine power transporter Transener, to
Eton Park Capital Management for US$54 million.

Petrobras Argentina announced in mid-June that it had accepted
Eton Park's offer.  The deal now needs approval by Argentine
regulatory authorities.

Citilec, whose other owner is rising Argentine investment fund
Grupo Dolphin, controls 52.67% of Transener.

Eton Park said in a separate statement that upon signing the
contract, due diligence will now begin on plans to buy a stake
in Yacylec SA, an affiliated company.  That sale will also face
regulatory approval.

In June, Petrobras Energia said it planned to sell its 22.22%
stake in Yacylec for US$6 million.

                   About Petrobras Energia

Petrobras Energia Participaciones has natural gas and oil
operations in Argentina, Bolivia, Ecuador, Peru and Venezuela.
It is the second most heavily weighted company on Argentina's
Merval stocks index.

                      About Transener

Compania de Transporte de Energia Electrica en Alta Tension aka
Transener owns the national network of high-voltage power
transmission lines, which consist of nearly 8,800km of lines
together with the approximately 5,500km in its Transba
subsidiary's network.

On Feb. 23, 2006, Standard & Poor's Ratings Services raised its
local and foreign currency ratings on Argentina's largest
electricity transmitter, Compania de Transporte de Energia
Electrica en Alta Tension Transener S.A. aka Transener to 'B-'
from 'CCC+', and removed the ratings from CreditWatch with
positive implications.


VALUED SA: Individual Reports to be Filed in Court on Aug. 31
-------------------------------------------------------------
Horacio Caliri, the court-appointed trustee for Valued S.A.'s
bankruptcy proceeding, will present individual reports in court
on Aug. 31, 2006

The individual reports are based on the creditors' claims that
Mr. Caliri verified until July 6, 2006.  A court in Buenos Aires
will determine if the claims are admissible, taking into account
the trustee's opinion and the challenges and objections raised
by Valued and its creditors.

A general report that contains an audit of Valued's accounting
and banking records will follow on Oct. 13, 2006.

Mr. Caliri is also in charge of administering Valued's assets
under court supervision and will take part in their disposal to
the extent established by law.

The trustee can be reached at:

        Horacio Caliri
        Lavalle 1206
        Buenos Aires, Argentina


* ARGENTINA: Issuing US$2 Billion Joint Bond by September
---------------------------------------------------------
The so-called US$2 billion South Bond, to be jointly issued by
Venezuela and Argentina, will make its debut in August-
September, according to the head of the National Assembly
Finance Committee Rodrigo Cabezas, El Universal says.

Venezuela and Argentina will each issue US$1 billion.

The final terms of the issuance will be discussed Wednesday
during the regular session of the Finance Committee, El
Universal says.

According to El Universal, the new securities will trade in the
Venezuelan internal market.  Argentina will issue Boden 12 and
the Finance Ministry will release fixed-interest notes.

                        *    *    *

Fitch Ratings assigned these ratings on Argentina:

                     Rating     Rating Date
                     ------     -----------
   Country Ceiling     RD      Dec. 14, 2005
   Long Term IDR       B       Dec. 14, 2005
   Short Term IDR      B-      Jun.  3, 2005
   Local Currency
   Long Term Issuer
   Default Rating      B       Jun.  3, 2005


* ARGENTINA: Uruguay Sues Nation Due to Road Blocks
---------------------------------------------------
Argentina is facing a lawsuit filed by Uruguay in the Southern
Common Market Claims Court due to roadblocks on international
routes, Prensa Latina reports.

Argentina's citizens are barricading in the nation's Rios
province as a protest to the cellulose plants' construction in
Fray Bentos in Rio Negro -- a branch of the Uruguay River.
According to the strikers, the plants are environmentally
harmful, the same report says.

According to Prensa Latina, Uruguay claims that the roadblocks
in Gualeguaychu caused the country:

    -- US$400 million loss,
    -- loss of jobs, and
    -- loss of small businesses in the peak of the tourist
       season.

The report notes that Jorge Taiana, the Foreign Minister of
Argentina, rejected Uruguay's plea to create a Binational
Technical Monitoring Commission, believing that it would be like
accepting the construction of the plants.

Uruguay and Argentina are first attending an oral hearing along
with their witnesses as a preliminary step of the proceedings,
Prensa Latina states.

                        *    *    *

Fitch Ratings assigned these ratings on Argentina:

                     Rating     Rating Date
                     ------     -----------
   Country Ceiling     B+      Aug. 1, 2006
   Local Currency
   Long Term Issuer    B       Aug. 1, 2006
   Short Term IDR      B       Dec. 14, 2005
   Long Term IDR       RD      Dec. 14, 2005




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


COMPLETE RETREATS: Gets Interim OK for Utility Firm's Services
--------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Connecticut
granted, on an interim basis, Complete Retreats LLC and its
debtor-affiliates' request enjoining utility companies from
discontinuing their services to the Debtors.

The Troubled Company Reporter on Aug. 3, 2006 noted that the
Debtors asked the Court to:

    (i) determine that the Utility Companies have been provided
        with adequate assurance of payment under Bankruptcy Code
        section 366;

   (ii) approve the Debtors' proposed offer of adequate
        assurance and procedures governing the Utility
        Companies' requests for additional or different adequate
        assurance;

  (iii) prohibit the Utility Companies from altering, refusing,
        or discontinuing services on account of prepetition
        amounts outstanding or on account of any perceived or
        alleged inadequacy of the proposed adequate assurance;

   (iv) establish procedures for the Utility Companies to seek
        to opt out of the proposed adequate assurance
        procedures;

    (v) determine that the Debtors are not required to provide
        any additional adequate assurance;

   (vi) set a final hearing on the proposed adequate assurance
        procedures on Aug. 17, 2006; and

  (vii) provide for the return of the unused portions of all
        deposits shortly after the substantial consummation of
        any confirmed plan of reorganization in their cases.

In connection with the operation of their business and
management of their properties, the Debtors obtain electricity,
gas, water, sewer, trash removal, telephone, Internet, cable
television, and other utility services from various utility
companies.

A 14-page list of Utility Companies providing services to the
Debtors is available for free at:

               http://researcharchives.com/t/s?ec4

                 Proposed Adequate Assurance

The Debtors intend to pay all postpetition obligations owed to
the Utility Companies.  In addition, the Debtors propose to
provide a deposit equal to two weeks of Utility Service to any
Utility Company that requests a deposit in writing.  However, no
deposit will be given to a Utility Company that already holds a
deposit equal to or greater than two weeks of Utility Services
and that is paid in advance for its services.

Upon acceptance of the Deposit, the Utility Company would be
deemed to have stipulated that the Deposit constitutes adequate
assurance of payment under Bankruptcy Code section 366 and would
not be able to make an Additional Adequate Assurance Request.

           Proposed Adequate Assurance Procedures

In light of the severe consequences to the Debtors of any
interruption in services by the Utility Companies, but
recognizing the right of the Utility Companies to evaluate the
Proposed Adequate Assurance on a case-by-case basis, the Debtors
propose that the Court approve and adopt these uniform
procedures:

    a. If a Utility Company does not comply with the Adequate
       Assurance Procedures, it will be forbidden from
       discontinuing, altering, or refusing service.

    b. Any Utility Company requesting a Deposit must make a
       request in writing to:

          (i) the Debtors
              Tanner & Haley Resorts
              285 Riverside Avenue, Suite 310
              Westport, CT 06880
              Attn: Jason I. Bitsky, Esq., and

         (ii) counsel to the Debtors
              Dechert LLP
              30 Rockefeller Plaza
              New York, NY 10112
              Attn: Joel H. Levitin, Esq., and
                    David C. McGrail, Esq.

    c. If the requesting Utility Company satisfies the
       requirements, the Debtors would provide a deposit.

    d. Any Utility Company desiring additional adequate
       assurance of payment must serve its request on the
       Debtors and the Debtors' counsel.

    e. The Debtors have at least two weeks to reach a consensual
       agreement with the Utility Company resolving the
       Additional Adequate Assurance Request.

    f. The Debtors would be permitted to resolve any Additional
       Adequate Assurance Request by mutual agreement with the
       Utility Company and without further Court order.

    g. If the Debtors can't reach a timely consensual resolution
       with the Utility Company, a hearing will be held to
       determine the adequacy of adequate assurance of payment.

    h. Pending resolution of the Determination Hearing, that
       particular Utility Company would be prohibited from
       discontinuing, altering, or refusing service to the
       Debtors.

                   Process for Opting Out

A Chapter 11 debtor was historically able to place the burden on
utility providers to prove that the adequate assurance offered
by the debtor was insufficient.  After recent amendments to
Bankruptcy Code section 366, the burden has arguably shifted to
debtors to provide adequate assurance that the utility providers
find satisfactory and to seek court review if a utility provider
does not accept the proposed adequate assurance.

Under the new reading of Bankruptcy Code section 366, a Utility
Company could, on the 29th day after the Petition Date, announce
that the proposed adequate assurance is not acceptable, demand
an unreasonably large deposit from the Debtors, and threaten to
terminate Utility Service the next day unless satisfied.

The Debtors believe it is prudent to require Utility Companies
to raise any objections to the Adequate Assurance Procedures, so
that those objections may be heard by the Court within 30 days
of the Petition Date.

The Debtors propose these uniform objection procedures:

    a. Any Utility Company that objects to the Adequate
       Assurance Procedures must to file a timely objection.

    b. Any Procedures Objection must, among others, be made in
       writing and set forth the reason why the Utility Company
       believes it should be exempted from the Adequate
       Assurance Procedures.

    c. The Debtors would be permitted to resolve any Procedures
       Objection by mutual agreement with the Utility Company
       and without further Court order.

    d. If no prompt consensual resolution is reached, the
       Procedures Objection would be heard at the Final Hearing.

    e. All Utility Companies that do not timely file a
       Procedures Objection would be deemed to consent to the
       Adequate Assurance Procedures.

                  About Complete Retreats

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

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

Complete Retreats and its debtor-affiliates filed for chapter 11
protection on July 23, 2006 (Bankr. D. Conn. Case No. 06-50245
through 06-50306).  Nicholas H. Mancuso, Esq., Jeffrey K. Daman,
Esq., Joel H. Levitin, Esq., David C. McGrail, Esq., Richard A.
Stieglitz Jr., Esq., at Dechert LLP, are representing the
Debtors in their restructuring efforts.  Xroads Solutions Group,
LLC, is the Debtors financial and restructuring advisor.  When
the Debtors filed for chapter 11 protection, they listed total
debts of US$308,000,000.  (Complete Retreats Bankruptcy News,
Issue No. 3; Bankruptcy Creditors' Service, Inc., 215/945-7000).


COMPLETE RETREATS: Paying US$140K of Foreign Creditors' Claims
--------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Connecticut gave
Complete Retreats LLC and its debtor-affiliates authority to
pay, at their discretion, the prepetition claims of their
foreign creditors, up to an aggregate amount of US$140,000.

The Court directed the Debtors to file a list, certified by an
officer of the Debtors, of each Foreign Creditor whose
prepetition claims have been or will be paid, including the
amount of the claim.

The Debtors and their foreign affiliates are parties to numerous
agreements and leases with foreign creditors in Abaco, Bahamas;
Cabo San Lucas, Mexico; Nevis, West Indies; and the Dominican
Republic, among other foreign locations.

The Troubled Company Reporter on Aug. 2, 2006, noted that
certain Foreign Creditors have already taken, or threatened to
take, actions against the Debtors, including refusing to provide
essential goods and services to the Debtors or their affiliates
until their claims are paid.  In many instances, the Debtors
told the Court that they would not be able to locate replacement
providers in time to avoid disrupting service to their members.

                   About Complete Retreats

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

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

Complete Retreats and its debtor-affiliates filed for chapter 11
protection on July 23, 2006 (Bankr. D. Conn. Case No. 06-50245
through 06-50306).  Nicholas H. Mancuso, Esq., Jeffrey K. Daman,
Esq., Joel H. Levitin, Esq., David C. McGrail, Esq., Richard A.
Stieglitz Jr., Esq., at Dechert LLP, are representing the
Debtors in their restructuring efforts.  Xroads Solutions Group,
LLC, is the Debtors financial and restructuring advisor.  When
the Debtors filed for chapter 11 protection, they listed total
debts of US$308,000,000.  (Complete Retreats Bankruptcy News,
Issue No. 3; Bankruptcy Creditors' Service, Inc., 215/945-7000).


WINN-DIXIE: Completes Sale of 12 Supermarkets in Bahamas
--------------------------------------------------------
Winn-Dixie Stores, Inc. has completed the sale of its 12
supermarkets in the Bahamas -- 9 operated by Winn-Dixie under
the City Markets banner and 3 under the Winn-Dixie banner.

The stores were sold to BSL Holdings Limited, a Bahamian
investor group represented by Fidelity Merchant Bank & Trust
Limited, for approximately US$54 million.  All 12 stores are
remaining open under their new owners.

W-D (Bahamas) Ltd., a Bahamas Company and a wholly-owned
subsidiary of Winn-Dixie, has sold all of its shares of Bahamas
Supermarkets Limited to BSL Holdings Limited pursuant to a
definitive agreement.

W-D (Bahamas) owned approximately 78% of the common shares of
BSL.  The remainder of BSL's common shares will remain publicly
traded in the Bahamas.

Winn-Dixie currently operates 527 stores in Florida, Alabama,
Louisiana, Georgia, and Mississippi.

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




===============
B A R B A D O S
===============


ANDREW CORP: Bid Rejection Cues S&P to Put Ratings on NegWatch
--------------------------------------------------------------
Standard & Poor's Ratings Services revised its CreditWatch
implications on Andrew Corp. to negative from developing.  The
'BB' corporate credit rating and other ratings on the company
were placed on CreditWatch developing on Aug. 7, 2006.

The action follows Andrew's announcement that it terminated the
existing stock-based offer made by ADC Telecommunications (based
on mutual agreement), whose value had declined from US$2 billion
to US$1.3 billion over the last few months.  Andrew also
rejected the US$1.7 billion cash bid made by CommScope Inc.
(BB/Watch Neg/--).

"At this point, it is uncertain what direction Andrew's
management will take but it may potentially include plans to
engage in defensive measures," said Standard & Poor's credit
analyst Bruce Hyman.

CommScope's bid remains outstanding and may be revised or
withdrawn.  The rating agency will monitor developments and
respond accordingly.

Headquartered in Westchester, Illinois, Andrew Corporation
(NASDAQ: ANDW) -- http://www.andrew.com/-- designs,
manufactures and delivers innovative and essential equipment and
solutions for the global communications infrastructure market.
The company serves operators and original equipment
manufacturers from facilities in 35 countries including, among
others, these Latin American countries: Argentina, Bahamas,
Belize, Barbados and Bermuda.  Andrew is an S&P 500 company
Founded in 1937.


ANDREW CORP: CommScope Responds to Bid Rejection
------------------------------------------------
CommScope, Inc., issued a response to Andrew Corp.'s rejection
of its proposal to acquire all of the company's outstanding
shares for US$9.50 per share in cash.

"We are disappointed that Andrew has decided to reject our
proposal.  CommScope's operational excellence and financial
discipline has made us a global leader in the 'last mile' of
telecommunications.  We intend to continue building upon our
leadership position and we are confident that CommScope is
poised to continue creating value for its stockholders," Frank
Drendel, CommScope's Chairman and Chief Executive Officer said.

                      About CommScope

CommScope -- http://www.commscope.com-- designs and
manufactures "last mile" cable and connectivity solutions for
communication networks.  Through its SYSTIMAX(R) Solutions(TM)
and Uniprise(R) Solutions brands CommScope is the global leader
in structured cabling systems for business enterprise
applications.  It also manufactures coaxial cable for Hybrid
Fiber Coaxial applications.

                        About Andrew

Headquartered in Westchester, Illinois, Andrew Corporation
(NASDAQ: ANDW) -- http://www.andrew.com/-- designs,
manufactures and delivers innovative and essential equipment and
solutions for the global communications infrastructure market.
The company serves operators and original equipment
manufacturers from facilities in 35 countries including, among
others, these Latin American countries: Argentina, Bahamas,
Belize, Barbados and Bermuda.  Andrew is an S&P 500 company
Founded in 1937.

                        *    *    *

Standard & Poor's Ratings Services retained on Aug. 7, 2006, its
'BB' ratings on Westchester, Illinois-based Andrew Corp. remain
on CreditWatch, where they were placed with positive
implications on May 31, 2006; the implications are revised to
developing from positive.

The revision reflects an unsolicited offer by CommScope Inc. to
acquire Andrew for approximately US$1.5 billion cash to Andrew's
shareholders, which represents a US$400 million premium to the
current equity value of Eden Prairie, Minnesotta-based ADC
Telecommunications Inc.'s shares.  Additionally, CommScope would
assume Andrew's debt. ADC had initially agreed to merge with
Andrew on a stock-for-stock transaction on May 31, 2006.




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


* BELIZE: Tries to Resolve City Council's Financial Crisis
----------------------------------------------------------
Government officials of Belize held a meeting on Aug. 9 after it
was found out the Belize City Council was in a fiscal imbalance
as an effect of the government's cancellation of the head tax
the council would be collecting, Love FM reports.

According to Love FM, officials who attended the meeting
include:

        -- Prime Minister Said Musa,
        -- Minister of Local Government Jose Coye,
        -- Belize City Mayor Zenaida Moya, and
        -- Deputy Mayor Wayne Usher.

Mayor Moya described the meeting to Love FM as encouraging.

Mayor Moya told Love FM, "The Prime Minister indicated as it
pertains to the amount that we use to receive from the head tax
that he will be making a call to the Belize Tourism Board to ask
them to please reinstate immediately that amount to the City
Council so that we will be able to have that monies to continue
our payments because that is what we use to use to assist in
terms of the sanitation services.  What was being received
before was US one dollar he said he wasn't sure if they will be
able to do the US tow dollars but they said they will definitely
ask that the amount that was being given at the time be
reinstated and the amount was US one dollar per tourist.  We
didn't receive anything for April, May, June and July so we are
hoping that they will be able to give us monies to defray that,
they will have to decide upon that because those monies whatever
was to have been paid to this Council we definitely will need
all of it to pay towards these sanitation contractors.  The
second thing was the fact that a loan from the Bank of Nova
Scotia that was paid off which came up to forty three thousand
dollars monthly was being deducted from our monthly subvention
they have agreed on assisting in terms of spreading the loan
payments to for example three months which would ease the
council so that it is not forty three thousand dollars that
would be coming out."

The group also considered other means of possible income for the
City Hall, Love FM relates, citing Mayor Moya.

Mayor Moya told Love FM, "Another thing that came up was the
fact as it pertains to Environmental tax because what we had
indicated was that the Environmental tax initially called the
plastic tax was to be used to assist with the waste management
plastics.  Now it's been levied across the board therefore the
Belize Mayors' Association felt that municipalities should be
receiving a portion of the Environmental tax to assist them as
it pertains to the waste disposal.  What he indicated was that
while he understands that situation he said that they will be
dealing with this solid waste management project they would have
needed the money towards that project, we told them well we have
a project we are working on in Belize City whereby we will be
able to collect the garbage from all the municipalities and turn
it into material that will be able to build houses, it will be
generating revenues for the council otherwise.  He said it seems
that both of us have our projects he said lets see which one
looks more feasible and either way he said for example ours is
more feasible then they will say ok you go ahead and the
Environmental tax could move towards the municipalities but if
it is that it is theirs then they will engage us in a revenue
generating measure.  We also discussed the revenue generation
that could be received from the Port of Belize we informed them
that since the Port is of an industrial nature we in terms of
its operations and in terms of it takes a lot out of our city's
resources then we should be able to receive something so again
that is something that we will be discussing.  As well as the
whole prevention formulas that the Belize Mayors' Association
had put forward and has agreed upon which will take us up to a
per capita level whereby each municipalities will be receiving
in terms of subventions as per capita that same per capita
across the board.  We felt that was equitable because you can't
really give one municipality more than the other and by that I
mean more as in terms of per capita so to avoid all of that we
are saying lets deal with this across the board one per capita
amount so that is something that will be looked at, in terms of
the other area we will be discussing that when we meet with the
Prime Minister as the Belize Mayors' Association."

The Ministry of Local Government said in a statement that Prime
Minister Musa made it clear that the matter of sharing a portion
of the cruise ship arrivals head tax was a Belize tourist Board
decision and that the Board was under no legal requirement to do
so.

The press release notes that Prime Minister Musa told Mayor Moya
that the government could only encourage the "B-T-B" to consider
whatever assistance it could possibly make to City Hall.

Mayors' Association of Belize is also requesting to discuss with
the prime minister their financial problems, Love FM says.

                        *    *    *

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

                        *    *    *

As reported in the Troubled Company Reporter-Latin America on
Aug. 8, 2006, Standard & Poor's lowered its long-term foreign
currency sovereign credit rating on Belize to 'CC' from 'CCC-'
while leaving its outlook on the rating at negative.  Standard &
Poor's affirmed its 'CCC+' long-term local currency sovereign
credit rating on Belize and revised its outlook on the rating to
stable from negative.  The 'C' short-term sovereign credit
ratings on the sovereign were affirmed.




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


REFCO: Davidson Kempner Offering to Buy Refco Capital Claims
------------------------------------------------------------
Davidson Kempner Capital Management LLC is offering to buy:

     * scheduled and undisputed Securities Customer Claims (as
       that term is defined in the RCM Settlement Agreement)
       against Refco Capital Markets, LTD, at a rate of 65
       cents-on-the-dollar; and

     * scheduled and undisputed FX/Unsecured Claims (as that
       term is defined in the RCM Settlement Agreement) against
       Refco Capital Markets, LTD, at a rate of 25 cents-on-the-
       dollar.

This offer is valid through Aug. 21, 2006, contingent on due
diligence, the price is subject to change based on events in the
bankruptcy and day-to-day news in the industry, and other
strings are attached.

For additional information, contact:

     Aileen M. Watson
     Davidson Kempner Capital Management LLC
     65 East 55th Street, 19th Floor
     New York, New York 10022
     Telephone (212) 446-4065
     Facsimile (646) 924-0465

                      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 INC: Eight Refco LLC Claimants Can File Consolidated Claim
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
authorizes certain entities that expressed intent to file
similar proofs of claim against Refco, LLC, to lodge a single
master proof of claim that will be deemed to have been filed
against the Debtor on their behalf.

The Refco Claimants include:

   * Bersec International, LLC,
   * Cargill Investor Services Limited,
   * Haut Commodities, LLC,
   * Kroeck & Associates, LLC,
   * Lind-Waldock Financial Partners, LLC,
   * Lind-Waldock Securities LLC,
   * Marshall Metals, LLC, and
   * New Refco Group Ltd., LLC.

Nothing will prohibit the Refco Claimants from filing individual
proofs of claim in lieu of a Master Proof of Claim against Refco
LLC.

In a separate order, Judge Drain grants Skadden, Arps, Slate,
Meagher & Flom LLP, until 5:00 p.m. on Oct. 17, 2006, to file
a proof of claim against Refco LLC for professional services
rendered before Nov. 25, 2005.

                       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: Ratings Cut May Seriously Affect Future Earnings
--------------------------------------------------------------
Lilla Zuill, at Reuters, says that Scottish Re Group Ltd.'s
recent ratings downgrades could seriously cut into its future
earnings prospects, as shown by other reinsurers' experiences.

Last week, Moody's downgraded the reinsurer's senior unsecured
debt rating below investment grade (Ba2), while Standard and
Poor's lowered Scottish Re's counterparty credit rating to BB+.

According to analysts quoted by Ms. Zuill, Scottish Re is in a
different segment of the reinsurance market from those
companies, but after reporting a US$123.9 million quarter loss
and executive departures, the company may have trouble winning
new business and keeping its current customers.

"With a reinsurer one of the main things they are selling is
their financial strength; so if anybody loses faith in that,
regardless of the reason, it can impair them going forward,"
Richard Sbaschnig, at Oppenheimer & Co. Inc., was quoted by Ms.
Zuill as saying.

According to Mr. Sbaschnig, a minimum A- rating from A.M. Best
is crucial for most insurers.

Several reinsurance companies have closed doors as a result of
massive claims from last year's hurricane season.

Scottish Re said on a conference call last week that none of its
major customers showed any signs of leaving the firm, Ms. Zuill
relates.

Reinsurers assume part or all of an insurance company's
liability.  They provide cover that can bail out insurers when
they most need help -- when claims start piling up from the
policies they have sold to individuals and corporations.

                     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.




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


INTERNATIONAL PAPER: Earns US$115 Mil. in Quarter Ended June 30
---------------------------------------------------------------
International Paper Company filed its second quarter financial
statements for the three months ended June 30, 2006, with the US
Securities and Exchange Commission on Aug. 7, 2006.

For the second quarter of 2006, International Paper reported net
sales of US$6.3 billion, compared with US$5.9 billion in the
second quarter of 2005 and US$6.1 billion in the first quarter
of 2006.

Net income totaled US$115 million in the second quarter of 2006.
This compared with net income of US$77 million in the second
quarter of 2005 and a net loss of US$1.2 billion in the first
quarter of 2006.  The first quarter 2006 net loss included a
US$1.3 billion pre-tax charge to reduce the carrying values of
the net assets of the Coated and Supercalendered Papers
businesses to their estimated fair value.  Amounts include the
effects of special items in all periods.

At June 30, 2006, the Company's balance sheet showed
US$26.154 billion in total assets, US$18.853 billion in total
liabilities, US$200 million in minority interests, and
US$7.101 billion in total stockholders' equity.

                     Antitrust Matters

International Paper is party to a class action lawsuit by a
group of private landowners alleging that the Company and
certain of its fiber suppliers, known as Quality Suppliers,
engaged in an unlawful conspiracy to artificially depress the
prices at which the Company procures fiber for its mills.

The paper company continues to maintain that its Quality
Supplier program did not violate any antitrust laws,
International Paper agreed to settle this case in the second
quarter by paying US$12.4 million, including plaintiff counsel
fees.

The Federal District Court in Columbia, South Carolina, has
preliminarily approved the settlement.  A final hearing for
court approval is scheduled for Sept. 25, 2006.

International Paper was a defendant in a purported antitrust
class action brought by purchasers of coated publication papers
in various U.S. federal and state courts.  These cases are based
on alleged cartel activity by various U.S. and European
manufacturers of coated papers.  The Company believed it was not
a proper party to these cases, and in the second quarter, has
been dismissed with prejudice from all but one remaining
California indirect-purchaser case.  In that case, the Company
and the California indirect-purchaser class counsel have filed a
stipulation to dismiss the Company as a defendant, which is
pending court approval.

Full-text copies of the second quarter financials are available
for free at http://ResearchArchives.com/t/s?f51

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

                        *    *    *

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




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


AES TIETE: Reports BRL305.5 Million Second Quarter Net Income
-------------------------------------------------------------
AES Tiete presented good results in the 1H06.  EBITDA reached
BRL 268.8 million in the 2Q06 totaling BRL 542.5 million in the
semester, compared with EBITDA of BRL 223.2 million in the 2Q05
and BRL 427.4 million in the 1H05.  EBITDA Margin of the quarter
and the semester were 77.1% and 77.7%, respectively,
representing a little reduction when compared to the same period
of 2005, as a result of some operating provisions registered in
the 2Q06.

The 2Q06 net income reached BRL 152.6 million, representing an
increase of 34.8% when compared to 2Q05 and BRL 305.5 million in
the 1H06 up 45.2% from 1H05.  Net margin for both second quarter
and first semester were 43.8%.  This growth was mainly the
result of a higher volume of the sales through the bilateral
contract with Eletroapulo that has higher price than the old
initial contracts, ended in December 2005. Since January 2006,
all the assured energy is sold through the bilateral contract.

In Aug. 9, 2006, the company's Board of Directors approved the
distribution of dividends of BRL 305.5 million, corresponding to
100% of the net income of the semester.  The dividends will be
paid at BRL 3.06 per thousand of common shares and BRL 3.36 per
thousand of non-voting shares.  The payment will be made to
shareholders holding shares on Aug. 17, 2006.  On Aug. 18, 2006
the shares will be negotiated as ex-dividend.

AES Tiete S.A. is controlled by the Brasiliana holding company,
which is a joint venture between U.S.-based AES Corp. and
Brazil's National Development Bank aka BNDES.  It is a ten-dam
hydroelectric generating company located in the State of Sao
Paulo, Brazil.  The company has been granted the right to
operate the dams pursuant to a 30-year concession agreement.

                        *    *    *

Moody's Investors Service upgraded on Aug. 1, 2006, the foreign
currency rating for the senior secured certificates due 2016
issued by Tiete Certificates Grantor Trust to B1 from B3.  The
rating outlook is stable.  This rating action concludes the
review that was initiated on January 17, 2006.


BANCO NACIONAL: IDB Grants Local Currency Payments for CCLIP
------------------------------------------------------------
The Inter-American Development Bank approved the option of
lending in local currency for the existing multi-billion dollar
Conditional Credit Line for Investment Projects or CCLIP
agreement in effect with Brazil's Banco Nacional de
Desenvolvimento Economico e Social aka BNDES.

The CCLIP, launched in 2004, allowed BNDES to support the
expansion, integration and financing Brazilian micro, small and
medium-sized enterprises with medium and long-term loans for
investment projects and for permanent working capital to make
firms more competitive.

The modification, authorized by the IDB Board of Executive
Directors in accordance with the new IDB Framework for Lending
in Local Currency, will allow BNDES to request local currency
disbursements in reais and the conversion of outstanding loan
balances into local currency if they wish to.

The CCLIP allows BNDES to use resources from three successive
operations of up to US$1 billion each in a nine-year term.  The
first of the three loans has been disbursed almost completely
with operations totaling US$990 million in US dollars. Request
by BNDES of a second program is expected soon.

The reformulation of the CCLIP also involves other innovations,
such as flexibility in determining the amortization schedule and
terms; and prices based on actual cost of financing.

The program's resources under the CCLIP will total US$6 billion
and loans will have the guarantee of the Federal Government of
Brazil. Since 1995 the IDB, the oldest and largest regional
development bank, has supported five successful multi-sectoral
credit line programs with BNDES for a total of US$4.5 billion.

BNDES, the only significant source of medium and long-term
financing for financial intermediaries in Brazil, grants credit
for micro, small and medium-sized companies, which play a
fundamental role in the modernization of industry, services and
productive processes.

                        *    *    *

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


BUCKEYE TECHNOLOGIES: Earns US$1.2 Mil. in Quarter Ended June 30
----------------------------------------------------------------
Buckeye Technologies, Inc., earned US$1.2 million after tax in
the quarter ended June 30, 2006.

Buckeye disclosed that the results included a US$800,000 tax
benefit and restructuring and impairment expenses of US$500,000
after tax on equipment sales at its closed operations in
Lumberton, North Carolina, and Glueckstadt, Germany.

During the same quarter of the prior year, Buckeye earned
US$8.8 million after tax, which included a US$5.5 million tax
benefit and US$1.7 million after tax, in restructuring and
impairment expenses.

Buckeye also disclosed that, during fiscal year 2006 it earned
US$2 million after tax, including restructuring and impairment
expenses of US$3.6 million after tax, compared to fiscal year
2005 earnings of US$20.2 million after tax.

Net sales for the April-June quarter were US$193.4 million, 5%
above the US$183.9 million achieved in the same quarter of the
prior year.  Net sales for fiscal year 2006 were US$728.5
million, 2% above the US$712.8 million achieved in the prior
year.

John B. Crowe, Buckeye's chairman, said, "Fiscal year 2006 was
highlighted by the completion of the restructuring programs that
began three years ago.  The closure of the Glueckstadt, Germany
cotton cellulose pulp plant and the start of market pulp
production at our Americana, Brazil cotton cellulose pulp plant
completed the planned consolidation necessary to improve our
cost structure.  While the Americana ramp-up has been slower
than we expected, the facility is building revenue and we expect
to improve financial performance in fiscal 2007.  With the
restructuring program completed, we are positioned for growth in
fiscal year 2007."

Mr. Crowe went on to say, "During fiscal year 2006 high energy,
chemical, and transportation costs coupled with the Americana
startup compressed our margins.  However, cash flow in the
second half of the fiscal year was encouraging.  Net cash
provided by operating activities for fiscal 2006 totaled US$58.7
million, which enabled us to complete the investment in
Americana and reduce debt by US$16 million (from US$537 million
to US$521 million).  We intend to continue to reduce debt in
fiscal 2007."

Headquartered in Memphis, Tennessee, Buckeye Technologies, Inc.
(NYSE:BKI) -- http://www.bkitech.com/-- is a leading
manufacturer and marketer of specialty fibers and nonwoven
materials.  The Company currently operates facilities in the
United States, Germany, Canada, and Brazil.  Its products are
sold worldwide to makers of consumer and industrial goods.

                        *    *    *

As reported in the Troubled Company Reporter on March 9, 2006,
Standard & Poor's Ratings Services revised its outlook on
Buckeye Technologies Inc. to negative from stable.  At the same
time, Standard & Poor's affirmed its ratings, including the
'BB-' corporate credit rating, on the Memphis, Tennessee-based
specialty pulp producer.


CHEMTURA CORP: Earns US$420,000 in Second Quarter of 2006
---------------------------------------------------------
Chemtura Corp. filed its second quarter financial statements for
the three months ended June 30, 2006, with the US Securities and
Exchange Commission on Aug. 7, 2006.

Chemtura reported net income of US$420,000 on US$1,016,323,000
of net sales for the second quarter ended June 30, 2006,
compared with a US$16,998,000 net loss on US$602,329,000 of net
sales for the same period in 2005.

For the six months ended June 30, 2006, Chemtura reported net
income of US$13,625,000 on US$1,932,084,000 of net sales
compared with US$3,437,000 of net income on US$1,192,059,000 of
net sales for the same period in 2005.

Chemtura's net sales and operating profit increased for both
the quarter and six month periods ended June 30, 2006, as
compared with the same periods in 2005, notwithstanding
increases in general corporate expense, antitrust costs, a
charge for impairment of long-lived assets and merger costs for
the six-month period, which were partially offset by decreases
to facility closures, severance and related costs for the
quarter period.

At June 30, 2006, Chemtura's balance sheet showed
US$4,885,289,000 in total assets, US$3,027,349,000 in total
liabilities, and US$1,857,940,000 in total stockholders' equity.

                  Significant Transactions

Chemtura Corp. continues to assess its business portfolio and
debt position.  To date, the Company has undertaken these
initiatives:

   1. In July 2006, the Company completed the redemption of the
      remaining US$158.9 million of outstanding 9.875% Senior
      Notes due 2012, which was funded through the revolving
      credit facility, the uncommitted working capital
      facilities and available cash.  The purchase price to
      tender the notes was US$1,123.87 per US$1,000 principal
      amount.  The Company anticipates that the premium and
      other costs associated with the redemption will be
      approximately US$25.0 million and will be recorded as a
      loss on early extinguishment of debt in the third quarter
      of 2006.

   2. On June 23, 2006, the Company sold a significant portion
      of the real estate at the West Lafayette, Indiana
      location, for net proceeds of US$6.1 million, inclusive of
      US$400,000 of associated costs.  There was no gain or loss
      recognized on this sale.

   3. On May 12, 2006, the Company sold its Industrial Water
      Additives business to BWA Water Additives for US$85
      million, exclusive of a US$10.2 million adjustment for
      retained accounts receivable and payable.  A reduction in
      net assets of US$81.0 million, primarily related to
      US$33.6 million of goodwill; US$32.5 million of net
      intangibles related to technology, brands and customer
      relationships; and US$12.2 million of finished goods
      inventory was a result of this sale.  Additionally, the
      Company incurred US$3.3 million in associated costs,
      US$400,000 related to employee retention agreements,
      US$2.3 million due to future losses related to supply
      agreements with BWA, and US$400,000 related to other
      expenses.  A loss of US$12.5 million (US$14.1 million
      after-tax) has been included in other expense, net on the
      condensed consolidated statement of earnings.

      No facilities or manufacturing assets were included in
      this transaction and Chemtura will continue to manufacture
      and sell products to BWA via supply agreements.  These
      assets were reviewed for recoverability under the
      requirements of Financial Accounting Standards Board
      Statement No. 144, "Accounting for the Impairment of
      Disposal of Long-Lived Assets," and a charge of US$5.6
      million related to the impairment of the fully-dedicated
      manufacturing assets retained was recorded in operating
      profit.

      Contemporaneous with the sale, the Company entered into an
      exclusive distribution agreement with BWA related to the
      Liquibrom product line.

   4. On May 24, 2006, the Company completed a tender offer to
      repurchase the remaining US$164.8 million of its
      outstanding Senior Floating Rate Notes due 2010.  The
      purchase price to tender notes was US$1,095.83 per
      US$1,000 principal amount.  As a result of the tender, the
      Company recorded a loss on early extinguishment of debt of
      US$19.5 million during the second quarter of 2006.  The
      loss includes a premium of US$15.8 million and the write-
      off of unamortized deferred costs of US$3.7 million.

   5. On April 19, 2006, the Company and certain of its
      consolidated subsidiaries entered into an underwriting
      agreement with several financial institutions for the sale
      of US$500 million aggregate principal amount of 6.875%
      Senior Notes due 2016.  The offering closed on
      April 24, 2006, and the Company received net proceeds from
      the offering of US$492.3 million after expenses.  The
      proceeds were utilized to repay the outstanding balance on
      the Company's revolving credit facility of US$364 million,
      the outstanding balance on uncommitted lines of credit of
      US$50 million and to repurchase receivables under the
      domestic receivable securitization programs of US$60
      million, with the remaining proceeds used for general
      corporate purposes.

   6. On March 24, 2006, the Company acquired the Trace
      Chemicals business from Bayer CropScience LP for net cash
      of US$6.7 million.  Trace Chemicals is a leader in farmer-
      applied seed treatments in markets serving the United
      States of America.  The acquisition will serve to enhance
      the Company's offerings in the Crop Protection business.

Full-text copies of the Company's second quarter financials are
available for free at http://ResearchArchives.com/t/s?f4f

                     About Chemtura Corp.

Headquartered in Middlebury, Connecticut, Chemtura Corp.
(NYSE: CEM) -- http://www.chemtura.com/-- is a global
manufacturer and marketer of specialty chemicals, crop
protection and pool, spa and home care products.  The Company
has approximately 6,400 employees around the world and sells its
products in more than 100 countries.  In Latin America, Chemtura
has facilities in Brazil and Mexico.

                        *    *    *

As reported in the Troubled Company Reporter on April 21, 2006,
Moody's Investors Service assigned a Ba1 rating to Chemtura
Corp.'s US$400 million of senior notes due 2016 and affirmed
the Ba1 ratings for its other debt and the corporate family
rating.

As reported in the Troubled Company Reporter on April 21, 2006,
Standard & Poor's Ratings Services assigned its 'BB+' senior
unsecured debt rating to Chemtura Corp.'s US$400 million notes
due 2016.  Standard & Poor's affirmed Chemtura's 'BB+' long-term
corporate credit rating.  The outlook remains positive.


COMPANHIA ENERGETICA: EDF Transfers Shares in Light S.A. to Unit
----------------------------------------------------------------
Companhia Energetica de Minas Gerais aka Cemig discloses that
the shares held by EDF International S.A. in Light S.A. and in
Lidil Comercial Ltda. were transferred to Rio Minas Energia
Participacoes S.A aka RME, in which the company holds 25% of the
registered capital.

RME is a holding company whose objective is to invest in
companies operating in the electricity sector.  Its present
stockholders are:

   -- Companhia Energetica de Minas Gerais -- Cemig;
   -- Andrade Gutierrez Concessoes S.A.;
   -- Pactual Energia Participacoes; and
   -- Luce Brasil Fundo de Investimento em Participacoes.

Luce acquired the shares in RME that were formerly held by JLA
Participacoes S.A. aka JLA, and has the same controlling
stockholder as JLA.

The transaction involved the purchase of 100,719,912,442 common
shares in Light and the totality of the shares of Lidil, a
company that holds 5,584,685,447 common shares in Light,
resulting in the transfer of a total of 106,304,597,889 common
shares, representing, as of Aug. 10, 2006, 79.39% of the
registered capital and of the voting stock in Light.

The total price was BRL697,953,064.46, equivalent to
US$319,809,871.91, for the purchase of 106,304,597,889 common
shares in Light, representing an approximate price of BRL6.56
per share, or US$3.01 per thousand shares.  On Aug. 10, 2006,
RME paid the full price in cash and on the same day, the shares
were transferred to the company.

An amendment was signed under the Stock Purchase Agreement
providing that in the event that RME disposes of shares in Light
acquired from EDFI within one year, it will have to pay EDFI 50%
of the amount of profit obtained on the sale of such shares.

Moreover, RME will carry out a public offering for the
acquisition of the shares of Light S.A. that are in circulation
in the market, in accordance with Law 6404/76, CVM Instruction
361/2002 and the Regulations of the Novo Mercado, guaranteeing
to the other stockholders of Light the same treatment accorded
to EDFI.

Light is a holding company that indirectly operates in
electricity generation, transmission and distribution in Rio de
Janeiro State. For RME and its stockholders, the transaction to
purchase Light represents an opportunity to invest in a market
with great growth potential, and which is at present the third
largest electricity distribution market in Brazil.

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

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

                        *    *    *

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


COMPANHIA SIDERURGICA: Earns BRL1.9 Billion in Second Quarter
-------------------------------------------------------------
Companhia Siderurgica Nacional aka CSN reported its financial
results in the first half and second quarter of 2006.

   -- First-half and second quarter net revenue of BRL3.9
      billion and BRL1.9 billion, respectively.  Second-quarter
      net revenue was in line with the previous three months but
      lower than in the 2Q05 due to the reduction in sales
      volume triggered by the accident to Blast Furnace 3.

   -- Second-quarter EBITDA of BRL924 million, including
      provisions for lost profit.

   -- First-half net income of BRL750 million.  Despite the
      accident to Blast Furnace 3, 2Q06 net income was BRL69
      million, 20% higher when compared to the prior quarter.

   -- Increase of 14% in second-quarter domestic sales over the
      previous three months.

   -- Sales Mix concentrated in the domestic market, which
      represented 74% of the 2Q06 sales.

   -- Average domestic prices with a slight downturn of 3% over
      the 1Q06, while export prices moved up an average 4% in
      the same period.

   -- Increase of market share in Distribution segment (from 28%
      to 29%) and Home Appliances segment (from 36% to 37%) and
      maintenance of market share in other segments.

   -- Increase in raw-material costs due to slab acquisitions
      from third parties.  In the second quarter the company
      acquired 529,000 tons of slabs, adding BRL390 million to
      total production costs.

   -- Second-quarter investments of BRL485 million.  Among them
      CSN highlights resources that went to the Casa de Pedra
      mine expansion project beyond expenses with repairs and
      maintenance.

   -- Year-to-date dividend and interest on equity payments of
      BRL1.7 billion. The second-quarter figure stood at BRL802
      million.

   -- Lost profit, insurance claim BF-3.  In the second quarter,
      CSN booked BRL493 million as provisions for lost profit
      under other operating expenses/revenues.  In year-to-date
      terms, this figure came to BRL670 million.  The Company
      already received US$75 million as an advance from
      insurance companies.  Preliminary and conservative
      estimates by FIPECAFI indicate US$300 million in lost
      profits.

                 Economic and Sector Outlook

The international market scenario presented restricted supply,
hefty demand, low inventories and increases in the cost of
certain raw materials, which explains the higher average prices.
Although prices has already peaked, demand should remain strong
in the second half; thus the Company does not expect significant
changes in this scenario.  The Brazilian flat steel market
performed well, with second-quarter domestic sales moving up 9%
year-on-year and 14% over the previous three months.  The key
drivers of the recovery were the auto, distribution and home-
appliance sectors.  The demand is expected to remain favorable
throughout the second-half of the year.

Auto industry production reached record levels in May and the
sector closed the first half with a 4.4% year-on-year increase
in output. Production and sales trend continue to do well until
the end of the year, thanks to the cuts in interest rates and
the expansion of credit.  The distribution sector put up an
outstanding performance, with growth of 5% over the 2Q05 and 17%
over the previous quarter, pushed by autoparts and construction.
The home-appliance market grew 14% year-on-year and 18% over the
1Q06, fueled by machinery and equipment and domestic appliances.

                           Output

The low level of crude steel output in the second quarter
resulted from the shutdown of Blast Furnace 3 as a result of the
accident on January 22.  However, the blast furnace 3
recommenced operations on June 23, going through comissioning
stage during the month of July, when it reached 76% of its total
capacity, and shall reach normal production levels by mid-
August, when the recovery and commissioning stage will be over.

Rolled volume staged a recovery, climbing by 9% over the 1Q06
results, thanks to the use of slabs acquired on the market to
partially offset the shortage triggered by the accident.

In the first half, crude and rolled steel output fell 63% and
27% year-on-year, respectively, once again explained by the
above-mentioned incident.

Although the accident undoubtedly hit sales volume, in
comparison to the previous quarter, domestic sales grew by 14%
and exports suffered a 37% drop.

In turn, coated products' share of total sales, was 52% in the
second quarter and 55% accumulated year-to-date.  The Company
maintained its segment market shares compared to the previous
three months.  The variation in the Distribution and
Construction sectors was only one percentage point each, from
28% to 29% and from 36% to 37%, respectively.  The share of home
appliances and OEMs remained flat at 33%, as did the Auto
industry's at 13%.

                           Prices

In the second quarter, average steel prices increased worldwide
and remained high throughout, thanks to the continuing imbalance
between supply and demand in Europe and the US.  Other
contributing factors included low distribution and service-
center inventories and higher raw-material costs, especially
zinc.  All in all, we expect the upward price trend to last
through the third quarter.

Domestic-market prices are also expected to increase, since
demand should remain firm until the end of the year, especially
in the auto sector.  The industry reached record production
levels in May, which pushed up demand for galvanized products.
July's results were equally encouraging and above expectations
as the sector experienced its best sales figures since mid-1997,
when they reached record levels in Brazil.

CSN's prices remained flat in the second quarter compared to the
previous three months.  The slight turndown of 3% on the
domestic market was caused by specification variations in each
product line, while the 4% upturn in export tags followed the
international trend.  In July, CSN implemented prices increases
by 8% for hot and cold-rolled and by 12% for galvanized,
followed by a 9% hike for tin plate hike in August.

                         Net Revenue

Although average 2Q06 prices were higher than in the previous
three months, the increase was not enough to offset the lower
sales volume caused by the problems with the Blast Furnace 3,
which explains the 2% quarter-over-quarter slide in net revenue.

               Production Costs (parent company)

As a result of the accidental stoppage, Blast Furnace 3 remained
out of operations for almost the entire second quarter, and the
consequent purchase of third party slabs at a US$380/t CIF
average cost at Sepetiba and US$400/t CIF at Usina is the main
factor for the increase of CSN's total production costs by 33%
over the 1Q06.  In the year-on-year comparison, there was a 3%
decline, since the increase in raw-material costs was more than
offset by the decrease in general manufacturing costs (lower
materials, supplies and maintenance consumption) Raw-material
costs increased by 100% over the 1Q06 and 17% over the 2Q05, due
to the higher consumption of slabs acquired from third parties,
which jumped from 88,000 tons in the 1Q06 to 529,000 in the
2Q06, although this was partially offset by reduced consumption
of other raw materials.

In comparison with the first quarter, the highlights were the
increase in the costs of zinc (BRL17 million), slab purchases
(BRL390 million) and labor (BRL24 million), the latter
influenced by the shift allowance and the pay rise following the
2006/2007collective agreement in May. Compared to the 2Q05,
these variations came to +BRL22 million, +BRL469 million and
+BRL4 million, respectively.

As for the main raw materials, the average price of coal dropped
from US$138/t, in the 1Q06, to US$136/t in the 2Q06, although
this was higher than the 2Q05 average of US$112/t.  The average
coal and coke inventory cost, totaled US$126/t and US$217/t,
respectively, in June. It is worth emphasizing that no acquired
coke was consumed in the second quarter.

      Operating Expenses (and information on insurance BF#3)

The main operating expense item was the provisions for lost
profit, booked under other net operating revenue/expenses.  In
the second quarter, these provisions totaled BRL493 million,
giving BRL670 million year-to-date.  Immediately after the
accident in BF#3, to provide arguments for an advance request,
FIPECAFI (institution hired by the lead insurer of our insurance
policy -- Unibanco AIG) estimated, based on extremely
conservative assumptions, a compensation of US$330 milion
related to lost profits only.  The insurance claim was
recognized by insurers, by IRB (Brazilian Reinsurance Institute)
and by foreign reinsurance companies.  FIPECAFI and Unibanco AIG
recognizes the conservative feature of this preliminary
estimate, and as BF#3 resumes operations and financial results
of the company are released, the final number will be calculated
and the final request for regulation will be made to insurance
companies and related insurers.  The maximum limit for the
compensation policy is of US$750 million, including lost profits
and material damages.

It is worth to mention that up to now, CSN received US$75
million from insurance companies.  Provision of BRL493 million
in quarter related to the insurance claim of BF#3 CSN received
US$75 million from insurance companies

                           EBITDA

Second-quarter EBITDA totaled BRL477 million. If we include the
provisions for lost profits, the figure came to BRL924 million,
2.4% lower than the 1Q06. Year-to-date EBITDA, with the
provisions, stood at BRL1.9 billion.

It is important to mention that the company has not calculated
the adjusted EBITDA margins, since the provision for lost
profits was not accounted separately in the respective lines
affected by the insurance (Net Revenue and Cost of Goods Sold),
but only in Other Operating Expenses.  Thus the adjustment would
result in a distorted figure.

                Net Financial Result and Debt

Second-quarter net debt increased by BRL1.0 billion quarter-
over-quarter, due to BRL802 million in dividend and interest on
equity payments, period investments of BRL485 million and BRL173
million in the cost of debt.  As a result, the net debt/EBITDA
ratio - using 2005 EBTIDA, which was not affected by any non-
recurring event - climbed from 1.09x in 1Q06 to 1.32x in 2Q06.

In the 2Q06, gross debt increased in both short and long term
finacing, with special highlight to the 4th debenture issue in
the amount of BRL600 million.  The average accumulated cost of
debt was 7% p.a. in Brazilian Reais, or 41% of the CDI, and the
average maturity was 10.3 years.

                         Income Taxes

Second quarter income taxes totaled BRL118 million, BRL102
million less than in the previous three months due to reduced
income in the period and lower losses from the exchange
variation on the net equity of offshore companies.

                           Net Income

Net income increased by 20% over the 1Q06, mainly due to the
reduction of income tax and social contribution expenses.

                            Capex

Quarterly investments amounted to BRL485 million,

   -- BRL96 million of which went to projects related to the
      Casa de Pedra expansion (mine and port),

   -- BRL162 million to repairs, maintenance and technological
      updates,

   -- BRL52 million to MRS, and

   -- BRL105 million related to Metalurgica Prada acquisition.

Year-to-date investments totaled BRL735 million.

                       Working Capital

Working capital increased by BRL100 million, quarter over
quarter, mainly due to the increase in inventories (slab
acquisitions), partially offset by the reduction in accounts
receivable and the increase in suppliers line (also due to slab
acquisitions).

                      Capital Markets

CSN's shares appreciated by 7% in the second quarter, following
the 43% appreciation in the first three months.  This
appreciation occurred despite the unfavorable international
scenario, with interest rate hikes in the US and Europe
offsetting the positive developments in the steel market, with
strong demand, high prices and several mergers and acquisitions.

                     Recent Developments

Dividends

Dividends and interest on own capital paid year-to-date are
summarized as follows:

Reference          Amount Paid          Payment      Approval
   Year       BRL          BRL/share      Date        Date

  2005    936,814,710.14     3.6393     2/9/2006     1/31/2006
          387,272,072.28    1.50447     5/8/2006     4/28/2006

  2006    415,000,000.00    1.61219    6/30/2006     6/23/2006
          333,000,000.00    1.29364    8/10/2006      8/3/2006

Total   2,072,086,782.42    8.04959

The dividend yield, calculated as the sum of all these payments
over the share price (not adjusted for dividends) on
Jan. 2, 2006, is 16.4%.

Strategic Alliance with Wheeling-Pittsburgh Steel

On July 20 and on August 3, the company released the main terms
and conditions of an eventual merger between CSN LLC (US
subsidiary) with Wheeling Pittsburgh.  In addition to the
capital of CSN LLC, CSN would provide US$225 million as a loan
convertible into shares, and would sign a long-term agreement
for slabs supply in exchange for a 49.5% stake in the new
incorporated company.

This strategic alliance would benefit both companies by
combining know-how, guaranteeing sustained long-term access to
key inputs, improving the portfolio of products offered to the
North American market, and ensuring strategic investments in
Wheeling Pittsburgh to increase its competitiveness and solid
financial support for Wheeling on the part of CSN.

The alliance aims at turning the combined entity into a truly
world-class company, a low-cost steel producer with expertise to
compete on local and global basis.

Cement Project

The Board of Directors approved new investments in the Cement
Project, totaling approximately US$185 million, for the set up
of a grinding mill with 3 million tons/year capacity in Volta
Redonda -- State of Rio de Janeiro, and a clinker furnace with
825,000 tons/year capacity in Arcos -- State of Minas Gerais.
These plants are expected to be operational in the last quarter
of 2007 and 2008, respectively.

Long Steel Project

The Board of Directors approved investments of approximately
US$113 million, for set up of rebars, wire rod and profiles
production units, with 500,000 tons/year capacity, located in
Volta Redonda -- State of Rio de Janeiro.  The project will be
conducted in 18 months from the signing of respective contracts.

Election of Board Members and Audit Committee

In the Board of Directors' meeting held on August 8, Benjamin
Steinbruch and Jacks Rabinovich were re-elected for another one-
year term as Chairman and Vice-Chairman of the Board.  The Board
of Directors also appointed the Board members Yoshiaki Nakano,
Dionísio Dias Carneiro and Fernando Perrone for another term as
Audit Committee members.

Change of Executive Officers

Otavio de Garcia Lazcano, current Financial Director, takes over
as Executive Officer responsible for the financial area, for a
two-year term.  Otavio Lazcano, an economist with post-graduate
studies in Finance, has been working in CSN for 10 years and has
been the Financial Director since 2003.

Change in the Investor Relations Department

The new Investor Relations Director is Jose Marcos Treiger, who
will report directly to the CEO.  Mr. Treiger returns to CSN,
where he previously acted as head of Investor Relations from
1996 to 2002, after 4 years working at Braskem.  He is a very
experienced professional, leading the first IR team to reach the
international standards, as the first IR manager to be involved
in the listing of Level III ADRs in New York Stock Exchange.

Marcos Leite Ferreira, who led the IR department since January
2005, steps down as Investor Relations manager, and takes over
the Investment Analysis Department.

                           Outlook

In the domestic market, an increase in investments is expected,
fueled by a loose monetary policy.  In the international front,
prices should maintain the upward trend throughout the third
quarter 2006, with probability of a slight downturn in the last
quarter of the year.

                          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.

                        *    *    *

Standard & Poor's Ratings Services affirmed on Aug. 4, 2006, its
'BB' long-term corporate credit rating on Brazil-based steel
maker Companhia Siderurgica Nacional aka CSN after the
announcement of its association with U.S.-based steel maker
Wheeling-Pittsburgh Corp. in the U.S.  The outlook is stable.

Fitch Ratings viewed the proposed merger of Companhia
Siderurgica Nacional's or CSN North American operations with
those of Wheeling-Pittsburgh Corporation or WPSC to be neutral
to CSN's credit quality.  Fitch's ratings of CSN include:

  -- Foreign currency Issuer Default Rating: 'BB+';
  -- Local currency IDR: 'BBB-';
  -- National scale rating: 'AA (bra)';
  -- Senior unsecured notes 'BB+'; and
  -- Brazilian Real denominated debentures: 'AA (bra)'.


ELETROPAULO: Posts EBITDA of BRL523.3 Million in Second Quarter
---------------------------------------------------------------
Eletropaulo Metropolitana Eletricidade de Sao Paulo S.A.
presented favorable results in 2Q06.  Its EBITDA was BRL523
million during the quarter compared to EBITDA of BRL424 million
during the first quarter of the year, as a result of a reduction
in operating expenses during the period.

The quarter's net income was 47.7% higher than in 2Q05, almost
completely reversing (90.5%) accumulated losses, for a current
balance of BRL 21.7 million.  In May, Eletropaulo concluded the
early liquidation of the remaining portion of the restructured
debt and during the past 12 months the company reduced net debt
by BRL572 million.  As a consequence, in July it obtained a
higher domestic scale rating for Eletropaulo from S&P, going
from BBB to BBB+.

   -- Total consumption was 9,578.1 GWh in 2Q06, 4.7% higher
      than in 2Q05.

   -- Gross Revenues of BRL2,744.2 million in 2Q06 were 5.7%
      lower than 2Q05, as a result of conclusion of the 2003
      tariff review process in 2Q05, which generated additional
      revenues of BRL106.9 million.

   -- Reduction of BRL216.3 million in Operating Expenses in
      2Q06, mainly due to a decline in expenses from purchased
      energy.

   -- Adjusted EBITDA rose BRL27 million over 2Q05, totaling
      BRL671.2 million with a Margin of 33.4%.

   -- 2Q06's Consolidated Financial Result was an expense of
      BRL126.1 million, 61.9% higher then 2Q05.  Increase in
      the expense was result of a 22.7% reduction of financial
      income due to the decline of Selic, coupled with the
      impact of the currency variation.

   -- Net Income in 2Q06 totaled BRL 201.9 million, 47.7% higher
      than 2Q05's Net Income.  The quarter's earnings were
      influenced by the significant reduction in the volume paid
      of IR/CS tax expenses.

   -- On May 12, 2006, the Company concluded the early
      liquidation, in the amount of BRL234.7 million, of the
      remaining portion of the debt that had been renegotiated
      with its creditor banks in March 2004, through receipt of
      a local loan of BRL 300 million formalized through Bank
      Credit Notes.

Eletropaulo distributes power in Brazil's industrial hub of Sao
Paulo city and 23 surrounding towns. Power consumption in Sao
Paulo state grew 3.8% in 2005 from 2004, according to data from
Sao Paulo state government.

                        *    *    *

Standard & Poor's assigned on June 20, 2006, its B+ rating to
Brazilian electric utility Eletropaulo Metropolitana
Eletricidade de Sao Paulo S.A.'s US$200 million senior unsecured
and unsubordinated euro bonds.  The outlook is stable.

Fitch Ratings has affirmed on May 15, 2006, the international
local and foreign currency ratings of Eletropaulo Metropolitana
Eletricidade de Sao Paulo S.A. and the rating of its USD200
million international bond issuance at 'B+'.  The long-term
national scale rating and the rating of the eighth and ninth
debenture issuances were also affirmed at 'BBB(bra)'.  All
ratings maintain a Stable Outlook.


PETROLEO BRASILEIRO: In Talks with PDVSA to Form Company
--------------------------------------------------------
Petroleo Brasileiro SA and Petroleos de Venezuela SA are
considering an agreement to establish a company for the
exploration and production of natural gas in the Mariscal Sucre
province of Venezuela, El Universal reports.

Petrobras International Area Director Nestor Cervero told the
local daily that the initiative is expected to cost US$2
billion.  Petroleo Brasileiro will get about 35% of the new
company, Mr. Cervero said, the rest will go to Petroleos de
Venezuela.  Mr. Cervero noted that as part of this project,
Petrobras will ponder also on Pdvsa production of liquefied
natural gas for the purposes of export to Brazil.

                 About Petroleos de Venezuela

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

                  About Petroleo Brasileiro

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

                        *    *    *

Petroleo Brasileiro SA's long-term corporate family rating is
rated Ba3 by Moody's and its foreign currency long-term debt is
rated BB- by Fitch.

                        *    *    *

As reported in the Troubled Company Reporter on April 26, 2006,
in conjunction with the roll out of Issuer Default Ratings and
Recovery Ratings for Latin America Corporates, Fitch Ratings has
taken rating actions on Petroleo de Brasileiro SA.  These
ratings were affected:

  Foreign Currency:

    -- Previous Rating: 'BB-'
    -- New RR: 'BB', Rating Outlook Positive

  US$2.5 billion, Senior Unsecured Notes due 2008, 2013, 2014
  and 2018:

    -- Previous Rating: 'BB-'
    -- New IDR: 'BB+'


PETROLEO BRASILEIRO: Investing US$22.1 Bil. to Expand Gas Output
----------------------------------------------------------------
Petroleo Brasileiro SA will be investing US$22.1 billion to
increase natural gas production in order to meet rising local
demand, the Tehran Times reports.

Ildo Sauer, Petroleo Brasileiro's director for gas and energy,
said that the investment is a quarter of its five-year
investment budget.  He estimated that domestic demand for
natural gas will increase to 121 million by 2011, double the
current local need, the Tehran times states.

Part of the fund will be used to rent two floating storage and
regasification ships for LPG, the same report says.

To meet the projected demand, Petroleo Brasileiro aims a daily
increase of 31 million cubic meters to 71 million cubic meters,
the Tehran Times states.  The rest will be met by a daily output
of 20 million cubic meters of regasified liquid petroleum gas
and 30 million cubic meters of Bolivian gas.

Brazil's state-owned oil firm has been pushed to diversify
energy sources as a result of Bolivia's nationalization of its
hydrocarbons sector on May 1.

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

                        *    *    *

Petroleo Brasileiro SA's long-term corporate family rating is
rated Ba3 by Moody's and its foreign currency long-term debt is
rated BB- by Fitch.

                        *    *    *

As reported in the Troubled Company Reporter on April 26, 2006,
in conjunction with the roll out of Issuer Default Ratings and
Recovery Ratings for Latin America Corporates, Fitch Ratings has
taken rating actions on Petroleo de Brasileiro SA.  These
ratings were affected:

  Foreign Currency:

    -- Previous Rating: 'BB-'
    -- New RR: 'BB', Rating Outlook Positive

  US$2.5 billion, Senior Unsecured Notes due 2008, 2013, 2014
  and 2018:

    -- Previous Rating: 'BB-'
    -- New IDR: 'BB+'


VARIG: Variglog Faces Suit for Payment of Airline Workers' Wages
----------------------------------------------------------------
VarigLog, the purchaser of VARIG S.A.'s operating assets, is
facing a potential lawsuit by the Brazilian Labor Prosecutor's
Office.

The Prosecutor's Office said it would sue VarigLog and VARIG for
payment of late salaries and the rescission rights of VARIG's
workers, Investnews (Brazil) reports.  Rodrigo Carelli, Esq., of
the Prosecutor's Office, said the lawsuit would be aimed at
VarigLog, Investnews adds.

VarigLog, VARIG's former cargo unit, was acquired by Volo do
Brasil in a transaction early this year.

As previously reported, Volo purchased VARIG's assets for more
than US$600,000,000 at a July 20 auction sanctioned by the
Brazilian bankruptcy court.  The sale is subject to regulatory
approval by the Brazilian National Civil Aviation Authority.

                         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.




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


ATLAS TRADING: Creditors Must File Proofs of Claim by Sept. 7
-------------------------------------------------------------
Atlas Trading, Ltd.'s creditors are required to submit proofs of
claim by Sept. 7, 2006, to the company's liquidator:

         Linburgh Martin
         John Sutlic
         P.O. Box 1034, George Town
         Grand Cayman, Cayman Islands

Creditors who are not able to comply with the Sept. 7 deadline
won't receive any distribution that the liquidator will make.
Creditors are required to present proofs of claim personally or
through their solicitors.

Atlas Trading's shareholders agreed on July 15, 2006, for the
company's voluntary liquidation under Section 135 of the
Companies Law (2004 Revision) of the Cayman Islands.

Parties-in-interest may contact:

         Thiry Gordon
         Close Brothers (Cayman) Limited
         Fourth Floor, Harbour Place
         P.O. Box 1034, George Town
         Grand Cayman, Cayman Islands
         Tel: (345) 949-8455
         Fax: (345) 949-8499


AVENEL LIMITED: Proofs of Claim Filing Deadline Is on Sept. 7
-------------------------------------------------------------
Avenel Limited's creditors are required to submit proofs of
claim by Sept. 7, 2006, to the company's liquidator:

         Westport Services Ltd.
         P.O. Box 1111
         Grand Cayman, Cayman Islands

Creditors who are not able to comply with the Sept. 7 deadline
won't receive any distribution that the liquidator will make.
Creditors are required to present proofs of claim personally or
through their solicitors.

Avenel Limited's shareholders agreed on July 21, 2006, for the
company's voluntary liquidation under Section 135 of the
Companies Law (2004 Revision) of the Cayman Islands.

Parties-in-interest may contact:

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


CHARLOTTE LIMITED: Shareholders Vote to Liquidate Business
----------------------------------------------------------
Charlotte Limited's shareholders decided on July 18, 2006, to
place the company in voluntary liquidation under the Companies
Law (2004 Revision) of the Cayman Islands.

Cromer Limited and Cawsand Limited were appointed as liquidators
to facilitate the winding up of Charlotte Limited's business.

The liquidators can be reached at:

         Cromer Limited
         Cawsand Limited
         P.O. Box 887GT, George Town
         Grand Cayman, Cayman Islands


COBBLE (OVERSEAS): Last Day to File Proofs of Claim Is Sept. 7
--------------------------------------------------------------
Cobble Creek Overseas Ltd.'s creditors are required to submit
proofs of claim by Sept. 7, 2006, to the company's liquidators:

         G. James Cleaver
         Gordon I. MacRae
         P.O. Box 1102, George Town
         Bermuda House, 4th Floor
         Grand Cayman, Cayman Islands

Creditors who are not able to comply with the Sept. 7 deadline
won't receive any distribution that the liquidator will make.
Creditors are required to present proofs of claim personally or
through their solicitors.

Cobble Creek's shareholders agreed on July 22, 2006, for the
company's voluntary liquidation under Section 135 of the
Companies Law (2004 Revision) of the Cayman Islands.

Parties-in-interest may contact:

         Korie Drummond
         Kroll (Cayman) Limited
         4th Floor, Bermuda House
         Dr. Roy's Drive
         Grand Cayman, Cayman Islands
         Tel: +1 (345) 946-0081
         Fax: +1 (345) 946-0082


COBBLE (SELECT): Filing of Proofs of Claim Is Until Sept. 7
-----------------------------------------------------------
Cobble Creek Select Offshore Ltd.'s creditors are required to
submit proofs of claim by Sept. 7, 2006, to the company's
liquidators:

         G. James Cleaver
         Gordon I. MacRae
         P.O. Box 1102, George Town
         Bermuda House, 4th Floor
         Grand Cayman, Cayman Islands

Creditors who are not able to comply with the Sept. 7 deadline
won't receive any distribution that the liquidator will make.
Creditors are required to present proofs of claim personally or
through their solicitors.

Cobble Creek's shareholders agreed on July 22, 2006, for the
company's voluntary liquidation under Section 135 of the
Companies Law (2004 Revision) of the Cayman Islands.

Parties-in-interest may contact:

         Korie Drummond
         Kroll (Cayman) Limited
         4th Floor, Bermuda House
         Dr. Roy's Drive
         Grand Cayman, Cayman Islands
         Tel: +1 (345) 946-0081
         Fax: +1 (345) 946-0082


COLESVILLE LIMITED: Proofs of Claim Must be Filed by Sept. 7
------------------------------------------------------------
Colesville Limited's creditors are required to submit proofs of
claim by Sept. 7, 2006, to the company's liquidator:

         Westport Services Ltd.
         P.O. Box 1111
         Grand Cayman, Cayman Islands

Creditors who are not able to comply with the Sept. 7 deadline
won't receive any distribution that the liquidator will make.
Creditors are required to present proofs of claim personally or
through their solicitors.

Colesville Limited's shareholders agreed on July 21, 2006, for
the company's voluntary liquidation under Section 135 of the
Companies Law (2004 Revision) of the Cayman Islands.

Parties-in-interest may contact:

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


DEUTSCHE INT'L: Proofs of Claim Filing Deadline Is on Sept. 7
-------------------------------------------------------------
Deutsche International Nautical's creditors are required to
submit proofs of claim by Sept. 7, 2006, to the company's
liquidators:

         David Dyer
         Deutsche Bank (Cayman) Limited
         P.O. Box 1984GT, George Town
         Grand Cayman, Cayman Islands

Creditors who are not able to comply with the Sept. 7 deadline
won't receive any distribution that the liquidator will make.
Creditors are required to present proofs of claim personally or
through their solicitors.

Deutsche International's shareholders agreed on July 14, 2006,
for the company's voluntary liquidation under Section 135 of the
Companies Law (2004 Revision) of the Cayman Islands.


FAIRFIELD SAXO MASTER: Proofs of Claim Filing Ends Sept. 7
----------------------------------------------------------
Fairfield Saxo Master Fund Ltd.'s creditors are required to
submit proofs of claim by Sept. 7, 2006, to the company's
liquidators:

         Chris Humphries
         Sophia A. Dilbert
         P.O. Box 2510, George Town
         Grand Cayman, Cayman Islands
         Tel: (345) 949 3344
         Fax: (345) 949 2888

Creditors who are not able to comply with the Sept. 7 deadline
won't receive any distribution that the liquidator will make.
Creditors are required to present proofs of claim personally or
through their solicitors.

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


FAIRFIELD SAXO: Proofs of Claim Must be Submitted by Sept. 7
------------------------------------------------------------
Fairfield Saxo Fund Ltd.'s creditors are required to submit
proofs of claim by Sept. 7, 2006, to the company's liquidators:

         Chris Humphries
         Sophia A. Dilbert
         P.O. Box 2510, George Town
         Grand Cayman, Cayman Islands
         Tel: (345) 949 3344
         Fax: (345) 949 2888

Creditors who are not able to comply with the Sept. 7 deadline
won't receive any distribution that the liquidator will make.
Creditors are required to present proofs of claim personally or
through their solicitors.

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


FLAGTOWN LIMITED: Last Day to File Proofs of Claim Is on Sept. 7
----------------------------------------------------------------
Flagtown Limited's creditors are required to submit proofs of
claim by Sept. 7, 2006, to the company's liquidator:

         Westport Services Ltd.
         P.O. Box 1111
         Grand Cayman, Cayman Islands

Creditors who are not able to comply with the Sept. 7 deadline
won't receive any distribution that the liquidator will make.
Creditors are required to present proofs of claim personally or
through their solicitors.

Flagtown Limited's shareholders agreed on July 21, 2006, for the
company's voluntary liquidation under Section 135 of the
Companies Law (2004 Revision) of the Cayman Islands.

Parties-in-interest may contact:

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


IBC INTERNATIONAL: Shareholders Place Company in Liquidation
------------------------------------------------------------
IBC International's shareholders decided on Jan. 17, 2006, to
place the company in voluntary liquidation under the Companies
Law (2004 Revision) of the Cayman Islands.

Simon Whicker and Keith Blake of KPMG were appointed as
liquidators to facilitate the winding up of IBC International's
business.

The liquidators can be reached at:

         Simon Whicker
         Keith Blake
         KPMG
         P.O. Box 493, George Town
         Grand Cayman, Cayman Island


PARAMUS LIMITED: Creditors Must File Proofs of Claim by Sept. 7
---------------------------------------------------------------
Paramus Limited's creditors are required to submit proofs of
claim by Sept. 7, 2006, to the company's liquidator:

         Westport Services Ltd.
         P.O. Box 1111
         Grand Cayman, Cayman Islands

Creditors who are not able to comply with the Sept. 7 deadline
won't receive any distribution that the liquidator will make.
Creditors are required to present proofs of claim personally or
through their solicitors.

Paramus Limited's shareholders agreed on July 21, 2006, for the
company's voluntary liquidation under Section 135 of the
Companies Law (2004 Revision) of the Cayman Islands.

Parties-in-interest may contact:

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


QUINTERO HOLDINGS: Proofs of Claim Filing Is Until Sept. 7
----------------------------------------------------------
Quintero Holdings Limited's creditors are required to submit
proofs of claim by Sept. 7, 2006, to the company's liquidator:

         Royhaven Secretaries Limited
         Coutts (Cayman) Limited
         Coutts House, 1446 West Bay Road
         P.O. Box 707, George Town
         Grand Cayman, Cayman Islands

Creditors who are not able to comply with the Sept. 7 deadline
won't receive any distribution that the liquidator will make.
Creditors are required to present proofs of claim personally or
through their solicitors.

Quintero Holdings' shareholders agreed on July 25, 2006, for the
company's voluntary liquidation under Section 135 of the
Companies Law (2004 Revision) of the Cayman Islands.

Parties-in-interest may contact:

         Lesley Walker
         P.O. Box 707, George Town
         Grand Cayman, Cayman Islands
         Tel: (345) 945-4777
         Fax: (345) 945-4799


SEAGATE TECH: Discloses US$2.5 Bil. Share Repurchase Program
------------------------------------------------------------
Seagate Technology disclosed that its Board of Directors has
authorized the company to repurchase up to US$2.5 billion of its
outstanding shares of common stock over the next 24 months.

This program reinforces Seagate's ongoing commitment to enhance
shareholder value in which, during fiscal year 2006, Seagate
returned over US$500 million to its shareholders through stock
repurchases and quarterly dividends.  Based on the stock price
the new repurchase program would represent approximately 20% of
the company's capitalization.  As of July 28, 2006 Seagate had
approximately 576 million shares of stock outstanding.

Seagate expects to fund the stock repurchase through a
combination of cash on hand, future cash flow from operations
and potential alternative sources of financing.  Stock
repurchases under this program may be made through a variety of
methods, which may include open market purchases, privately
negotiated transactions, block trades, accelerated share
repurchase transactions or otherwise, or by any combination of
such methods.  The timing and actual number of shares
repurchased will depend on a variety of factors including the
stock price, corporate and regulatory requirements and other
market and economic conditions. The stock repurchase program may
be suspended or discontinued at any time.

Headquartered in Scotts Valley, California, and registered in
Cayaman Islands, Seagate Technology (NYSE: STX) --
http://www.seagate.com/-- is the worldwide leader in the
design, manufacturing and marketing of hard disc drives,
providing products for a wide-range of Enterprise, Desktop,
Mobile Computing, and Consumer Electronics applications.

                        *    *    *

Moody's Investors Service has confirmed on July 17, 2006, the
ratings of Seagate Technology HDD Holdings and upgraded the
ratings of Maxtor Corp., now a wholly owned subsidiary of
Seagate Technology US Holdings, following the completion of its
acquisition on May 19, 2006, and subsequent guaranteeing of
Maxtor's debt by Seagate.  This concludes the review initiated
by Moody's on Dec. 21, 2005.  The review was prompted by the
company's announcement of its intention to acquire Maxtor in an
all-stock transaction for approximately US$1.9 billion. The
ratings outlook is stable.

Moody's confirmed these ratings:

   -- Corporate Family Rating: Ba1; and

   -- SGL Rating of 1.

Moody's upgraded these ratings:

   Seagate Technology HDD Holdings:

      -- US$400 million senior notes 8%, due 2009: to Ba1


SEAGATE TECH: Moody's Comments on US$2.5 Bil. Buyback Program
-------------------------------------------------------------
Moody's Investors Service comments on the recent announcement by
Seagate Technology HDD Holdings, Inc.'s that it had obtained
board authorization for a stock buyback program of up to US$2.5
billion over the next two years.

Moody's believes that the impact of the pending buyback program
on Seagate's credit profile and rating, if any, is still too
early to determine.  Seagate clearly has substantial liquidity
with cash balance of over US$1.7 billion and debt capacity with
total Debt to EBITDA less capex about 2 x.  While some type of
buyback was incorporated in Moody's confirmation of Seagate's
rating on July 17, 2006 (Corporate Family rating of Ba1, stable
outlook), the current authorization of $2.5 billion is
significant.  As Moody's pointed out in its recent credit
opinion, Seagate operates in a sector characterized by its
"capital intensity, volatility, and the commoditized
nature...with short product life cycles and maturation linked
ASP declines," liquidity and conservative capital structure are
important factors in maintaining its current rating of Ba1.

Moody's will continue to monitor the situation in finalizing its
analysis will focus on

   1) level of liquidity Seagate intends to keep in conjunction
      with the buyback;
   2) the target capital structure from a potential leveraging
      of its balance sheet to fund such a buyback;

   3) the pace of the buyback program execution vis-a-vis its
      operating cash flow and financial strength and
      liquidity; and

   4) Seagate's financial policy as to further shareholder
      friendly activities going forward and management
      philosophy related to liquidity and leverage.

Seagate, with primary offices in Scotts Valley, California, is a
worldwide leader in the design, manufacture and marketing of
rigid disc drive products used as the primary medium for storing
electronic information in systems ranging from personal
computers and consumer electronics to data centers delivering
information over corporate networks and the Internet.

Seagate Technology (NYSE: STX) is a major manufacturer of hard
drives, founded in 1979 and based in Scotts Valley, California.
The company is registered in the Cayman Islands. Their hard
drives are used in a variety of computers, from servers,
desktops, and laptops to other consumer devices such as digital
video recorders, the Microsoft Xbox and the Creative Zen Micro
line of digital audio players.  Seagate is the oldest
independent hard disk maker still in operation.


TAG ABSOLUTE: Creditors Must File Proofs of Claim by Sept. 7
------------------------------------------------------------
The Tag Absolute Return Offshore Fund, Ltd.'s creditors are
required to submit proofs of claim by Sept. 7, 2006, to the
company's liquidators:

         John Cullinane
         Derrie Boggess
         c/o Walkers SPV Limited
         P.O. Box 908, George Town
         Grand Cayman, Cayman Islands
         Tel: (345) 914-6305

Creditors who are not able to comply with the Sept. 7 deadline
won't receive any distribution that the liquidator will make.
Creditors are required to present proofs of claim personally or
through their solicitors.

Tag Absolute's shareholders agreed on July 18, 2006, for the
company's voluntary liquidation under Section 135 of the
Companies Law (2004 Revision) of the Cayman Islands.


TELEOLOGIC LIMITED: Filing of Proofs of Claim Is Until Sept. 7
--------------------------------------------------------------
Teleologic Limited's creditors are required to submit proofs of
claim by Sept. 7, 2006, to the company's liquidator:

         Ogier Corporate Services (UK) Limited
         Equitable House, 47 King William Street
         London, EC4R 9JD

Creditors who are not able to comply with the Sept. 7 deadline
won't receive any distribution that the liquidator will make.
Creditors are required to present proofs of claim personally or
through their solicitors.

Teleologic Limited's shareholders agreed on July 7, 2006, for
the company's voluntary liquidation under Section 135 of the
Companies Law (2004 Revision) of the Cayman Islands.


TSF-D1: Deadline for Proofs of Claim Filing Is Set for Sept. 7
--------------------------------------------------------------
TSF-D1, Inc.'s creditors are required to submit proofs of claim
by Sept. 7, 2006, to the company's liquidators:

         John Cullinane
         Derrie Boggess
         c/o Walkers SPV Limited
         P.O. Box 908, George Town
         Grand Cayman, Cayman Islands
         Tel: (345) 914-6305

Creditors who are not able to comply with the Sept. 7 deadline
won't receive any distribution that the liquidator will make.
Creditors are required to present proofs of claim personally or
through their solicitors.

TSF-D1's shareholders agreed on July 27, 2006, for the company's
voluntary liquidation under Section 135 of the Companies Law
(2004 Revision) of the Cayman Islands.




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


ARAMARK SERVICES: Moody's Reviews Ratings for Possible Downgrade
----------------------------------------------------------------
Moody's Investors Service confirmed the Baa3 rating on the 7.1%
senior notes due 2006 of Aramark Services, Inc., a wholly owned
subsidiary of Aramark Corp.  All other senior note issues of
Aramark Services remain on review for possible downgrade.

The rating action follows Aramark's announcement that it has
signed a definitive merger agreement under which the company's
Chairman and Chief Executive Officer and a group of investment
funds will acquire the company in a transaction valued at
approximately US$8.3 billion, including the assumption or
repayment of approximately US$2 billion of debt.  The merger
agreement was approved by the board of directors based on the
unanimous recommendation of a special committee consisting of
independent directors.  Moody's placed all the credit ratings of
Aramark on review for possible downgrade on May 1, 2006
following the announcement that it received a proposal from the
company's CEO and a group of investors to acquire all of the
outstanding shares of common stock.

The transaction is expected to be completed by late 2006 or
early 2007, subject to receipt of stockholder and regulatory
approvals.  The investor group has obtained equity and debt
financing commitments for the transactions contemplated by the
merger agreement.  There is no financing condition to the
proposed transaction.

Based upon the expected terms of the proposed transaction,
Moody's expects a substantial increase in debt levels and
weakening of credit metrics.  Moody's believes that a corporate
family rating in the single B rating category is possible upon
conclusion of the review.  The rating review will focus on
Aramark's post-acquisition capital structure including the
company's plans regarding the treatment of the existing senior
unsecured notes, liquidity position and operating strategy.

Aramark has not announced the components of its post-acquisition
capital structure. The confirmation of the Baa3 rating on the
senior notes due 2006 reflects Moody's expectation that such
notes will either mature before the transaction closes or will
be repaid as a condition to any new financing. Aramark's other
issues of senior notes (maturing in 2007-2012) remain on review
for possible downgrade because of uncertainty as to whether such
notes will be refinanced in connection with the acquisition or
will remain in the post-acquisition capital structure.  Moody's
expects to confirm the ratings of any senior notes that will be
refinanced in connection with the acquisition and to downgrade
by multiple notches any senior notes that remain in the post-
acquisition capital structure.

Moody's confirmed this rating:

   -- US$125 million senior unsecured notes due 2006: Baa3;

These ratings remain on review for possible downgrade:

   -- US$300 million senior unsecured notes due 2007: Baa3;
   -- US$31 million senior unsecured notes due 2007: Baa3;
   -- US$300 million senior unsecured notes due 2008: Baa3;
   -- US$250 million senior unsecured notes due 2012: Baa3;
   -- Senior unsecured shelf registration: (P) Baa3; and
   -- Senior subordinated shelf registration: (P) Ba1.

Aramark Corp., a managed services company headquartered in
Philadelphia, Pennsylvania, provides or manages a variety of
services, including food and support services, and uniform
rental and sales.  The company's revenues were approximately
US$11.3 billion for the twelve-month period ended
March 31, 2006.




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


* COLOMBIA: FTA Won't Change Flower Sector's Tariff Exemptions
--------------------------------------------------------------
Colombia's Free Trade Agreement with the United States or FTA
won't affect tariff exemptions in the former's flower industry,
the Upside Down World reports.

As reported in the Troubled Company Reporter-Latin America on
June 7, 2006, the government of Colombia reached a free trade
agreement with the United States.  The Colombian and US
negotiators are yet to present the final text of the agreement
to the legislature of both countries for ratification.

According to Upside Down, about 60% of fresh cut flowers sold in
the US come from Colombia.

Upside Down relates that the 100,000 workers in the industry
don't expect any benefits from the FTA.

The report underscores that workers have been suffering from
"carpel tunnel syndrome" from repetitive jobs, over exposure to
pesticides and fertilizers, and discriminatory firing for women
during pregnancy or before eligibility for maternity leave.

While experiencing health problems, workers continue to be paid
a minimum wage, Upside Down World states.

                        *    *    *

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


DENNY'S CORP: June 30 Balance Sheet Upside-Down by US$257.9 Mil.
----------------------------------------------------------------
Denny's Corp. reported its financial results for the second
quarter ended June 28, 2006, to the US Securities and Exchange
Commission on Aug. 4, 2006.

For the three months ended June 28, 2006, Denny's earned
US$1.8 million of net income on US$243.5 million of net
revenues, compared with US$2 million of net income on US$246.6
million of net revenues in 2005.

At June 28, 2006, Denny's balance sheet showed US$500.3 million
in total assets and US$758.2 million in total liabilities,
resulting in a US$257.9 million stockholders' deficit.

Denny's June 28 balance sheet showed strained liquidity
with US$65.7 million in total current assets available to pay
US$133.9 million in total current liabilities coming due within
the next 12 months.

Denny's disclosed that, it received amendments to its credit
agreements allowing for the sale of the 84 properties, including
two company locations, in its prospective pool of asset sales.
The net cash proceeds from the potential sale of the properties
will be applied to reduce outstanding indebtedness under its
credit facility.

Denny's further disclosed that its initial sales efforts began
with the franchisees that operate the respective restaurant
properties.  The first of the agreements closed in late June,
with an additional two properties sold in July for gross
proceeds of approximately US$2.4 million.  In addition to
further sales directly to franchisees, discussions have been
held with various third parties that have expressed an interest
in purchasing a portion of the properties and the associated
lease income.

Mark Wolfinger, chief financial officer, stated, "Our focus on
strengthening our balance sheet and enhancing cash generation is
supported through targeted asset sales and strict allocation of
capital expenditures.  The execution of our real estate sale
plans is underway, marked by the divestiture of 13 surplus and
operating properties through July for proceeds of approximately
US$14 million.  While we would like to complete this sale
process promptly, there are logistical challenges involved in
negotiating with more than 30 separate franchisees or with third
party due diligence on this number of prospective tenants.
Until we have definitive sale agreements on the properties, we
cannot predict with certainty the timetable for completion.  It
is our hope that the majority of these properties will be sold
within the next twelve months."

Full-text copies of the Company's Quarterly Report is available
for free at http://researcharchives.com/t/s?f49

Headquartered in Spartanburg, South Carolina, Denny's Corp.
-- http://www.dennys.com/-- is America's largest full-service
family restaurant chain, consisting of 543 company-owned units
and 1,035 franchised and licensed units, with operations in the
United States, Canada, Costa Rica, Guam, Mexico, New Zealand and
Puerto Rico.




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


* CUBA: Entities Await Talks on Payback for Confiscated Assets
--------------------------------------------------------------
Firms and people whose assets were confiscated by Cuba after the
1959 revolution are waiting to negotiate a payback, the
Associated Press reports.

AP relates that the Foreign Claims Settlement Commission
certified about 5,911 claims against Cuba totaling about US$1.85
billion in 1972.

The report underscores that with interest, the claims could be
as much as US$7 billion, with 30 US firms holding 57% of the
total value.

The US, under the Justice Department's program that expired in
1972, can negotiate for a payment on behalf of the claimants, AP
says.  However, there had been no negotiations.

Robert Muse, a Washington-based attorney who represents two
companies with large claims against Cuba, told AP, "The claims
were so large, and the hostility so great, that there has never
really been an attempt to resolve the claims."

Attorney Muse refused to reveal to AP the companies' names.

According to AP, several of the claims have changed hands many
times over the years, as firms were bought and sold.  Included
in the original list were:

      -- Cuban Electric Co.;

      -- Standard Oil Co. and Texaco Co., which now belong
         respectively to Exxon Mobil Corp. and Chevron Corp.;
         and

     -- International Telephone & Telegraph Corp., which is now
        owned by Starwood Hotels & Resorts Worldwide Inc.

AP notes that Starwood filed property-seizure claim against Cuba
after the settlement commission launched for the second time an
effort for claims on properties confiscated after May 1967.
Starwood alleged that Cuba nationalized land worth US$61.2
million including interest.

Attorney Muse told AP that resolving the claims would likely
require:

     -- Cuba to decide that it wants the ban, and
     -- US to want a new relationship with Cuba.

Some firms may not pursue outstanding claims when the time comes
like in the case of Standard Oil and Texaco, AP says, citing
Jorge Pinon -- a senior researcher with the University of
Miami's Institute for Cuban and Cuban-American Studies.  He said
that Standard Oil and Texaco had plants in Cuba that were
nationalized in 1960.  The firms might not want those assets as
they are now in bad shape and carry potential environmental
liabilities and are basically worth nothing.

Mr. Pinon also told AP that Exxon Mobil and Chevron will not
risk their long-term profitability outlook to get involved in a
long legal fight.

"We believe it to be enforceable if and when there is a change
in the Cuban government," Kent Robertson, a spokesperson of
Chevron, said in a statement about the company's property claim.

Attorney Muse told AP that Cuba has settled property claims --
which were not in the same magnitude of the US claims -- with
countries:

        -- Switzerland,
        -- Canada, and
        -- United Kingdom.

The report underscores that Philip Peters -- the vice president
of Vancouver-based Lexington Institute -- warns against property
claims becoming a central issue between the US and Cuba.

"People deserve to be compensated.  But if the US makes this the
top issue, it means we run the risk of strangling progress and
putting a huge burden on the Cuban government's budget at time
when most would want the government to move forward," Mr. Peters
told AP.

                        *    *    *

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


* CUBA: US Forms Panel to Determine Economic Future with Country
--------------------------------------------------------------
Some United States senators have formed a task force to explore
a possible economic relationship with Cuba after Fidel Castro's
reign, the Business Review relates.

The senators believe that such a move is necessary given Fidel
Castro's age.  The Cuban leader is 80 years old and has been in
power since 1959.  The US has long maintained a trade embargo
against Cuba.

"The primary purpose of this task force is to bring people
together and prepare now for our economic future," Sen. Efrain
Gonzalez Jr., the Bronx Democrat who was selected by Senate
Minority Leader David Paterson to chair the task force, told the
Business Review. "It's an important first step."

Sen. Gonzalez elaborated that the task force will hold public
hearings and seek out advice and assistance from business
leaders and foreign policy experts, the Business Review says.
It will also make recommendations on state and federal law and
policies to encourage fair trade practices with Cuba.

The same report states that Cuban-American business leader
Carlos Portes in New York City will be chairman of an advisory
committee to the task force.

                        *    *    *

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: AES Andres Lessens Blackouts in Dominican Republic
------------------------------------------------------------
The launching of an AES Andres unit in the Dominican Republic
has improved the power supply, decreasing blackouts in the
country, the DR1 Newsletter reports, citing the Superintendence
of Power.

According to DR1, the plant has a capacity of about 275
megawatts per hour, using natural gas.

The "peak demand" was at 1,948 megawatts, while maximum supply
was at 1,594 megawatts for an average deficit of 21%, the
Superintendence told DR1.

AES Andres is a unit of AES Corp. in the Dominican Republic.

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

AES's business group in Asia & Middle East is comprised of
electric utilities and generation plants in Kazakhstan, Oman,
Qatar, Pakistan, Sri Lanka, China and India.  Fuels include
coal, diesel, hydro, gas and oil.  AES has been in the region
since 1994, when it acquired the Cili generation plant in China.

                          *     *     *

As reported in the Troubled Company Reporter on May 25, 2006,
Fitch affirmed The AES Corporation's Issuer Default Rating at
'B+'.  Fitch also affirmed and withdrew the ratings for the
company's junior convertible debt.  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 diversified 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 Corp., 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: Ex-Head Insists Lois Malkun Fraud Trial
---------------------------------------------------------------
Ramon Baez Figueroa, the former head of the Banco
Intercontinental SA aka Baninter, told Dominican Today that Jose
Lois Malkun -- the former central bank governor -- must undergo
a fraud trial for using the government's funds to pay deposits
and other commitments without adhering to the central bank's
liquidation process.

The use of the funds violated the Monetary and Financial Law,
Dominican Today reports, citing Mr. Figueroa.

Dominican Today underscores that Mr. Figueroa was questioned for
more than three hours.  Luis Gonzalez and Jose Polanco -- the
assistants of Jose Manuel Hernandez, the National District
prosecutor -- conducted Mr. Figueroa's interrogation.

According to Dominican Today, Mr. Hernandez said that he plans
to interrogate Mr. Malkun this week, saying that Mr. Figueroa's
complaint does not limit his investigation into anyone's
actions, even abroad, which constitute a criminal activity.

Mr. Hernandez told Dominican Today, "It will not be just one
interrogation, we are going to use all the necessary resources
until the complaint is explained totally."

Meanwhile, Mr. Figueroa told Dominican Today, "We ratified the
terms of our complaint and presented to the office of the
Prosecutor the information and evidence that guarantee our
accusations against the previous authorities of the Central
Bank."

Atty. Juarez Castillo, who represented Mr. Figueroa, confirmed
to Dominican Today that in the interrogation all terms of the
complaint were ratified, based on the accusations against Mr.
Malkun, who destroyed Baninter's chances of meeting its
commitments and caused the quasi-fiscal deficit.

About 76% of Baninter's depositors had sums below DOP500,000,
Mr. Figueroa affirmed to Dominican Today.  He said that the
Dominican government could have guaranteed those reimbursements
with DOP6.5 billion, in compliance with the Monetary Law.

"But they did not do it thusly, but that in addition paid to the
24% of the depositors, who were those which had over 500,000
pesos, including the shareholders and members of the council of
directors of the bank.  Then Mr. Malkun I believe that it wasn't
correct what he did, being the main monetary authority of the
country," Mr. Figueroa complained to Dominican Today.

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.




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


PETROECUADOR: Delivers 450,000 Barrels of Napo Crude to Taurus
--------------------------------------------------------------
Petroecuador, the state-owned oil firm of Ecuador, said in a
statement that it has shipped about 450,000 barrels of Napo
crude to Taurus on Thursday from its OCP heavy oil pipeline
terminal.

As reported in the Troubled Company Reporter-Latin America on
July 5, 2006, a spokesperson of Petroecuador said that the firm
awarded Taurus, Mitsubishi Corporation-Tokyo and Mitsubishi
International shipments of 400,000 barrels of crude each.
Petroecuador conducted a bidding process on June 29 for two
million barrels of crude produced on block 15, among the oil
fields stripped from US oil firm Occidental Petroleum Corp.  The
crude was to be sold on the spot market in five separate loads
of 400,000 gallons to firms that are pre-qualified by
Petroecaudor.  Taurus was awarded three loads of 400,000 barrels
of crude during that auction.  Taurus had offered the lowest
discount from the spot market price of US$17.50.

Business News Americas reports that Petroecuador will deliver
the remaining 1.56Mb on Aug. 12 to Taurus, Mitsubishi
Corporation and Mitsubishi International.

Petroecuador, according to published reports, is faced with
cash-problems.  The state-oil firm has no funds for maintenance,
has no funds to repair pumps in diesel, gasoline and natural gas
refineries, and has no capacity to pay suppliers and vendors.
The government refused to give the much-needed cash alleging
inefficiency and non-transparency in Petroecuador's dealings.


* ECUADOR: Banana Growers' Planned Strike Cancelled
---------------------------------------------------
The strike that banana growers in Ecuador had planned to hold in
El Oro was postponed, Fresh Plaza reports.

Fresh Plaza relates that the growers were against the low prices
of banana.

Activities in El Oro went on as normal, Fresh Plaza says.
However, the strike was still deemed to happen at any time.

Xavier Sanmartin, the leader of the grower association ABO, told
Fresh Plaza that Ecuadorian authorities have taken strategic
positions along roads and highways to prevent the junctions from
being occupied by the strikers.

Meanwhile, the quality inspections of bananas are being executed
in the ports, according to Fresh Plaza.

However, a resolution of the Ministry of Agriculture will set
the inspections to a plantation level, the report states.

Fresh Plaza notes that the resolution was highly criticized, as
it is impossible to have a sufficient number of established and
trustworthy inspectors.  Logistics to ports would be seriously
obstructed and delayed.

The report underscores that the increased level of inspections
also lessens the quality guarantee for importers, as it is
impossible to tell how the bananas will arrive at their
destinations.

The cost of bananas would be affected, further complicating
sales, Fresh Plaza relates.

                        *    *    *

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




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


GOODYEAR TIRE: Reports US$2 Million Net Income in Second Quarter
----------------------------------------------------------------
The Goodyear Tire & Rubber Company filed its financial results
for the second quarter ended June 30, 2006, with the US
Securities and Exchange Commission on Aug. 4, 2006.

For the three months ended June 30, 2006, Goodyear earned
US$2 million of net income on US$5.14 billion of net revenues,
compared to US$69 million of net income on US$5 billion of net
revenues in 2005.

At June 30, 2006, Goodyear had US$1,564 million in cash and cash
equivalents as well as US$1,679 million of unused availability
under the company's various credit arrangements, compared to
US$2,162 million and US$1,677 million at Dec. 31, 2005,
respectively.  Cash and cash equivalents decreased primarily due
to payments of debt maturities and funding of seasonal working
capital.  Cash and cash equivalents do not include restricted
cash.  Restricted cash primarily consists of Goodyear
contributions made related to the settlement of the Entran II
litigation and proceeds received pursuant to insurance
settlements.  In addition, the Company will, from time to time,
maintain balances on deposit at various financial institutions
as collateral for borrowings incurred by various subsidiaries,
as well as cash deposited in support of trade agreements and
performance bonds.

As of June 30, 2006, cash balances totaling US$224 million were
subject to restrictions, compared to US$241 million at
Dec. 31, 2005.

A full-text copy of the Company's Quarterly Report is available
for free at http://researcharchives.com/t/s?f3b

Headquartered in Akron, Ohio, The Goodyear Tire & Rubber Company
(NYSE: GT) -- http://www.goodyear.com/-- is the world's largest
tire company.  The company manufactures tires, engineered rubber
products and chemicals in more than 90 facilities in 28
countries.  It has marketing operations in almost every country
around the world.  Goodyear employs more than 80,000 people
worldwide.  In Latin America, the company operates in Argentina,
Brazil, Chile, Colombia, Guatemala, Jamaica, Mexico, Peru,
Uruguay and Venezuela.

                        *    *    *

As reported in the Troubled Company Reporter on June 8, 2006,
Fitch affirmed The Goodyear Tire & Rubber Company's Issuer
Default Rating at 'B'; US$1.5 billion first lien credit facility
at 'BB/RR1'; US$1.2 billion second lien term loan at 'BB/RR1';
US$300 million third lien term loan at 'B/RR4'; US$650 million
third lien senior secured notes at 'B/RR4'; and Senior Unsecured
Debt at 'CCC+/RR6'.

As reported in the Troubled Company Reporter on June 23, 2005,
Moody's Investors Service assigned a B3 rating to Goodyear Tire
& Rubber Company's US$400 million ten-year senior unsecured
notes.

As reported in the Troubled Company Reporter on June 22, 2005,
Standard & Poor's Ratings Services assigned its 'B-' rating to
Goodyear Tire & Rubber Co.'s US$400 million senior notes due
2015 and affirmed its 'B+' corporate credit rating.




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


* HAITI: Will Receive US$17-Mil. Aid from Caribbean Development
---------------------------------------------------------------
Haiti will receive US$17 million from the Caribbean Development
Bank, as aid for the nation's social and economic recovery,
Petrolworld reports.

Petrolworld relates that the contribution is part of the
commitment of the Caribbean Community or CARICOM to support
Haiti in its reconstruction.

According to a news release from the CARICOM Secretariat
Turkeyen, Ambassador Colin Granderson -- CARICOM's Assistant
Secretary-General for Foreign and Community Relations -- said at
a Donor Community Meeting Haiti's President Rene Preval convened
two weeks ago that the group is ready to join Haiti's
international partners in helping to:

    -- stimulate reforms,
    -- strengthen institutions, and
    -- promote political, economic and social development.

Ambassador Granderson told Petrolworld that Haiti will also have
access to the Petroleum Fund the Trinidad and Tobago established
in 2004.  The Fund aims to provide relief to CARICOM member
states undergoing economic hardship, as an aftermath of
persistently high international prices for crude oil and
petroleum products.

Petrolworld notes that Ambassador Granderson disclosed that the
CARICOM is making plans on a technical assessment mission in
Haiti in the coming weeks, in response to a request by President
Preval.  A delegation would work with a Haitian counterpart
team.

CARICOM plans to restore a technical office in Port-au-Prince to
facilitate efforts in health, education, agriculture and natural
disaster mitigation, Petrolworld says, citing Ambassador
Granderson.

CARICOM would do its best to support Haiti's efforts towards
recovery, Ambassador Granderson told Petrolworld.

                        *    *    *

Haiti is currently seeking international help to spur economic
development in the country.  President Rene Preval submitted
that the country's poverty, widespread unemployment and the
dilapidated state of infrastructures will be alleviated with
increased international assistance.




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


WARNACO GROUP: S&P Affirms BB- Corporate Credit Rating
------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on The
Warnaco Group Inc.'s ratings to stable from positive.  At the
same time, the ratings on Warnaco were affirmed, including its
'BB-' corporate credit rating.  Total debt outstanding at
April 1, 2006, was about US$431 million.

"The outlook revision follows the company's announcement that it
will restate its financial statements for the fiscal year ended
December 2005 and the first quarter of 2006 ended April 1, 2006,
as a result of certain irregularities and errors related to its
accounting for returns and vendor allowances at its Chaps
menswear division," said Standard & Poor's credit analyst Susan
H. Ding.

The financial impact of these restatements will not
significantly affect credit protection measures.  However, the
company needs to restate its financial statements due to
accounting irregularities and an error related to the company's
SAP implementation in its swimwear division.  These items will
result in reported material weaknesses for its financial
statements.  In addition, Warnaco needs to seek waivers for
certain technical defaults under its credit agreement.

The ratings on New York, N.Y.-based Warnaco reflect:

   -- its participation in a highly competitive and promotional
      retail environment,

   -- its concentration in the slower-growing department store
      channel, and

   -- its exposure to fashion risk in some of its business
      segments.

The ratings also incorporate the operating risk associated with
reinvigorating the company's various product offerings and the
integration risk related to the company's acquisition of the
Calvin Klein businesses in Europe and Asia.  Furthermore, the
ratings reflect Warnaco's positive operating momentum and its
well-recognized brand names.

Warnaco manufactures and markets men's and women's intimate
apparel, underwear, and sportswear (including jeans, khakis, and
swimwear).  Products are sold under owned and licensed names
such as Olga, Warner's, Anne Cole, Ocean Pacific, Speedo, Chaps,
and Calvin Klein, among others.  Some of Warnaco's core products
are characterized by relatively stable demand.

Standard & Poor's expects Warnaco to maintain credit measures
that are stronger than the medians for the current rating, given
the company's business challenges.  Still, if the company can
improve and sustain financial results in the intermediate term,
including reducing debt leverage, the outlook may be revised
back to positive.  However, if the company is not able to
sustain its operating momentum and engages in share repurchases
or additional acquisitions, or if the company faces integration
problems, or if further restatements or adjustments are found
upon the completion of the internal accounting investigation,
the ratings and outlook would be reviewed.


* HONDURAS: Bus. Sector Says FTA Futile If Instability Continues
----------------------------------------------------------------
The free trade accords Honduras has with other nations would be
useless unless the government and businesses take proactive
steps to end social instability in the nation, El Heraldo
reports, citing Mario Canahuati, the head of the Honduran
Council of Private Enterprise.

Mr. Canahuati told El Heraldo that the maquila sector is a
powerful tool for employment and poverty alleviation.

A maquiladora or maquila is a factory importing materials and
equipment on a duty-free and tariff-free basis for assembly or
manufacturing and then re-exports the assembled product, usually
back to the originating nation.

According to El Heraldo, Mr. Canahuati believed that there must
be more investment and technical assistance given to micro,
small, and medium enterprises.

El Heraldo relates that Mr. Canahuati considers the enterprises
as the backbone of Honduras' economy and society.

Mr. Canahuati agrees to reforms to the national institute of
training that would give more attention to the enterprises, El
Heraldo states.

                        *    *    *

Moody's Investor Service assigned these ratings on Honduras:

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




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


AIR JAMAICA: London Unit Says Flights Undisturbed by Terrorism
--------------------------------------------------------------
Air Jamaica's unit in London told RJR News that terrorism
threats have not disturbed its flight schedules.

RJR News relates that British police have arrested on Thursday
more than 20 British Muslims booked on consecutive flights out
of London, Glasgow, Birmingham, and Manchester, aiming to blow
up 20 flights bound for the United States.  The British Airport
Authority had announced that inbound flights to the United
Kingdom were suspended.

The report underscores that several security measures were put
in place across UK airports.  Luggage was checked-in, and items
like mobile phones and other electrical equipment, alcohol and
other flammable items were not allowed on as hand luggage.
Passengers were made to taste any liquid allowed as hand
luggage.

According to RJR News, Home Secretary John Reid was managing the
situation as Prime Minister Tony Blair was away on holidays in
Barbados.  Mr. Reid raised the UK's threat level from "severe"
to "critical", the highest category in a five-point scale, which
indicated that an attack was imminent.

However, Air Jamaica's headquarters in the United Kingdom said
that all flights are normal, RJR News reports, citing a
spokesperson of the airline.

A flight from Jamaica would arrive on Thursday, as expected.
The flight that would leave Heathrow for Jamaica would also be
on schedule, Air Jamaica told RJR News.

Meanwhile, passengers leaving Jamaica from two international
airports were put through additional checks, Radio Jamaica
states.  Air Jamaica advised its passengers that it would be
instituting new security measures, as British and US authorities
recommended.

Air Jamaica said in a press release that items banned from carry
on luggage include:

     -- alcohol,
     -- gels,
     -- shampoo,
     -- suntan lotion, and
     -- toothpaste.

Air Jamaica told Radio Jamaica that the restrictions include
products purchased at in-bond shops inside the departure areas
of airports.  Passengers were advised to pack the items in their
checked luggage.

Only essential items would be allowed as carry-on luggage, Radio
Jamaica relates, citing Sandrea Falconer -- Air Jamaica's
director of communications.

The increased security measures would result in longer check in
periods and passengers would be required to be at the airport
three hours before departure, Ms. Falconer told Radio Jamaica.

                        *    *    *

On July 21, 2006, Standard & Poor's Rating Services assigned B
long-term foreign issuer credit rating on Air Jamaica Ltd.,
which is equal to the long-term foreign currency sovereign
credit rating on Jamaica, is based on the government's
unconditional guarantee of both principal and interest payments.




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


CINEMARK INC: Century Buy Prompts Moody's to Affirm B1 Rating
-------------------------------------------------------------
Moody's Investors Service affirmed the B1 corporate family
rating for Cinemark, Inc., in light of the company's announced
plans to acquire Century Theatres, Inc.  Cinemark's B1 corporate
family rating can sustain the less than one turn increase in
leverage that Moody's anticipates will result from the proposed
transaction.  Moody's estimates the acquisition will result in
incremental debt of approximately US$500 million as well as the
assumption of Century's existing debt.

Moody's also affirmed all existing Cinemark ratings, and the
outlook remains stable.

Moody's took these rating actions:

   Cinemark, Inc.

      -- Affirmed B1 Corporate Family Rating; and
      -- Affirmed Caa1 Senior Unsecured Notes Rating.

   Cinemark USA, Inc.

      -- Affirmed Ba3 Senior Secured Bank Credit Facility
         Rating; and

      -- Affirmed B3 Senior Subordinate Notes Rating

Moody's also affirmed Century's Ba3 corporate family rating and
its Ba3 senior secured bank rating.  Should the transaction
proceed as planned, Moody's will withdraw Century's ratings.

Moody's estimates Cinemark leverage pro forma for the
transaction will be in the mid 6 times range (as per Moody's
standard adjustments, including operating leases).  The
affirmation of the B1 corporate family rating incorporates
Moody's analysis of the combined company. The B1 corporate
family rating reflects high leverage, sensitivity to product
from movie studios, and a weak industry growth profile, offset
by expectations for continued positive free cash flow and the
advantages of scale and geographic diversity.  Modest upside
cash flow benefits from increased advertising also support the
rating.

Cinemark, Inc. operates approximately 300 theaters and 3,300
screens in North America, Latin America, and South America
through its Cinemark USA, Inc. and other subsidiaries.  One of
the largest motion picture exhibitors in North America with
annual revenue of approximately US$1 billion, the company
maintains its headquarters in Plano, Texas. Century Theatres,
Inc. operates approximately 80 theaters with 1,000 screens
located primarily in the western half of the United States.  The
company maintains its headquarters in San Rafael, California,
and its annual revenue is approximately US$500 million.


CORPORACION GEO: S&P Assigns BB Foreign & Local Issuer Ratings
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned these rating to
Corporacion Geo S.A. de C.V.:

   -- Long-term foreign issuer rating: BB; and
   -- Long-term local issuer rating: BB.

The ratings on Geo reflect the company's

   -- position as the largest homebuilder in Mexico;

   -- nationwide presence;

   -- increased participation in the economic, middle income,
      and residential housing segments; and

   -- adequate liquidity.

These factors are partially offset by the concentration of
mortgage origination in the public housing agencies, the
inherent cyclicality of the construction industry, increased
competition, relatively high financial costs for the Mexican
homebuilding industry, and intense working capital requirements.

Headquartered in Mexico City, Geo is the largest homebuilder in
Mexico with operations in 19 states.  Geo's market position and
its nationwide presence grant the company more stability and
diversification of its cash-flow generation, and facilitate
access to financing to develop its projects.  In recent years
the group's growth in the middle-income and economic segments
has allowed the company to reduce its exposure to the Mexico
City metropolitan area and the traditional segment. The G-Homes
product line has also allowed the group to reduce slightly its
dependence on the public housing agencies. Nevertheless, the
aforementioned categories contribute about 40% of consolidated
revenues, fastening Geo to the aforementioned agencies.
Standard & Poor's Ratings Services expects no major changes in
revenues mix during the second half of 2006.  The homebuilder
will participate in some small new enterprises to offer
additional services to its customer base and diversify its
product offering.

Geo's financial performance has improved and is now more
adequate for its current rating category.  The joint venture
with Prudential Real Estate Investors and the securitization of
accounts receivable through structured MTNs have been important
factors that have allowed the group to reduce its debt leverage
and improve its cash-flow protection measures. Geo has slightly
decreased its margins due to the reduction in its average sales
price, obeying its larger focus on the traditional housing
segment.  For the 12 months ended June 30, 2006, the group
posted double-digit EBITDA growth of 14.8% versus the same
period one year earlier.

Although the increase in collections has lagged top-line growth,
the ratio of accounts receivable to sales improved to about 35%,
and we estimate that Geo titled about 16,200 units during the
first half of 2006. For the 12 months ended June 30, 2006, Geo
posted EBITDA interest coverage, total debt-to-EBITDA, and funds
from operations-to-total debt ratios of 3.2x, 1.4x, and 40.0%,
respectively.  Its land bank was also sufficient for the
construction of 253,067 units.  Including securitizations, Geo's
total debt-to-EBITDA ratio for second-quarter 2006 was 1.6x,
which is adequate for its current rating category.

Liquidity

Geo's liquidity is adequate. As of June 30, 2006, the company
held approximately $173 million in cash and equivalents and had
available about $365 million in uncommitted credit facilities,
which compares favorably to its short-term debt of US$211
million, which is primarily composed of bridge loans.  The
improvement in Geo's accounts receivable versus previous years
is a result of strategies to nimble titling and of intrinsic
seasonality, highlighting the need to maintain an adequate
liquidity.  The rating considers that Geo will continue to show
a significant cash and equivalents position on its balance sheet
to meet debt service and working capital needs in case of a
sharp slowdown in the pace of collections.

Outlook

The outlook is stable.  The rating anticipates that Geo will
maintain financial indicators and liquidity adequate for its
current rating. Also, the rating considers that the company will
moderate its growth plans in case of a reduction in the mortgage
origination targets of the public housing agencies.  A positive
national scale rating action is possible if Geo is able to
improve its EBITDA interest coverage and total debt-to-EBITDA
ratios to 4.0x and 1.0x, respectively, coupled with a reduction
in industry risk.  A weakening of the company's liquidity
position, particularly a significant reduction in its cash
balances and credit line availability, and/or key financial
ratios, particularly an EBITDA interest coverage of less than
3.0x and a total debt-to-EBITDA ratio of more than 3.0x
(including securitizations), could lead to a negative rating
action.


COTT CORP: Second Quarter Earnings Down to US$7.6 Million
---------------------------------------------------------
Cott Corp.'s net income for the second quarter ended July 1
was US$7.6 million, compared to US$25 million in the second
quarter of 2005.

Cott Corp. disclosed that the decline in net income reflects
pre-tax charges of US$8.9 million related to the Company's
recent chief executive officer change, the expensing of stock
options and charges related to unusual items.

Revenue increased 2% in the quarter to US$502 million compared
to US$492.7 million in the second quarter of last year.
However, excluding the impact of acquisitions and foreign
exchange, second quarter revenue declined 5% when compared to
the second quarter of 2005.

Gross margin as a percentage of revenue declined to 14.4% in the
quarter from 16.4% in the second quarter of last year, but
increased from 13.4% in the first quarter of 2006.

Cott Corp. said revenue in the first six months increased
1% to US$896.2 million from US$888.2 million in the first six
months of the prior year and gross margin as a percentage of
revenue for the first half of the year was 13.9%, compared to
15.4% during the first half of last year.

Net income for the first half of 2006 declined to US$5.5 million
compared with US$33.3 million in the first half of 2005.

Cott Corp. also reported that it has initiated an extensive
ongoing cost reduction program designed to transform business
practices and support its goal of being the lowest cost producer
in its segments.

Cott Corp. further reported, it is making progress expanding its
portfolio of energy drinks with new flavors and packaging
formats to new customers and channels in the U.K., Canada, and
the U.S., has developed a line of premium ready-to-drink single
serve teas and has gained authorizations from major North
American customers.  The teas, offered in 20-ounce PET bottles,
will begin shipping in the third quarter.

Cott Corp.'s new business in Brazil is on track and expected to
expand further in that country through the balance of the year
and that it has also entered into arrangements with three
bottlers in China.

Headquartered in Toronto, Ontario, Canada, Cott Corporation
(NYSE:COT; TSX:BCB) -- http://www.cott.com/-- is a non-
alcoholic beverage company and a retailer brand beverage
supplier.  The Company commercializes its business in over 60
countries worldwide, with its principal markets being the United
States, Canada, the United Kingdom and Mexico.  Cott markets or
supplies over 200 retailer and licensed brands, and Company-
owned brands including Cott, Royal Crown, Vintage, Vess and So
Clear.  Its products include carbonated soft drinks, sparkling
and flavoured mineral waters, energy drinks, juices, juice
drinks and smoothies, ready-to-drink teas, and other non-
carbonated beverages.

                        *    *    *

As reported in the Troubled Company Reporter on Feb. 3, 2006,
Moody's Investors Service downgraded Cott Beverages, Inc.'s
Senior Subordinated Regular Bond/Debenture rating to B1 from Ba3
and Cott Corp.'s Corporate Family Rating, to Ba3 from Ba2.  The
ratings outlook is stable, Moody's said.

As reported in the Troubled Company Reporter on Jan. 31, 2006,
Standard & Poor's Ratings Services lowered its ratings on Cott
Corp. by one notch, including its corporate credit rating, to
'BB-' from 'BB'.  S&P said the outlook is negative.


CREDIT SUISSE: S&P's Rating on Class H Certificates Tumbles to D
----------------------------------------------------------------
Standard & Poor's Ratings Services raised its rating on class D
of Credit Suisse First Boston Mortgage Securities Corp.'s
commercial mortgage pass-through certificates series 1998-C1.
Concurrently, the rating on one other class is lowered, and the
ratings on eight classes are affirmed.

The raised and affirmed ratings reflect credit enhancement
levels that provide adequate support through various stress
scenarios, as well as the defeasance of an additional US$210.7
million (11%) in collateral since Standard & Poor's last review.
Several of the ratings are constrained by concerns regarding the
specially serviced assets.

The downgrade of class H to 'D' reflects credit support
deterioration due to anticipated principal losses upon the
resolution of the assets with the special servicer and expected
continued interest shortfalls to class H.  As of the remittance
report dated July 17, 2006, there were 13 delinquent assets
(US$76 million, 4%) in the transaction, and 13 appraisal
reduction amounts totaling US$22.2 million (1%) were in effect.

According to the July 17 remittance report, the trust collateral
consisted of 269 mortgage loans and four REO assets with an
outstanding principal balance of US$1.873 billion, down from 324
loans totaling US$2.483 billion at issuance.  The master
servicer, KeyBank Real Estate Capital, reported mainly full-year
2005 financial information for 94% of the pool.  Based on this
information, Standard & Poor's calculated a weighted average
debt service coverage ratio of 1.61x for the pool, up from 1.51x
at issuance.  Credit tenant leases accounted for 55 loans
($264.9 million, 14%), while the collateral for 50 loans ($495.6
million, 26%) has been defeased.

The top 10 loan exposures secured by real estate have a balance
of US$454.7 million (24%).  Year-end 2005 financial information
was provided for eight of the top 10 loans.  Based on this
information, Standard & Poor's calculated a weighted average
DSCR of 1.83x, up from 1.58x at issuance.  DSCRs for eight of
the top 10 loans have improved since issuance, while the DSCR
for the second-largest loan has declined.  This loan is on the
master servicer's watchlist and is discussed below. Standard &
Poor's reviewed the property inspection reports obtained from
KeyBank, and all properties were said to be in "good" or
"excellent" condition.

As of Aug. 4, 2006, 19 assets totaling US$103.8 million (6%)
were with the special servicer, LNR Partners Inc., including 12
of the delinquent assets in the pool.  The delinquent assets
include:

    * two REO assets ($4.9 million),
    * three loans (US$21 million) in foreclosure,
    * three loans (US$22.3 million) over 90 days delinquent,
    * one loan (US$18.7 million) that is 60-90 days delinquent,
      and
    * one loan (US$2.5 million) that is 30-60 days delinquent.

The remaining nine loans (US$34.4 million) with LNR are current
or less than 30 days delinquent.  In addition, two REO assets
(UD$5.3 million aggregate total exposure) were liquidated for
approximately US$3.5 million after the remittance report was
released.  The larger loans with the special servicer (those
with balances over US$5 million) are discussed in detail below,
while the remaining assets with LNR were stressed according to
valuation information obtained by Standard & Poor's.

Kmart -- Virginia Beach No. 4986 is a 190,500-sq.-ft. retail
property solely occupied by Kmart in Virginia Beach, Va. The
property secures a 60-90 days delinquent loan (US$18.7 million)
with a total exposure of US$19.1 million.  The loan was
transferred to LNR in January 2003 following Kmart's bankruptcy
filing.  While Kmart did not vacate the property, it did enter
into a three-year rent modification agreement.  Kmart has
extended its lease for another three years at a rate that is
lower than the principal and interest payment, and the borrower
is unwilling to fund the difference.  LNR is pursuing
foreclosure.

Embassy Suites -- Milwaukee, Wisconsin, is a 203-room
independently operated hotel in the Milwaukee suburb of
Brookfield.  The loan (US$14.7 million) is in foreclosure and
has a total exposure of US$15.5 million.  The loan was
transferred to LNR in November 2005 after the borrower
terminated its franchise agreement without consent.  Reported
occupancy was 51% as of year-end 2005.  An ARA of US$1.5 million
is in effect, and the property was appraised at US$15.1 million
in March 2006.

Valley Stream Village Apartments and Perry Lake Village are
multifamily properties in Ohio that secure two loans (US$20.3
million) with the same sponsor.  The loans are over 90 days
delinquent and were transferred to LNR in January 2006 for
nonpayment resulting from the borrower's reported cash flow
problems.  Year-end 2005 occupancies were 53% and 54%,
respectively.  The total exposure on the loans is US$21.1
million, and ARAs totaling US$7.1 million are in effect.  The
properties were recently appraised for a total of US$18.2
million.

Logan Manor Nursing Home, a 180-bed skilled nursing facility in
Whiting, New Jersey, secures a US$6 million loan that is
operating under a forbearance agreement.  The loan was
transferred to LNR in February 2003 due to the borrower's
inability to service the debt.  An ARA of US$3.7 million is in
effect on the loan.

The Best Western Oak Manor Inn, a 116-room, limited-service
hotel in Biloxi, Mississippi, secures a loan for US$5.6 million.
The loan was transferred to the special servicer in September
2005 following Hurricane Katrina.  Repairs to 37 rooms damaged
by the hurricane are underway and should be completed this
month.  Occupancy was reported at 83% as of June 2005.

Winfield Landing Apartments and Wisteria Gardens Apartments,
both multifamily properties in or around Houston, Texas, secure
loans (US$9.4 million) that are less than 30 days delinquent and
which were recently transferred to LNR due to imminent default.
Occupancies were 75% as of March 2006 for Winfield Landing
Apartments and 91% as of June 2006 for Wisteria Gardens
Apartments.

RHC -- Capistrano is a 152-unit mobile home park in San Juan
Capistrano, California, securing a US$5.1 million loan that is
in foreclosure, with a total exposure of US$5.5 million.  The
loan was transferred to LNR in July 2005 after the borrower
informed the master servicer that it was unable to pay due to
structural property damage resulting from California's rainy
season.  A receiver was appointed in March 2006.  The property
still has structural problems, and an appraisal is pending upon
the completion of a seismic report and a slope stability
evaluation.  An ARA of US$1.8 million is in effect on the loan.

The master servicer reported 49 loans totaling $239.2 million
(13%) on its watchlist.  Ritz-Carlton Cancun, the second-largest
loan exposure, has a current balance of $66.4 million (4%).  The
loan is secured by a mortgage on a nine-story, 365-room, full-
service luxury resort in Cancun, Mexico, that received AAA's
five-diamond rating.  The loan was placed on the watchlist due
to a significant drop in the DSCR to 1.16x at year-end 2005 from
1.63x at issuance as a result of extensive damage to the
property during Hurricane Wilma in the fall of 2005.  According
to KeyBank, the property is currently undergoing major
renovations and was 100% vacant for most of 2006; however, the
hotel is scheduled to reopen in August 2006.

The remaining loans on the watchlist appear there due to low
occupancies, low DSCRs, or upcoming lease expirations.

Standard & Poor's stressed various assets in the mortgage pool,
including those with the special servicer and on the watchlist,
as part of its analysis.  The resultant credit enhancement
levels adequately support the raised, lowered, and affirmed
ratings.

                        Rating Raised

        Credit Suisse First Boston Mortgage Securities Corp.
    Commercial mortgage pass-through certificates series 1998-C1

                          Rating
                          ------
             Class      To     From   Credit enhancement(%)
             -----      --     ----   ---------------------
             D          AA-    A+              13.97

                        Rating Lowered

        Credit Suisse First Boston Mortgage Securities Corp.
    Commercial mortgage pass-through certificates series 1998-C1


                          Rating
                          ------
            Class      To     From   Credit enhancement(%)
            -----      --     ----   ---------------------
            H          D      CCC             0.72

                         Ratings Affirmed

        Credit Suisse First Boston Mortgage Securities Corp.
    Commercial mortgage pass-through certificates series 1998-C1

               Class     Rating   Credit enhancement(%)
               -----     ------   ---------------------
               A-1B      AAA              35.85
               A-2MF     AAA              35.85
               B         AAA              28.56
               C         AAA              21.26
               E         A-               11.98
               F         BB-               4.36
               G         B                 3.36
               A-X       AAA               N/A

                       N/A - Not applicable.


DIRECTV GROUP: Second Quarter Revenues Up 10% to US$3.52 Billion
----------------------------------------------------------------
The DIRECTV Group, Inc., reported that second quarter revenues
increased 10% to US$3.52 billion and operating profit before
depreciation and amortization nearly doubled to US$977 million
compared to last year's second quarter.  The DIRECTV Group
reported second quarter 2006 operating profit and net income
both more than doubled to US$741 million and US$459 million,
respectively, when compared to the same period last year.
Earnings per share were US$0.36 compared with US$0.12 in the
same period last year.  These operating results include the
effect of US$253 million of equipment that DIRECTV U.S.
capitalized during the quarter under its lease program, which
was implemented March 1, 2006.

"Similar to recent quarters, DIRECTV U.S. generated excellent
financial results highlighted by a 12% increase in revenues to
US$3.3 billion, a 93% increase in operating profit before
depreciation and amortization to US$977 million and a nearly
tripling of cash flow before interest and taxes to US$450
million," said Chase Carey, president and CEO of The DIRECTV
Group, Inc.

Carey continued, "In many ways, the results in the quarter
reflect our strategy to target higher quality subscribers.  For
example, although gross subscriber additions of 863,000 and net
additions of 125,000 in the quarter were below expectations,
it's important to note that we added 11% more higher quality
gross subscribers in the quarter compared to last year.  This
trend -- which is driving both the top-line and bottom-line
financial results -- is primarily due to the ongoing changes
we're making to refine our credit policy and dealer network.
These factors played an important role in reducing DIRECTV's
monthly churn rate from 1.69% to 1.59% this quarter.  In
addition, customers are buying more premium services such as
high definition programming and digital video recorders that is
contributing to the strong ARPU growth of 5.6% in the quarter.
The increase in operating profit -- excluding the accounting
effect from the new lease program -- is also directly linked to
the improved subscriber mix primarily due to the reduced
acquisition costs associated with the significant reduction in
lower quality customers attained and the related lower bad debt
expense incurred.  We are also pleased that our acquisition cost
per subscriber, or SAC, declined both sequentially and compared
to last year as our set-top box cost reductions offset the
higher sales of advanced boxes."

Carey concluded, "With continued improvements in subscriber
growth and the launch of several new products and services, we
look forward to a strong second half of the year. For example,
we are currently promoting our enhanced NFL Sunday Ticket(R)
package that features new interactive services and more high
definition games.  In addition, we just launched 19 regional
sports networks in high definition and we will continue to add
new high definition local channel markets as we strive to reach
approximately 75% of all U.S. television households by the end
of the year. Finally, we're also very excited about the launch
of our new HD-DVR which is scheduled to be introduced in Los
Angeles later this month and nationwide in the following weeks."

                    Second Quarter Review

Lease Program

On March 1, 2006, DIRECTV U.S. introduced a set-top receiver
lease program primarily to increase future profitability by
providing DIRECTV U.S. with the opportunity to retrieve and
reuse set-top receivers from deactivated customers.  Under this
new program, set-top receivers are capitalized and depreciated
over their estimated useful lives of three years. Prior to
March 1, 2006, set-top receivers provided to new and existing
DIRECTV U.S. subscribers were immediately expensed upon
activation as a subscriber acquisition or upgrade and retention
cost.  The lease program is expected to result in a reduction in
subscriber acquisition, and upgrade and retention costs.  The
amount of set-top receivers capitalized during the period is now
reported in the DIRECTV U.S. Consolidated Statements of Cash
Flows under the captions "Cash paid for subscriber leased
equipment -- subscriber acquisitions" and "Cash paid for
subscriber leased equipment -- upgrade and retention."  The
amount of cash DIRECTV U.S. paid during the quarter ended
June 30, 2006 for leased set-top receivers totaled US$253
million -- US$153 million for subscriber acquisitions and US$100
million for upgrade and retention.

Operational Review

In the second quarter of 2006, The DIRECTV Group's revenues of
US$3.52 billion increased 10% over the same period in the prior
year principally due to the larger subscriber bases at DIRECTV
U.S. and DIRECTV Latin America, as well as strong growth in
average revenue per subscriber at DIRECTV U.S.  These changes
were partially offset by the exclusion of Hughes Network Systems
results in 2006 due to its sale.

The higher operating profit before depreciation and amortization
of US$977 million and operating profit of US$741 million were
mostly related to DIRECTV U.S. operations due to the
capitalization of customer equipment under the lease program for
both new and existing subscribers, the increase in gross profit
generated from the higher revenues, and reduced subscriber
acquisition costs resulting primarily from lower gross
subscriber additions.  Also impacting the comparison was a non-
cash gain of US$28 million in the second quarter of 2005 related
to the successful migration and retention of a portion of the
DIRECTV Latin America subscribers in Mexico to the Sky Mexico
platform.

Net income increased to US$459 million in the second quarter of
2006 primarily due to the changes in operating profit discussed
above and a second quarter 2005 charge of US$65 million related
to the premium paid for the redemption of senior notes and the
write-off of a portion of deferred debt issuance costs resulting
from debt refinancing (recorded in "Other, net" in the
Consolidated Statements of Operations).  Partially offsetting
these improvements was higher income tax expense in the most
recent quarter associated with the higher pre-tax income and a
US$31 million credit in the second quarter of 2005 (recorded in
"Income from discontinued operations, net of taxes" in the
Consolidated Statements of Operations) related to the favorable
settlement of a U.S. federal income tax dispute associated with
a previously divested business.

                    Year-To-Date Review

The DIRECTV Group's revenues of US$6.91 billion in the first
half of 2006 increased 9% compared to the same period of 2005
driven principally by subscriber growth at DIRECTV U.S. and
DIRECTV Latin America, as well as continued solid ARPU growth at
DIRECTV U.S. These changes were partially offset by the
exclusion of Hughes Network Systems results in 2006 due to its
sale.

In the first six months of 2006, operating profit before
depreciation and amortization more than doubled to US$1.58
billion and operating profit more than quadrupled to US$1.13
billion driven primarily by DIRECTV U.S. due to the
capitalization of US$339 million of customer equipment under the
lease program for both new and existing subscribers, the
increase in gross profit generated from higher revenues, and
reduced subscriber acquisition costs resulting from lower gross
subscriber additions, partially offset by higher retention and
upgrade spending at DIRECTV U.S. Also impacting the comparison
was a US$57 million non-cash gain recorded in the first quarter
of 2006 resulting from the completion of DIRECTV Latin America's
Sky Mexico transactions, a non-cash gain of US$28 million in the
second quarter of 2005 related to the migration and retention of
a portion of the DIRECTV Latin America subscribers in Mexico to
the Sky Mexico platform, and a loss in the first quarter of 2005
at HNS primarily related to charges associated with its sale.

The increase in first half 2006 net income to US$694 million was
due to the higher operating profit discussed above, a second
quarter 2005 charge of US$65 million related to the premium paid
for the redemption of senior notes and the write-off of a
portion of deferred debt issuance costs from debt refinancing,
and higher interest income in 2006 resulting primarily from
higher average interest rates.  Partially offsetting these
improvements were higher 2006 income tax expense resulting from
an increase in pre-tax income and a US$31 million credit in the
second quarter of 2005 related to the favorable settlement of a
U.S. federal income tax dispute associated with a previously
divested business.

DIRECTV U.S. gross subscriber additions of 863,000 declined 10%
compared to the second quarter of 2005 primarily due to the
implementation of revised credit policies and dealer incentives
designed to improve the quality of new subscriber additions.  As
a result of these changes, DIRECTV U.S. increased the number of
higher quality subscribers attained in the quarter by 11%
compared to last year.  This trend of attaining higher quality
subscribers was a major contributor to the reduction in monthly
churn from 1.69% to 1.59% in the current quarter.  DIRECTV U.S.
added 125,000 net subscribers in the quarter bringing the total
number of DIRECTV U.S. subscribers to 15.51 million as of
June 30, 2006, an increase of 6% over the 14.67 million
subscribers on June 30, 2005.

In the quarter, DIRECTV U.S. revenues increased 12% to US$3.32
billion due to the larger subscriber base and strong ARPU
growth.  ARPU of US$71.59 increased 5.6% compared to last year
principally due to programming package price increases as well
as higher mirroring, lease, digital video recorder and high-
definition programming fees.

The second quarter 2006 operating profit before depreciation and
amortization increased 93% to US$977 million and operating
profit increased 132% to US$774 million primarily due to the
capitalization of customer equipment, the increase in gross
profit generated from the higher revenues and lower subscriber
acquisition costs resulting primarily from the reduction in
lower quality subscriber additions. Excluding the US$253 million
of customer equipment that was capitalized under the new lease
program, operating profit before depreciation and amortization
would have increased 44%.

                 DIRECTV Latin America Segment

DIRECTV Latin America and Sky Consolidation

On October 11, 2004, The DIRECTV Group announced a series of
transactions with News Corporation, Grupo Televisa, Globo and
Liberty Media that are designed to strengthen the operating and
financial performance of DIRECTV Latin America by combining the
two Direct-To-Home platforms into a single platform in each of
the major territories served in the region.  In 2006, The
DIRECTV Group paid News Corporation and Liberty Media
approximately US$373 million for their equity stakes in Sky
Mexico and received approximately US$59 million from Televisa at
the completion of the Sky Mexico transaction.  DIRECTV Latin
America completed the migration of approximately 144,000
subscribers to the Sky Mexico platform and ceased operations in
2005.  The DIRECTV Group owns approximately 41% of Sky Mexico,
which has 1.39 million subscribers.  In the third quarter of
2006, The DIRECTV Group expects to receive approximately US$97
million from News Corp. upon completion of the transaction in
Brazil.  For the rest of the region, the consolidation
transactions have been completed.

Operational Review

In the second quarter of 2006, DIRECTV Latin America added
77,000 net subscribers principally due to solid subscriber
growth in Argentina and Venezuela.  The total number of DIRECTV
subscribers in Latin America as of June 30, 2006, increased 14%
to 1.73 million compared to 1.52 million as of June 30, 2005.

Revenues for DIRECTV Latin America increased 10% to US$202
million in the quarter primarily due to the larger subscriber
base partially offset by the absence of revenues in 2006 from
DIRECTV Latin America's Mexico operations due to its shutdown.
The decline in DIRECTV Latin America's second quarter 2006
operating profit before depreciation and amortization to US$21
million and the operating loss of US$13 million were primarily
attributable to a non-cash gain of US$28 million in the second
quarter of 2005 related to the successful migration and
retention of a portion of the DIRECTV Latin America subscribers
in Mexico to the Sky Mexico platform.

                    Network Systems Segment

                              Three Months      Six Months
                              Ended June 30,   Ended June 30,
Network Systems Segment
(US Dollars in Mil)            2006    2005     2006    2005

Revenue                           -     $45        -    $211

Operating Loss Before
Depreciation and
Amortization                     -      (8)       -     (61)

Operating Loss                    -      (8)       -     (61)

On April 22, 2005, The DIRECTV Group completed the sale of a 50%
interest in HNS LLC, an entity that owns substantially all of
the assets of HNS, to SkyTerra Communications, Inc. As of the
date of this sale until January 2006, The DIRECTV Group
accounted for 50% of HNS' net income or loss as an equity
investment in "Other, net" in the Consolidated Statements of
Operations.  In January 2006, The DIRECTV Group completed the
sale of the remaining 50% interest in HNS LLC to SkyTerra and
received US$110 million in cash.

               Consolidated Balance Sheet And Cash Flow

The DIRECTV Group                  June 30,       December 31,

Dollars in Billions                  2006            2005

Cash, Cash Equivalents
& Short-Term
Investments                        US$2.05        US$4.38

Total Debt                             3.41           3.42

Net Debt/(Cash)                        1.36          (0.96)

The DIRECTV Group's consolidated cash and short-term investment
balance of US$2.05 billion declined by US$2.34 billion in the
first half of 2006 mostly due to the implementation of a planned
US$3.00 billion share repurchase program announced on
Feb. 8, 2006.  During the first half of the year, The DIRECTV
Group repurchased and retired 168 million shares of DIRECTV
Group common stock (including 131 million shares of common stock
purchased from General Motors employee pension and benefit
trusts) for approximately US$2.70 billion at an average price of
US$16.01 per share.  Also impacting the cash balance through
June 30, 2006, were net payments of US$314 million related to
the DIRECTV Latin America transactions, US$110 million received
for the sale of the remaining interest in HNS, as well as free
cash flow in the period of US$566 million.  Free cash flow was
driven by cash flow from operations of US$1.30 billion partially
offset by cash paid for satellites and property and equipment of
US$734 million.  Total debt remained essentially unchanged at
US$3.41 billion.

                        About DIRECTV

The DIRECTV Group, Inc., formerly Hughes Electronics
Corporation, headquartered in El Segundo, California, is a
world-leading provider of multi-channel television
entertainment, and broadband satellite networks and services.
The DIRECTV Group, Inc. with sales in 2004 of approximately
US$11.4 billion is 34% owned by Fox Entertainment Group, Inc.,
which is owned by News Corporation.  DIRECTV is currently
available in Latin American countries: Argentina, Brazil, Chile,
Colombia, Costa Rica, Ecuador, El Salvador, Guatemala, Honduras,
Mexico, Nicaragua, Panama, Puerto Rico, Trinidad & Tobago,
Uruguay, Venezuela and several Caribbean island nations.

                        *    *    *

Standard & Poor's Rating Services placed a BB credit rating on
DIRECTV Group'S long-term foreign and local currency ratings
effective Aug. 9, 2004.  S&P said the outlook is stable.


GRUPO MEXICO: La Caridad Mine Operations Resume After Strike
------------------------------------------------------------
Grupo Mexico SA de CV told Dow Jones Newswires that smelter
operations at the La Caridad mine have resumed after prolonged
strikes ceased.

As reported in the Troubled Company Reporter-Latin America on
July 31, 2006, Grupo Mexico said that workers blocking its La
Caridad mine had returned the installations to the firm, in
exchange of the company's withdrawal of the lawsuits it filed
against them.  Grupo Mexico and the Mexican government had been
in conflict with the union.  La Caridad mine workers had walked
off their jobs on March 24, 2006, in support of Napoleon Gomez
Urrutia, whose leadership in the union was snubbed by both the
government and Grupo Mexico due to allegations of embezzling
about US$55 million in funds paid into a trust by Grupo Mexico
in relation to the 1990 privatization of La Caridad and Cananea.
Eduardo Bours Castelo -- the governor of Sonora, where the La
Caridad mine is situated -- had tried to intervene to stop the
shutting down of the mine.  Labor authorities had approved
earlier in July Grupo Mexico's request to shut the La Caridad
mine and end the collective contract.  Grupo Mexico said that it
would hire new workers.  The company had fired about 2,000 La
Caridad workers in July.  However, Grupo Mexico said that it was
willing to hire back miners fired for participating in the
strike, particularly those who had expressed interest in going
back to their jobs.

The supplies of concentrate to the smelter at La Caridad had
returned to normal levels two weeks ago, Juan Rebolledo -- Grupo
Mexico's vice president for international affairs -- told Dow
Jones.

Copper output had began to recover at La Caridad, which had
continued to operate through the strike at reduced capacity, Dow
Jones relates, citing Mr. Rebolledo.

Mr. Rebolledo told Dow Jones, "I am very pleased with the latest
developments.  Operations at Cananea are now back at 100% since
last week, and the smelter at La Caridad started operations with
concentrates from Cananea last week."

However, Mr. Rebolledo said that refined copper output decreased
sharply as the Caridad smelter operates mostly with concentrate
from its own mine and the mine at the Cananea, Dow Jones says.

The report underscores that Mr. Rebolledo estimated losses of
about 60,000 metric tons of copper concentrate.

According to Dow Jones, Mr. Rebolledo said that the La Caridad
mine had began rehiring workers.  The company official said that
150 miners were rehired under new contracts, as the collective
contract was cancelled when the mine closed.

"This allows us to reopen the Caridad mine, and they are now
starting to enter the mine to review what has to be done and
repaired before operations can resume in full," Mr. Rebolledo
told Dow Jones.

The report notes that Grupo Mexico expects most of the former
1,800 workers at La Caridad to be rehired within the next two
weeks.

Mr. Rebolledo said that all copper mining and production
activities will be fully restored by the end of August, Dow
Jones states.

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

                        *    *    *

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

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


GRUPO MEXICO: Operations at Cananea Copper Mine Back to Normal
--------------------------------------------------------------
Grupo Mexico SA de CV told Dow Jones Newswires that operations
at its Cananea copper mine are back to normal, after prolonged
strikes.

As reported in the Troubled Company Reporter-Latin America on
July 31, 2006, workers at Cananea ended their protest, following
a company threat to shut down the mine.  The workers had been
holding demonstrations since June 1, when they first walked out
of their job after Grupo Mexico refused half of them a day off
to celebrate the 100th anniversary of a historic 1906 strike at
the mine.  The union had demanded:

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

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

    -- that the four arrested union members be released.

According to Dow Jones, mining operations at Cananea resumed on
July 17.

"I am very pleased with the latest developments.  Operations at
Cananea are now back at 100% since last week (two weeks ago),
and the smelter at La Caridad started operations with
concentrates from Cananea last week," Dow Jones reports, citing
Juan Rebolledo -- Grupo Mexico's vice president for
international affairs.

Mr. Rebolledo said that all copper mining and production
activities are expected to be fully restored by the end of
August, Dow Jones states.

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

                        *    *    *

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

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


KANSAS CITY SOUTHERN: Investing US$101MM on Locomotive Import
-------------------------------------------------------------
Kansas City Southern's Mexican unit will invest about US$101
million to import 30 locomotives and install the Management
Control System or MCS, a new monitoring system, according to a
report by El Norte.

Kansas City Southern de Mexico currently runs about 467
locomotives.  Business News Americas relates that the number
would soon arrive at 500 once the delivery of the new
locomotives is made towards the end of the year.  The company
also has a fleet of 4,280 wagons, and another 9,504 that it
leases.

Jose Zozaya, the president of the Mexican unit, told BNamericas
that the company will also be spending on nonstop maintenance
works on its infrastructure.

MCS is a control process for the whole system for trains, wagons
and products, granting Kansas City Southern exact control over
their locations and where the goods are headed at any time,
BNamericas reports, citing Mr. Zozaya.

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.


KANSAS CITY SOUTHERN: Unit Will Sue Ferromex for Damages
--------------------------------------------------------
Kansas City Southern's Mexican unit will sue Ferromex for
damages caused by the "de facto amalgamation" of operations with
the latter since November 2005, Business News Americas reports.

As reported in the Troubled Company Reporter-Latin America on
June 27, 2006, the Federal Competition Commission or CFC -- the
Mexican antitrust agency -- rejected Grupo Mexico SA de CV's
merger request after Kansa City Southern pointed out that the
move would hurt competition.  CFC ruled that the merger would
give Grupo Mexico dominance in Mexican regions like Mexico City
as well as in the Veracruz port.  Grupo Mexico insisted that the
merger is necessary for Ferromex, which it had acquired from
Carlos Slim, to compete in the rail sector as Kansas City
Southern enjoys advantages of a seamless network between the US
and Mexico.

BNamericas relates that Kansas City Southern de Mexico is
putting together a report on the economic damages the Ferromex-
Ferrosur merger provoked.

Vicente Corta, Kansas City Souther de Mexico's legal
representative, told BNamericas, "They [Ferromex] are making
life more difficult for us with Ferrosur compared to how we were
before, although now they are being careful so that the
authorities will approve their merger."

According to BNamericas, Mr. Corta denied that the Ferromex-
Ferrosur merger was similar to that of Kansas City Southern de
Mexico and TFM as Ferromex has claimed, saying that neither the
rail network nor the services on offer were extended as what
would have happened with the Ferrosur merger.

It was merely one partner acquiring the interests of another,
Mr. Corta told BNamericas.

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.


NEWPARK RESOURCES: Moody's Rates US$150 Million Term Loan at B2
---------------------------------------------------------------
Moody's Investors Service assigned a B2 rating to Newpark
Resources, Inc.'s new US$150 million five-year senior secured
term loan facility.  At the same time, Moody's affirmed
Newpark's B1 Corporate Family Rating and B3 senior subordinated
note rating.  The rating outlook remains negative pending the
filing of its financial statements for the last five fiscal
years, as well as for the fiscal quarters within 2004 and 2005.

Proceeds from the new term loan are being used to refinance
Newpark's US$125 million 8.625% senior subordinated notes and
repay other debt.  Moody's will withdraw the rating on the
subordinated notes upon their redemption.  The company's delay
in filing its financial statements has resulted in it violating
the financial reporting covenants under both its senior
subordinated notes and its bank credit facility.  On
July 20, 2006, the company received a notice of default from
more than 25% of the holders of its subordinated notes.  Under
the terms of the indenture, the company has 30 days to cure the
default (by Aug. 19, 2006) or risk having the notes accelerated.
The company has received an extension (until September 10, 2006)
of its financial statement delivery requirements from the
lenders under its bank credit facility.

Newpark is restating its financial statements for the last five
fiscal years, as well as for the fiscal quarters within 2004 and
2005, due to accounting irregularities.  The accounting
irregularities, which were uncovered as part of routine internal
audit procedures and prompted an internal investigation
commissioned by the Audit Committee, primarily relate to the
processing and payment of invoices by Soloco Texas, LP, one of
the Newpark's subsidiaries in its mat and integrated services
segment.  The Audit Committee also commissioned an internal
investigation into improper stock option granting practices,
which uncovered findings of improper practices.  The company
estimates the impact of the restatement will impact pretax
income by approximately US$12 million.  The company found cause
for the termination of the CFO and the former CEO, who was at
the time the chairman and CEO of Newpark Environmental Water
Services, LLC, and an officer of Soloco Texas, LP, due to their
responsibility for many of the actions uncovered.  In addition,
Newpark's COO resigned; however, the resignation appears
unrelated to the investigation.

On July 7, 2006, Moody's downgraded Newpark's Corporate Family
Rating to B1 from Ba3 and the rating on the company's senior
subordinated notes to B3 from B2 reflecting Moody's concern that
the restatements stem from weak corporate governance and
internal controls, uncertainty regarding the integrity of
Newpark's financial information, the expectation that the
restatements and the disruption at the senior management level
have and will continue to create significant management
distractions, the heightened risk of potential costly litigation
and fines, and increased risk that the company's reputation and
relationship with its customers could be impaired.  While
Moody's views favorably the company's willingness to take quick,
strong action in response to the accounting irregularities and
notes that the financial impact of the restatements appears
modest, these factors were unable to offset the risks associated
with a weak governance and internal control environment at the
higher rating category.  Prior to the rating action, Moody's had
a negative rating outlook on the company, which had reflected
both the company's announcement that it was conducting an
internal investigation regarding accounting irregularities and
Moody's concern that Newpark's margins and returns have been
lower than its similarly rated peers.

The negative outlook reflects Moody's concern that the time to
complete the restatements could be considerable.  In addition,
with any such investigation, the possibility remains that
additional issues and concerns will be identified, which could
expand the investigation's original scope.

Should the delay in completing the financial statements become
extended materially beyond September 2006 and if Moody's
determines that it lacks sufficient financial information to
appropriately monitor the company's credit, the ratings could be
withdrawn.

If further material accounting irregularities are uncovered, the
company faces material fines and legal liabilities, or the
company fails to continue receiving support form its lender
group the ratings may either be placed on review for possible
downgrade or downgraded.

The outlook could move to stable if the company is able to file
its restated financial statements with the SEC in the near-term
and it becomes current on its quarterly financial statement
filings.  However, the rating and outlook would be subject to a
full review of the company and the audited financial statements,
including an assessment of Newpark's credit profile,
particularly in respect to its margins and returns.

Newpark's B1 Corporate Family Rating reflects:

   -- the company's relatively small scale;

   -- the inherent volatility of the oilfield services sector
      and the sensitivity of the company's drilling fluids
      business to the level of drilling activity;

   -- its continued, albeit improving, geographic concentration
      in the mature US Gulf Coast market;

   -- the highly competitive nature of the oilfield service
      industry;

   -- the risk of changes in the oilfield waste regulatory
      environment and potential environmental liability
      exposure; and

   -- the challenges management faces to in order to improve
      both its profitability and its governance and internal
      control environment.

The B1 rating is supported by the company's

   -- product diversification across drilling fluids, E&P
      waste treatment, and mat sales and rentals;

   -- sound and growing market position in drilling fluids;

   -- expected continued strong demand for oilfield services
      over the near-term;

   -- substantial knowledge and operating experience in the
      oilfield waste disposal business; and

   -- improved financial leverage profile.

The new term loan is notched down one notch from the Corporate
Family Rating level given that it does not have a first security
interest in all of the assets of the company.  The term loan
lenders will have a first lien on all long-term assets and a
second lien position on inventory and receivables assets behind
the senior secured revolving credit facility (not rated), which
the company plans to upsize to US$90 million.  While Moody's
ascribes some value to the term loan's first lien collateral
pool, we believe there is considerable uncertainty regarding
future valuations.  Moody's views the collateral pool to be
illiquid, which, in the event of distress, could significantly
impact valuations.  It does not attribute much value to the
second lien position on inventory and receivables as the first
lien holders will be able to block the second lien lenders from
exercising remedies for 180 days in a default scenario, the
second lien lenders will not object to the value of the first
lien claims, and the revolver could be further upsized.  The
term loan facility is guaranteed by Newpark's existing and
future domestic subsidiaries.  The term loan facility will have
minimal amortization but is expected to have a cash sweep
mechanism that would require a portion of free cash flow to be
applied toward debt reduction, and sets mandatory pre-payments
with proceeds from capital markets financings and asset sales.
Financial covenants under the facility are expected to include a
leverage ratio and interest coverage ratio.

Newpark Resources, Inc. is headquartered in Metarie, Louisiana.
The company provides its products and services principally to
the oil and gas exploration and production industry in the
United States Gulf Coast, west Texas, the United States Mid-
continent, the United States Rocky Mountains, Canada, Mexico,
and areas of Europe and North Africa.


PROGRESS RAIL: S&P Withdraws B+ Corporate Credit Rating
-------------------------------------------------------
Standard & Poor's Ratings Services withdrew its ratings on
Progress Rail Services Holdings Corp., PRSC Acquisition Corp.,
and PMRC Acquisition Co., including its 'B+' corporate credit
rating.  The ratings were removed from CreditWatch, where they
were originally placed with positive implications on March 22,
2006.

The ratings withdrawal follows the redemption of the remaining
US$77 million (out of an original US$200 million par value) of
the company's 7.75% senior unsecured notes.  The debt redemption
was undertaken as part of the acquisition of the company by
Caterpillar Inc. (A/Stable/A-1).


SATELITES MEXICANOS: Files for Chapter 11 Protection in New York
----------------------------------------------------------------
Satelites Mexicanos, S.A. de C.V., filed for Chapter 11
Reorganization with the U.S. Bankruptcy Court for the Southern
District of New York on Aug. 11, 2006.

Contemporaneous with the filing of its chapter 11 petition, the
Debtor filed a motion to dismiss the Section 304 Case it
commenced on Aug. 4, 2005.  The preliminary injunction issued by
the Court pursuant to the Section 304 petition terminates today.

Satmex's Chapter 11 filing is part of a Restructuring Agreement
with major creditors and equity constituencies that provides for
a global restructuring of its Senior Secured Notes, Existing
Bonds and Interests, through the filing and approval of a Plan
under Mexico's "concurso mercantil" reorganization proceeding
and the confirmation of a Chapter 11 plan in the U.S. Bankruptcy
Court.

The Debtor and:

    * Servicios Corporativos Satelitales, S.A. de C.V.;
    * Loral Skynet Corporation;
    * Principia, S.A. de C.V.;
    * certain holders of the Debtor's Senior Secured Notes; and
    * certain holders of the Debtor's Existing Bonds

executed the terms of this consensual Restructuring Agreement on
March 31, 2006.

As of its bankruptcy filing, the Debtor's principal indebtedness
includes:

      -- approximately US$320,000,000 in principal amount of
         10-1/8% Unsecured Senior Notes due Nov. 1, 2004,
         pursuant to a February 1998 indenture with The Bank of
         New York, as Indenture Trustee; and

      -- approximately US$203,400,000 in principal amount of
         Senior Secured Notes due June 30, 2004, pursuant to the
         March 1998 indenture with Citibank, N.A., as Indenture
         Trustee.

The Senior Secured Notes are secured by first priority liens
against, and a security interest in substantially all of
Satmex's assets.

                       Satmex's Woes

The telecommunications sector's sharp downturn in the early
2001, resulted in the cancellation of existing contracts and a
decrease in revenues earned by the Debtor.

The Debtor ceased making interest payments on its Existing Bonds
beginning Aug. 1, 2003, and failed to pay the principal amount
of the Existing Bonds that came due upon maturity on Nov. 1,
2004.  The Senior Secured Notes matured on June 30, 2004, and
the Debtor also did not make the required principal payment.

The default of Servicios -- Satmex's immediate payment of parent
company -- on the US$125.1 million promissory note referred to
as the "menoscabo" on September 2003 also constituted a default
under the indentures governing the Senior Secured Notes and
Existing Bonds.

The Debtor realized that a financial restructuring was
imperative due to liquidity constraints and defaults under the
Existing Bond Indenture and the Existing Note Indenture.  During
the latter part of 2003, it commenced negotiations with advisors
for certain holders of Existing Bonds and advisors for certain
holders of Senior Secured Notes in an effort to restructure its
existing indebtedness and obtain financing to complete the
launch of Satmex 6.

In December 2004, the Debtor's negotiations with the Ad Hoc
Committees resulted in a proposed term sheet outlining the terms
of a plan of reorganization to restructure Satmex's debt
obligations.  The Debtor, however, was unable to garner the
necessary support for the proposed term sheet from the Mexican
Government in its capacity as, among other things, regulator and
shareholder of Satmex.

Due the breakdown in the negotiation process, certain holders of
the Existing Bonds and the Senior Secured Notes filed an
involuntary chapter 11 petition against the Debtor on
May 25, 2005.

The Debtor says that as a continuation of the effort to
restructure its outstanding indebtedness, it filed a voluntary
petition for a Mexican reorganization, known as a concurso
mercantile, on June 29, 2005.  The case was assigned to the
Second Federal District Court for Civil Matters for the Federal
District in Mexico City.

The Mexican Court, on June 30, 2005, admitted the Debtor's
petition to commence the Concurso Proceeding and ordered the
Instituto Federal de Especialistas de Concursos Mercantiles to
appoint an independent auditor called the "Visitador" to
determine if Satmex satisfied the requirements to be a debtor
under the Ley de Concursos Mercantiles of Mexico.

The Mexican Bankruptcy Court also entered an order:

    (i) staying any foreclosure proceeding against the rights
        and assets of the Debtor,

   (ii) prohibiting the Debtor from disposing or encumbering its
        main properties or assets, and

  (iii) prohibiting the Debtor from transferring its valuables
        or funds to third parties.

During this period, the Debtor continued negotiations with its
creditors in an attempt to:

    (i) resolve the involuntary chapter 11 on a consensual basis
        in the near term; and

   (ii) come to agreement on global restructuring issues,
        particularly with respect to the Senior Secured Notes
        and the Existing Bonds.

In July 2005, the Debtor reached an agreement with the
Petitioning Creditors, which provided that, among other things,
that the Petitioning Creditors would consent to the:

    (a) dismissal of the involuntary chapter 11 case,

    (b) commencement of a case under Section 304 of the
        Bankruptcy Code ancillary to the Concurso Proceeding,
        and

    (c) entry of a preliminary injunction in connection with the
        304 Case against, among other things, any actions
        against the Debtor or its assets.

On Sept. 7, 2005, the Mexican Bankruptcy Court declared Satmex
in "concurso mercantil" under the LCM and on Oct. 11, 2005, the
Mexican Bankruptcy Court appointed Thomas Stanley Heather
Rodriguez as conciliador in the Concurso Proceeding.

The Debtor subsequently filed its or Concurso Plan with the
Mexican Bankruptcy Court which details the terms and framework
of the restructuring agreed upon by the Debtor and its creditors
and equity holders.  That Plan also provides for final
implementation of the Debtor's restructuring through a plan
confirmed in a case commenced under chapter 11 of the Bankruptcy
Code.  The Mexican Bankruptcy Court approved the Concurso Plan
on July 17, 2006.

                        About Satmex

Satelites Mexicanos, S.A. de C.V., provides fixed satellite
services in Mexico.  Satmex provides transponder capacity via
its satellites to customers for distribution of network and
cable television programming, direct-to-home television service,
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.  Satmex also provides the government of
the United Mexican States with approximately 7% of its satellite
capacity for national security and public purposes without
charge, under the terms of the Orbital Concessions.

The Debtor filed for chapter 11 petition on August 11, 2006
(Bankr. S.D.N.Y. Case No. 06-11868).  Luc A. Despins, Esq., at
Milbank, Tweed Hadley & McCloy LLP represents the Debtor in the
U.S. Bankruptcy proceedings.  Attorneys from Galicia y Robles,
S.C., and Quijano Cortina Lopez y de la Torre give legal advice
in the Debtor's Mexican Bankrutpcy proceedings.  UBS Securities
LLC and Valor Consultores, S.A. de C.V., give financial advice
to the Debtor.  Steven Scheinman, Esq., Michael S. Stamer, Esq.,
and Shuba Satyaprasad, Esq., at Akin Gump Strauss Hauer & Feld
LLP give legal advice to the Ad Hoc Existing Bondholders'
Committee.  Dennis Jenkins, Esq., and George W. Shuster, Jr.,
Esq., at Wilmer Cutler Pickering Hale and Dorr LLP give legal
advice to Ad Hoc Senior Secured Noteholders' Committee.  As of
July 24, 2006, the Debtor has US$905,953,928 in total assets and
US$743,473,721 in total liabilities.

On May 25, 2005, certain holders of Satmex's Existing Bonds and
Senior Secured Notes filed an involuntary chapter 11 petition
against the Company (Bankr. S.D.N.Y. Case No. 05-13862).

On June 29, 2005, Satmex filed a voluntary petition for a
Mexican reorganization, known as a Concurso Mercantil, which was
assigned to the Second Federal District Court for Civil Matters
for the Federal District in Mexico City.

On August 4, 2005, Satmex filed a petition, pursuant to Section
304 of the Bankruptcy Code to commence a case ancillary to the
Concurso Proceeding and a motion for injunctive relief seeking,
among other things, to enjoin actions against Satmex or its
assets (Bankr. S.D.N.Y. Case No. 05-16103).

Satmex's affiliates, Loral Space & Communications Ltd., and
affiliates, filed for chapter 11 protection on July 15, 2003
(Bankr. S.D.N.Y. Case Nos. 03-41709 through 03-41728).


SATELITES MEXICANOS: Case Summary & 9 Largest Unsecured Lenders
---------------------------------------------------------------
Debtor: Satelites Mexicanos, S.A. de C.V.
        Rodolfo Gaona #86
        Col. Lomas de Sotelo
        Mexico D.F. 11200 Mexico

Bankruptcy Case No.: 06-11868

Type of Business: Satmex is the leading provider of fixed
                  satellite services in Mexico.  Satmex
                  provides transponder capacity via its
                  satellites to customers for distribution of
                  network and cable television programming,
                  direct-to-home television service, 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.  Satmex markets
                  the use of satellite transmission capacity for
                  new applications, such as Internet via
                  satellite.

                  Satmex also provides the government of the
                  United Mexican States with approximately 7%
                  of its satellite capacity for national
                  security and public purposes without charge,
                  under the terms of the Orbital Concessions.
                  Satmex is the largest provider of satellite
                  services to the Mexican Government and these
                  services are crucial to the Mexican
                  Government's national security and defense
                  operations.

                  On May 25, 2005, certain holders of Satmex's
                  Existing Bonds and Senior Secured Notes filed
                  an involuntary chapter 11 petition against the
                  Company (Bankr. S.D.N.Y. Case No. 05-13862).

                  On June 29, 2005, Satmex filed a voluntary
                  petition for a Mexican reorganization, known
                  as a concurso mercantile, which was assigned
                  to the Second Federal District Court for Civil
                  Matters for the Federal District in Mexico
                  City.

                  On June 30, 2005, the Mexican Bankruptcy Court
                  admitted Satmex's petition to commence the
                  Concurso Proceeding and ordered the Instituto
                  Federal de Especialistas de Concursos
                  Mercantiles to appoint an independent auditor
                  called the "Visitador" to determine if Satmex
                  satisfied the requirements to be a debtor
                  under the Ley de Concursos Mercantiles of
                  Mexico.

                  On August 4, 2005, Satmex filed a petition,
                  pursuant to section 304 of the Bankruptcy Code
                  to commence a case ancillary to the Concurso
                  Proceeding and a motion for injunctive relief
                  seeking, among other things, to enjoin actions
                  against Satmex or its assets (Bankr. S.D.N.Y.
                  Case No. 05-16103).

                  Satmex's affiliates, Loral Space &
                  Communications Ltd., and affiliates, filed for
                  chapter 11 protection on July 15, 2003 (Bankr.
                  S.D.N.Y. Case Nos. 03-41709 through 03-41728).

Chapter 11 Petition Date: August 11, 2006

Court: Southern District of New York (Manhattan)

Judge: Robert D. Drain

Debtor's Counsel: Luc A. Despins, Esq.
                  Milbank, Tweed Hadley & McCloy LLP
                  One Chase Manhattan Plaza
                  New York, NY 10005
                  Tel: (212) 530-5000
                  Fax: (212) 530-5219

Debtor's
Mexican Counsel:  Galicia y Robles, S.C.
                  Torre del Bosque
                  Boulevard Manuel Avila Camacho No. 24-7 Piso
                  Col. Lomas de Chapultepec C.P.
                  11000 Mexico D.F., Mexico
                  Tel. 52(55) 5540-9200
                  Fax: 52(55) 5540-9202

                       -- and --

                  Quijano Cortina Lopez y de la Torre
                  Capuchinas 55, San Jose Insurgentes, 03900
                  Mexico, Mexico

Debtor's
Financial
Advisor:          UBS Securities LLC

                       -- and --

                  Valor Consultores, S.A. de C.V.

Debtor's Auditor: Deloitte & Touche

Debtor's Claims,
Noticing, and
Balloting Agent:  Kurtzman Carson Consultants LLC

Ad Hoc Existing
Bondholders'
Committee's
Counsel:          Steven Scheinman, Esq.
                  Michael S. Stamer, Esq.
                  Shuba Satyaprasad, Esq.
                  Akin Gump Strauss Hauer & Feld LLP
                  590 Madison Avenue
                  New York, NY 10022

Ad Hoc Senior
Secured
Noteholders'
Committee
Counsel:          Dennis Jenkins, Esq.
                  George W. Shuster, Jr., Esq.
                  Wilmer Cutler Pickering Hale and Dorr LLP
                  60 State Street
                  Boston, MA 02109

Financial Condition as of July 24, 2006:

      Total Assets: US$905,953,928

      Total Debts:  US$743,473,721

Debtor's 9 Largest Unsecured Creditors:

   Entity                     Nature of Claim       Claim Amount
   ------                     ---------------       ------------
The Bank of New York          10-1/8% Unsecured   US$413,774,527
(as indenture trustee for     Senior Notes
the Existing Bonds)
101 Barclay Street
Floor 21 West,
New York, NY 10286

Attn: Ming J. Shiang
Assistant Vice President
Tel: (212) 815-7181

Castalia Communications       Trade                   US$549,306
Corporation
1532 Dunwoody Village Parkway
Suite 205
Atlanta, GA 30338

Attn: Luis Torres-Bohl
President
Tel: (770) 396-7850
Fax: (770) 396-3464

Xeipn Canal 11/Canal 11       Trade                   US$250,602
Prolongacion de Carpio 475
Mexico D.F. 11340

Attn: Julio Di-Bella Roldan
Director
Tel: +52 (55) 5356-1111
Fax: +52 (55) 5341-2043

Corporacion Ecuatoriana de    Trade                   US$191,659
Television, S.A./ECUAVISA
Cerro Del Carmen S/N
Casilla Postal 10992
Guayaquil, Ecuador 10992

Attn: Xavier Alvarado Robles
President
Tel: + 593 (4) 256 2444
Fax: + 593 (4) 256 6219


ACS Global TV C.V.            Trade                   US$146,610
Latinoamerica TV
Calle Enriqueta Compte Y
Rique 1276
Montevideo, Uruguay 11800

Attn: Atanasio Aguirre Lussich
Tel: +598 (2) 208-3363
     int 323/214
Fax: +598 (2) 208-3363
     int 200

Nexus International           Trade                   US$114,030
Broadcasting, Inc.
Colorvision
2140 South Dixie
Highway, Suite 207
Miami, FL 33133

Attn: Cesar Mazzotta
Managing Director
Tel: (305) 398-8812
Fax: (305) 358-8525

Television                    Trade                    US$75,179
Metropolitanacanal 22
Atletas 2, Edif. Pedro
Infante
Mexico D.F. 04220

Attn: Hector Abadie Vazquez

Tel: +52 (55) 5549-6298
     +52 (55) 5549-6888
Fax: +52 (55) 5544-4843

Massachusetts Institute of    Service provider         US$39,916
Technology/M.I.T.
Provision
244 Wood Street, Room S3-219
Lexington, MA 02420

Attn: David L Briggs
Director
Cooperative Research

   -- and --

Gail A Powderly, C.P.
Technology & Contracts
Office, Lincoln Laboratory
Tel: (781) 981-7087
Fax: (781) 981-1494

Medio Entertainment, S.A.     Trade                    US$26,042
de C.V. CBTV Michoacan
Agustin Melgar 325-101
Morelia/Michoacan 58260
Mexico

Attn: Isllali Belmonte Rosales
Tel: +52 (443) 314-3515
Fax: +52 (443) 315-6883


* MEXICO: Auto Exports Rise While Domestic Sales Drop in July
-------------------------------------------------------------
Auto exports in Mexico increased 32.4% to 85,725 units while
domestic sales decreased 2.3% to 83,067 units, compared with
figures reported in the same month last year, Dow Jones
Newswires reports, citing the Mexican Auto Industry Association
or AMIA.

AMIA told Dow Jones that auto production also grew 21.3% to
118,602 units in July 2006, compared with the one recorded in
July 2005.

The report says that production, through the first seven months
of 2006, increased 36.9% year-on-year.  Meanwhile, exports rose
48.2%.  Sales also grew 0.7% from the same period of 2005.

According to Dow Jones, the automotive industry in Mexico has
been undergoing a sharp recovery since last year's second half.

The weakness in sales was mainly due to seasonal effects, Dow
Jones quoted Cesar Flores, the head of AMIA.

"We don't believe that political events have been a big factor
in reducing sales in July," Mr. Flores told Dow Jones.

The report underscores that Mr. Flores admitted that consumers
are likely postponing purchases in a period of political
uncertainty.  However, Mr. Flores said that the election dispute
isn't a danger for further investment in the auto sector.

Mr. Flores told the press that he still expects full-year
records of:

     -- 1.6 million in exports,
     -- two million in units produced, and
     -- 1.2 million or more in domestic sales.

                        *    *    *

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




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


* NICARAGUA: State Firm Inks Supply Contract with Empresa Ventus
----------------------------------------------------------------
According to a report posted in the Nicaragua's presidential Web
site, Enacal -- the nation's state water utility, has signed a
15-year power supply contract with Empresa Ventus.

Under the contract, Ventus will start supplying electricity to
Enacal in May 2008 from a 20-megawatt wind park, Business News
Americas reports, citing an Enacal spokesperson.

The report notes that the wind park, which will be constructed
in Puerto Diaz in the Chontales department, is Nicaragua's first
initiative on wind power generation.  It aims to develop the
nation's wind generation potential.

The project is Nicaragua's first wind power generation
initiative and aims to open the door to the development of the
country's wind generation potential.

The wind park will be built in the community of Puerto DAYA-az
in Chontales department.

Fernando Gallo, the head of Enacal, told Business News Americas
the contract would enable Enacal to save almost US$3 million per
year on its electric bill.

The Enacal spokesperson said that electricity bill is 50% of the
company's operating costs, BNamericas relates.

The report underscores that Mr. Gallo said the contract is part
of a cost-saving strategy on moving away from rate-based power
supplied by concessionaires to contracts that supply cheaper
power from renewable energy sources.

Ventus was the only firm to present an proposal of four groups
that pre-qualified for the contract, Mr. Gallo told BNamericas.

Suzlon Energy, an integrated wind power firm, will provide
equipment for the project, BNamericas says.

                        *    *    *

Moody's Investor Service assigned these ratings to Nicaragua:

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




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


CHIQUITA BRANDS: Closes Two Plantations in Bocal del Toro
---------------------------------------------------------
Virgilio Aizpurua, a representative of Chiquita Brands
International Inc., told Fresh Plaza that the company has closed
two plantations in Bocas del Toro due to market saturation
problems.

Fresh Plaza relates that the purchases of banana growers in
Panama were also cancelled.

A clause in a contract between Chiquita and the independent
growers states that the latter are obliged to deliver
exclusively to Chiquita, for US$1.5 per box, according to the
local press.

Chiquita Brands International is a Cincinnati, Ohio-based
producer and distributor of bananas and other produce, under a
variety of subsidiary brand names, collectively known as
Chiquita.  Chiquita is the successor to the United Fruit Company
and is the leading distributor of bananas in the United States.
The company also owns a German produce distribution company,
Atlanta AG, which it acquired in 2003.  It markets, produces and
distributes fresh fruits, processed fruits and vegetable
products.

On June 15, 2006, Standard & Poor's Ratings Services affirmed
its ratings on Cincinnati, Ohio-based Chiquita Brands
International Inc., including the 'B+' corporate credit rating.
S&P said the rating outlook is negative.


* PANAMA: IDB Approves US$27MM Loan to Improve Chiriqui Province
----------------------------------------------------------------
The Inter-American Development Bank approved a US$27-million
loan to Panama for the first phase of a sustainable development
program to improve living conditions in the Chiriqui province.
The program will total US$32 million, including an expected
US$5-million grant from the Global Environment Facility.

Chiriqui is a rich agricultural region in western Panama on the
Costa Rican border.  Its development has been driven over the
past 50 years by products such as bananas, the main export
commodity and largest source of jobs.  But due to changes in
international markets the big banana companies left the zone,
leaving only small and medium-sized farmers and cooperatives, 60
percent of them on untitled lands.  The province is below the
national average in per capita income and in the human
development index.

"This program is expected to help generate conditions for a more
balanced development of the province, supporting economically,
socially and environmentally beneficial activities to
sustainably improve the quality of life of the local
population," said IDB Team Leader Eli Nessim.

Based on the province's human and natural resources potential,
the project will help improve governance by strengthening
institutions and local participation, it will reduce poverty by
boosting employment and income, and will increase the region's
competitiveness and productivity, while promoting the idea of
environmental and ecosystem management for the sustainable use
of both land and coastal marine natural resources.  Investments
will be based on community demand.

"In the short term the focus will be to create jobs and generate
income for the poorest segment of the population affected by the
banana crisis," said Mr. Nessim.  "Activities will be
restructured, for example, around exports of nontraditional
products, adding value to primary production or by promoting
coastal artisanal fishing."

Given the different conditions within the province, Nessim said
that the following special criteria has been applied to each of
the sub-regions:

   Chiricano Eastern

      -- Poverty reduction through new productive activities.

   Lower Western

      -- Job creation and production diversification to reduce
         socio-economic dependence on banana and retrain
         workers.

   Upper Western

      -- Productive restructuring and land use planning to
         support new tourism development.

   Central Subregion

      -- Planned growth and creation of management capacity.

   Coastal Island

      -- Sustainable environmental management of coastal marine
         resources, focus of the GEF project.

The Japan Special Fund at the IDB provided a US$550,000 grant to
help design the project, formulate a program through a widely
participative process and develop good management instruments,
such as:

   -- a complete base-line including the provincial, district
      and sub-regional levels;

   -- a geo-referenced information system in the whole
      territory;

   -- a plan of functional territorial order; and

   -- an action and investment plan.

These instruments will help monitor and evaluate results of the
different initiatives in the province.

This Program supports the IDB 2005-2009 Strategy with Panama to
foster sustainable economic development with social inclusion by
promoting more competitive production systems and creating a
positive business climate to attract private investment.

The Ministry of the Presidency will be in charge of the program
through the Executive Secretariat of the National Sustainable
Development Council or CONADES.  It will also have the support
of a Provincial Technical Junta to supervise the sectoral policy
application and facilitate inter-institutional integration.
Subregional committees will guarantee participation of all
parties involved and local governments in the formulation of the
initiatives and supervision of projects.

The loan is for 20 years, with a five-year grace period and a
variable interest rate.

                        *    *    *

Fitch Ratings assigned these ratings on Panama:

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




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


PETROLEO BRASILEIRO: Will Expand Operations in Peru
---------------------------------------------------
Jose Sergio Gabrielli de Azevedo -- the president of Brazilian
state-run Petroleo Brasileiro SA aka Petrobras -- will be in
Peru to discuss with President Alan Garcia the firm's expansion
opportunities in the country, Oilvoice reports.

Petrobras has been in Peru since the middle of the 1990s.
Petrobras has also purchased in 2002 Petrobras Energia S.A.

Petrobras produces 15,000 barrels of oil and gas daily in Peru.
The firm has been positioning itself strategically in the
Camisea Field region, in southern Peru, since 2005, aiming at
expanding its exploration and production activities, Oilvoice
says.

Mr. de Azevedo would be accompanied by:

   -- Nestor Cervero, Petrobras' International Area director;
      and
   -- company technicians.

Mr. de Azevedo will also meet with:

   -- Juan Valdivia Romero, Peru's Energy and Mines Minister;
   -- Pedro Gamio Aita, Peru's Vice Minister, and
   -- executives from Peru's Petroperu and Perupetro national
      oil firms.

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

                        *    *    *

Petroleo Brasileiro SA's long-term corporate family rating is
rated Ba3 by Moody's and its foreign currency long-term debt is
rated BB- by Fitch.

                        *    *    *

As reported in the Troubled Company Reporter on April 26, 2006,
in conjunction with the roll out of Issuer Default Ratings and
Recovery Ratings for Latin America Corporates, Fitch Ratings has
taken rating actions on Petroleo de Brasileiro SA.  These
ratings were affected:

  Foreign Currency:

    -- Previous Rating: 'BB-'
    -- New RR: 'BB', Rating Outlook Positive

  US$2.5 billion, Senior Unsecured Notes due 2008, 2013, 2014
  and 2018:

    -- Previous Rating: 'BB-'
    -- New IDR: 'BB+'


TELEFONICA DEL PERU: Access Grows 11.4% in First Semester 2006
--------------------------------------------------------------
Telefonica del Peru reported its financial results for the first
half of 2006.

At the end of the first half of the year Telefonica del Peru
manages 3.4 million accesses, 11.4% more than in June 2005
thanks to the strong rate of growth that its fixed telephony
accesses maintain (+8.2% year-on-year, up to 2.4 million
accesses), accompanied by a high level of growth of the retail
Internet broadband accesses (+40.9% year-on-year), that reached
389,300.  Additionally, the plant of pay TV -- Cable Magico has
shown a good behavior growing 17.5% with respect to June of
2005, which has allowed reaching 490,400 clients.  General good
behavior of the plant must to the strong commercial activity
that the company is registering.

Accumulated revenues to June show a year-to-year growth of 2.3%
in local currency, reaching EUR547.3 million.  The revenue
growth was mainly triggered by the Internet business (broadband
+ narrowband + cable TV), which is growing 21.7% year-on-year in
local currency due to the good performance of revenues from
broadband (+31.4% in local currency) and cable TV (+17.9% in
local currency).  The turnover from the Internet business
continues to increase its weight in relation to the overall
revenues (19.1% in the first half of 2006, in comparison to
16.1% for the same period in 2005).  Also showing positive
growth in local currency are both the revenue resulting from
data services (+5.7%) and the revenue from IT (+22.5%), which
are jointly responsible for 5.6% of the company's sales.

Operating expenses increased 1.2% in local currency due to
higher personnel costs (+6.3% in local currency) given that 430
temporary employees were hired on a permanent basis.  This move,
on the other hand, meant that there were some savings in the
costs of temporary work included in the subcontract expenses,
which increased 3.3% in local currency (higher expenses in
customer services and network maintenance).

Operating Income Before Depreciation and Amortization or OIBDA
reached EUR239.9 million which means a annual growth of 12.2% in
local currency, mainly due to the increase of revenues and a
lesser amount of extraordinary contingencies, particularly with
regards to labor and tax issues.  The OIBDA margin reached 43.8%
(+3.9 p.p. up on the same period in the previous year).  The
CapEx shows a year-on-year decrease of 1.7% in local currency,
falling to EUR45.2 million.  Approximately 30% was invested in
broadband projects and new businesses.  The generation of
operating free cash flow (OIBDA - CapEx) of EUR194.7 million
(+16.0% in local currency) is due to the good performance of the
OIBDA and the CapEx containment.

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

                        *    *    *

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

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


* PERU: Railway System with Bolivia to Cut Transport Cost by 70%
----------------------------------------------------------------
A planned railway system connecting Peru to Bolivia would reduce
transport costs by 70%, Ruben Caceres, an infrastructure
analyst, told the Peruvian press.

Business News Americas reports that Peru's President Alan Garcia
disclosed the creation of a port in Tacna, consisting a highway
and a railway system that would connect Tacna to Bolivian
capital La Paz to encourage the landlocked nation to transport
its foreign trade through the region.

The report says that the projects would have private investment,
provided through concessions.  However, the amounts needed for
the construction are yet to be determined.

According to BNamericas, Mr. Caceres said the railway system
would be constructed from the Peru's southern region Tacna to La
Paz, Bolivia.  The railway would decrease the unitary transport
costs.

Mr. Caceres told BNamericas that the current average cost of
transporting one ton per kilometer (t/km) on highways is
US$0.07.  Transport by train would cost US$0.02 per t/km.

Railway systems are more durable than highways, which demand
maintenance works every five years, BNamericas relates, citing
Mr. Caceres.

The railway system transports 10 times more than a highway.
While road capacities become saturated at an annual 8-10Mt,
railway systems can transport up to 100Mt and about 1.5 million
passengers per year, Juan de Dios Olaechea, a railway specialist
in Peru, told BNamericas.

                        *    *    *

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


CENTENNIAL COMM: Balance Sheet Upside Down by US$1.06B at May 31
----------------------------------------------------------------
Centennial Communications Corp. reported income from continuing
operations of US$3.4 million, or US$0.03 per diluted share, for
the fiscal fourth quarter of 2006 as compared to a loss from
continuing operations of US$13.6 million, or US$0.13 per diluted
share, in the fiscal fourth quarter of 2005.  The fiscal fourth
quarter of 2005 included a US$36.3 million pre-tax charge for
accelerated depreciation on the Company's wireless network in
Puerto Rico, which was replaced and upgraded.  Consolidated
adjusted operating income from continuing operations for the
fiscal fourth quarter was US$91.9 million, as compared to
US$94.1 million for the prior-year quarter.

"Growing free cash flow through organic growth in our existing
markets is our central focus as we head into fiscal 2007," said
Michael J. Small, Centennial's chief executive officer.  "We've
reaffirmed our commitment to increasing shareholder value by
deleveraging and will continue to capitalize on our strong
collection of assets and great local teams to achieve this
goal."

Centennial reported fiscal fourth-quarter consolidated revenue
from continuing operations of US$240.4 million, which included
US$115.7 million from U.S. wireless and US$124.7 million from
Caribbean operations.  Consolidated revenue from continuing
operations grew 5 percent versus the fiscal fourth quarter of
2005.  The Company ended the quarter with 1.39 million total
wireless subscribers, which compares to 1.24 million for the
year-ago quarter and 1.39 million for the previous quarter ended
February 28, 2006.  The Company reported 337,700 total access
lines and equivalents at the end of the fiscal fourth quarter,
which compares to 299,100 for the year-ago quarter.

                Full-Year Fiscal 2006 Results

For the full year, Centennial reported income from continuing
operations of US$20.2 million, or US$0.19 per diluted share, as
compared to income from continuing operations of US$19.6
million, or US$0.19 per diluted share, for fiscal year 2005.
The Company's net income from continuing operations for fiscal
2006 includes US$19.3 million of costs related to the Company's
strategic alternatives and recapitalization process.

Centennial reported full-year 2006 consolidated revenue from
continuing operations of US$945.7 million, which included
US$444.4 million from U.S. wireless and US$501.4 million from
Caribbean operations.  The Company's fiscal 2006 consolidated
AOI from continuing operations was US$362.1 million, which
included an approximately US$9 million startup loss related to
the launch of service in Grand Rapids and Lansing, MI. This
compares to consolidated AOI from continuing operations of
US$366.4 million in fiscal 2005, which included US$9.1 million
of favorable non-recurring items.

              Fourth-Quarter Segment Highlights

U.S. Wireless Operations

   -- Revenue was US$115.7 million, a 15 percent increase from
      last year's fourth quarter.  Strong feature and access
      revenue benefited from a 9 percent increase in total
      retail subscribers.  Roaming revenue increased 13 percent
      from the year-ago quarter as a result of increased traffic
      due to solid growth in GSM minutes.

   -- Average revenue per user was US$65 during the fiscal
      fourth quarter, a 5 percent year-over-year increase. ARPU
      included approximately US$1.90 of data revenue per user.

   -- AOI was US$44.4 million, a 7 percent year-over-year
      increase, representing an AOI margin of 38 percent.
      AOI benefited from strong growth in roaming and access
      revenue, partially offset by increased customer
      acquisition costs due to strong customer activations,
      increased equipment expense associated with customer
      retention and GSM handset upgrades and costs related to
      increased minutes-of-use.

   -- U.S. wireless ended the quarter with 648,000 total
      subscribers including 51,100 wholesale subscribers.
      This compares to 586,000 for the prior-year quarter
      including 39,300 wholesale subscribers and to 638,600 for
      the previous quarter ended February 28, 2006, including
      50,900 wholesale subscribers.  At the end of the fiscal
      fourth quarter, approximately 74 percent of U.S. retail
      wireless subscribers were on GSM calling plans.  Postpaid
      retail subscribers increased 10,800 from the fiscal third
      quarter of 2006, supported by broad-based sales momentum
      across the Company's U.S. wireless markets.

   -- Capital expenditures were US$25.2 million for the fiscal
      fourth quarter as U.S. wireless continued the development
      and expansion of its wireless network.

Caribbean Wireless Operations

   -- Revenue was US$92.5 million, a decline of 4 percent from
      the prior-year fourth quarter, driven primarily by lower
      access and airtime revenue in Puerto Rico and the
      Dominican Republic.

   -- ARPU was US$41, a 16 percent decline from the year-ago
      period, due to the continued impact of prepaid subscriber
      growth in the Dominican Republic and more aggressive
      marketing of companion rate plans in Puerto Rico.
      Postpaid ARPU in Puerto Rico was US$68, which included
      Approximately US$3.30 of data revenue per user.

   -- AOI totaled US$32.1 million, a 14 percent year-over-year
      decrease, representing an AOI margin of 35 percent.  AOI
      was unfavorably impacted by weak subscriber growth and
      higher equipment expense.

   -- Caribbean wireless ended the quarter with 739,200
      subscribers, which compares to 658,800 for the prior-year
      quarter and to 750,500 for the previous quarter ended
      February 28, 2006.  Customer growth during the fourth
      quarter was pressured by higher prepaid churn in the
      Dominican Republic, partially offset by postpaid
      subscriber growth of 4,600 due to improved postpaid churn
      of 2.4%.

   -- Capital expenditures were US$14.3 million for the fiscal
      fourth quarter as Caribbean wireless continued the
      development and expansion of its wireless network.

Caribbean Broadband Operations

   -- Revenue was US$36.8 million, a 2 percent year-over-year
      increase, driven by solid access line growth.

   -- AOI was US$15.4 million, a 3 percent increase from the
      year-ago period, representing an AOI margin of 42 percent.
      AOI increased due to solid access line growth in Puerto
      Rico, partially offset by higher interconnection expense
      in the Dominican Republic.

   -- Switched access lines totaled approximately 70,700 at the
      end of the fiscal fourth quarter, an increase of 8,500
      lines, or 14 percent from the prior-year quarter.
      Dedicated access line equivalents were 267,000 at the end
      of the fiscal fourth quarter, a 13 percent year-over-year
      increase.

   -- Wholesale termination revenue was US$5.2 million, a 2
      percent year-over-year decrease, primarily driven by a
      decrease in the per minute rate for southbound
      terminating traffic to the Dominican Republic.

   -- Capital expenditures were US$12.5 million for the fiscal
      fourth quarter as the Company continues to expand its
      broadband network infrastructure.

                     Fiscal 2007 Outlook

   -- Centennial expects consolidated AOI from continuing
      operations between US$365 million and US$385 million for
      fiscal 2007, excluding approximately US$9.8 million of
      projected stock-based compensation expense based on stock
      options outstanding as of May 31, 2006, due to the
      Company's adoption of SFAS 123R (expensing for stock
      options).  Consolidated AOI from continuing operations for
      fiscal year 2006 was US$362.1 million.  The Company has
      not included a reconciliation of projected AOI because
      projections for some components of this reconciliation are
      not possible to forecast at this time.

   -- Centennial expects U.S. wireless roaming revenue to
      decline by approximately US$20 million during fiscal 2007.
      U.S. wireless roaming revenue for fiscal year 2006 was
      US$79.4 million.

   -- Centennial expects the sum of consolidated capital
      expenditures and spectrum acquisition costs will be
      approximately US$140 million for fiscal 2007.  The
      Company recently signed a definitive agreement to purchase
      10 MHz of PCS wireless spectrum from Leap Wireless
      covering an aggregate of approximately 730,000 population
      equivalents in Fort Wayne, Indiana and neighboring
      counties.  In addition, the Company is participating in
      the Advanced Wireless Services Auction 66.

   -- Centennial recently purchased the remaining 20% interest
      of All America Cables and Radio, Inc. (Dominican Republic
      subsidiary) it did not already own to facilitate a
      strategic and operational alternatives process for its
      Dominican Republic business.

             About Centennial Communications

Based in Wall, N.J., Centennial Communications, (NASDAQ: CYCL)
-- http://www.centennialwireless.com/-- is a provider of
regional wireless and integrated communications services in
the United States and the Caribbean with approximately 1.3
million wireless subscribers and 326,400 access lines and
equivalents.  The U.S. business owns and operates wireless
networks in the Midwest and Southeast covering parts of six
states.  Centennial's Caribbean business owns and operates
wireless networks in Puerto Rico, the Dominican Republic and the
U.S. Virgin Islands and provides facilities-based integrated
voice, data and Internet solutions.  Welsh, Carson, Anderson &
Stowe and an affiliate of the Blackstone Group are controlling
shareholders of Centennial.

At May 31, 2006, Centennial Communications' balance sheet
showed a US$1,064,859,000 stockholders' deficit compared with
US$518,432,000 deficit at May 31, 2005.

                        *    *    *

Fitch assigned these ratings on June 28, 2006, for
Centennial Communications Corp. and its subsidiaries:

   Centennial Communications Corp.

      -- Issuer default rating: B-; and
      -- Senior unsecured notes: CCC/RR6.

   Centennial Cellular Operating Co.

      -- Issuer default rating: B-;
      -- Senior secured credit facility: BB-/RR1;
      -- Senior unsecured notes: B+/RR2; and
      -- Senior subordinated notes: CCC+/RR5.


NBTY INC: S&P Upgrades Bank Loan Rating to BB+ from BB
------------------------------------------------------
Standard & Poor's Ratings Services raised its bank loan rating
for Bohemia, N.Y.-based NBTY Inc., to 'BB+' from 'BB', and
raised the recovery rating to '1' from '2'.  At the same time,
Standard & Poor's revised its outlook to stable from negative
and affirmed the 'BB' corporate credit rating and all other
ratings on NBTY.

The '1' recovery rating indicates the expectation of a full
recovery of principal in the event of a default.  Approximately
US$227.4 million of total debt was outstanding at June 30, 2006.

"The higher ratings reflect the expectation of lenders' full
recovery of principal on the company's US$160.4 million senior
secured credit facility in a simulated payment default scenario
because of a meaningful level of bank debt repayment over the
past year," said Standard & Poor's credit analyst Alison
Sullivan.  "The outlook revision reflects the company's improved
financial profile and credit measures resulting from reduced
debt levels."

NBTY repaid US$207 million of debt in the first nine months of
fiscal 2006 and an additional US$10 million in July.  The
company is expected at minimum to maintain these lower debt
levels and may further reduce leverage as a result of its
continuing efforts to lower inventories and improve working
capital.

NBTY is a vertically integrated vitamin, mineral, and supplement
manufacturer and marketer, with a strong retail presence in the
U.K.

Standard & Poor's expects that continued promotional activity to
capture market share will suppress material margin improvement
through fiscal 2006.  However, it expects margins to stabilize
at the current levels over the near term and do not expect any
further margin erosion.

"In the event that the company's financial policy becomes more
aggressive, or margins are further depressed, we could revise
the outlook to negative," Ms. Sullivan said.

NBTY, Inc., together with its subsidiaries, manufactures,
markets, and retails nutritional supplements in the United
States and worldwide.  The company offers approximately 22,000
products, including vitamins, minerals, herbs, sports nutrition
products, diet aids, and other nutritional supplements under
various company's and third-party brands. As of September 30,
2005, it operated 542 Vitamin World and Nutrition Warehouse
retail stores in the United States, Guam, Puerto Rico, and the
Virgin Islands; 101 Le Naturiste retail stores in Quebec,
Canada; 545 Holland & Barrett, GNC (UK), and Nature's Way retail
stores in the United Kingdom and Ireland; and 67 De Tuinen
retail stores in the Netherlands. In addition, the company sells
its products in wholesale in various countries throughout
Europe, Asia, and Latin America.


RENT-A-CENTER: Court Nixes Burdusis et al. Request for Review
-------------------------------------------------------------
The California Court of Appeals denied plaintiffs' appeal of a
ruling by the California Superior Court for Los Angeles that
refuses to remove the trial judge handling the purported class
action alleging wage and hour law violations against Rent-A-
Center, Inc.

Two suits "Jeremy Burdusis, et al. v. Rent-A-Center, Inc., et
al." and "Israel French, et al. v. Rent-A-Center, Inc." were
initially filed in October 2001.  They allege that the company
violated various provisions of state law regarding overtime,
lunch and work breaks, and that the company failed to pay all
wages due to its California employees.

The same law firm seeking to represent the purported class in
"Pucci" is seeking to represent the purported class in
"Burdusis."  The "Burdusis" and "French" proceedings are pending
before the same judge in California.

On March 24, 2003, the "Burdusis" court denied the plaintiffs'
motion for class certification in that case, which the company
views as a favorable development in that proceeding.  On
April 25, 2003, the plaintiffs in "Burdusis" filed a notice of
appeal of that ruling, and on May 8, 2003, the "Burdusis" court,
at its request, stayed further proceedings in "Burdusis" and
"French" pending the resolution on appeal of the court's denial
of class certification in "Burdusis."

In June 2004, the "Burdusis" plaintiffs filed their appellate
brief.  The company's response brief was filed in Sept. 2004,
and the "Burdusis" plaintiffs filed their reply in Oct. 2004.

On Feb. 9, 2005, the California Court of Appeals reversed and
remanded the trial court's denial of class certification in
"Burdusis" and directed the trial court to reconsider its ruling
in light of two other recent appellate court decisions,
including the opinions of the California Supreme Court in "Sav-
On Drugs Stores, Inc. v. Superior Court," and of the California
appeals court in "Bell v. Farmers Insurance Exchange."

After remand, the plaintiffs filed a motion with the trial court
seeking to remove from the case the trial court judge who
previously denied their motion for class certification.  The
trial court denied the motion.

In response, plaintiffs' filed a petition for writ of mandate
with the California Court of Appeals requesting review of the
trial court's decision.  The California Court of Appeals heard
oral arguments in this matter on Aug. 29, 2005, and ruled
against the plaintiffs, denying the requested relief.  The case
is now being returned to the trial court as previously ordered.

                    About Rent-A-Center

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.


RENT-A-CENTER: Declares Prospective Settlement of Burdusis Case
---------------------------------------------------------------
Rent-A-Center, Inc., has reached a prospective settlement with
the plaintiffs to resolve the Jeremy Burdusis, et al. v. Rent-A-
Center, Inc., et al./Israel French, et al. v. Rent-A-Center,
Inc. and Kris Corso, et al. v. Rent-A-Center, Inc., coordinated
matters pending in California Superior Court for Los Angeles.
These matters allege violations by the Company of certain wage
and hour laws of California.

Under the terms contemplated, Rent-A-Center anticipates it will
pay an aggregate of US$4.95 million in cash, including
plaintiffs' attorneys' fees, to be distributed to an agreed-upon
class of Company employees from August 1998 through the date of
preliminary court approval of the settlement.  The Company
estimates the class size to be approximately 6,000 persons.
However, in the event there are more than 6,250 class members,
the Company has agreed to increase the settlement fund by US$750
per person in excess of 6,250.  In connection with the
prospective settlement, the Company is not admitting liability
for its wage and hour practices in California.  As a result of
the settlement, the Company anticipates recording a charge in
the third quarter of this year to account for the aforementioned
settlement amount and attorneys' fees.  The terms of the
prospective settlement are subject to the parties entering into
a definitive settlement agreement and obtaining court approval.
While the Company believes that the terms of this prospective
settlement are fair, there can be no assurance that the
settlement, if completed, will be approved by the court in its
present form.

                     About Rent-A-Center

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.




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


BRITISH WEST: Delays Heathrow-Piarco Flight for Three Hours
-----------------------------------------------------------
Dionne Ligoure, the corporate communications manager of British
West Indies Airlines aka BWIA, told the Trinidad and Tobago
Express that the airline delayed its flight from London's
Heathrow airport to Piarco for three hours on Aug. 10 due to a
foiled terrorism plot in aircrafts bound to the United States.

All flights to and from London, however, would continue, The
Express relates.

The flight from Heathrow that was initially scheduled to arrive
in Trinidad and Tobago at 11:15 a.m. arrived at 2:00 p.m., The
Express says, citing Ms. Ligoure.  The flight would have left
London on Wednesday.  Taking to consideration the flying time
and the time difference between the two countries, the flight
would arrive the next day.  The Aug. 10 flight to London was
scheduled to leave at 8:30 p.m.

According to The Express, Ms. Ligoure said that passengers
should give themselves plenty of extra time in getting to the
airport to facilitate some of the increased security measures
set in place at the airlines internationally.

BWIA tries to minimize passenger inconvenience and disruptions,
The Express states, citing Ms. Ligoure.

"The airline business is one of the most highly-regulated
industries in the world.  There are systems and procedures in
place to deal with different situations.  Our personnel are
trained to the highest international standards and activate the
appropriate response, working closely with the relevant
authorities, to ensure a timely departure and that passengers
and crew are safe and secure.  Customer and crew safety and
security are of paramount importance to BWIA," Ms. Ligoure told
The Express.

BWIA was founded in 1940, and for more than 60 years has been
serving the Caribbean islands from Trinidad and Tobago, the hub
of the Americas, linking the twin island republic and many other
Caribbean islands with North America, South America, the United
Kingdom and Europe.

The airline has reportedly been losing US$1 million a week due
to poor operational management.  An employee survey revealed
that lack of responsibility by the management is a major issue
in the company.  A number of key employees moved to other
companies caused by a deadlock in the company's negotiation with
its labor union.




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


BANCO ITAU: Slams Rumor on Selling BankBoston Uruguay After Buy
---------------------------------------------------------------
A spokesperson of Banco Itau Holding Financeira SA told Business
News Americas that it has no plans to sell BankBoston Uruguay.

Local press reports say that Banco Itau was buying the
BankBoston unit to sell it later on.

However, the spokesperson told BNamericas, "The proceedings for
the acquisition of BankBoston and [credit card] OCA operations
in Uruguay are at the final stage.  News that Itau will sell
these two operations in Uruguay is absurd."

As reported in the Troubled Company Reporter-Latin America on
May 31, 2006, Banco Itau and Bank of America aka BofA reached an
agreement earlier in May regarding the purchase of BankBoston
Brazil.  Itau was also given exclusive rights to buy BankBoston
operations in Chile and Uruguay.  Banco Itau Holding would treat
the acquisition of BankBoston Chilean and Uruguayan units as a
single purchase.  Banco Itau was given until Aug. 1, 2006, to
complete the purchases.

However, Banco Itau recently said that it will conclude the
acquisition by the end of this week, BNamericas relates.

"These acquisitions represent a strategic decision by Itau to
operate BankBoston Uruguay and OCA because of the value they
represent in the expansion of Itau's businesses in Latin
American markets," the spokesperson told BNamericas.

                      About BankBoston

BankBoston is one of the 10 largest banks in Argentina in terms
of assets, deposits and loans and it ranks among the top five
private banks.  It operates through 89 branches and has assets
of US$2.5 billion.

                     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.

                        *    *    *

As reported in the Troubled Company Reporter on March 9, 2006,
Standard & Poor's Ratings Services assigned a 'BB' currency
credit rating on Banco Itau S.A.


* URUGUAY: Sues Argentina Due to Road Blocks
--------------------------------------------
Uruguay has filed a suit against Argentina in the Southern
Common Market Claims Court due to roadblocks on international
routes, Prensa Latina reports.

Prensa Latina relates that Argentina's citizens are barricading
in the nation's Rios province as a protest to the cellulose
plants' construction in Fray Bentos in Rio Negro -- a branch of
the Uruguay River.  According to the strikers, the plants are
environmentally harmful.

According to Prensa Latina, Uruguay claims that the roadblocks
in Gualeguaychu caused the country:

    -- US$400 million loss,
    -- loss of jobs, and
    -- loss of small businesses in the peak of the tourist
       season.

The report notes that Jorge Taiana, the Foreign Minister of
Argentina, rejected Uruguay's plea to create a Binational
Technical Monitoring Commission, believing that it would be like
accepting the construction of the plants.

Uruguay and Argentina are first attending an oral hearing along
with their witnesses as a preliminary step of the proceedings,
Prensa Latina 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
=================


CITGO PETROLEUM: May be Fined for Oil Spill in Louisiana
--------------------------------------------------------
The US Department of Environmental Quality said that Citgo
Petroleum Corp. -- Venezuelan oil holding Petroleos de Venezuela
SA's US refining branch -- could be fined in connection with a
spill of 47,000 barrels of crude oil and water on June 21 into
the Calcasieu Ship Channel, in Louisiana, following a heavy
storm, El Universal reports, citing Reuters.

According to El Universal, the spill resulted to the closure of
Lake Charles, which seats several refineries with a capacity
exceeding 700,000 bpd.  The 10-day closure of the channel
resulted in higher oil prices and forced some refiners to seek
temporary loans from the US Strategic Petroleum Reserve.

Billy Eakin, manager of the Environmental agency's Baton Rouge
regional office, told Reuters that figures on how much oil was
spilled are preliminary, and DEQ is awaiting a formal report on
the numbers from Citgo.

"The case has been referred to the Department of Environmental
Quality's Enforcement Division and the relevant actions are
expected," Mr. Eakin told Reuters.  He added that Citgo could be
fined US$32,500 per day if found with violations.

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


ELECTRICIDAD DE CARACAS: Aims 9.4% Debt Reduction by Year-End
-------------------------------------------------------------
Officials of Electricidad de Caracas told Dow Jones Newswires
that the company plans to decrease its US$342 million total debt
by 9.4% before the end of 2006.

Electricidad de Caracas hopes to reduce its debt to US$310
million, Andres Paffen -- the company's new vice president of
finance -- told reporters during a briefing.

Dow Jones relates the Electricidad de Caracas is planning to
gradually extend the maturity profile of its debt, which
currently averages six years.

Electricidad de Caracas made two separate share offerings in the
local market for a total of US$103.3 million shares that netted
the utility a total of US$33.5 million, Dow Jones reports,
citing Mr. Paffen.

The money will be used partly to pay off debt and to finance
additional investment projects, Julian Nebreda, the executive
president of Electricidad de Caracas, told Dow Jones.

Electricidad de Caracas is a vertically integrated utility in
Venezuela, operating in electricity distribution, transmission,
and generation in the capital city of Caracas and its
metropolitan area.

It is the largest private electric utility in the country and is
owned by US-based AES Corp. (B+/Positive/--).  EDC reported net
profits of US$20.6 million from January to March, versus net
losses of US$26.9 the same period in 2005.

                        *    *    *

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

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


PETROLEOS DE VENEZUELA: Auctions Four Offshore Gas Blocks
---------------------------------------------------------
Thirty-four companies were called to bid Tuesday for four
offshore blocks in La Blanquilla and Punta Pescador, El
Universal reports, citing energy and petroleum minister Rafael
Ramirez.

State firm Petroleos de Venezuela holds a 70% stake in block A
of La Blanquilla and 35% in the three remaining blocks, El
Universal says.

Eulogio Del Pino, the president of the Venezuelan Petroleum
Corp. -- a subsidiary of Petroleos de Venezuela, explained that
according to a survey conducted in 1980-1982, reserves in the
target areas are estimated at 7 trillion cubic feet of both gas
and condensates, El Universal relates.

The companies that will participate in the projects are expected
to be announced this week.  They should pay US$350,000 for a kit
including seismic and geological data, the license template and
the selection guidelines, El Universal says.

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.

                        *    *    *

Standard & Poor's said on July 17 that it may lower the
company's B+ foreign-currency debt rating in part because of the
absence of timely financial and operating information.

Moody's has withdrawn its ratings on the company because of the
absence of relevant financial information.


YPF SA: Parent Firm to Vie for Venezuela Gas Contract
-----------------------------------------------------
Repsol YPF SA -- the parent company of YPF SA -- will bid for a
natural gas extraction and production contract in Venezuela, La
Gaceta de los Negocios reports.

According to La Gaceta, Repsol will compete with 34 other firms
interested in the contract.

The report says that the contract is part of the Delta-Caribe
project of the Venezuelan government.

The government predicts that the project will need EUR12.4
billion investments.  The project would last until 2012, La
Gaceta states.

                        *    *    *

As reported in the Troubled Company Reporter-Latin America on
June 9, 2006, Moody's Investors Service upgraded YPF Sociedad
Anonima's rating under the revised foreign currency ceilings:

   -- Foreign Currency Corporate Family Rating: to B2 from B3;
       Outlook remains Negative.

These five ratings are affirmed:

   -- Issuer Rating (domestic currency): Baa2/NEG;

   -- Senior Unsecured Rating (foreign currency): Ba2/NEG;

   -- Senior Unsecured Rating MTN (foreign currency): Ba2/NEG;

   -- Senior Secured Shelf Rating (foreign currency):
      (P)Ba2/NEG; and

   -- Senior Unsecured Shelf Rating (foreign
      currency):(P)Ba2/NEG.

In November 2005, Moody's published a Request for Comment,
entitled "Revised Policy with Respect to Country Ceilings".
Based on supportive market responses Moody's decided to revise
the current policy.  The new policy incorporates the possibility
that a foreign currency government bond default would not be
accompanied by a moratorium on foreign currency external
payments.

The Foreign Currency Corporate Family Rating of YPF remains
constrained by the new country ceiling B2 of Argentina.  YPF is
an Argentine subsidiary of Repsol YPF S.A. in Spain (Baa1 Issuer
Rating/Outlook Negative)


* VENEZUELA: Banking Regulator Balks at Service Charges
-------------------------------------------------------
Venezuela's Bank Superintendence asserts that banks should lower
service charges in light of the fees representing more than 50%
of financial institutions' profits, El Universal reports.

The Superintendence said that for the first six months, the
banking sector received US$512.6 million from commissions on
trusts, electronic transactions and credit card fees, according
to the same report.

Trino Alcides Diaz, the Bank Superintendence's head, called the
commissions exaggerated and insisted they should no longer be
allowed.  He underscored that talks with the Banks Association
to curb such fees have borne no fruit, El Universal says.

Meanwhile, the Banks Association, told El Universal those
charges are normal.  It emphasized that fees have gone up as a
result of higher operational costs because of an increased
liquidity in the market.

                        *    *    *

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


* VENEZUELA: President Bags Ten Investment Projects During Tour
--------------------------------------------------------------
President Hugo Chavez was able to bring home eight letters of
intent, one memorandum of intent and one agreement for
Venezuela's Ministry of Basic Industry and Mining -- MIBAM -- as
a result of his tour of Europe and Asia, El Universal reports.

In a press statement, Mibam Investment Promotion Vice-Minister
Valmore Vasquez said that the eight letters of intent include a
deal with Belarus company Belaz for a feasibility study.  The
study is aimed at a strategic alliance to build a manufacturing,
assembling and marketing plant of trucks for the mining
industry, El Universal relates.

Letters of intent signed with the Russian Federation include
technical, economic and financial feasibility study to develop a
manufacturing plant of aluminum household tools.  The projected
investment amounts to US$30 million.  Russian Sual-Holding would
be a party to the agreement, El Universal says.

                        *    *    *

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


* VENEZUELA: Tax Authority Imposing Levy on Electronic Commerce
--------------------------------------------------------------
Venezuela's National Customs and Tax Administration Service
-- Seniat -- is drafting a bill to impose taxes on electronic
commerce, El Universal says.

The regulation would affect business entities involved in
electronic commerce activities.  Individuals purchasing over the
Internet are not included.

According to Seniat, the law is necessary "as electronic
commerce tends to become a usual form of trade; it operates in a
borderless territory; it constitutes a taxable activity and many
electronic transactions lack any identification of the person
involved and the tax address," El Universal relates.

                        *    *    *

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


* Airline & Airport Ratings Unaffected by Foiled Terrorist Plot
---------------------------------------------------------------
Moody's Investors Service stated that British authorities'
announcement on a foiled apparent terrorist plot targeted at
transatlantic airline flights does not have any immediate
implications for airline and airport ratings.  Nevertheless, the
development highlights the ongoing exposure of the air travel
industry to events in the global war on terrorism.  This is
despite the considerable investment of capital and the
implementation of specific procedures to enhance airline safety.

The foiled terrorist plot comes at a time when airline traffic
has been steadily recovering, and poses renewed revenue and cost
risks for rated airlines.  Terrorism aimed at airlines has the
risk of curtailing the industry's recent revenue momentum by
adversely affecting passenger confidence, reducing future
bookings, and weakening the ability of airlines to achieve price
increases needed to cover growing costs.  At a minimum, airlines
will experience higher costs related to the disruption of their
networks caused by cancellations, delays and rerouting stemming
from today's events.  Over the longer term, airline costs could
also be adversely impacted by the introduction of any additional
security measures and procedures.  As many U.S. carriers have
only recently begun to restore financial stability, these
developments could interrupt the progress of this recovery.

Despite these risks, Moody's stated that most airlines have the
financial capacity to accommodate the near term adverse revenue
and cost effects of today's events within their current rating
levels. While no rating actions are currently expected, Moody's
noted that those airlines with weaker financial strength and/or
liquidity could be the most susceptible to any further adverse
developments.  Moody's will monitor trends in airline bookings,
yields, revenue generation, and any incremental costs related to
potential terrorist activity.

Moody's is also considering the implications of a possible
sustained reduction in demand for air travel on the credit
standing of airports globally.  Many airports continued to enjoy
a strong credit position in the aftermath of the terrorist
attacks of September 11, 2001 and the economic recession, based
on a relatively quick recovery of the demand for air travel,
good cost recovery mechanisms, and the deferral of capital
programs.  In the current environment, Moody's initial focus
will be on those hub airports that may be disproportionately
affected by developments related to any particular airline, as
well as airport debt secured by fixed per-passenger charges,
such as the Passenger Facility Charge in the United States.


* US Mulls Withdrawal of Trade Benefits to Developing Nations
-------------------------------------------------------------
The United States is considering the removal of trade benefits
that have been conferred for two decades to Brazil, Argentina,
Venezuela and other advanced developing countries, El Universal
reports.

According to Reuters, the decision resulted from the collapse of
international trade negotiations where developing nations have
become reluctant to open their markets to foreign goods.

El Universal says that the US have imported goods totaling
US$26.7 billion from 133 developing countries under the
Generalized System of Preferences in 2005.  Under the trade
program, products from developing countries are free from
tariffs.


                         ***********


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

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

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

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without
prior written permission of the publishers.

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

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


           * * * End of Transmission * * *