TCRLA_Public/060815.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

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

          Tuesday, August 15, 2006, Vol. 7, Issue 161

                          Headlines

A R G E N T I N A

ALMATA PE: Verification of Proofs of Claim Is Until Sept. 22
ASOCIACION ARGENTINA: Verification of Claims Is Until Sept. 25
BANCO HIPOTECARIO: Posts ARS72.2MM Net Income in Second Quarter
DISTRIBUIDORA CENTER: Claims Verification Deadline Is Sept. 29
ESCON SA: Trustee Verifies Proofs of Claim Until Sept. 14

PROFESA SA: Seeks for Court Approval to Restructure Debts
PUENTE HNOS: Moody's LatAm Assigns B2 Global Local Curr. Rating
QMH SRL: Verification of Proofs of Claim Is Until Sept. 29
SIGNO GROUP: Last Day for Claims Verification Is on Sept. 26
TELECOM ARGENTINA: Posts First Semester Net Income of ARS99MM

* ARGENTINA: Expects Ruling on Pulp Mill Conflict by Sept. 7

B A H A M A S

WINN-DIXIE: Wants to Assume 21 Employment-Related Contracts
WINN-DIXIE: Wants to Reject 98 Employment-Related Contracts

B A R B A D O S

ANDREW CORP: Bid Rejections Cues S&P to Put Ratings on WatchNeg
SECUNDA INT'L: Amends Terms of Purchase Offer on Floating Notes

B E L I Z E

* BELIZE: Prime Minister Looks for US Investors

B E R M U D A

COMPLETE RETREATS: Can Continue to Honor Existing Reservations
QUANTA CAPITAL: In Talks with Lenders to Amend Credit Facility
REFCO INC: Investors Buy US$69.9 Million in Claims
SEA CONTAINERS: Hasn't Completed 2005 Annual & Quarterly Reports
SEA CONTAINERS: S&P Places CCC- Credit Rating on Negative Watch

B O L I V I A

* BOLIVIA: Extending Gas Price Talks with Petroleo Brasileiro
* BOLIVIA: Inks MOU to Keep Trade Benefits with Venezuela
* BOLIVIA: Puts Off Nationalization of Hydrocarbons Sector

B R A Z I L

BANCO BMG: S&P Rates US$150 Million Sr. Unsecured Debt at B+
NOVELIS INC: Extends Exchange Offer Expiration to Oct. 20
NOVELIS INC: Lenders Extend Waiver Period Until Sept. 18
PETROLEO BRASILEIRO: Continues Gas Price Talks with YPFB
PETROLEO BRASILEIRO: Earnings Up 37% in First Half of 2006

PETROLEO BRASILEIRO: Inks Offshore Oil Study With Galp & Partex
UNIAO DE BANCOS: Posts First Semester Net Income of BRL1.068 Bln
USINAS SIDERURGICAS: Posts BRL1 Bln Net Profit in First Semester

* BRAZIL: Fitch Discusses Payroll Deductible Loans

C A Y M A N   I S L A N D S

ABF CUBE: Deadline for Filing of Proofs of Claim Is on Sept. 7
ADVISORY EUROPEAN: Proofs of Claim Filing Deadline Is on Sept. 7
ASIA PROJECT: Creditors Must File Proofs of Claim by Sept. 7
AVEBURY FINANCE: Last Day to File Proofs of Claim Is on Sept. 7
CASCADIA II: Fitch Expects to Assign BB+ Rating on Notes

COLLATERALISED LOAN: Proofs of Claim Must be Filed by Sept. 7
MELODY SHARE: Creditors Have Until Sept. 7 to Submit Claims
HUB ASSET: Deadline for Proofs of Claim Filing Is Sept. 7
STAGE SEGREGATED: Proofs of Claim Must be Filed by Sept. 7
PMA EUROPEAN: Creditors Must Present Proofs of Claim by Sept. 7

PMA EUROPEAN (MASTER): Proofs of Claim Must be Filed by Sept. 7

C O L O M B I A

BBVA COLOMBIA: Plans to Make Two Acquisitions in 2006
ECOPETROL: Will Award Contract to Upgrade Cartagena Refinery

* COLOMBIA: Inks MOU to Keep Trade Benefits with Venezuela

C O S T A   R I C A

* COSTA RICA: Price Increase on Basic Food Products Slow

C U B A

* CUBA: In Talks with Iran on Increasing Industrial Cooperation

D O M I N I C A N   R E P U B L I C

FALCONBRIDGE LTD: To Invest US$130MM in Perseverance Mine

* DOMINICAN REPUBLIC: Fitch Comments on Power Sector Challenges

E C U A D O R

PETROECUADOR: Calls for Bids on Diesel Supply Contract

* ECUADOR: Inks MOU to Keep Trade Benefits with Venezuela

E L   S A L V A D O R

* EL SALVADOR: Importing Beans, Rice from Honduras
* EL SALVADOR: Insurance Industry First Half Profit Rises 36.9%

H O N D U R A S

* HONDURAS: Exporting Beans, Rice to El Salvador
* HONDURAS: Exporting Beans, Rice to Nicaragua

J A M A I C A

KAISER ALUMINUM: Supplies Fabricated Aluminum to Lockheed Martin
NATIONAL COMMERCIAL: S&P Assigns B Issuer Credit Ratings

M E X I C O

ALERIS INTERNATIONAL: Board of Directors Okay Aurora Merger Pact
BALLY TOTAL: Anticipates Lower Cash Contribution for 2006
BALLY TOTAL: Paul Toback Resigns as Chairman, President & CEO
BOWNE & CO: Earns US$6.5 Million for Quarter Ended June 30
EL POLLO: Reports US$65.9M in Revenues for Quarter Ended June 30

ENESCO GROUP: Continues to Seek Long-Term Debt Financing
FLEXTRONICS INTL: Post Net Sales of US$4.1 Billion for 1Q2006
METROFINANCIERA: Moody's Affirms B1 Local Currency Issuer Rating
NEWPARK RESOURCES: S&P Rates US$150MM Sr. Secured Loan at BB-
ODYSSEY RE HOLDINGS: Earns US$202 Mil. in Quarter Ended June 30

SATELITES MEXICANOS: Files Plan and Disclosure Statement in NY
URBI DESARROLLOS: S&P Outlines Factors that Constrain BB Ratings
VITRO SA: S&P Says B- Ratings Reflect High Financial Leverage

* MEXICO: Saving US$350M After Prepaying World Bank & IDB Debts

N I C A R A G U A

* NICARAGUA: Importing Beans, Rice from Honduras

P E R U

IIRSA NORTE: Fitch Assigns BB Corporate Credit Rating
IIRSA NORTE: S&P Rates US$213MM Senior Secured Notes at BB
PAXAR CORP: Earns US$14.6 Million in Second Quarter of 2006
PETROLEO BRASILEIRO: Inks MoU With Petroperu and Perupetro
TELEFONICA DEL PERU: Deploying IP Network for Peru's Tax Office

* PERU: Inks MOU to Keep Trade Benefits with Venezuela

P U E R T O   R I C O

ADELPHIA: Wachovia To Pay US$1.25 Million in Securities Lawsuit

T R I N I D A D   &   T O B A G O

BRITISH WEST: Excludes Cellphone Luggage Restriction

U R U G U A Y

* URUGUAY: Ruling on Pulp Mill Conflict Expected by September 7

V E N E Z U E L A

PETROLEOS DE VENEZUELA: In Talks with Petrobras to Form Company
PETROLEOS DE VENEZUELA: Forming New Ventures with Foreign Firms
YPF SA: Parent Firm Inks Accord with Venezuela to Create Company

* VENEZUELA: Fondafa Sets US$930 Million for Agricultural Loans
* VENEZUELA: Issuing US$2 Billion Joint Bond by September
* VENEZUELA: Will Keep Trade Benefits with Andean Community


                          - - - - -


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


ALMATA PE: Verification of Proofs of Claim Is Until Sept. 22
------------------------------------------------------------
Santos Luparelli, the court-appointed trustee for Almata Pe
S.R.L.'s bankruptcy proceeding, verifies creditors' proofs of
claim until Sept. 22, 2006.

Under Argentine bankruptcy law, Mr. Luparelli is required to
present the validated claims in court as individual reports.
Court No. 25 in Buenos Aires will determine if the verified
claims are admissible, taking into account the trustee's opinion
and the objections and challenges raised by Almata Pe and its
creditors.

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

Mr. Luparelli will also submit a general report that contains an
audit of Alamata Pe's accounting and banking records.  The
report submission dates have not been disclosed.

Almata Pe was declared bankrupt at the behest of Ramona Medina,
whom it owes US$7,968.69.

Clerk No. 50 assists the court in the case.

The debtor can be reached at:

    Almata Pe S.R.L.
    Lavalle 1616
    Buenos Aires, Argentina

The trustee can be reached at:

    Santos Luparelli
    Paraguay 2067
    Buenos Aires, Argentina


ASOCIACION ARGENTINA: Verification of Claims Is Until Sept. 25
--------------------------------------------------------------
Liliana Cecilia Bozzano, the court-appointed trustee for
Asociacion Argentina de Trabajadores Autonomos Asociacion Civil
en Liquidacion's reorganization proceeding, verifies creditors'
proofs of claim until Sept. 25, 2006.

Under Argentine bankruptcy law, Ms. Bozzano is required to
present the validated claims in court as individual reports.
After which, Court No. 22 in Buenos Aires will determine if the
verified claims are admissible, taking into account the
trustee's opinion and the objections and challenges raised by
Asociacion Argentina and its creditors.

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

Ms. Bozzano will also submit a general report that contains an
audit of Asociacion Argentina's accounting and banking records.
The report submission dates have not been disclosed.

On May 23, 2007, Asociacion Argentina's creditors will vote on a
settlement plan that the company will lay on the table.

Clerk No. 44 assists the court in the proceeding.

The debtor can be reached at:

    Asociacion Argentina de Trabajadores Autonomos
    Asociacion Civil en Liquidacion
    Mario Bravo 470
    Buenos Aires, Argentina

The trustee can be reached at:

    Liliana Cecilia Bozzano
    11 de Septiembre 2140
    Buenos Aires, Argentina


BANCO HIPOTECARIO: Posts ARS72.2MM Net Income in Second Quarter
---------------------------------------------------------------
Banco Hipotecario S.A. disclosed its second quarter 2006
results.

                          Highlights

   -- Banco Hipotecario recorded net income of ARS72.2 million
      for the second quarter 2006 (ARS0.48 per share), 140.3%
      higher than the net income recorded in the second quarter
2005. Cumulative net income for the first six months
2006 was ARS136.3 million, or 69.4% higher than the
      comparable period of 2005.

   -- The Bank's net income was bolstered by financial
      intermediation margins of ARS153.6 million for the first
      six months of 2006, which was 29.2% higher than the
      comparable period of 2005.  This growth resulted
      primarily from the continuous expansion in lending and
      substantial reduction in financial costs.

   -- Sustained increase in the volume of business.  The Bank's
      stock of loans to the private sector, net of reserves and
      excluding the effect on its balance sheet derived from
      securitizations made during the period, increased 26.3% to
      ARS2,596.3 million as of June 30, 2006, compared to
      ARS2,032.4 million as of June 30, 2005, while financial
      income from private sector loans increased 31% compared
      to the first six months of 2005.

   -- Significant reduction in financial expenditures.  Total
      liabilities decreased 4% in the last twelve months ended
      June 30, 2006, while total financial expenditures
      decreased 18.8%, or ARS46.3 million for the six months
      ended June 30, 2006, compared to the six months ended
      June 30, 2005, reflecting the Bank's efficient financial
      management, substitution of liabilities and extension of
      maturities on its debt outstanding.

   -- Further diversification of the Bank's business.  The
      Bank's higher volume of business resulted in a 383%
      increase in the stock of credit card accounts outstanding
      to 154,000 as of June 30, 2006, positioning it among the
      top 10 banks in the Argentine financial system in terms of
      credit card transaction volumes. As of June 30, 2006, our
      portfolio of non-mortgage loans increased to 29% of its
      total loan portfolio compared to 20% as of June 30, 2005.
      In addition, mortgage loan origination increased 12%
      compared to June 30, 2005, and disbursements were
      ARS79 million higher than in the same period the previous
      year.

   -- Strong increase in deposit base. During the last twelve
      months the Bank's deposits grew 43%, or ARS186 million,
      mainly as a result of a 57% increase in time deposits
      along with higher savings account balances, which rose
      22%.

   -- Adequate loan asset quality.  The continued improvement
      in the Bank's loan asset quality has resulted in an
      improved ratio of non-performing loans to total loans of
      6.1% as of June 30, 2006, compared to 6.4% as of
      March 31, 2006, the lowest such ratio ever recorded by
      the Bank, and total loan loss reserves to non-performing
      loans of 105%.  The Bank's non-performing loan assets, in
      steady downward trend, largely consist of unpaid loan
      installments since 2002, and are mostly secured by
      mortgages.

   -- High profitability and equity ratios.  The Bank had a net
      interest margin of 3.6%, a ROA of 3.2%, an equity ratio
      of 26% and a ROE of 12.0%, reflecting its efficient
      management and satisfactory business performance.  As of
      June 30, 2006, Banco Hipotecario's equity was ARS2,353.4
      million, ranking second among the banks of the Argentine
      financial system.

Banco Hipotecario S.A. was formed under the laws of Argentina in
September 1997 to continue the business of Banco Hipotecario
Nacional.  The Bank distributes its products through a network
of 24 branches and 14 sales offices located throughout
Argentina.

                        *    *    *

As reported in the Troubled Company Reporter on March 28, 2006,
Standard & Poor's Ratings Services raised to B the foreign and
local currency counterparty credit ratings on Banco Hipotecario
S.A.  This rating action followed the upgrade on the
Republic of Argentina.

S&P raised the bank's global foreign and local currency
ratings on Argentina to 'B' from 'B-' and the ratings on the
national scale to 'raAA-' from 'raA', reflecting Argentina's
improved external and fiscal flexibility. S&P said the outlook
on the sovereign rating is stable.

                        *    *    *

On June 4, 2006, Moody's Investors Service took these rating
actions on Banco Hipotecario S.A.:

   -- Bank Financial Strength Rating: upgraded to E+ from E,
      with positive outlook;

   -- Long-term global local-currency deposit rating: Ba3 with
      stable outlook;

   -- Short-term global local-currency deposit rating: Not Prime
      with stable outlook; and

   -- National scale rating for foreign currency deposits:
      Ba1.ar with stable outlook.

Moody's affirmed these ratings:

   -- National scale rating for local-currency deposits: Aa1.ar
      with stable outlook;

   -- Long-term foreign currency-deposit rating: Caa1 and

   -- Short-term foreign currency-deposit rating: Not Prime.

                        *    *    *

Fitch Ratings Services upgraded on Aug. 4, 2006, these ratings
of Banco Hipotecario:

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

   -- Short-term IDR affirmed at 'B';

   -- Individual rating affirmed at 'D'; and

   -- Support rating affirmed at '5'.

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


DISTRIBUIDORA CENTER: Claims Verification Deadline Is Sept. 29
--------------------------------------------------------------
Luis Hugo Di Cesare, the court-appointed trustee for
Distribuidora Center Plack S.R.L.'s bankruptcy case, verifies
creditors' proofs of claim until Sept. 29, 2006.

Under Argentine bankruptcy law, Mr. Di Cesare is required to
present the validated claims in court as individual reports.
After which, Court No. 23 in Buenos Aires will determine if the
verified claims are admissible, taking into account the
trustee's opinion and the objections and challenges raised by
Distribuidora Center and its creditors.

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

Mr. Di Cesare will also submit a general report that contains an
audit of Distribuidora Center's accounting and banking records.
The report submission dates have not been disclosed.

Distribuidora Center was plunged into bankruptcy at the request
of Durlock S.A., which it owes US$74,183.11.

Clerk No. 46 assists the court in the proceeding.

The debtor can be reached at:

    Distribuidora Center Plack S.R.L.
    Avenida San Juan 2161
    Buenos Aires, Argentina

The trustee can be reached at:

    Luis Hugo Di Cesare
    Viamonte 1336
    Buenos Aires, Argentina


ESCON SA: Trustee Verifies Proofs of Claim Until Sept. 14
---------------------------------------------------------
Court-appointed trustee Luis Humberto Chelala verifies
creditors' proofs of claim against bankrupt company Escon S.A.
until Sept. 14, 2006.

Under Argentine bankruptcy law, Mr. Chelala is required to
present the validated claims in court as individual reports.
Court No. 12 in Buenos Aires will determine if the verified
claims are admissible, taking into account the trustee's opinion
and the objections and challenges raised by Escon and its
creditors.

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

Mr. Chelala will also submit a general report that contains an
audit of Escon's accounting and banking records.  The report
submission dates have not been disclosed.

Escon was forced into bankruptcy at the request of Ismael
Sandoval, whom it owes US$22,580.70.

Clerk No. 24 assists the court in the proceeding.

The debtor can be reached at:

    Escon S.A.
    Paraguay 930
    Buenos Aires, Argentina

The trustee can be reached at:

    Luis Humberto Chelala
    Corrientes 2335
    Buenos Aires, Argentina


PROFESA SA: Seeks for Court Approval to Restructure Debts
---------------------------------------------------------
A court in Buenos Aires is studying the merits of Profesa S.A.'s
petition to restructure its debts after defaulting on its
obligations.

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

The debtor can be reached at:

    Profesa S.A.
    Parana 597
    Buenos Aires, Argentina


PUENTE HNOS: Moody's LatAm Assigns B2 Global Local Curr. Rating
---------------------------------------------------------------
Moody's Latin America has assigned first-time insurance
financial strength ratings to Puente Hnos. SGR of A1.ar on
Argentina's national rating scale and B2 on the global local-
currency rating scale.  Both ratings have a stable outlook.

Moody's said these ratings primarily reflect the financial
guarantor's good credit quality in its investments and its
currently low operational leverage (i.e. total par outstanding
divided by total investments).  The majority (almost 90%) of
Puente SGR's investment portfolio is comprised of highly-rated
fixed-income securities (i.e. US Treasury Bills, Federal Home
Loan Bank Bonds, investment-grade bonds, etc.).  Although
Moody's expects the operational leverage of Puente SGR, which
has recently initiated business and is in growth mode, to
increase somewhat in the future, its current ratio of
outstanding guarantees to total investments is relatively modest
at 1.03x as of June 30, 2006.  In addition to these factors,
Moody's noted that since the outstanding guarantees are issued
in local currency and the investments are foreign currency-
denominated; Puente SGR's exposure to a potential depreciation
of the Argentine Peso against foreign currencies, will not have
a negative impact.

The rating agency also commented that Puente SGR's use of local
reinsurance, provided by an Argentine state-sponsored entity, is
a positive factor in reducing the company's net exposure to
guarantees outstanding, although it increases its potential
systemic exposure to the Argentine country risk.  The company's
integration with Puente Sociedad de Bolsa, a Buenos Aires Stock
Exchange brokerage firm, has benefited Puente SGR due to Puente
Sociedad de Bolsa's significant market share in the corporate
checks trading business, which Puente SGR in turn guarantees.

Offsetting these positive credit factors are Puente SGR's
exposures to large single risks within its pool of guarantees,
as well as the lack of an established track record in this
industry, Moody's said.  The top ten largest single risks
represented 38% of total guarantees as of June 30, 2006.

Moody's commented that the ratings could be upgraded if Puente
SGR demonstrates sustained profitability during the coming years
combined with a more diversified pool of guarantees by single
risk.  On the other hand, a significant deterioration in the
investment portfolio quality, a reduction in the traded volume
of secured checks at the Buenos Aires Stock Exchange and an
increase in operational leverage above 1.4x could result in a
ratings downgrade.

Based in Buenos Aires, Puente Hnos. SGR reported total assets of
ARS$39.4 million for the six months period ended June 30, 2006,
and it reported a net profit of ARS0.05 million for the first
half of 2006. Total outstanding guarantees accounted for ARS38.5
million.


QMH SRL: Verification of Proofs of Claim Is Until Sept. 29
----------------------------------------------------------
Court-appointed trustee Pablo Daniel Exposito verifies
creditors' proofs of claim against bankrupt company QMH S.R.L.
until Sept. 29, 2006.

Under Argentine bankruptcy law, Mr. Exposito is required to
present the validated claims in court as individual reports.
Court No. 23 in Buenos Aires will determine if the verified
claims are admissible, taking into account the trustee's opinion
and the objections and challenges raised by QMH and its
creditors.

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

Mr. Exposito will also submit a general report that contains an
audit of QMH's accounting and banking records.  The report
submission dates have not been disclosed.

QMH was declared bankrupt for nonpayment of US$312,200 debt to
Luis Giancotti.

Clerk No. 45 assists the court in the proceeding.

The debtor can be reached at:

    QMH S.R.L.
    Coronel Chilavert 3138
    Buenos Aires, Argentina

The trustee can be reached at:

    Pablo Daniel Exposito
    Cordoba 859
    Buenos Aires, Argentina


SIGNO GROUP: Last Day for Claims Verification Is on Sept. 26
------------------------------------------------------------
Court-appointed trustee Sandra Claudia D. Ambrosio will verify
creditors' proofs of claim against bankrupt company Signo Group
S.A. until Sept. 26, 2006.

Under Argentine bankruptcy law, Ms. Ambrosio is required to
present the validated claims in court as individual reports.
Court No. 1 in Buenos Aires will determine if the verified
claims are admissible, taking into account the trustee's opinion
and the objections and challenges raised by Signo Group and its
creditors.

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

Ms. Ambrosio will also submit a general report that contains an
audit of Signo Group's accounting and banking records.  The
report submission dates have not been disclosed.

Signo Group was declared bankrupt at the behest of Archelli
Grafica S.A.I.C. y F., whom it owes US$21,642.84.

Clerk No. 1 assists the court in the proceeding.

The debtor can be reached at:

    Signo Group S.A.
    Suipacha 745
    Buenos Aires, Argentina

The trustee can be reached at:

    Sandra Claudia D. Ambrosio
    Sarmiento 1574
    Buenos Aires, Argentina


TELECOM ARGENTINA: Posts First Semester Net Income of ARS99MM
-------------------------------------------------------------
Telecom Argentina disclosed Consolidated Net Income of ARS99
million for the six-month period ended June 30, 2006.

          Summary of Major Events and Developments

   -- During 1H06 Telecom's operations continued to evolve
      positively, particularly in the cellular and broadband
      markets.  Cellular and broadband customer growth reached
      42% and 85% respectively.  Fixed Lines in service grew
      4% when compared to the same period of 2005.

   -- Net Revenues reached ARS3,357 million (+30% vs. 1H05)
      mainly fueled by the expansion of the cellular business,
      which increased 57% when compared to 1H05.  Revenues
      generated by Internet services increased by 26%.

   -- Operating Profit before Depreciation and Amortization or
      OPBDA increased by ARS147 million (+15% vs. 1H05) reaching
      ARS1,119 million.  Operating Profit reached ARS419 million
      (+88% vs. 1H05).

   -- Net Income reached ARS99 million, decreasing ARS359
      million vs. 1H05, mainly due to foreign exchange
      fluctuations.  Shareholders' Equity as of June 30, 2006,
      amounted to ARS1,971 million.

   -- As a consequence of the financial restructuring and the
      cash flow generation, the nominal value of the Net
      Financial Debt as of June 30, 2006 decreased to ARS4,008
      million (-ARS1,939 million vs. 1H05 or -ARS528 million
      vs. 4Q05).  The ratio of Net Financial Debt to OPBDA for
      the last 12 months decreased from 3.1x as of
      June 30, 2005, to 1.8x.

During 1H06, Consolidated Net Revenues increased by 30% to
ARS3,357 million (+ARS772 million vs. 1H05), mainly fueled by
the expansion of the cellular and broadband businesses.  This
was partially offset by higher interconnection expenses and
direct taxes on revenues.  In addition, Telecom undertook a set
of important commercial and marketing strategies that permitted
the impressive cellular subscriber growth in Argentina and
Paraguay, as well as in ADSL connections in Argentina.

Therefore, OPBDA increased by 15% to ARS1,119 million (+ARS147
million), with a slight decrease when considered as a percentage
of Net Revenues (33.3% vs. 37.6%).

Net Income reached ARS99 million, vs. ARS458 million during
1H05.  The Net Income was negatively affected by a loss in
foreign exchange results of ARS90 million, compared to a ARS671
million profit registered during 1H05.

                   Consolidated Net Revenues

The evolution of Consolidated Net Revenues (+30% vs. 1H05) was
as follows:

                       Fixed Telephony

During 1H06, Telecom launched a set of campaigns aimed at
increasing its Fixed Telephony subscriber base, particularly in
the residential market.  This resulted in a 4% increase in terms
of Lines in Service, reaching approximately 4 million.

In addition, during the last quarters, Telecom has seen a
permanent migration from Restricted Lines to General Subscriber
Lines, a clear reversion from a process that was strong during
the period of macroeconomic crisis in Argentina (2001/2002).

As a consequence, Monthly Charges increased by ARS23 million or
7% in 1H06, reaching ARS354 million.  No increase has been
applied to regulated tariffs.

Local Measured Service revenues totaled ARS251 million (+2%),
Domestic Long Distance revenues decreased to ARS217 million (-
1%), while overall traffic volume in minutes remained stable.

Revenues generated by International Telephony reached ARS119
million (ARS9 million or 8% higher than 1H05) due to an increase
in traffic and sales of other services, partially offset by
marginally lower prices.

Interconnection revenues increased by ARS26 million (+22%), to
ARS144 million.  The most dynamic item was the mobile traffic
transported and/or terminated in Telecom's fixed line network.

               Internet and Data Transmission

Revenues generated by Data transmission and Internet amounted to
ARS269 million, increasing by ARS45 million, or 20% vs. 1H05,
fueled by the increase in ADSL access connections, in a context
of increased commercial activity, portfolio innovation and re-
engineering of customer support channels.

As regards to the retail ADSL market, the recently launched
low/mid segment product "Arnet 640Kb" has resulted in an
important commercial success.  In addition, in the Business
segment overall product portfolio was renewed, seeking to
provide an improved response to the needs of different types of
clients.

As of the end of 1H06, total ADSL subscribers amounted to
300,000 (+138,000 or +85% vs. 1H05).  Lines with ADSL
connections amounted to more than 7% of Telecom's lines in
service.  Regarding ISP services, Arnet subscribers totaled
338,000 (+38% or 93,000 subscribers), as a consequence of the
increase of 127,000 broadband subscribers and the decrease of
34,000 dial-up subscribers.

                     Cellular Telephony

As of June 30, 2006, the subscriber base of Personal in
Argentina reached approximately 6.9 million; 2.1 million
customers more than those registered as of June 30, 2005 (+43%).
It is important to highlight that the postpaid customer base
increased by 67%, while the prepaid customer base increased by
32% vs. 1H05.

As of June 30, 2006, approximately 64% of the overall subscriber
base was prepaid and 36% was postpaid customers. Subscribers
with GSM technology represented 80% of the overall subscriber
base.

Total traffic measured in minutes increased by 36% vs. 1H05. SMS
traffic (outgoing messages) increased from an average of 173
million per month during 1H05 to an average of 460 million per
month during 1H06 (+166%).

In this context, Telecom Personal's revenues in Argentina
reached ARS1.716 million, increasing ARS626 million (+57%) when
compared to the same period of last year.  This positive
evolution results from the combination of a larger subscriber
base and a higher average monthly revenue per user in Argentina,
which increased to ARS38 or +10% vs. 1H05.  The ARPU increase is
a direct consequence of the Personal's subscriber acquisition
policy, which is focused on acquiring high value subscribers.
In addition, higher handset sales contributed positively to the
increase in revenues.

In fiscal year 2006 Personal has initiated several actions aimed
to improve its brand positioning, enhance service quality and
strengthen distribution channels throughout the country.

Regarding the product portfolio, Personal launched Blackberry
services (both for Corporates and Professional), value added
services based on WAP content and several commercial plans,
particularly those oriented to the young demographic group, one
of the most dynamic market segments.

Nucleo, Personal's subsidiary that operates in Paraguay,
generated revenues of ARS147 million (+51% when compared to
1H05).

Regarding the subscriber base, the 791,000 customers as of
June 30, 2006, represented a 40% increase from 1H05. Prepaid and
Postpaid customers represented 84% and 16%, respectively.  GSM
to total subscriber ratio was 59% (vs. 50% at the end of 1Q06).

                        Directories

Publicom sales amounted to ARS9 million in 1H06, +ARS2 million
vs. 1H05.  Considering already acquired advertising contracts
and the seasonality of Directory publishing in the main markets,
revenues for fiscal year 2006 are expected to increase when
compared to those of 2005.

                Consolidated Operating Costs

The Cost of Services Provided, Administrative Expenses and
Selling Expenses totaled ARS2,938 million in 1H06, which
represents an increase of ARS576 million or 24%.

Salaries and Social Security Contributions increased by ARS71
million, or 22%, to ARS400 million, reflecting wage increases
granted at the end of 2005 and beginning of 2006, as well as a
headcount increase mainly related to the expansion of the
cellular businesses in Argentina and Paraguay.

Taxes amounted to ARS236 million, with an increase of 32%,
consistent with the overall evolution of revenues.

Agents and Prepaid Cards Commissions increased by ARS97 million,
or 68%, to ARS239 million.  The main drivers of this item were
the acquisition of new subscribers and higher sales of cellular
prepaid cellular cards.  In addition, cellular and Internet
advertisement campaigns where responsible for higher Advertising
costs (+ARS31 million, or 53%) that amounted to ARS89 million in
1H06.  The cellular business advertisement was focused on
subscriber acquisition and the launch of new services, while in
Internet, resources where dedicated to a brand redesign
campaign, unifying all service portfolio under the Arnet brand.

The cost of cellular handsets increased by ARS156 million to
ARS390 million mainly due to the increase in handset sales
related subscriber growth and TDMA to GSM migration.

TLRD (termination charges in third party cellular networks) and
Roaming costs increased by ARS74 million, reaching ARS245
million, due to the increase in traffic delivered among cellular
operators, in line with the significant expansion of the market.

During 1H06 Allowance for Doubtful Accounts was ARS37 million
(+ARS22 million or 147%), equivalent to 1% of net revenues.

Depreciation of Fixed and Intangible Assets decreased by ARS49
million to ARS700 million (+ARS20 million in the cellular
operation, -ARS68 million in Telecom Argentina and -ARS1 million
in Publicom).

         Consolidated Financial and Holding Results

Financial and Holding Results resulted in a loss of ARS296
million, as compared to a ARS299 million profit registered in
1H05.  Despite lower net financial expenses, this variation is
mainly a consequence of foreign exchange fluctuations.  The
interest accrued on financial debt amounted to ARS187 million
(of which ARS123 million correspond to Telecom Argentina).

             Consolidated Other Expenses (net)

Other expenses (net) increased by ARS36 million, (+72% vs. 1H05)
to ARS86 million.

            Net Financial Debt (Nominal Value)

As of June 30, 2006, the nominal value of Net Debt (Loans minus
Cash, Banks, Current Investments and Other credits derived from
derivative Investments) amounted to ARS4,008 million, a
reduction of ARS528 million as compared to Dec. 31, 2005.  In
April 2006, Telecom Argentina prepaid an amount equivalent to
approximately US$216 million of its financial debt.

             Consolidated Capital Expenditures

The total amount of ARS464 million invested in fixed assets
during 1H06 was allocated to the cellular business (ARS240
million) and the fixed telephony, data and Internet business
(ARS224 million).

It is important to highlight that according to the approval of
the Bondholder's Meeting of Telecom Argentina celebrated on
March 27, 2006, all quantitative restrictions to Personal's
capital expenditures were eliminated.

         Conversion of Class "C" to Class "B" shares

On July 12, 2006, the Bolsa de Comercio de Buenos Aires
authorized the conversion of 2,112,986 ordinary Class "C" Shares
into the same amount of ordinary Class "B" Shares.  The
conversion was implemented according to the resolution of the
Extraordinary Shareholders' Meeting held on April 27, 2006.

After this conversion, the capital stock is comprised of:

           Class "A" Shares        502,034,299
           Class "B" Shares        438,526,927
           Class "C" Shares        43,819,752
           Total                   984,380,978

Telecom is the parent company of a leading telecommunications
group in Argentina, where it offers directly or through its
controlled subsidiaries local and long distance fixed-line
telephony, cellular, data transmission and Internet services,
among other services.  Additionally, through a controlled
subsidiary, the Telecom Group offers cellular services in
Paraguay.  The company commenced operations on November 8, 1990,
upon the Argentine Government's transfer of the
telecommunications system in the northern region of Argentina.

Nortel Inversora S.A., which acquired the majority of the
company from the Argentine government, holds 54.74% of Telecom's
common stock.  Nortel is a holding company where the common
stock (approximately 68% of capital stock) is owned by Sofora
Telecomunicaciones S.A. Additionally, Nortel capital stock is
comprised of preferred shares that are held by minority
shareholders.  As of June 30, 2006, Telecom had 984,380,978
shares outstanding.

Headquartered in Buenos Aires, Telecom Argentina S.A. --
http://www.telecom.com.ar/index-flash.html-- is the fixed-line
operator for local and long-distance services in northern and
southern Argentina.  It also provides cellular and PCS phone
services in Argentina, as well as in Paraguay through a 68%
stake in Nocleo.  France Telecom formerly controlled the company
through its Nortel Inversora venture with Telecom Italia.
France Telecom sold most of its stake in 2003 to the Werthein
Group, an Argentine agricultural concern owned in part by vice
chairman Gerardo Werthein.  Nortel continues to be Telecom
Argentina's largest shareholder with a 55% stake.  Nortel is
owned by Sofora, a consortium owned by Telecom Italia (50%), the
Werthein Group (48%), and France Telecom (2%).

                        *    *    *

Telecom Argentina's US$64,128,000 and US$54,124,000 notes due
Oct. 15, 2014, carry Standard & Poor's and Fitch's B- ratings.

                        *    *    *

As reported in the Troubled Company Reporter on April 27, 2006,
Fitch Ratings made these changes on Telecom Argentina's ratings:

   Foreign Currency

    -- Previous Rating: 'B-'
    -- New RR: 'B', Rating Outlook Stable

  Local Currency

    -- Previous Rating: 'B-'
    -- New RR: 'B', Rating Outlook Stable

  US$1.5 billion, Senior Unsecured Notes due 2011 and 2014

    -- Previous Rating: 'B-'
    -- New IDR: 'B/RR4'

                        *    *    *

As reported in the Troubled Company Reporter on April 26, 2006,
Standard & Poor's Ratings Services raised its foreign and local
currency corporate credit ratings on several Argentine entities
and removed them from CreditWatch, where they were placed with
positive implications on March 23, 2006.  Telecom Argentina
S.A.'s rating was upgraded to B from B-.

The rating actions followed the upgrade on the global foreign
and local currency ratings on the Republic of Argentina to 'B'
from 'B-' and the ratings on Argentina's national scale to
'raAA-' from 'raA'.


* ARGENTINA: Expects Ruling on Pulp Mill Conflict by Sept. 7
------------------------------------------------------------
A ruling from Mercosur's arbitration court on the pulp mill
conflict between Uruguay and Argentina is expected by
Sept. 7, 2006, Merco Press reports.

According to Merco Press, the ruling could be appealed.

As reported in the Troubled Company Reporter-Latin America on
Aug. 14, 2006, Uruguay filed a complaint against Argentina in
the Southern Common Market Claims Court due to roadblocks on
international routes.  Argentina's citizens had been 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.  Uruguay claimed that the roadblocks in
Gualeguaychu caused the country losses of US$400 million, jobs,
and small businesses in the peak of the tourist season.  Jorge
Taiana, the Foreign Minister of Argentina, had rejected
Uruguay's plea to create a Binational Technical Monitoring
Commission, believing that it would be like accepting the
construction of the plants.

Merco Press relates that the Uruguayan government claimed that
Argentina made no efforts to end the demonstrations, demanding
that the latter be compelled to curb the same kind of protest in
the future.

The Uruguayan Foreign Affairs ministry said in a release that
Argentina did not fulfill its obligations under Mercosur norms
because of its refusal to adopt measures to prevent and/or cease
impediments to the free circulation.

Dozens of loaded trucks -- including those from Chile -- had to
change routes or appeal to maritime or fluvial transport, the
report states.  Many of those trucks were transporting equipment
and material for the two pulp mills.

Hearings at the Mercosur court in Montevideo started on
Wednesday with the presentation of witnesses from both Uruguay
and Argentina.  On Thursday, the government representatives made
their claims.  Discussions were made confidential, as
established in the Mercosur Olivos Protocol, Merco Press notes.

Merco Press underscores that Argentina said it did not hold back
protesters because they have the right to "freedom of speech"
and a right to circulate freely.

Argentine government told Merco Press that the protest did not
obstruct bilateral trade, adding that there was always at least
one of the three land passages open.

Merco Press emphasizes that Argentina said it would make an
appeal if it would lose the case.

Meanwhile, Argentina challenged one of the three judges in the
Mercosur court who has a Spanish nationality, as ENCE -- one of
the builders of the pulp mill -- was of the same citizenship,
Merco Press relates.  Other judges of the court were an
Argentine and a Uruguayan.

                        *    *    *

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


WINN-DIXIE: Wants to Assume 21 Employment-Related Contracts
-----------------------------------------------------------
Winn-Dixie Stores, Inc., and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Middle District of Florida to allow
them to assume 21 prepetition employment-related contracts as of
the effective date of their proposed plan of reorganization.

The Debtors clarify that the assumption is conditioned on their
plan being declared effective.

To the extent that there has been a default under the Contracts,
the Debtors agree to pay cure amounts and provide adequate
assurance to the counterparties before assuming the Contracts.

The Debtors also ask the Court to fix the costs of assumption of
the Contracts at these cure amounts:

     Non-Debtor               Debtors'
    Counterparty            Cure Amount
    ------------            -----------
    Kwentoh, Emeka I.        US$22,250
    Barton, Joel                   0
    Baxley, William R.             0
    Cavin, Margaret M.             0
    Chisholm, Paul M.              0
    Doss, Gary W.                  0
    Gore, Curtis M.                0
    Gue, George T. Jr.             0
    Hanley, Dennis                 0
    Matta, Mark                    0
    Mitchell, Mary                 0
    Moore, Dwight A. Jr.           0
    Opasinski, John                0
    Seeley, Jim                    0
    Sheehan, John                  0
    Strother, Justin D.            0
    Thatcher, James H.             0
    Timbrook, Stanley R. Jr.       0
    Tulko, Robert                  0
    Wong, Roy                      0
    Zahra, E. Ellis Jr.            0

Counterparties who dispute the proposed cure amounts must file
their objection with the Court before Aug. 17, 2006.

Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc.
-- http://www.winn-dixie.com/-- is one of the nation's largest
food retailers.  The Company operates stores across the
Southeastern United States and in the Bahamas and employs
approximately 90,000 people.  The Company, along with 23 of its
U.S. subsidiaries, filed for chapter 11 protection on Feb. 21,
2005 (Bankr. S.D.N.Y. Case No. 05-11063, transferred Apr. 14,
2005, to Bankr. M.D. Fla. Case Nos. 05-03817 through 05-03840).
D.J. Baker, Esq., at Skadden Arps Slate Meagher & Flom LLP, and
Sarah Robinson Borders, Esq., and Brian C. Walsh, Esq., at King
& Spalding LLP, represent the Debtors in their restructuring
efforts.  Paul P. Huffard at The Blackstone Group, LP, gives
financial advisory services to the Debtors.  Dennis F. Dunne,
Esq., at Milbank, Tweed, Hadley & McCloy, LLP, and John B.
Macdonald, Esq., at Akerman Senterfitt give legal advice to the
Official Committee of Unsecured Creditors.  Houlihan Lokey &
Zukin Capital gives financial advisory services to the
Committee.  When the Debtors filed for protection from their
creditors, they listed US$2,235,557,000 in total assets and
US$1,870,785,000 in total debts.  (Winn-Dixie Bankruptcy News,
Issue No. 48; Bankruptcy Creditors' Service, Inc., 215/945-
7000).


WINN-DIXIE: Wants to Reject 98 Employment-Related Contracts
-----------------------------------------------------------
Winn-Dixie Stores, Inc., and its debtor-affiliates seek
authority from the U.S. Bankruptcy Court for the Middle District
of Florida to reject prepetition contracts of former and current
employees, effective immediately.

A list of the 48 Former Employee Contracts and 50 Current
Employee Contracts for rejection is available free of charge at
http://ResearchArchives.com/t/s?f86

The offer letters, retention agreements, and other contracts of
former employees are not necessary to the Debtors' ongoing
businesses, D.J. Baker, Esq., at Skadden, Arps, Slate, Meagher &
Flom LLP, in New York, relates.

Mr. Baker clarifies that current employees who are
counterparties to Current Employee Contracts are not going to be
terminated and their employment status will not be affected.
Rather, the rejection of their contracts is being sought as a
necessary step toward the Debtors' reorganization.

"Many of the contracts of current employees include provisions
that are inconsistent with rights granted under Court orders and
with the terms of the Plan of Reorganization.  It is solely to
avoid inconsistent obligations that the Debtors are seeking to
reject the Current Employee Contracts," Mr. Baker explains.

If the parties of the Contracts assert rejection damages, the
Debtors ask the Court to establish the rejection damages
deadline to be 30 days after the Court grants their request.

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 Rejections Cues S&P to Put Ratings on WatchNeg
---------------------------------------------------------------
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.  S&P will monitor developments and respond
accordingly.

Headquartered in Westchester, Illinois, Andrew Corp.
(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.


SECUNDA INT'L: Amends Terms of Purchase Offer on Floating Notes
---------------------------------------------------------------
Secunda International Limited is amending its previously
announced tender offer and consent solicitation for any and all
of its US$125.0 million Senior Secured Floating Rate Notes due
2012 (CUSIP No. 81370FAB4).

The company is amending, by a Supplement to the Offer to
Purchase dated Aug. 14, 2006, the terms of the Offer to Purchase
and Consent Solicitation Statement of the company dated
June 27, 2006, and the accompanying Consent and Letter of
Transmittal such that it is now offering to pay to all Holders
whose Notes it accepts for purchase in the Tender Offer, if such
Notes are tendered prior to Early Tender Time, a revised "Total
Consideration" of US$1,045.00 per US$1,000 principal amount of
Notes, plus accrued and unpaid interest up to, but not
including, the Settlement Date.

The revised Total Consideration includes an Early Tender Payment
of US$30 per US$1,000 principal amount of Notes payable on the
Settlement Date only to Holders who tender their Notes prior to
5:00 p.m., New York City time, on Aug. 25, 2006.  Holders who
tender their Notes after the Early Tender Time and prior to the
Expiration Time will be entitled to receive the Total
Consideration less the Early Tender Payment per US$1,000
principal amount of the Notes on the Settlement
Date.

Secunda is also extending the Expiration Time to 5:00 p.m., New
York City Time, on Sept. 12, 2006.  Subject to the satisfaction
or waiver of the conditions to consummation of the Tender Offer,
the "Settlement Date" will be promptly after the Expiration
Time, and is expected to be the business day following the
Expiration Time.  The previously announced Expiration Time for
the Tender Offer was Aug. 11, 2006, at 5:00 p.m., New York City
time.

Holders who tendered notes pursuant to the original Tender Offer
may withdraw their Notes at any time on or prior to the Early
Tender Time, but not thereafter.  No action is required by any
Holder who has tendered prior to the date, and who wishes to
remain subject to the Tender Offer as amended by the Supplement
to the Offer to Purchase dated Aug. 14, 2006.  Any Holder who
has tendered on or prior to the date hereof and who wishes to
withdraw Notes should follow the procedures described in the
Offer to Purchase.

As previously reported, 100.0% of the Notes were tendered prior
to the Consent Time, which was 5:00 p.m., New York City time on
July 12, 2006.  After receiving the approval of the Holders of
at least a majority of the outstanding principle amount of
Notes, we executed the Supplemental Indenture to effect the
proposed amendments to the Indenture governing the Notes.
However, the Supplemental Indenture will become operative only
upon our purchase, pursuant to the Tender Offer, of more than a
majority in principal amount of the outstanding Notes.

The Tender Offer is subject to the satisfaction of certain
conditions, including the receipt of tenders from holders of a
majority in principal amount of the outstanding Notes, entering
into a new credit facility or another financing vehicle that
provides the Company with sufficient cash to fund the Tender
Offer, the successful pricing of the initial public offering of
the company's common shares in Canada, and satisfaction of
customary conditions.

Additional information concerning the Tender Offer may be
obtained by contacting:

           Banc of America Securities LLC,
           High Yield Special Products
           Tel: (212) 847-5836 (collect)
                (888) 292-0070 (U.S. toll-free).

Secunda International is also offering to registered holders of
the Notes to purchase for cash, Notes in an aggregate principal
amount of up to US$3,800,000, on a pro rata basis and on the
terms and subject to the conditions set forth in an offer to
purchase dated Aug. 1, 2006, copies of which may be obtained by
contacting the information agent for the Annual reduction Offer
at:

           D.F. King and Co., Inc.
           Tel: (212) 269-5550 (collect)
                (800) 758-5378 (U.S. toll-free)

Pursuant to the terms of the Indenture governing the Notes, on
Aug. 1, 2006, Secunda International was required to make an
offer to purchase Notes in an aggregate principal amount of
US$3,800,000 at a purchase price in cash equal to 100% of the
principal amount thereof plus accrued and unpaid interest, if
any, to the date of purchase.  The Annual Reduction Offer is
currently scheduled to expire at 5:00 p.m., New York City time
on Aug. 29, 2006.  Subject to the requirements of the Indenture,
the Annual Reduction Offer will be extended as necessary to
permit Notes that are currently tendered in the Tender Offer to
be tendered in the Annual Reduction Offer if the Tender Offer is
not consummated.

                 About Secunda International

Headquartered in Nova Scotia, Secunda International Limited
-- http://www.secunda.com/-- is a wholly owned Canadian vessel
owner/ operator with locations in the UK and Barbados.  Secunda
is the leading supplier of marine support services to oil and
gas companies in one of the world's harshest marine environments
-- off the East Coast of Canada.

                        *     *     *

As reported in the Troubled Company Reporter-Latin America on
June 30, 2006, Standard & Poor's Ratings Services held its 'B-'
long-term corporate credit and senior secured debt ratings on
offshore support vessel provider Secunda International Inc. on
CreditWatch with positive implications, where they were placed
Sept. 29, 2005.




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


* BELIZE: Prime Minister Looks for US Investors
-----------------------------------------------
John Briceno, the deputy prime minister of Belize, is making
rounds in the United States in hopes of persuading entrepreneurs
to invest in his country, NWI Times reports.

According to NWI, Belize is a small country that is unknown to
several businessmen in the United States.

NWI relates that Prime Minister Briceno spoke at the Radisson
Hotel at Star Plaza, saying, "The future of our young nation is
bright and prosperous.  There are a lot of economic
opportunities for entrepreneurs."

The report underscores that Prime Minister Briceno tried to
portray Belize as a peaceful, beautiful, democratic nation that
is close to the US, shares its values and makes efforts to
ensure that Americans can easily make investments or put up a
business in the nation.

Belize could be more attractive to US executives than nations
around it like El Salvador, Guatemala and Nicaragua, which had
unstable governments and violence, and Asian nations, NWI says,
citing Prime Minister Briceno.

"You don't go to Belize for its shopping malls.  You go to
Belize for its nature.  In Belize, we are known for our
conservation efforts.  Thirty-six percent of the land is
protected," the Prime Minister told NWI.

NWI notes that Prime Minister Briceno also spoke about:

      -- Belize's free-market economy,
      -- the nation's free-trade philosophy,
      -- government officials eager to help American start-ups,
      -- tax-free regions, and
      -- that 30% of the nation's budget is dedicated to
         education.

Prime Minister Briceno admitted to NWI that he is unaware of any
Northwest Indiana firms in Belize.  However, he said that they
should be very interested in tourism, which is Belize's number
one industry.  According to him, the booming cruise ship
business should help hotels, restaurants, tour operators and
other service-related businesses.

The report emphasizes that Prime Minister Briceno expects the
discovery of up to 100 million barrels of oil in the next five
years, saying that about six US firms have signed production-
sharing accords with the Belize government.

Other great opportunities for the US, according to the Prime
Minister, are:

     -- shrimp,
     -- citrus,
     -- banana, and
     -- telecommunications industries.

                        *    *    *

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


COMPLETE RETREATS: Can Continue to Honor Existing Reservations
--------------------------------------------------------------
Complete Retreats LLC and its debtor-affiliates obtained
permission from the U.S. Bankruptcy Court for the District of
Connecticut to continue to honor existing reservations of their
destination clubs members.

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

The Troubled Company Reporter on Aug. 4, 2006 stated that
members of the Debtors' destination clubs pay annual dues and
daily usage fees.  Annual dues are paid semi-annually, at the
end of either the first and third quarters or the second and
fourth quarters, while daily usage fees are paid upon completion
of a member's retreat.

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

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

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

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

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

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

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

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

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

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

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


QUANTA CAPITAL: In Talks with Lenders to Amend Credit Facility
--------------------------------------------------------------
Quanta Capital Holdings Ltd. continues to work with its lenders
regarding an amendment to its credit facility and an extension
to its waiver period, which expired Aug. 11, 2006.

On June 7, 2006, A.M. Best Co. downgraded the financial strength
ratings to B from B++ and the issuer credit ratings to bb from
bbb for the insurance/reinsurance subsidiaries of Quanta Capital
Holdings Ltd.

These rating actions apply to Quanta Reinsurance Ltd., its
subsidiaries and Quanta Europe Ltd.  A.M. Best also downgraded
Quanta's ICR to b from bb and the securities rating to ccc from
b+ for its US$75 million 10.25% Series A non-cumulative
perpetual preferred shares.  All ratings have been removed from
under review with negative implications and assigned a negative
outlook.

Subsequently, all ratings of Quanta will be withdrawn and the
FSRs will be assigned a rating of NR-4 in response to
management's request that Quanta be removed from A.M. Best's
interactive rating process.

The company disclosed that the A.M. Best rating action triggered
a default under Quanta's credit facility.

                      About the Company

Headquartered in Hamilton, Bermuda, Quanta Capital Holdings Ltd.
(NASDAQ: QNTA) -- http://www.quantaholdings.com/-- operates its
Lloyd's syndicate in London and its environmental consulting
business through Environmental Strategies Consulting (ESC) in
the United States.  The Company is in the process of running off
its remaining business lines.  The Company maintains offices in
Bermuda, the United Kingdom, Ireland and the United States.


REFCO INC: Investors Buy US$69.9 Million in Claims
--------------------------------------------------
More than US$69,900,000 in claims against Refco, Inc., and its
debtor-affiliates' estates have changed hands since they filed
for bankruptcy.

Investors capitalized on the decision of about 50 Refco
claimants to cash in on their claims now instead of waiting for
the Bankruptcy Court to confirm a plan of reorganization for
Refco, to recover what they're owed.

                        Total Claims
     Investor             Acquired     % Acquired
     --------           ------------   ----------
     Abadi & Co.         US$27,523,369    39%
+++++++++++++++++++-
     Contrarian Funds     15,572,016    22% ++++++++++++
     Hain Capital          8,823,133    13% ++++++-
     Deutsche Bank         8,781,246    13% ++++++-
     Fimex Int'l           4,206,762     6% +++
     DK Acquisition        1,374,812     2% +
     QVT Fund LP.          1,006,491     2% +
     Others                3,992,643     5% ++-

Abadi & Co. was the biggest spender, taking home US$27,523,369
in aggregate claims from 11 claimants, including:

     Transferor                         Claim Amount
     ----------                         ------------
     NKB Investments Ltd.                US$11,303,266
     Aldesa Valores Puesto                 1,961,934
     Atlantic Global                       2,143,762
     Union Bank for Savings& Investment    2,063,000

Hain Capital Holdings LLC filed on January 13, 2006, the first
notice of transfer agreement pursuant to Rule 3001(e) of the
Federal Rules of Bankruptcy Procedure, after acquiring an
US$858,014 claim by Arbitrade 2003.  Hain also bought claims
from five other claimants, including a US$6,000,000 claim by
Prism Ltd.

Contrarian Funds LLC acquired four claims totaling US$7,603,741
from Denali Master Fund LP and a US$7,968,275 claim from KPC
Corp. Deutsche Bank Securities, Inc., bought US$8,781,246 in
claims from Frankfurt FX, LP, Alphix Co. Ltd., and North Hills
Management LLC.

Fimex International got two US$2,000,000 claims from Abadi & Co.
QVT Fund bought claims from Ralph Hervarac, Inc., and Hibernia
Investment & Finance, S.A.  DK Acquisition got a US$1,374,812
claim by Capital Returns.

Other investors that purchased claims against Refco are:

     Investor             Total Amount
     --------             ------------
     SPCP Group LLC         US$965,361
     Dresdner Bank AG        751,768
     ASM Capital II, LP      213,832
     Trade-Debt.net           74,934
     ASM Capital, LP          72,950
     Argo Partners            36,228
     Liquidity Solutions       5,171

                      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).


SEA CONTAINERS: Hasn't Completed 2005 Annual & Quarterly Reports
----------------------------------------------------------------
Sea Containers Ltd. disclosed certain information regarding the
company's operations and financial position including the
performance of its subsidiary Great North Eastern Railway aka
GNER.  The company has not yet completed its 2005 annual report
on SEC Form 10-K or its first and second 2006 quarterly reports
on SEC Form 10-Q.

           Update on Financial Condition and on
                GNER'S Operating Performance

   -- Sale of Silja Ferry business completed; sale of remaining
      ferry assets progressing well;

   -- Total debt reduced by US$648 Million since
      Dec. 31, 2005;

   -- Free cash of US$80 Million Available at July 31, 2006,
      for operational requirements;

   -- Container division refinancing underway;

   -- GE SeaCo maintaining high utilization and satisfactory
      performance;

   -- GNER underperforming original franchise expectations; and

   -- Sea Containers will shortly begin active discussions with
      financial stakeholders on restructuring process.

Commenting on Sea Containers' current financial position, Bob
MacKenzie, President and Chief Executive Officer, said, "Our
priority is to tackle the underperforming operations, simplify
and reduce the cost base and place the Company on a sound
footing through necessary financial restructuring.  GNER in
particular faces significant challenges, and I believe the
original projections for the franchise now appear optimistic.  I
intend to devote attention over the coming months to address
this situation, spending time in the business and with the UK
Government's Department for Transport.

"Armed with the business plan which the Company has prepared
over the past few months, we are now able to engage in dialogue
with financial stakeholders and embark on the active phase of
our restructuring program.  We are pleased to have achieved the
sale of Silja within the desired timeframe and that the disposal
of other ferry and non-core assets is well underway.  Both
partners in the GE SeaCo joint venture are firmly focused on
improving the competitiveness through reduced cost and improved
technology.  But the anticipation that we will not be able to
pay the senior notes due on Oct. 15, 2006 unless we have
adequate working capital and can be sure of our ability to pay
the other public notes maturing in subsequent years, puts a
critical time pressure on the restructuring process.  Although
the seas are rough, we are navigating a route through this."

        Cash Flow During the First Six Months of 2006

The table below summarizes Sea Containers' sources and uses of
cash during the first six months of 2006 and 2005.  This
financial information is unaudited, is derived from the
company's management accounts and, while the company believes
the information is materially accurate, is subject to possible
future amendment.

Sea Containers' total consolidated cash position at
June 30, 2006, was US$178 million.  Of this amount,
approximately US$79 million was restricted as security for
obligations to third parties, and approximately US$57 million
was held in subsidiaries and could not be remitted back to the
Company for various legal, regulatory or bank covenant reasons.
The combined US$136 million (US$79 million restricted plus US$57
million not readily available) is described herein as
"unavailable cash".

The remaining US$42 million at June 30, 2006, is described as
"free cash."  The company has not applied this free cash to
retire its public notes and is treating it as available to meet
ongoing operating requirements.  Management regards the measure
of free cash as a useful indicator of liquidity while
progressing its financial restructuring plans.

Selected Cash Flow Data                 Six months  Six months
  US$ million                           to June 30, to June 30,
                                            2006        2005

                                        (Unaudited) (Unaudited)

Cash flows from operating activities
Net cash (used in) provided by
Operating activities                      (88)        (46)

Cash flows from investing activities
Purchase of fixed assets                   (31)        (34)

Acquisitions and investments,
net of cash acquired                       --          (1)

(Increase) in restricted cash              (51)         (6)

Proceeds from sale of fixed assets          52           7

Proceeds from sale of shares in OEH         --         109

Net cash provided by (used in)
investing activities                      (30)         75

Cash flows from financing activities
Repayment of long term debt               (74)        (76)

Working capital facilities and
re-drawable loans                          --          27

Issuance of long term debt                  12          10

Debt repaid on sale of assets              (48)         --

Proceeds from issuance of shares            --          40

Redemption of preference shares             --         (15)

Payment of dividends                        --          (2)

Net cash (used in) provided by
financing activities                      (110)       (16)

Effect of exchange rate changes
on cash and cash equivalents               --          (8)

(Decrease) increase in cash and
cash equivalents                          (228)          5

Cash and cash equivalents,
beginning of period                        327         129

Cash and cash equivalents,
end of period                               99         134

Cash and cash equivalents,
end of period                               99         134

Restricted cash,
end of period                               79          23

Total, end of period                        178         157

The decrease in cash and cash equivalents during the first six
months of 2006 compared to the corresponding period in 2005
reflects, among other things:

        Net Cash Used In/Provided By Operating Activities

   -- Silja had a cash outflow of US$7 million during the first
      six months of 2006, compared with an outflow of US$9
      million during the corresponding period in 2005,
      reflecting improved vessel cost control.

   -- The rest of ferry division had a cash outflow of US$20
      million during the first six months of 2006, compared with
      an outflow of US$31 million during the corresponding
      period in 2005.  The improvement is substantially
      attributable to the closure of Hoverspeed in late 2005.

   -- Rail division had a cash outflow of US$33 million during
      the first six months of 2006, compared with an outflow of
      US$1 million during the corresponding period in 2005.  It
      should be noted that the first four months of 2005 were
      under the expired GNER franchise so that the first six
      months of 2005 are not directly comparable with the first
      six months of 2006.

   -- Container division had a cash inflow of US$17 million
      during the first six months of 2006, of which US$10
      million is included in cash flow from operating activities
      and US$7 million was paid directly into the company's
      restricted bank accounts and is thus not reflected in the
      above cash flow.

      The aggregate US$17 million compares to an inflow of US$22
      million during the corresponding period of 2005.  Receipts
      from containers owned and leased out by Sea Containers
      outside of the GE SeaCo joint venture were down by US$2
      million as this fleet ages and reduces in size.  Receipts
      from containers owned by Sea Containers and leased out by
      GE SeaCo were stable.  Container factories and depots were
      down by US$3 million partly through reduced trading
      and partly through cash timing differences.

   -- The cash outflow related to corporate expenses, including
      restructuring costs and interest, was US$38 million during
      the first six months of 2006, compared with an outflow of
      US$35 million during the corresponding period of 2005.
      This deterioration is attributable to costs of the
      company's ongoing restructuring program partially offset
      by lower net interest expense due to debt repaid.

   -- The US$46 million net cash used in operating activities
      for the six months to June 30, 2005, excludes the US$8
      million effect of exchange rate changes which are
      separately disclosed on the face of the cash flow
      statement.  The effect of exchange rate changes for the
      six months to June 30, 2006 has not been determined and
      is therefore not separately classified in the above table.

               Equity Investment in GE SeaCo

   -- The Company accounts for its holding in GE SeaCo on an
      equity basis because this joint venture with GE Capital
      is not controlled by Sea Containers.  GE SeaCo paid no
      dividends during the periods covered in the table above
      which, accordingly, does not reflect any portion of the
      cash flow generated by GE SeaCo's owned containers.
      Dividend policy of GE SeaCo is determined by its Board of
      Managers on which Sea Containers has four representatives
      and GE Capital has five representatives.  At present,
      GE SeaCo uses its cash flow for operations and to invest
      in new container equipment.

      GE SeaCo continues to operate in strong international
      container leasing markets and maintains high utilization
      rates of its container fleet.  Following the settlement of
      the arbitration between Sea Containers and GE Capital,
      GE SeaCo management is focusing on reducing the joint
      venture's SG&A costs and completing the implementation of
      new operating and financial IT systems.  These steps will
      enhance the competitiveness of GE SeaCo that is already a
      market leader in dry and refrigerated container leasing.

                  Purchase of Fixed Assets

   -- Fixed asset purchases of US$31 million were US$3 million
      less during the first six months of 2006, compared with
      the corresponding period in 2005.  Of the 2006 amount,
      US$6 million was attributable to rail division, US$6
      million to container division and $19 million to ferry
      division. The latter included $12 million of capital
      expenditures in Silja for the upgrade of two vessels, the
      Serenade and Symphony.

                    Sale of Fixed Assets

   -- Asset sale proceeds during the first six months of 2006
      were US$52 million, including $48 million from the sale of
      three vessels (Walrus, SuperSeaCat 1 and Rapide).  These
      ship sale proceeds were used to repay debt secured by
      these vessels and are included as cash outflow from
      financing activities.  In addition, US$4 million was
      received from the sale of containers.

   -- Asset sale proceeds during the first six months of 2005
      were US$7 million, all of which related to sale of
      containers.

                 Increase in Restricted Cash

   -- The company's restricted cash increased by US$58 million
      in the six months to June 30, 2006. This arose within two
      separate container loan facilities; US$51 million is shown
      separately in the above table and described further below,
      and US$7 million is described within the explanation for
      container division cash flows above.

                 Repayment of Long-Term debt

   -- This relates to scheduled debt repayment on secured bank
      debt.

                 Issuance of Long-Term Debt

   -- Financing of capital expenditures in 2006 of US$12 million
      was attributable to planned station enhancement programs
      by GNER, required under the terms of its new franchise
      agreement.

                Cash Balances at July 31, 2006

At July 31, 2006, Sea Container's total cash was approximately
US$144 million, a reduction of US$34 million from total cash of
US$178 million at June 30, 2006.  Of the US$144 million at
July 31, 2006, US$64 million was unavailable cash and US$80
million was free cash.  Unavailable cash has been reduced by
US$72 million, and free cash has increased by US$38 million.

The reduction in unavailable cash reflected principally the
application of restricted cash of $51 million to repay partially
one of the company's secured container debt facilities.  A
further US$7 million was paid from restricted cash to repay
partially a second secured container debt facility.  In
addition, there was a release from unavailable cash to free cash
of US$14 million held within Silja on completion of the sale.

The main contribution to the increase in free cash during July
was US$65 million from the sale of Silja (including the US$14
million cash release), offset by payment of US$14 million to
settle the GE SeaCo arbitration with GE Capital and a US$13
million net outflow for operating, interest and capital
expenditure payments.

                   Status of Ferry Sales

On July 19, 2006, the company completed the sale of its Baltic
ferry subsidiary Silja Oy Ab and the six vessels deployed on
Silja's core routes.

Sea Containers has separately completed the sale of the Walrus,
Rapide and SuperSeaCat 1 for a total of US$48 million, all of
which was used to repay debt secured by the vessels.  The
company's remaining ferries are:

Vessel     Approximate   Approximate   Location      Operating
            Passenger     Car/freight                  Status
            Capacity       Capacity
SeaCat
Scotland       430         85 cars     Sunderland, UK   Laid up

SeaCat
France         430         85 cars       Tilbury, UK    Laid up

PescaraJet     450         85 cars       Italy         Chartered
                                                           To
                                                        Adriatic
                                                         Sea JV

SpeedRunner 1  570         85 cars       Greece        Chartered
                                                        To Med.
                                                        Sea JV

SuperSeaCat 2  800        175 cars       Isle of Man   Chartered
                                                        To IOM
                                                         Steam
                                                       Packet Co

SuperSeaCat 3  800        175 cars       Finland        Trading

Helsinki-
                                                        Tallinn

SuperSeaCat 4  800        175 cars       Finland        Trading

Helsinki-
                                                        Tallinn

Diamant        675        140 cars       Spain         Chartered
                                                          to
                                                      Eurolineas

Finnjet      1,780      50 trailers/     Freeport,      Laid up
                          395 cars       Bahamas

Opera        1,390           n/a         Tilbury, UK    Laid up

The table does not include the four passenger-only vessels on
charter to SeaStreak, the commuter ferry service provided by Sea
Containers in New York Harbor.  Discussions regarding the sale
of SeaStreak are ongoing with a number of interested parties.

Sea Containers is continuing its efforts to sell its remaining
ferry assets and businesses and is in active dialogue with a
number of parties regarding the sale of several of its vessels.
To maximize value, the company may decide to continue operating
or chartering certain vessels for a period of time before
ultimately selling them. The company estimates that the ferry
vessels shown in the table above are presently valued in a range
US$127 million to US$137 million. Realized sale values may
differ from these estimates.

                        Outstanding Debt

At July 31, 2006, Sea Containers had US$610 million of
consolidated debt outstanding associated with the following
businesses:

                                    US$ million,
                                    unaudited

          Rail (largely GNER)           15
          Containers                   140
          Ferries                       68
          Public Notes                 385
          Other                          2
          Total                        610

In addition to the outstanding debt to financial institutions
and public noteholders shown above, Sea Container has a US$20
million unsecured liability to a shipyard that is due for
payment by Sept. 29, 2006.

Except for GNER, the company is either the primary obligor or
the guarantor of substantially all of this outstanding debt.

Pursuant to a forbearance agreement signed earlier this year
with one of its container banking syndicates, the Company
formally granted a security interest over cash balances held on
deposit with the banks over which the banks had legal rights of
set off.  Sea Container further agreed in exchange for continued
forbearance to apply the pledged cash, after the completion of
the Silja sale, to repay in part secured debt outstanding to the
syndicate.  Accordingly, after Silja was sold, the company
repaid approximately US$51 million of debt secured by
containers.

Sea Container is in active discussions with a number of
financial institutions to refinance its existing container debt
facilities.  The primary purpose of a refinancing would be to
replace liquidity used to repay secured container debt following
the Silja sale, as described above.

The changes in outstanding debt from Dec. 31, 2005, to
July 31, 2006, are:

                                             US$ million,
                                               unaudited

    Opening balance as at December 31, 2005      1,258

    Borrowings January 1 - July 31, 2006            12

    Repayments on ferry disposals

    January 1 - July 31, 2006                    (551)

    Repayments on other bank facilities

    January 1 - July 31, 2006                    (137)

    Foreign exchange and other movements

    January 1 - July 31, 2006                      28

    Closing balance at July 31, 2006              610

Sea Container remains in default under many of its secured
credit facilities due to breaches of certain financial covenants
and other requirements contained in these facilities.  The
company's secured and other credit facilities also generally
include cross-default provisions so that non-compliance with a
covenant in one secured credit facility constitutes a default
under substantially all other credit facilities. No lender has
taken any action to exercise remedies in respect of any events
of default, and the company is in continuing discussions with
its remaining lenders regarding such defaults.

Sea Container is also in default under various covenants in its
public note indentures including failure to apply asset sale
proceeds to retire public notes.  On June 12, 2006, the company
has not made an "excess proceeds offer" under those indentures
to retire public notes. The company's free cash balance at
July 31, 2006, of US$80 million included the benefit of
approximately US$100 million of excess proceeds as described in
its news release of June 12, 2006.  The company considers it
necessary to retain its free cash resources to fund operations
until the completion of its restructuring.  No action has been
taken against the company under the public note indentures.

Sea Container has prepared a business plan that includes certain
strategic and financial alternatives for the company, including
a potential refinancing or permanent restructuring of the
company's unsecured financial obligations.  The company has
provided financial projections and other information under
confidentiality agreements to advisors who act for an ad hoc
committee of public note holders and, separately, to advisors
for pension trustees.  The company intends in the next few weeks
to begin discussions with these advisors in respect of a
potential restructuring of the Company's unsecured financial
obligations.

Sea Container is due to pay the US$115 million principal amount
of its 10-3/4% senior notes on Oct. 15, 2006.  Payment will not
be made unless the company concludes that it will be able to pay
in full when due its other public notes maturing in 2008, 2009
and 2012 and all other unsecured creditors, and to retain
sufficient working capital.  The interest coupon on the
company's 7.875% senior notes due on Aug. 15, 2006 will be paid.

                          Pensions

At Dec. 31, 2005, there were seven material defined benefit
pension plans operated by Sea Containers group companies.  At
that date, the total funded status (as defined by SFAS No 87) of
these plans was an estimated deficit of US$110 million, compared
with a deficit of US$90 million at Dec. 31, 2004.  Since
Dec. 31, 2005, the Hoverspeed group of companies has entered
into insolvent liquidation proceedings and Sea Containers
believes the funding obligation for the Hoverspeed plan does not
rest with the company.  In addition, Sea Containers has disposed
of its Silja ferry business including the plan operated by
Silja.

Sea Containers is exploring a range of strategic and financial
alternatives to address financial obligations, including pension
liabilities.  Sea Containers estimates that the total claims
that might be brought by the pension trustees if the five
remaining defined benefit plans currently operated by
subsidiaries were terminated could be materially higher in
amount than the December 31, 2005, funded status figure shown
above.  The company cautions, however, that no decision
regarding termination has been made.

In addition to the above plans, employees of GNER participate in
the UK rail industry's defined benefit pension plan which
includes a financially distinct sub-plan attributable to GNER
employees.

                           GNER

GNER was reviewed at the start of its new franchise on
May 1, 2005 until June 30, 2006.  In summary, GNER has
underperformed the financial projections in its franchise plan.
The most important variance to date arises from a shortfall in
passenger revenue, but additional pressure on financial
performance is expected from higher costs as well.

                     Passenger Revenue

In the first 14 months of the new franchise to June 30, 2006,
several significant events outside GNER's control have
materially adversely affected GNER's financial results over that
period and its future prospects over the franchise period.
These include the terrorist activity in London in July 2005, the
decision by the UK Office of Rail Regulation or ORR to allow
additional open access operators to compete with GNER, a
weakening in the UK GDP growth, significant increases in
electricity prices, and improvement in Network Rail's
performance.

Passenger revenue for the period May 1, 2005, to June 30, 2006,
was US$918 million (GBP510 million; unaudited).  This represents
a 3.3% increase compared to the projected 9.9% increase in the
franchise plan, causing passenger revenue to be US$60 million
(GBP33 million) lower than projected for the 14-month period.
GNER believes that just more than half of the shortfall is due
to the July 2005 terrorist activity in London.  GNER was
disproportionately affected by the terrorist activity compared
to other UK rail operators due to GNER's greater dependence on
the long-distance travel market to and from London and the focus
of the terrorist activity around Kings Cross Station in London.
A claim has been submitted to the UK Department for Transport or
DfT for the partial recovery of lost revenue under the force
majeure mechanism of the franchise agreement.  This mechanism
will not compensate GNER fully, however, and the DfT has not
concluded its review of that claim.

GNER expects that its revenue projections may also be materially
adversely affected in the future by the ORR's decision in
connection with open access arrangements for competitors,
recently upheld by the High Court in London.

                  Other Issues Relating to GNER

GNER's ability to meet its original projections will also be
materially impacted by the variable infrastructure payments to
or from Network Rail, which are largely outside GNER management
control. There are two components.  One relates to payments to
GNER by Network Rail for its performance failure or disruption
to timetable through planned maintenance work by Network Rail,
and the other relates to payments from GNER to Network Rail for
providing improved rail infrastructure performance.  Network
Rail's performance is now expected to be better than anticipated
in GNER's franchise plan so that net payments to Network Rail
should continue at a higher level than planned.

A further issue which is likely to affect materially GNER's
profitability relates to electricity charges.  These rose in
April 2006 by 26%, considerably more than forecast in GNER's
franchise plan.  GNER has also received initial notification
that a further 65% increase is likely to occur in April 2007,
far in excess of the assumptions made at the time of the bid.
Taken together the 2006 increase and expected 2007 increase
would have an average annual cost impact compared with the
original franchise plan assumption of approximately US$20
million (GBP11 million) per annum from April 2007.  GNER
understands there is a further increase possible in April 2008.

Although GNER management has begun to implement initiatives to
reduce aggregate controllable costs, these costs are not
sufficiently large to provide scope for improvements that could
significantly offset the potential shortfall in profitability
relating to the factors described above.  In light of this, GNER
currently expects to make a profit or loss result much lower
than the net profit margin before tax of 3.75% originally
estimated in its plan.  In order to make dividend payments to
the company, GNER must earn distributable profits and also meet
certain financial criteria under the franchise agreement.  GNER
does not presently expect to make any dividend payments for the
short to medium term.

The company has raised with the DfT the financial impact on GNER
of these adverse factors and will discuss them further, although
the timing and outcome of these discussions with the DfT are
uncertain, as is the future value of the GNER franchise to Sea
Containers.

Under the direction of Bob MacKenzie, who becomes Executive
Chairman of GNER on August 31, 2006, GNER will continue to seek
to grow revenue and reduce operating costs.  In the meantime,
GNER continues to exceed its operating performance criteria and
delivers excellent customer service.

                  Financial Support for GNER

Under the franchise agreement, there is a bond in favor of the
DfT securing GNER's performance under the agreement.  This can
be used by the DfT in limited circumstances for specific
purposes.  A bank has issued the bond pursuant to a facility
with GNER that the company has guaranteed.  The amount of the
performance bond is currently US$27.5 million (GBP15.3 million)
rising to US$51.7 million (GBP28.7 million) in May 2007.

It is a condition of the franchise that GNER has in place a
US$54 million (GBP30 million) standby credit facility during the
term of the franchise, callable by GNER in the event of
liquidity need.  The company has provided this facility to GNER,
but it is undrawn on Aug. 11, 2006.

It is also a condition of the franchise that GNER has an US$18
million (GBP10 million) overdraft facility to provide additional
working capital if needed.  This facility is provided by a bank
and guaranteed by the company.  As of Aug. 11, 2006, no funds
had been drawn.

                    About Sea Containers

London-based Sea Containers -- http://www.seacontainers.com/--  
engages in passenger and freight transport and marine container
leasing.  The Bermuda registered company is primarily owned by
U.S. shareholders and its common shares have been listed on the
New York Stock Exchange (SCRA and SCRB) since 1974.

Through its GNER subsidiary, Sea Containers Passenger Transport
operates Britain's fastest railway, the Great North Eastern
Railway, linking England and Scotland.  It also conducts ferry
operations, serving Finland and Estonia as well as a commuter
service between New York and New Jersey in the U.S.

                        *    *    *

In June 2006, Moody's Investors Service downgraded the senior
unsecured ratings and confirmed the senior secured rating of Sea
Containers -- Senior Unsecured to Caa3, Senior Secured at B3.
Moody's said the outlook is negative.

The downgrades were due to the increased probability of a
payment default following Sea Containers' disclosure that it is
unable to confirm whether it will pay the US$115 million
principal amount of 10-3/4% senior unsecured notes due October
2006.


SEA CONTAINERS: S&P Places CCC- Credit Rating on Negative Watch
---------------------------------------------------------------
Standard & Poor's Ratings Services said that its ratings on Sea
Containers Ltd., including the 'CCC-' corporate credit rating,
remain on CreditWatch with negative implications.  Ratings were
lowered to current levels May 1, 2006; they were initially
placed on CreditWatch with negative implications on
Aug. 25, 2005.

The CreditWatch update follows Sea Containers' update today on
its operational and financial restructuring efforts, including
the statement that it will not pay its US$115 million due
Oct. 15, 2006, on the 10_% senior notes "unless the company
concludes that it will be able to pay.its other public notes
maturing in 2008, 2009, and 2012, and all other unsecured
creditors, and retain sufficient working capital." Sea
Containers also said it "intends in the next few weeks to begin
discussions with. advisors [to public noteholders and others] in
respect of a potential restructuring of the company's unsecured
financial obligations."

"If a restructuring is undertaken that does not provide full
value to the noteholders, we would lower our ratings on the
affected notes to 'D' and the corporate credit rating to 'SD'
[selective default]," said Standard & Poor's credit analyst
Betsy Snyder.

Sea Containers provided also an update on various other ongoing
restructuring efforts:

   -- Sale of its Silja ferry unit was completed July 19, 2006,
      and proceeds applied to reduce debt (which has declined
      by US$648 million since Dec. 31, 2005, to US$610 million
      at July 31, 2006);

   -- Three ferries were sold for US$48 million, which was used
      to repay secured debt on the vessels, and the company is
      seeking to sell other ferries with an estimated value of
      US$127 million to US$137 million;

   -- Cash used in operating activities was US$88 million for
      the first six months of the year, almost double the
      US$46 million cash consumption of the prior-year period;
      and

   -- The Great North Eastern Railway or GNER is significantly
      underperforming original projections, due to
      lower-than-forecast revenues (including the effect of
      terrorist attacks in London in July 2005) and
      higher-than-forecast costs.

The company noted also that it remains in covenant default on
various debt instruments, including its public notes, though no
creditors has taken action to exercise remedies.




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


* BOLIVIA: Extending Gas Price Talks with Petroleo Brasileiro
-------------------------------------------------------------
Petroleo Brasileiro SA and Yacimientos Petroliferos Fiscales
Bolivianos have decided to extend the initial negotiation
deadline regarding the request the Bolivian company made for the
review of the Gas Purchase and Sale Agreement price clause for
another 60 days.

The decision was made during a meeting that was wrapped-up
Friday, in Rio de Janeiro, and held within the meeting schedule
that was agreed on with the Bolivian state-owned company.

The new deadline will allow Petrobras and YPFB to deepen their
joint efforts in the search for mutually acceptable solutions
for the issue.

The next meeting between the companies is scheduled for
September 14 in Bolivia.

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.

                        *    *    *

Fitch Ratings assigned these ratings on Bolivia:

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


* BOLIVIA: Inks MOU to Keep Trade Benefits with Venezuela
---------------------------------------------------------
Bolivia, along with other members of the Andean Community of
Nations or CAN trade group, signed a memorandum of understanding
with Venezuela to maintain programmed trade preferences, Dow
Jones Newswires reports.

Other CAN members are:

     -- Ecuador,
     -- Colombia, and
     -- Peru.

As reported in the Troubled Company Reporter-Latin America on
April 27, 2006, Venezuela's President Hugo Chavez ratified his
withdrawal from after President Alvaro Uribe of Colombia decided
to continue negotiating a free trade deal with the US.

The memorandum would preserve the tradition of trading goods --
amounting more than US$4.7 billion -- between Venezuela and the
other countries in the group, Alfredo Fuentes, the acting
secretary of CAN, told Dow Jones.

According to the report, the memorandum states that by Oct. 30,
both sides will sign an agreement to incorporate regulations
applying to free-trade policies, in terms of:

     -- origin,
     -- safeguards,
     -- dispute settlement,
     -- sanitary standards, and
     -- barriers to trade.

The memorandum said that by Oct. 30 at the latest both sides
will sign an accord that will incorporate regulations that apply
to free-trade policies, in terms of origin, safeguards, dispute
settlement, sanitary standards and barriers to trade.

CAN also told Dow Jones that it has formed a working group that
would propose norms to regulate trade between CAN and Venezuela
and find a way to settle trade disputes.

The group has up to 60 days to make the proposal, Dow Jones
relates, citing CAN.

                        *    *    *

Fitch Ratings assigned these ratings on Bolivia:

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


* BOLIVIA: Puts Off Nationalization of Hydrocarbons Sector
----------------------------------------------------------
The Bolivian government has temporarily suspended the
nationalization of its oil and natural gas industry.  President
Evo Morales declared May 1 the government's taking control of
the foreign-controlled fields.

Pulished reports said that the country was forced to halt the
process because the state-owned oil company, Yacimientos
Petroliferos Fiscales Boliviano, lacks the the necessary funds
and operating capacity to take over production.

Local paper La Razon relates that Bolivia's Hydrocarbons
Ministry said in a statement that the government seeks US$180
million from the central bank to replenish the coffers of
Yacimientos Petroliferos.

"Very little advancements" were made in taking over foreign-
owned refineries, raising export prices for natural gas and
rewriting contracts with the affected foreign companies,
Bloomberg News reports, citing La Razon.

Meanwhile, Bolivia extended for 60 days the six-month talks with
Petroleo Brasileiro SA, its biggest oil producer, over raising
the price that Brazil pays for Bolivian gas.

                        *    *    *

Fitch Ratings assigned these ratings on Bolivia:

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




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


BANCO BMG: S&P Rates US$150 Million Sr. Unsecured Debt at B+
------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' foreign-
currency long-term senior unsecured debt rating to Banco BMG
S.A.'s upcoming issuance of US$150 million MTNs.

"The ratings on Banco BMG (B+/Stable/B) reflect the risks of
significant product concentration; high competition in the
market with expected margin pressure on payroll-discounted
loans, and dependence on wholesale funding," said Standard &
Poor's credit analyst Daniel Araujo.  As a midsize bank, Banco
BMG also faces the challenge of maintaining a stable and
diversified funding base.  These risks are partially offset by a
well-defined and successful strategy as a niche bank, good
execution benefiting from technology and distribution
capabilities, good results in terms of profitability, and good
asset quality.

Banco BMG has significant concentration of assets in the segment
of payroll-discounted loans.  As of June 30, 2006, the bank had
outstanding loans of BRL2.3 billion.  Considering the loans
ceded to other financial institutions or used as underlying
assets in securitizations, this volume would go up to
approximately BRL8 billion. About 91% of this gross amount
refers to payroll-discounted loans. The bank has reported book
assets of BRL4.1 billion (equivalent to US$1.9 billion).

Banco BMG maintains a leading position in its niche market,
supported by its pioneer technology and distribution network.
While the bank is very successful in its niche, it is viewed as
more vulnerable to a potential margin reduction in the medium to
long term in comparison with larger and more diversified players
that are currently rated in the 'BB' category, because of its
more limited access to cheap funding. Banco BMG closed loan sale
agreements with different counterparties and has been able to
issue MTNs in the foreign market, which has sustained such
strong lending growth.  During the first half of 2006, total
loan sales reached a balance of BRL5.7 billion.  While results
have been strong, we expect profitability to decline due to
increasing competition and potential lower spreads.

The stable outlook reflects Standard & Poor's expectations that
Banco BMG will benefit from the maintenance of its core
competencies, with reasonable growth in its niche operations in
discount-payroll loans, maintaining asset quality and
capitalization at prudent levels.

The ratings may be raised if Banco BMG maintains good asset
quality indicators in line with those of previous years; shows
satisfactory profitability levels with the benefit of larger
volumes to compensate potential decline in margins expected for
the medium term; and demonstrates more diversification and
stability in domestic funding.

The ratings may be lowered if:

   -- there is a significant worsening in asset quality to
      levels worse than 5% (loans from 'E' to 'H' according to
      local regulations, adjusted for ceded loans);

   -- profitability levels drop to less than 1.5% on an adjusted
      basis (excluding sales of loan portfolio);

   -- funding becomes problematic to support the bank's
      operations; and

   -- liquidity is significantly impaired.


NOVELIS INC: Extends Exchange Offer Expiration to Oct. 20
---------------------------------------------------------
Novelis Inc. extends until Oct. 20, 2006, at 5:00 p.m. Eastern
Time, its offer to exchange up to US$1.4 billion aggregate
principal amount of its 7-1/4% Senior Notes due 2015, which were
initially issued and sold in a private placement on
Feb. 3, 2005, for an equal aggregate amount of its registered
7-1/4% Senior Notes due 2015.

The original expiration date of the exchange offer was
Oct. 31, 2005.  The expiration date was initially extended on
Nov. 1, 2005, and re-extended on Nov. 7, 2005, Jan. 31, 2006,
and May 10, 2006.  The latest extension started on May 10, 2006,
and expires on Aug. 14, 2006.  As of Aug. 9, 2006,
US$842,886,000 of the old notes had been tendered for exchange.

As a result of the original extension announced on Nov. 1, 2005,
the company began to accrue, beginning Nov. 11, 2005, and until
the exchange offer closes (or earlier, in certain circumstances,
as provided in the registration rights agreement relating to the
Senior Notes), a special interest rate on the Senior Notes
equaling an additional 0.25% per annum.

The rate of special interest increases 0.25% during each
subsequent 90-day period until the exchange offer closes, with
the maximum amount of additional special interest at a rate of
1.00% per annum.  Accordingly, on Aug. 8, 2006, the rate of
special interest increased from 0.75% per annum to 1.00% per
annum.

Novelis expects to file a post-effective amendment to the
exchange offer registration statement filed with the SEC when
the Company is current on its reporting requirements.  Except
for the extension of the expiration date, all of the other terms
of the exchange offer remain as set forth in the exchange offer
prospectus dated Sept. 27, 2005.

Any holder of the old notes, who would like to obtain copies of
the prospectus and related documents, or with questions
regarding the exchange offer, should contact Novelis Inc.'s
exchange agent:

            The Bank of New York Trust Company, N.A.
            Tel: (212) 815-5098

                       About Novelis

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

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

                        *    *    *

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

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


NOVELIS INC: Lenders Extend Waiver Period Until Sept. 18
--------------------------------------------------------
Lenders under Novelis Inc.'s Credit Agreement have agreed to
extend until Sept. 18, 2006, the deadline for filing the
company's 2005 Annual Report on Form 10-K and its 2006 first
quarter report on Form 10-Q.

The filing deadlines for these two reports had become
accelerated to Aug. 18, 2006, following the receipt of an
effective notice of default on July 21, in connection with the
Company's Senior Notes due 2015.

The Credit Agreement lenders also agreed to extend the deadlines
for filing the Company's 2006 second and third quarter reports
on Form 10-Q.  The second quarter report will be due the earlier
of 59 days after the receipt of a new notice of default, should
one occur in connection with the second quarter filings, and
Nov. 30, 2006.

The third quarter report will be due the earlier of 30 days
after the receipt of a new notice of default, should one occur
in connection with the third quarter filings, and Dec. 29, 2006.

                       About Novelis

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

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

                        *    *    *

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

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


PETROLEO BRASILEIRO: Continues Gas Price Talks with YPFB
--------------------------------------------------------
Petroleo Brasileiro SA and Yacimientos Petroliferos Fiscales
Bolivianos have decided to extend the initial negotiation
deadline regarding the request the Bolivian company made for the
review of the Gas Purchase and Sale Agreement price clause for
another 60 days.

The decision was made during a meeting that was wrapped-up
Friday, in Rio de Janeiro, and held within the meeting schedule
that was agreed on with the Bolivian state-owned company.

The new deadline will allow Petrobras and YPFB to deepen their
joint efforts in the search for mutually acceptable solutions
for the issue.

The next meeting between the companies is scheduled for
September 14 in Bolivia.

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: Earnings Up 37% in First Half of 2006
----------------------------------------------------------
Petroleo Brasileiro S.A. aka Petrobras reports its second
quarter 2006 results.

                         Highlights

   -- Earnings up 30% on 1H 2006;

   -- Oil production in Brazil rose 7%;

   -- Byproducts in Brazil grew 7%;

   -- Investments reach BRL13.6 billion, a 24% spike;

   -- Taxes and participations reached BRL33.8 billion, a 27%
      increase; and

   -- Market value rose 60% in a year, to BRL202.6 billion.

The positive result reflects higher prices and increased
production in Brazil.

In the first half of 2006, the consolidated net profit was
BRL13.6 billion, up 37% compared with the first half of 2005,
supported by the 7% growth in domestic oil and LNG production.
The net operating income totaled BRL73.8 billion in the first
half of the year, 19% more than same period last year mainly
because of the increased oil and byproduct prices in the
domestic and international markets.

In the second quarter 2006, net profit surged 41% compared to
Q2 2005, to BRL7 billion.  The net operating income totaled
BRL37.9 billion, a 17% improvement on the same period in 2005,
also because of the higher international and domestic prices.
Oil and LNG production in Brazil grew only 2% between Q2 2005
and Q2 2006 because of the concentration of programmed
maintenance shutdowns at nine production units in May and June
2006, despite operations having gone online at the P-50
(Albacora) and FPSO Capixaba (Golfinho) units.

The net revenue increase in the first half of 2006 (19%), and in
the second quarter of 2006(14%), on the same period of 2005, was
accompanied by a hike in sold product costs (19% and18%,
respectively), following global market trends.  Government
participation expenses is also spiked (29% and 28%,
respectively), because of the surge in domestic oil and natural
gas production in the new high productivity fields such as
Barracuda and Caratinga, and due to the higher reference prices
the NPA used to calculate spatial participation aliquots, which
are tied to the Brent oil price, the quotation for which rose
sharply in the period.

The prices of the oil the company produced in Brazil kept up
with the international market, taking the quality discounts
applied to heavy oil into account.  The price to transfer and
export the crude oil produced in Brazil (predominantly heavy)
surged 38% between the first half of 2005 and the first half of
2006, and 35% between the second quarters of the same years,
reaching US$55.92and US$58.20, respectively.  In the same
period, the average light Brent-type oil price rose 33% and35%
in American Dollars, topping out at US$65.69 and US$69.62,
respectively.

The company maintained its price policy in line with the
international market on the midterm, avoiding figuring in
seasonal or geographical variations.  Average byproduct sale
realization prices, in Reais, rose 13% and 11%, respectively,
between the first half of 2005 and the same period of 2006, as
well as in both years' second quarters.  Considering the
stronger Real in these periods, 15% and 12%, respectively, these
increases kept pace with international crude oil prices.

Operational highlights that also affected net profit in the
first half of 2006:

   -- Better financial results, due to a reduction in the losses
      with investments tied to the Dollar, kept as hedge for the
      debt in foreign exchange, due to the weaker Real compared
      to the Dollar (8%) in the first half of 2006 compared with
      the first half of 2005 (11%), and because of the higher
      profitability of the funds kept abroad due to the lower
      Brazilian risk rates;

   -- Closing of the hedge agreements on PESA's billing; and

   -- Increased income tax and social contribution provision on
      profit, totaling BRL2,858 million, due to the higher basic
      net profit for taxation and as a result of the
      provisioning of interest on self-owned capital in
      June/2005, which increased the period's profitability.

        Investments Strengthen Strategic and Business Goals

In the first half of 2006, Petrobras invested BRL13,644 billion
(24% above the same period in the previous year), BRL7,195
billion of which developing its oil and natural gas production
capacity in Brazil.

              Growth in Production and Refining

Domestic oil production in the first half of 2006 increased 7%
compared with the same period in 2005, mainly due to production
being kicked off at the P-43 platform (Barracuda), in December
2004, at the P-48 platform (Caratinga), in February 2005, at the
P-50 platform (Albacora Leste), in April 2006, and at the FPSO-
Capixaba (Golfinho), in May 2006.  Production was stabilized at
platforms P-43 and P-48 as of June 2005.

Only taking the second quarter 2006 into account, domestic oil
production had a slight increase (2%) on the production achieved
in the second quarter 2005.  New production at the units that
went online was offset by the programmed shutdowns, especially
in June 2006.  These units have already gone back into
operation.  It was also offset by decreased international
production (-15%) due to the migration of the operational
agreements in Venezuela to the mixed company mode with the
majority participation of PDVSA.

In the refining area in Brazil, the increased byproduct
production, up 7% from the first half of 2005 to the first half
of 2006, was possible thanks to the better usage of the
Brazilian installed capacity (91% against 85%), while domestic
oil usage remained high (80%) as a result of the investments
made in the refining park.

             Net Exports of Oil and by Products

In the first half of 2006, there was a 76,000 barrel-per-day
(54,000 barrels per day in the first half of 2005) surplus in
the oil and byproduct trade balance.  The period's oil exports
only weren't higher because of the new producing unit stock
accumulation, and due to the increase in byproduct production,
reached nearly entirely using domestic oil processing.
Byproduct exports were affected by a reduction in the percentage
of ethanol added to automotive gasoline, which limited the
product's availability for exports.

In financial terms, there was a US$176 million surplus, with
US$5,501 billion in exports and US$5,325 in imports.  These
results can be compared to a US$1,65 million deficit in the
first half of 2005, when exports totaled US$3,738 billion
against US$3,903 billion in imports.

According to Bloomberg, Petrobras CEO Jose Sergio Gabrielli
disclosed that the company intends to utilize the profits it has
earned to invest in its US$87.1 billion 2007-2011 plan.

Mr. Gabrielli aims to make Petrobras an exporter by year-end
with its rising output and to more than double oil production by
2015 to 4.5 million barrels per day, Bloomberg says.

"The story continues to be based on rising oil production and
higher fuel prices," Monica Araujo, oil analyst at BES
Securities in Rio de Janeiro told Bloomberg.  "This allows
Petrobras to continue its transformation."

Ms. Araujo told Bloomberg that Petrobras gets more from its
exports than from what its sells in the local scene with the
company being able to charge more abroad.

Bloomberg reports that Brazil's crude oil exports have almost
equaled its imports, with Petrobras' rising output mainly from
offshore fields near Rio de Janeiro.  With this occurrence, the
company cannot do all the refining of heavy crude, obliging it
to sell some internationally to be able to buy more expensive
grades to develop the Brazilian refineries' performance.

                  Refinery and Lifting Costs

Unit lifting costs in Brazil, without government participation,
rose 9% on the same period in 2005.  Discounting the effects of
a stronger Real, up 15%, associated with the percentage of costs
in domestic currency, the unit lifting cost was 8% lower
compared to the first half of 2005, basically because of the
increased oil and gas production, especially in the Barracuda,
Caratinga, Albacora Leste and Golfinho fields.

Taking government holdings into account, there was a 27%
increase compared to the first half of 2005 because of the
higher average domestic oil reference price for participation
calculation.  This was possible due to the spike in
international oil prices, after production stability as of June
2005, increasing royalty and special participation incidence
levels.

In the first half of 2006, the international lifting cost rose
15% on the same period in 2005 because of the increased material
and third party services costs in the Argentina unit.

The unit refining cost in Brazil in the first half of 2006 rose
by 8% compared with the same period last year.  Discounting the
higher value of the Real, associated to the expense percentages
in domestic currency in this activity, the refining cost was 6%
lower, mainly because of the increase in the number of
programmed shutdowns in the previous period and due to the
higher operating reliability throughout the productive chain.

               Shares Outperform Market Averages

In the first half of the year, common and preferred shares rose
17.2% and 16.0%, respectively, while Ibovespa recorded gains of
9.5%, demonstrating the positive performance Petrobras' shares
had was determined by the hike oil had in the international
market and because of the higher liquidity, while the Sao Paulo
Stock Exchange had a lower increase in the period because of the
volatility that struck the global share market, particularly the
emerging ones.

Petrobras' ADR performance was in line with local shares --
common shares rose 25.3%, while the preferred ones surged 24.0%.
In the same period, the Dow Jones went up 4.0%. The company's
market value reached BRL202.6 billion on June 30, 2006, a 60%
gain on June 30, 2005.
'
             Total Consolidated Debt Reduction

Total consolidated debt, on June 20, 2006, was BRL20.8 billion,
a 3% fall on March 31, 2006 (BRL21.5 billion), mainly reflecting
a reduction in financing amortization.  This performance
resulted in a 2% reduction in financial leverage, and in a 3%
fall in capital structure percentages.

         Economic Contribution and Government Holdings

Petrobras' economic contribution to Brazil, measured by taxes,
charges, and social contributions, totaled BRL25.9 billion in
the first half of 2006, up 26% on the same period in 2005.  In
the second quarter, the contribution added up to BRL13.8
billion, 37% higher than the value contributed in the same
period in 2005.

Government holdings in Brazil in the first half of 2006 rose 29%
compared with the first half of 2005, reflecting the 33% spike
in the reference price for domestic oil denominated in Reais
(44% in Dollars), reaching the average price per barrel of
BRL115.60 (US$53.43) compared with BRL87.04 (US$37.03) per
barrel in the first half of 2005, tied to the Brent quotation in
the international market.

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: Inks Offshore Oil Study With Galp & Partex
---------------------------------------------------------------
Petroleo Brasileiro S.A. aka Petrobras signed an agreement with
Portuguese companies Galp and Partex, on Aug. 11, 2006, for
joint studies in deep waters off of the Western coast of
Portugal.  The purpose of the studies is to evaluate the area's
oil possibilities for potential joint exploration and production
work.

The first phase of the work, which involves evaluating the
available geophysical data in Portugal, and its special
reprocessing in Brazil, foresees investments in the order of
US$5 million as of September.

The agreement was signed by Petrobras' President, Jose Sergio
Gabrielli, Galp's Executive Commission's president, Marques
Goncalves, and by Partex' president in Brazil, Alvaro Ribeiro.
The Prime Minister of Portugal, Jose Socrates de Cavalho Pinto
de Souza, Minister Dilma Roussef, Brazil's Chief of Staff, and
Brazil's Treasury Minister, Guido Mantega, also participated in
the ceremony.

The partnership also intends to involve Portugal's geological
academic community, aiming at transferring knowledge.  Petrobras
will be the study operator because of its technological
qualifications in deep and ultradeep exploration and production,
both in Brazil and abroad.  Each company's participation in this
partnership will be:

   -- 50% for Petrobras,
   -- 30% for Galp, and
   -- 20% for Partex.

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+'


UNIAO DE BANCOS: Posts First Semester Net Income of BRL1.068 Bln
----------------------------------------------------------------
In the first half of this year, Uniao de Bancos Brasileiros
S.A.'s net income was BRL1,068 million, up 25.1% from 1H05.
Unibanco posted a 2Q06 net income of BRL548 million, 21.0%
higher than in 2Q05 and a 5.4% increase compared to 1Q06.
Operating income for the quarter reached BRL869 million, an
increase of 4.2% and 26.9% in comparison with 1Q06 and 2Q05,
respectively.  The annualized return on average equity reached
24.7% in 2Q06.

The efficiency ratio reached 47.5%, a 530 b.p. decrease from
2Q05, confirming the trend of continuous improvement achieved
during recent years.  In 1H06, the 540 b.p. improvement in
comparison to 1H05 is mainly explained by a 25.4% growth in
revenues and supported by strict budgetary discipline.

Stockholders' equity reached BRL9,816 million in June 2006, up
13.3% from June 2005.

Unibanco's consolidated assets totaled BRL98,217 million at the
end of June, 2006, up 18.5% from June, 2005.

The loan portfolio increased 5.7% from March, 2006, higher than
the 5.2% growth posted by the Brazilian National Financial
System.  Since June 2005, credit operations grew 19.3%, despite
a 7.9% US currency devaluation against the Brazilian Real.

In the individuals credit operations, the highlight was the
evolution of the credit card portfolio, which posted a 42.9%
growth over the past 12 months.

Total deposits and assets under management stood at BRL79,858
million in June 2006, BRL41,081 million of which arose from
assets under management.

The continuous improvement in the deposit mix is explained by a
19.6% and 7.7% increase in core deposits when compared to June
2005 and March 2006, respectively.  The highlight was the 65.7%
growth in SuperPoupe over the past 12 months.

Unibanco remains satisfied and confident with the ongoing
results and the continuous improvement of its performance.

The earnings conference call will take place tomorrow, August
11th. For more information and to download the complete
documents, please access Unibanco's Investor Relations website.

                        *    *    *

Moody's Investors Service placed on Aug. 1, 2006, Uniao de
Bancos Brasileiros S.A. -- Unibanco's B1 long-term foreign
currency deposits under review for possible upgrade.

Standard & Poor's Ratings Services affirmed on July 27, 2006,
its 'BB/B' counterparty credit rating on Unibanco.  The outlook
is stable.

"The long-term counterparty credit rating on Unibanco
incorporates the implicit risks of operating in the Brazilian
market, including the potential worsening in asset quality when
economic conditions deteriorate, and the bank's challenge to
keep improving its efficiency ratio, which is still worse than
that of its major retail peers in Brazil and Latin America,"
said Standard & Poor's credit analyst Daniel Araujo.


USINAS SIDERURGICAS: Posts BRL1 Bln Net Profit in First Semester
----------------------------------------------------------------
Usinas Siderurgicas de Minas Gerais S.A. -- Usiminas --
disclosed its first quarter 2006 results.

"Our forecast since the beginning of 2006 was that the global
steel market would reverse the decline seen in 2005.  The
recovery has been verified in the domestic market, even in the
face of new turbulence in the international financial market,
which the country has been able to overcome with maturity.  In
the same way, conditions abroad have proven much more favorable.
Steel demand remained positive and prices in gradual increase,
driven by growth in the global economy and inflation and
interest rates at low levels in the main economies, in spite of
some pressure from the U.S.," Usiminas CEO Rinaldo Campos Soares
said.

"We are experiencing a new growth phase in the global steel
industry, mainly characterized by Chinese demand.  We also saw
continuation of the consolidation process, a transnational
movement, which is a consequence of globalization, although at a
slow pace.

"In view of the constantly changing environment and multiple
variables, the sustainability of the Usiminas System and its
position of leadership in the domestic market are increasingly
evidence, and the consistent results in the period encourage us
to continue to go forward.  We recorded expressive growth in
comparison to the first quarter of this year.  Domestic market
sales already account for 69% of the total sold in 2Q06.
Accumulated net revenues in the 1st half were BRL 6.0 billion,
we registered net profit of BRL 1.0 billion and reached
operating cash generation, measured by EBITDA, of BRL 2.0
billion.

"Our mills are operating at a stable rate, and we seek constant
advance.  We are implementing an action plan composed of several
operational measures aimed to reduce costs, improve processes
and increase revenues in order to generate more value to the
business.

"In this continuous evolutionary process, we note that Brazilian
steel production is on a growth path, and Usiminas is actively
participating through a vigorous investment program underway,
which focuses on strengthening and maximizing the existing
operations and future growth.

"We can affirm that our business strategy is perfectly aligned
with the trends derived from the significant transformations we
are watching. We remain confident in the strengthening of the
Usiminas System," Mr. Soares concluded.

                       About Usiminas

Headquartered in Minas Gerais, Brazil, Usiminas is among the
world's 20 largest steel manufacturing complexes, with a
production capacity of approximately 10 million tons of steel.
Usiminas System companies produces galvanized and non-coated
flat steel products for the automotive, small and large diameter
pipe, civil construction, hydro-electronic, rerolling,
agriculture, and road machinery industries. Brazil consumes 80%
of its products and the company's largest export markets are the
U.S. and Latin America.

                        *    *    *

Standard & Poor's Ratings Services affirmed on June 7, 2006, its
'BB+' long-term corporate credit rating on Brazil-based steel
maker Usinas Siderurgicas de Minas Gerais S.A. -- Usiminas.  At
the same time, Standard & Poor's assigned its 'BB+' senior
unsecured debt rating to the forthcoming US$200 million Global
MTNs due June 2016 to be issued by Cosipa Commercial Ltd.  The
outlook on the corporate credit rating is stable.

                        *    *    *

Moody's Investors Service assigned on June 7, 2006, a Ba2
foreign currency rating to the proposed senior unsecured bonds
to be issued by Cosipa Commercial Ltd., a subsidiary of
Companhia Siderurgica Paulista -- Cosipa based on the Cayman
Islands, in the amount of approximately US$200 million with
bullet maturity in 2016, under the US$500 million Medium Term
Notes Program of Usinas Siderurgicas de Minas Gerais S.A. --
Usiminas and Cosipa.  The rating outlook is stable.


* BRAZIL: Fitch Discusses Payroll Deductible Loans
--------------------------------------------------
In Brazil, a wide variety of assets may be classified as
consumer loans from a broad spectrum of originators, ranging
from banks, financial companies and retail businesses.  While
all these loan types generally seek the basic common goal of
financing individual consumption, this article will focus on the
subset of consumer loans that are secured by deductions from
payroll and social security benefit payments that is known as
credito consignado.

The purpose of this article by Jayme Bartling is to provide
investors with a comprehensive understanding of the primary
risks and mitigating factors involving this secured consumer
loan asset as it embarks on its fifth year within the local
securitization landscape.  Henceforth, payroll and social
security benefit loans will be jointly referred to as payroll
loans.

Fitch believes the increasing maturity of the payroll deductible
loan origination market will continue to benefit highly rated
securitization structures, which have already become a
predominant asset in Brazil's local securitization market.
These transactions became important and stable alternative
sources of funding for small and medium-sized banks in moments
of liquidity crises, as experienced during the Banco Santos
Central Bank intervention in 2004.  To date, virtually all main
bank originators of payroll loans have securitized portions of
their portfolios via Fundos de Investimentos em Direitos
Creditorios or FIDC or receivables funds, deemed as a valid
special-purpose vehicle.

Since the beginning of the local securitization market in 2002,
payroll deductible loan securitizations have represented at
minimum one-fourth of annual issuance volumes.  In expanding
payroll deductible loans to social security beneficiaries in
2004, these social security based loans have come to represent
nearly 40% of total payroll deductible loan origination.

Historically, Brazilian consumer credit for individuals has been
undermined by several factors, which include high interest rates
and lack of borrower sophistication.  In 2005, total credit
origination was approximately BRL623.9 billion (US$287.2
billion), representing 31.6% of GDP. Consumer credit reached
BRL199.2 billion (US$91.7 billion), of which approximately BRL35
billion was in the form of payroll deductible loans.  This
segment has more than tripled over the past two years from an
estimated BRL10 billion in 2003, ranking second in size only to
vehicle financings.  Despite such significant growth in payroll
deductible loans, it is estimated that more than 60% of
borrowers used the loan proceeds to refinance other existing
debts, thereby reducing its effects on overall consumer credit
growth.

                         Background

Small and medium-sized banks began origination of payroll loans
as early as 1997 to state and municipal public servants, and
loans were only granted to municipal and state public servants
supported by laws in those applicable jurisdictions.  In
December 2003, federal law permitted payroll loans to federal
public servants and this law was extended to private sector
company employees.  This legislation allows any employee to
enter into a consumer loan and have payments deducted directly
from monthly salaries.

In order to grant payroll loans to public servants, the
originating banks established operating agreements, known as
codigo proprio, with many municipal, state and federal
governments, which is governed by each respective law.  The
consignment of state and municipal public servant salaries is
governed and regulated by state and municipal decrees.  Federal
public servant salary consignment is governed by federal decree.
Items that may be retained from salary are generally categorized
into two specific groups:

   -- compulsory and
   -- noncompulsory.

Compulsory items include:

   -- income taxes,
   -- social security contributions,
   -- contribution to pension plans,
   -- child/marital support and
   -- other legal garnishments.

Noncompulsory items include:

   -- association fees,
   -- union fees,
   -- life and health insurance premiums, and
   -- monthly payments of loans granted by the accredited
      financial institution.

Compulsory items have a senior priority in receipt to the
detriment to noncompulsory items.  After considering compulsory
items, originating banks are permitted to grant loans with
monthly payments that do not exceed an established percentage of
disposable income (generally 30%).

            Social Security Beneficiaries (INSS)

In September 2004, Law 10.953 authorized qualifying banks to
grant consumer loans to social security beneficiaries of the
Instituto Nacional do Seguro Social or INSS.  The payments are
deducted from monthly benefit payments.  INSS loan origination
experienced substantial growth in 2005, reaching BRL14 billion
in April 2006.  Of a total 19 million retirees and pensioners
registered in the INSS system, 5.4 million have already secured
loans from one of the 41 banks authorized to grant such credit.

INSS loan origination follows a standardized regulation
established by the INSS, a federal entity related to the
Ministry of Social Security and Assistance.  Loans may not
exceed 36 months, with deductions limited to 30% of the net
benefit amount.  Furthermore, originating banks are prohibited
from charging loan fees.

As Fitch has publicly stated in previous reports and articles,
INSS loans are subject to political and regulatory risks.
Recent regulatory efforts have capped interest rates for these
loans and abolished assessments of loan fees assessed by
originating banks.  Although well-structured and with clear
legal precedence, Fitch views INSS loans to be exposed to
greater political and regulatory risks than public servant
payroll deductible loans.

                    Understanding Key Risk

                         Concerns

Fitch identifies several key risks in payroll deductible loan
securitizations that investors must give attention in or to
achieve highly rated structured transactions.  These risks
include:

   -- commingling and servicing risks,
   -- delinquency and loss,
   -- liquidity,
   -- interest rate mismatch and
   -- prepayment.

Although these risks are not different from other consumer loan
securitizations, several risks specific to payroll deductible
loan securitizations take on differing elements.

                   Commingling and Servicer Risks

While the originating bank generally plays a key role in the
servicing of delinquent loan payments in most transactions, the
level of commingling risk of the cash flows may vary.
Agreements (e.g., codigos proprios) between banks and
subnational entities may contain certain restrictions as to the
possibility of redirecting securitized loan payments to accounts
other than those of the originating bank.  In such cases, any
cash collections are made by the subnational entity into a
specific account at the originating bank.  These collections are
then immediately swept and transferred to the transaction's bank
account.  As this cash flow stream may present intraday transfer
risks, Fitch may require greater liquidity measures within the
transaction's structure to account for potential servicer
disruptions (e.g., intervention) of lowly rated originating bank
compared with the rating of the transaction.

In agreements that have no such restriction, all payments from
the subnational entity may be made directly to a collection
account domiciled at a designated collection agent (e.g., a
highly rated financial institution) in which payments of loans
sold to the transaction are identified and separated from those
owed to the originating bank.

                   Delinquency and Liquidity

Delinquency behavior within the 30-, 60- and 90-day buckets is
generally influenced by delays by the paying subnational
entities in transferring the deducted proceeds to the
transaction's collection account.  Smaller delays may be
attributable to processing lead times of deductions beyond the
payroll date.  However, Fitch views historical rises in
delinquency rates beyond 30 days in a given portfolio as a
possible consequence of momentary liquidity crises of
subnational entities' financial/economic conditions.  Fitch sees
such potential subnational entity-related liquidity issues in
meeting full and timely amortization payments to be a greater
driver of creditenhancement levels, rather than chargeoffs.

Therefore, in addition to analyzing historical payment data,
Fitch seeks to evaluate the underlying subnational entities'
credit and liquidity risk profiles in transactions with a
concentrated pool of subnational entities.

                         Chargeoffs

Historical portfolio losses have been predominantly driven by
borrower defaults due to death and disability, employment
termination or marital separations, all of which reduces
disposable income for deductions. Albeit a short-track history,
Fitch has observed that 180-day chargeoffs remain less than 3%
of the total portfolio balance.  Higher charge-off rates that
have been observed can be influenced by the level of automation
of a subnational entity's payroll functions.  Many
subnational entities still utilize manual forms of computing
payrolls and deductions, which may result in errors in
calculating consignable disposable income at the time the loan
is originated.

                   Interest Rate Mismatch

Payroll deductible loans yield a fixed rate of interest, which
generally services a floating-rate bearing coupon on the
securitization's security issuance.  Therefore, it is important
that available credit enhancement is sufficient to adequately
absorb adverse movements in floating interest rates.  Also,
transactions may be exposed to compression of portfolio yields
in an increasingly competitive interest rate environment as new
loans acquired over a transaction's revolving period obtain
lower gross yields.

                      Prepayment Risks

Payroll deductible loan origination has become increasingly
competitive among banks that operate within this market niche.
As a result, market participants have repeatedly extended loan
maturities and engaged in loan refinancing campaigns to retain
existing borrowers and obtain market share.  In response, Fitch
has observed a rise in prepayment rates on securitized
portfolios from low-single-digit levels to more than 50% annual
rates.

Most prepayment behavior that has been observed in this asset
class is attributed to refinancing campaigns that attempt to
retain the respective bank's participation in the borrower's
disposable income, followed by extension in loan maturities.
While a well-structured transaction is not negatively affected
by prepayment rates, prepayment risk can have a detrimental
effect when portfolios are purchased at a significant premium.
Generally, banks seek to securitize portfolios at a minimum
premium from their par value in order to compensate for loan
origination costs (commissions, etc.), which can reach as much
as 8%-12% of the loan amount.  In such a situation, only a
portion of the gross loan portfolio yield is sold to the
securitization, resulting in a lower available gross excess
spread.  Furthermore, in acquiring a loan portfolio at a premium
above compensating origination costs, the securitization is
ultimately anticipating financial revenue to the originating
bank.

Therefore, depending upon the amount of premium paid for
acquiring the loans, as prepayments occur, excess spread to be
generated from the loan is forgone, in addition to the increased
potential for loss of investor principal.  Prepayment rates in
portfolios of INSS loans have experienced significantly lower
rates due primarily to their shorter track record in the market
and greater difficulty for borrowers to refinance an existing
loan.

Different from loans to public servants, INSS loans, which are
prepaid, may take up to 15 days before the new loan is granted
in its place. Nonetheless, Fitch sees that recent regulation for
INSS loans that have reduced monthly interest rates by capping
at 2.9% (40.9% APR) will result in a potential increase from
existing prepayment levels.

Prepayment risk can be reduced in transactions due their
revolving nature of reinvesting any excess cash collections
and/or prepayments into newly originated loans, thus reducing
potential carrying costs. However, prepayment of loans acquired
at a premium will underestimate a transaction's credit-
enhancement levels of excess spread and subordination.




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


ABF CUBE: Deadline for Filing of Proofs of Claim Is on Sept. 7
--------------------------------------------------------------
ABF Cube Limited's creditors are required to submit proofs of
claim by Sept. 7, 2006, to the company's liquidators:

   Chris Marett
   Joshua Grant
   Maples Finance Limited
   P.O. Box 1093, 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.

ABF Cube's shareholders agreed on July 17, 2006, for the
company's voluntary liquidation under Section 135 of the
Companies Law (2004 Revision) of the Cayman Islands.


ADVISORY EUROPEAN: Proofs of Claim Filing Deadline Is on Sept. 7
----------------------------------------------------------------
Advisory European (General Partner) Inc.'s creditors are
required to submit proofs of claim by Sept. 7, 2006, to the
company's liquidators:

   Richard Gordon
   Mike Hughes
   Maples Finance Limited
   P.O. Box 1093, 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.

Advisory European's shareholders agreed on July 20, 2006, for
the company's voluntary liquidation under Section 135 of the
Companies Law (2004 Revision) of the Cayman Islands.


ASIA PROJECT: Creditors Must File Proofs of Claim by Sept. 7
------------------------------------------------------------
Asia Project Holdings I Co., Ltd.'s creditors are required to
submit proofs of claim by Sept. 7, 2006, to the company's
liquidators:

   Guy Major
   Emile Small
   Maples Finance Limited
   P.O. Box 1093, 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.

Asia Project'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.


AVEBURY FINANCE: Last Day to File Proofs of Claim Is on Sept. 7
---------------------------------------------------------------
Avebury Finance CDO Limited's creditors are required to submit
proofs of claim by Sept. 7, 2006, to the company's liquidators:

   Phillipa White
   Joshua Grant
   Maples Finance Limited
   P.O. Box 1093, 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.

Avebury Finance'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.


CASCADIA II: Fitch Expects to Assign BB+ Rating on Notes
--------------------------------------------------------
Fitch Ratings expects to assign a 'BB+' rating to the notes to
be issued by Cascadia II.  The risk structure of the contract is
parametric.  Under the counterparty contract, Cascadia II will
reimburse FM Global if, during the next three years, earthquakes
of various magnitudes occur in the Pacific Northwest portion of
the United States or in portions of British Columbia, Canada.
Proceeds from the proposed notes issue effectively collateralize
Cascadia II's obligations under the counterparty contract.

Cascadia II Limited is a special-purpose, Cayman
Islands-exempted company formed solely to issue the variable
rate notes, enter into a counterparty contract with Factory
Mutual Insurance Company aka FM Global and conduct activities
related to the notes' issuance.  FM Global, a U.S.-domiciled
insurer, and its subsidiaries write commercial property
insurance worldwide.

Fitch's ratings of the notes address the likelihood that
investors will receive payment of interest and principal in
accordance with terms of the transaction documents.  Fitch's
rating process included a review of the methodology and models
used by the modeling firm EQECAT, Inc., the loss assessment
probabilities resulting from that analysis, and the legal and
structural soundness of the notes.

Fitch's ratings are based on risk-adjusted modeled results where
the transaction's base-case modeled results were adjusted to
consider uncertainty associated with the model's frequency and
severity assumptions and methodology.  Fitch then compared these
risk adjusted modeled results with the catastrophe bond rating
grid as part of its overall rating process.  Fitch's analysis of
the transaction's structure included a review of Cascadia II's
organizational documents, contracts between Cascadia II and
other parties, and various legal opinions.

               Factory Mutual Insurance Company

FM Global is a Rhode Island-domiciled mutual insurance company
that traces its roots back over 170 years.  The company, along
with its subsidiaries, specializes in providing engineered loss-
prevention services and high-limit commercial property coverage
to its member clients worldwide.

Fitch believes that the company has a strong and unique
franchise largely derived from its engineering capabilities.
The organization employs more than 1,500 engineers who are
engaged in a wide variety of roles.  Fitch considers FM Global
the industry leader in incorporating engineering expertise into
insurance products and underwriting processes.

Fitch rates FM Globalfs insurer financial strength 'AA'
reflecting the company's strong competitive position in the
market for highly protected risks, engineering and underwriting
expertise, and solid balance sheet.

Fitch evaluates FM Global's underwriting results on a cumulative
basis over three-to-five-year periods because of the year-to-
year volatility inherent in insuring large-limit commercial
property risks.  The company's cumulative three- and five-year
calendar year combined ratios through year-end 2005 were 73.1%
and 80.5%, respectively, which Fitch considers to be very
strong.  The company's motivations for entering into this
transaction include enhancing and diversifying its reinsurance
capacity while mitigating potential coverage and collection
issues.

                   The Counterparty Contract

Concurrent with the securities' issuance, Cascadia II will enter
into a three-year financial contract with FM Global that
provides top-level catastrophe protection equivalent in function
to reinsurance coverage, although not in the form of a
traditional reinsurance contract.

The contract provides for up to US$300 million in payments to FM
Global following an earthquake of a pre-defined magnitude in a
pre-defined area.  In exchange for these potential
reimbursements, FM Global will make quarterly payments to
Cascadia II.  Cascadia II will use these counter-party payments
and bank payments related to the interest on the notes to fund
interest payments on the notes.

The primary risk to Cascadia's noteholders is an earthquake
occurring in specific areas of the northwest portion of the U.S.
and portions of British Columbia in southwestern Canada over the
next three years.  These specific areas are defined by latitude
and longitude measurements and are divided into three bounding
boxes:

    -- A (Northern California),
    -- B (primarily Pacific Northwest U.S.), and
    -- C (Southwestern British Columbia).

These zones and their respective latitude and longitude
measurements are depicted in the table at the top of page 3.
The securities are structured such that the notes'principal lost
from a given earthquake is determined by the earthquake's
geographic location and moment magnitude (Mw).  In addition, the
depth of the hypocenter of an earthquake (the initial point of
an earthquake's rupture within the earth, which is directly
below the epicenter) must not exceed 200 kilometers.

Cascadia II's risk structure is parametric, in that actual
insured losses do not form the basis for the losses on the
financial contract.

                     Calculation Agent

As calculation agent, EQECAT will perform certain services
including the determination if an event has occurred, and the
calculation of any event loss amounts, loss payments and
principal reductions.

EQECAT is required to calculate any losses to the notes if an
earthquake of a pre-defined magnitude occurs in a pre-defined
area and to report the losses to Cascadia II and to the
indenture trustee. EQECAT must provide these calculated losses
no later than 90 days after receiving a written request from FM
Global.  Cascadia II will pay EQECAT a fee for these services.

                         Deposit Bank

Cascadia II will enter into a bank deposit agreement with
respect to the proceeds in the collateral account with Wells
Fargo Bank, N.A. (long-term deposit rating of 'AA+' by Fitch).

The deposit bank is obligated to pay to the indenture trustee,
on behalf of Cascadia II, interest in an amount equal to three-
month LIBOR (minus the bank fee) of the net outstanding
principal amount.

                        Administrator

HSBC Financial Services (Cayman) Limited (HSBC) will act as
administrator and will serve as Cascadia II's principal
representative in the Cayman Islands.  HSBC will provide:

   -- general banking services,

   -- maintenance of corporate affairs,

   -- recordkeeping,

   -- filing and correspondence with any regulatory authorities
      and correspondence relating to the notes,

   -- counterparty contract and

   -- swap.

                         EQECAT, Inc.

EQECAT, founded in 1981, is a wholly owned subsidiary of ABSG
Consulting, Inc., headquartered in Houston, Texas, and one of
the largest loss control companies in the United States EQECAT
is headquartered in Oakland, Calif., with offices in Irvine,
Calif., Philadelphia, Pa., the United Kingdom, and Paris,
France.  The firm has a professional staff that includes
engineers, geologists, seismologists, meteorologists,
economists, mathematicians and finance professionals.

EQECAT is a leading provider of risk analysis and consulting
services to the insurance and reinsurance industry.  The company
has provided risk analysis services for 18 catastrophe-linked
bond issues.  Many of the insurance companies rated by Fitch use
EQECAT software to model their exposure to potential
catastrophe-related losses and to evaluate their reinsurance
needs.

                      Modeling Overview

Fitch believes that EQECAT's models form a reasonable basis for
estimating the notes' loss frequency and severity.  In addition,
Fitch believes that, as a quantitative tool, EQECAT's models are
on par with many others we use to rate securities in other
industries.

                       Earthquake Model

EQECAT utilized its seismic risk model to develop the modeled
loss statistics.  This included USQUAKE version 6.1 for U.S.
risks and a separate software model for risks in Southwestern
Canada.

An earthquake is the vibration of the earth's surface (including
the ocean bottom) that follows a sudden release of seismic
strain energy within the earth's crust that has built up over
time.  This release of strain energy is typically generated by
the displacement of large rock masses along a fracture or fault
within the earth.  The ground shaking at a particular site
depends on the size of the earthquake, the distance from the
source of the earthquake and the local soil conditions at the
site.  EQECAT uses a set of parameters, varied statistically, to
produce a stochastic catalog of simulated earthquakes.  Fitch
has previously analyzed several transactions that used EQECAT's
seismic risk model, including Cascadia Limited.  Only one known
historical event-the 1700 Great Cascadia earthquake (Box B) with
a moment magnitude of approxmately 9.0-would have resulted in a
loss to the notes (100% loss).

                    Fitch's Rating Process

As part of its rating process, Fitch evaluates the transaction's
first-dollar loss (FL) or frequency probability, and expected
loss (EL) or severity.  The FL probability measures the
likelihood that security holders will incur any loss on the
notes.  The EL statistic measures the average loss noteholders
can expect to incur, and is a function of loss severity and
event frequency.

Fitch's catastrophe bond rating criteria emphasizes EL
statistics over FL statistics, particularly in the non-
investment-grade portion of the rating scale.  Fitch also bases
its ratings on annualized loss statistics, regardless of the
number of years in the transaction.

The parametric risk structure of the notes helps to simplify the
scope of risk assessment; however, it also forces FM Global to
bear the basis risk resulting from potential differences between
their actual losses from covered events and payments from the
financial contract tied to parametric triggers.

This transaction, like all catastrophe bonds, contains an
element of modeling uncertainty.  Fitch believes the EQECAT
models are well designed.  However, Fitch also believes that any
quantitative tool used to simulate future events is subject to
inherent uncertainty.

In assigning its expected ratings, Fitch stressed base case
model outputs to account for modeling uncertainty.  Fitch's
proprietary stress factors for modeling uncertainty vary by
peril and reflect the widespread use and acceptance of natural
catastrophe models.

After stress testing the base-case modeled loss statistics,
Fitch compared the risk-adjusted loss statistics with our
catastrophe bond-rating grid.  Although Fitch includes the risk-
adjusted FL and EL statistics in this comparative process when
assigning a rating, the EL statistic determines the rating in
the non-investment grades.

The adjusted-loss statistics for the Cascadia II notes were
consistent with a 'BB+' rating.

                    Events of Defaults

The indenture specifies certain events of default in respect to
the rated bonds:

   -- Default for five business days or more in the payment of
      interest;

   -- Default in the payment of principal;

   -- Default of Cascadia II to observe any covenant or
      agreement that has a material adverse effect on
      noteholders;

   -- Default of Cascadia II to observe any representation or
      warranty that has a material adverse effect on
      noteholders;

   -- Filing of involuntary bankruptcy or insolvency proceedings
      in respect of Cascadia II; and

   -- Filing of voluntary bankruptcy or insolvency proceedings
      by Cascadia II.

If any of the events of default have occurred, with the
exception of the events of defaults caused by filing of
bankruptcy, either the indenture trustee or the noteholders
representing 25% of the outstanding principal amount of each
class of notes may declare the notes to be immediately due and
payable. In the case the event of default is caused by the
filing of either a voluntary or involuntary bankruptcy, both
outstanding principal and interest on the notes becomes due and
payable immediately.

                  Bank Deposit Agreement

Cascadia II will deposit the net proceeds from the notes issue
into a collateral account that will be assigned to the indenture
trustee.  The principal portion of the funds in the collateral
account will be available to satisfy, first, any obligation of
Cascadia II to FM Global under the counterparty contract, and
second, any principal repayment amounts due on the notes.

All funds in the collateral account will be invested in the bank
deposit.  The primary purpose of the bank deposit agreement is
to provide interest based on LIBOR that is consistent with the
accrual of interest on the notes.


COLLATERALISED LOAN: Proofs of Claim Must be Filed by Sept. 7
-------------------------------------------------------------
Collateralised Loan Obligations Numbered Entity 5 Limited's
creditors are required to submit proofs of claim by
Sept. 7, 2006, to the company's liquidators:

   Hugh Thompson
   Emile Small
   Maples Finance Limited
   P.O. Box 1093, 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.

Collaterised Loan's 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.


MELODY SHARE: Creditors Have Until Sept. 7 to Submit Claims
-----------------------------------------------------------
Melody Share Corp.'s creditors are required to submit proofs of
claim by Sept. 7, 2006, to the company's liquidators:

   Mark Wanless
   Liam Jones
   Maples Finance Jersey Limited
   2nd Floor Le Masurier House
   La Rue Le Masurier
   St. Helier, Jersey JE2 4YE

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.

Melody Share's shareholders agreed on July 26, 2006, for the
company's voluntary liquidation under Section 135 of the
Companies Law (2004 Revision) of the Cayman Islands.


HUB ASSET: Deadline for Proofs of Claim Filing Is Sept. 7
---------------------------------------------------------
Hub Asset Funding Limited's creditors are required to submit
proofs of claim by Sept. 7, 2006, to the company's liquidators:

   Richard Gordon
   Mike Hughes
   Maples Finance Limited
   P.O. Box 1093, 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.

Hub Asset's shareholders agreed on July 19, 2006, for the
company's voluntary liquidation under Section 135 of the
Companies Law (2004 Revision) of the Cayman Islands.


STAGE SEGREGATED: Proofs of Claim Must be Filed by Sept. 7
----------------------------------------------------------
Stage Segregated Portfolio Company Funding Corp.'s creditors are
required to submit proofs of claim by Sept. 7, 2006, to the
company's liquidators:

   Mark Wanless
   Liam Jones
   Maples Finance Jersey Limited
   2nd Floor Le Masurier House
   La Rue Le Masurier
   St. Helier, Jersey JE2 4YE

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.

Stage Segregated's shareholders agreed on July 26, 2006, for the
company's voluntary liquidation under Section 135 of the
Companies Law (2004 Revision) of the Cayman Islands.


PMA EUROPEAN: Creditors Must Present Proofs of Claim by Sept. 7
---------------------------------------------------------------
PMA European Scion Fund Limited's creditors are required to
submit proofs of claim by Sept. 7, 2006, to the company's
liquidators:

   Richard Gordon
   Mike Hughes
   Maples Finance Limited
   P.O. Box 1093, 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.

PMA European'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.


PMA EUROPEAN (MASTER): Proofs of Claim Must be Filed by Sept. 7
---------------------------------------------------------------
PMA European Scion Master Fund Limited's creditors are required
to submit proofs of claim by Sept. 7, 2006, to the company's
liquidators:

   Richard Gordon
   Mike Hughes
   Maples Finance Limited
   P.O. Box 1093, 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.

PMA European'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.




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


BBVA COLOMBIA: Plans to Make Two Acquisitions in 2006
-----------------------------------------------------
A top official of BBVA Colombia SA, a unit o f Spain's Banco
Bilbao Vizcaya Argentaria in Colombia, told Dow Jones Newswires
late last week that the firm will make two acquisitions this
year.

Dow Jones states that the acquisitions, which official described
the as significant, would be made in September and in the fourth
quarter of 2006.

"We do have plans of investments.  There is a portfolio of two
purchases that are, I think, significant, though not as
significant as Granahorrar," Luis Juango, the chief executive of
BBVA Colombia, told Dow Jones.

                        *    *    *

As reported in the Troubled Company Reporter on March 13, 2006,
Moody's Investors Service assigned a 'Ba3' long-term foreign
currency deposit rating on BBVA Colombia.  Moody's changed the
outlook to stable from negative.

                        *    *    *

As reported in the Troubled Company Reporter on June 9, 2006,
Fitch Ratings revised the Outlook on the long-term foreign
currency issuer default rating of BBVA Colombia to Positive from
Stable, after taking the same action on the sovereign foreign
currency IDR.  All other ratings remain unchanged as:

   -- Foreign currency long-term IDR: 'BB' with Outlook revised
      to Positive;

   -- Foreign currency short-term IDR: 'B';

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

   -- Local currency short-term IDR: 'B';

   -- Individual 'C/D' on Rating Watch Negative; and

   -- Support: '3'.


ECOPETROL: Will Award Contract to Upgrade Cartagena Refinery
------------------------------------------------------------
Ecopetrol, the state-run oil firm of Colombia, will award a
contract to upgrade a refinery in Cartagena by late August, Dow
Jones Newswires reports, citing Hernando Martinez, the country's
new mines and energy minister.

According to Dow Jones, the plant is the second largest in
Colombia.

The announcement will take place between Aug. 28 and Sept. 1,
Alexandra Santamaria, the press officer of Ecopetrol, told Dow
Jones.

Minister Martinez told the press, "The final process is
approaching.  Ecopetrol will make the announcement by late this
month."

The report relates that Ecopetrol pre-qualified these firms in
February:

     -- Switzerland's Glencore International AG,
     -- UK's BP,
     -- Japan's Marubeni Corp., and
     -- Brazil's Petroleo Brasileiro SA.

Ecopetrol will take into consideration which company offers the
best process to produce diesel, Dow Jones says, citing Minister
Martinez.

"That's a deciding element to select the winner.  Colombia
produces an undesirable type of diesel and the idea is improve
the kind of diesel we are producing," Minister Martinez told Dow
Jones.

Dow Jones underscores that Ecopetrol will also award the
investment contract to the firm that offers the highest capital
investment.

Isaac Yanovich, the head of Ecopetrol, had said last year that
the winning bidder would spend as much as US$800 million and
gain control of 51% of the refinery, Dow Jones notes.  Ecopetrol
will control 49% by investing no more than US$250 million.

Dow Jones emphasizes that the auction winner will create a new
firm with Ecopetrol to increase the refinery's capacity to at
least 140,000 barrels per day from 75,000 b/d.  More heavy crude
oil will also be processed at the upgraded plant.  It will also
produce low sulfur gasoline and diesel for national and
international consumption.

The Colombian government, says Dow Jones, hopes that the
refinery would be ready by the first half of 2010.

The refinery's expansion is important for Colombia.  The country
does not produce enough diesel to meet its domestic needs.
Colombia imports about 6,000 b/d of diesel from Venezuela.  It
also purchases diesel from the Dominican Republic, Dow Jones
states.

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

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


* COLOMBIA: Inks MOU to Keep Trade Benefits with Venezuela
----------------------------------------------------------
Colombia, along with other members of the Andean Community of
Nations or CAN trade group, signed a memorandum of understanding
with Venezuela to maintain programmed trade preferences, Dow
Jones Newswires reports.

Other CAN members are:

     -- Ecuador,
     -- Bolivia, and
     -- Peru.

As reported in the Troubled Company Reporter-Latin America on
April 27, 2006, Venezuela's President Hugo Chavez ratified his
withdrawal from after President Alvaro Uribe of Colombia decided
to continue negotiating a free trade deal with the US.

The memorandum would preserve the tradition of trading goods --
amounting more than US$4.7 billion -- between Venezuela and the
other countries in the group, Alfredo Fuentes, the acting
secretary of CAN, told Dow Jones.

According to the report, the memorandum states that by Oct. 30,
both sides will sign an agreement to incorporate regulations
applying to free-trade policies, in terms of:

     -- origin,
     -- safeguards,
     -- dispute settlement,
     -- sanitary standards, and
     -- barriers to trade.

The memorandum said that by Oct. 30 at the latest both sides
will sign an accord that will incorporate regulations that apply
to free-trade policies, in terms of origin, safeguards, dispute
settlement, sanitary standards and barriers to trade.

CAN also told Dow Jones that it has formed a working group that
would propose norms to regulate trade between CAN and Venezuela
and find a way to settle trade disputes.

The group has up to 60 days to make the proposal, Dow Jones
relates, citing CAN.

                        *    *    *

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

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

Fitch said the Rating Outlook is Stable.




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


* COSTA RICA: Price Increase on Basic Food Products Slow
--------------------------------------------------------
Costa Rica's National Statistics and Census Bureau told Inside
Costa Rica that increase on prices of basic food products are
slower in 2006 than in 2005.

Data from the agency show that basic food products increased 22%
in June 2005, compared with June 2004.  This year, however, the
increase through June was 11%, Inside Costa Rica relates.

This trend is favorable to the poor, analysts told Inside Costa
Rica.

                        *    *    *

Costa Rica is rated by Moody's:

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

Fitch assigned these ratings to Costa Rica:

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

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

      -- Foreign Currency LT Debt BB,
      -- Local Currency LT Debt   BB+,
      -- Foreign Currency ST Debt B, and
      -- Local Currency ST Debt   B.




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


* CUBA: In Talks with Iran on Increasing Industrial Cooperation
---------------------------------------------------------------
Yadira Garcia, the minister of industry in Cuba, met with Ahmad
Edrisian -- the Iranian ambassador to the nation -- to discuss
the latest developments in the technical and industrial
cooperation between countries, Mehr News Agency reports.

Minister Garcia told Mehr that Cuba is interested in
intensifying cooperation with Iran in various areas.

The Persian service of IRNA relates that both officials studied
previous cooperation accords on sectors:

     -- electricity,
     -- oil, and
     -- cement.

According to Mehr, Minister Garcia praised Iran's scientific and
industrial accomplishments.  The official said that Iran and
Cuba have vast untapped grounds on cooperation.

Cuba and Iran agreed to make plans for development of some joint
industrial projects, deciding on preparing the projects
development documents for final ratification in September by
both of the nations' authorities, Mehr states.

                        *    *    *

Moody's assigned these ratings to Cuba:

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




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


FALCONBRIDGE LTD: To Invest US$130MM in Perseverance Mine
---------------------------------------------------------
Falconbridge expects to invest approximately US$130 million
(CDN$145 million) in the development of the Perseverance zinc
mine, made possible in part by stronger zinc markets and the
continued collaboration and support of the Quebec Government.
The Quebec Premier Jean Charest and Minister of Natural
Resources and Wildlife, Pierre Corbeil, were in attendance at
the press conference in Matagami.

Construction will last about two years, with the mine's life
expectancy estimated at roughly five years.  The mine will
employ approximately 250 people during the construction's peak
period and about 225 thereafter.

Jean Desrosiers, Vice-President, Falconbridge Zinc Group,
underscored the positive economic news for the people of
Matagami.  "While the size of the Perseverance deposit will
allow only a relatively short operating life, the investment
will nevertheless give the community a seven to eight-year
period to pursue greater economic diversification."

The zinc produced at the Perseverance mine will be processed at
Falconbridge's former Lac Matagami mine facilities where, in
anticipation of the Perseverance project start-up, the Company
retained the administrative offices and concentrator after the
Bell-Allard mine's closure in 2004.  The annual production of
228,000 tons of zinc concentrate will be shipped and processed
at the CEZinc Refinery in Valleyfield, Quebec, the second
largest refinery in North America, employing 700 people.

Falconbridge remains firmly rooted in Abitibi and Northern
Quebec, with exploration camps in Rouyn-Noranda and Matagami, as
well as in the Nunavik where, alone or with partners, it has
invested more than Cdn$20 million in exploration annually in
recent years.  Falconbridge operates a smelter in Rouyn-Noranda,
employing 560, and a nickel mine in the Nunavik, employing 500
and using the services of 250 subcontractors.

Perseverance has measured and indicated resources of 5.1 million
tons grading 15.8% zinc, 1.24% copper, 29 grams of silver per
ton and 0.38 gram of gold per ton.  The Falconbridge exploration
team won the 2001 Bill Dennis Prospector of the Year Award from
the Prospectors and Developers Association of Canada for its
discovery of this deposit.

                     About Falconbridge

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

                        *    *    *

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


* DOMINICAN REPUBLIC: Fitch Comments on Power Sector Challenges
---------------------------------------------------------------
According to Fitch's Hilario Ramirez the Dominican power sector
faces many challenges that affect the integrity of the system,
the financial condition of its participants and the availability
of sufficient electricity for the country's consumers.  The
Dominican government is seeking to improve the macroeconomic,
monetary and fiscal policies, as well as strengthen key areas of
the economy, including the electricity sector.  Nevertheless,
actual realization of the goals presented is slower than
anticipated, and financial support from the government will be
critical for the sector for some time.

At the beginning of 2005, the Dominican government signed a
stand-by agreement with the International Monetary Fund to
address the deteriorating conditions of the electricity sector,
which increasingly suffers from:

   -- high distribution losses,
   -- low collection rates,
   -- a high generation cost,
   -- inefficient generation and
   -- a dependency on significant government contributions to
      finance the sector's growing deficit.

In order to strengthen the integrity of the electricity system,
the Dominican government, along with the World Bank, the IMF and
the U.S. Agency for International Development or USAID, designed
a reform of the sector in order to provide financial
sustainability with an emphasis on reducing the deficit in the
short term.  Key objectives of the plan included reducing energy
losses to approximately 30% (from the mid-40% range), increasing
the collection rate to 90%, a tariff adjustment to increase the
distributors' revenues by approximately 30% in dollar terms,
allowing for further adjustments to tariffs to reflect changes
in exchange rates and fuel prices, a commitment from the
government to pay its electrical bill on time (approximately 15%
of the total consumption) and reducing the average cost of
generation.

Despite the positive actions taken during 2005 and improved
efforts by the government to pay its own electrical bill, the
performance of the sector is still below the IMF's objectives.
Collection rates only increased to 86%, and energy losses
declined only three percentage points to 36%.  On the positive
side, generation rose to 9,900 GWh (versus 8,700 GWh in 2004),
contributing somewhat to a reduction of outages.  The continued
rise in oil prices, which increased 12% during the past year,
resulted in additional financial pressure to the market as
tariffs remained relatively stable in local currency
(approximately 17 cents/Kwh).  This combination led to further
increases in the subsidy required from the Dominican government,
reaching US$515 million.

The Dominican government estimates the subsidy to the electric
sector during 2006 will surpass the previous year due to the
high oil prices, lower than expected cash recovery rates and a
high level of electricity losses.  During the first four months
of 2006, the government's subsidy to the sector reached US$207
million.

The government appears to understand both the challenges it
faces and consequences of failure.  So far this year, a new
General Agreement of the Electric Sector (Acuerdo General del
Sector Electrico) was signed to allow for generators and
distributors to offset a large portion of their unpaid accounts,
which has helped clean up the balance sheets of these entities.
Total debt from distributors to generators still remains at high
levels (approximately US$265 million) and will be difficult to
address without real tariff increases and/or more supportive
regulations to enforce collection activity from end users. On
the cost side, the government has stated its intention to
renegotiate the generation contract and promote the development
of more efficient power plants that use less expensive fuel,
such as coal.

Fitch is cautiously optimistic that the sector can be fixed.  A
commitment by the government to the objectives already
identified, a willingness to allow a greater pass through of
true energy costs and greater cooperation among market
participants may allow the deficit to be reduced and the sector
to function on its own.  The result would be a financially
stronger market that allows for increased stability, reliability
and, ultimately, lower priced electricity for the Dominican
Republic.




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


PETROECUADOR: Calls for Bids on Diesel Supply Contract
------------------------------------------------------
Petroecuador, the state-run oil firm of Ecuador, said in a
statement that it has called for bids for a diesel supply
contract.

According to the statement, Petroecuador is seeking for a
company to supply Ecuador about 600,000 barrels of diesel to
satisfy national demand through the rest of 2006.

Business News Americas reports that the diesel would be supplied
to the to the Esmeraldas and La Libertad ports every Tuesday in
September in four shipments of 220,000 barrels each.

The report underscores that Petroecuador will have imported
about 8.86 million barrels of diesel by the end of 2006.

Petroecuador has qualified 47 firms to present bids.  The
company expects to receive the offers through Aug. 22,
BNamericas states.

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: Inks MOU to Keep Trade Benefits with Venezuela
---------------------------------------------------------
Ecuador, along with other members of the Andean Community of
Nations or CAN trade group, signed a memorandum of understanding
with Venezuela to maintain programmed trade preferences, Dow
Jones Newswires reports.

Other CAN members are:

     -- Bolivia,
     -- Colombia, and
     -- Peru.

As reported in the Troubled Company Reporter-Latin America on
April 27, 2006, Venezuela's President Hugo Chavez ratified his
withdrawal from after President Alvaro Uribe of Colombia decided
to continue negotiating a free trade deal with the US.

The memorandum would preserve the tradition of trading goods
-- amounting more than US$4.7 billion -- between Venezuela and
the other countries in the group, Alfredo Fuentes, the acting
secretary of CAN, told Dow Jones.

According to the report, the memorandum states that by Oct. 30,
both sides will sign an agreement to incorporate regulations
applying to free-trade policies, in terms of:

     -- origin,
     -- safeguards,
     -- dispute settlement,
     -- sanitary standards, and
     -- barriers to trade.

The memorandum said that by Oct. 30 at the latest both sides
will sign an accord that will incorporate regulations that apply
to free-trade policies, in terms of origin, safeguards, dispute
settlement, sanitary standards and barriers to trade.

CAN also told Dow Jones that it has formed a working group that
would propose norms to regulate trade between CAN and Venezuela
and find a way to settle trade disputes.

The group has up to 60 days to make the proposal, Dow Jones
relates, citing CAN.

                        *    *    *

Fitch assigned these ratings on Ecuador:

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




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


* EL SALVADOR: Importing Beans, Rice from Honduras
--------------------------------------------------
El Salvador will be importing basic grains, like beans and rice,
from Honduras.

Honduran farmers have increased their grain productions through
the help of the Ministry of Agriculture, which provided the
growers with technical and credit assistance.  The increased
output lowered prices.

Honduras is also able to commercialize their production after
gaining entrance to the United States' market after signing a
free trade accord in April.

                        *    *    *

Fitch Ratings assigned these ratings on El Salvador:

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


* EL SALVADOR: Insurance Industry First Half Profit Rises 36.9%
---------------------------------------------------------------
The first half profits of the insurance industry in El Salvador
this year increased 36.9% to US$12.5 million, compared with the
US$9.11 million recorded in the same period last year, Business
News Americas reports, citing Superintendencia del Sistema
Financiero, the country's banking and insurance regulator.

Eduardo Recinos -- Fitch Ratings Central America insurance
companies' director -- told BNamericas that the "bottom line"
results are mainly due to the industry's reserves adjustment.

According to BNamericas, Mr. Recinos said that in the first half
of 2005, the insurance industry reported a negative reserves
adjustment of US$7.06 million, mainly because life insurer SISA
Vida began to retain about 100% of certain policies sister
company AFP Confia sold.

In the first half of 2006, however, the insurance sector's
negative reserves adjustment was at US$2.28 million, which makes
a difference of about US$4.7 million over the first half of last
year that boosted the bottom line.  Without this contribution,
insurers' first half net profits would have decreased 16% to
US$7.6 million, BNamericas relates, citing Mr. Recinos.

BNamericas underscores that the insurance sector's revenues
increased 10% to US$273 million in the first half of 2006,
compared with the same period of 2005.  Net premiums rose 19% to
US$176 million in the first half of 2006 over the first half of
2005.  Retained premiums grew 10% to US$89.1 million.

Mr. Recinos told BNamericas, the boost in premium volume was due
to a number of factors:

     -- an increase in "bancassurance" sales,

     -- the economy performing better,

     -- the fact that insurers are serving as fronting
        companies, and

     -- companies tend to reinsure their risks with local
        insurers.

BNamericas notes that the insurance sector's underwriting result
increased 35% to US$21.5 million.

Mr. Recinos told BNamericas that the insurance sector's net
claims rose 14% to US$53.5 million as insurers paid claims
related to natural disasters and there was a rise in crime-
related claims like stolen cars.

According to the report, Mr. Recinos said that investment gains
decreased 17% to US$6.05 million from US$7.27 million.  This is
due to a contraction in the insurance industry's loan book.

The balance sheet shows that financial investments increased 13%
to US$185 million.  Technical reserves grew 6% to US$100
million.  Claim reserves rose 9% to US$41.8 million, BNamericas
states.

                        *    *    *

Fitch Ratings assigned these ratings on El Salvador:

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




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


* HONDURAS: Exporting Beans, Rice to El Salvador
------------------------------------------------
As a result of production growth and lower prices of
cultivation, Honduras will be exporting basic grains, like beans
and rice, to Nicaragua, according to local paper El Heraldo.

According to the Ministry of Agriculture, in cooperation with
140 non-governmental units, it provided technical and credit
assistance to about 80,000 farmers that resulted to an increase
in production, El Heraldo relates.

Honduras and El Salvador signed free trade accords with the
United States in April.  After signing the trade pact, Honduras
now has access to the US market, where nearly 1 million
Hondurans reside.  El Heraldo says that the US markets provide
the opportunity for Honduran producers to commercialize their
production.

                        *    *    *

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


* HONDURAS: Exporting Beans, Rice to Nicaragua
----------------------------------------------
As a result of production growth and lower prices of
cultivation, Honduras will be exporting basic grains, like beans
and rice, to Nicaragua, according to local paper El Heraldo.

According to the Ministry of Agriculture, in cooperation with
140 non-governmental units, it provided technical and credit
assistance to about 80,000 farmers that resulted to an increase
in production, El Heraldo relates.

After signing on April a free trade accord with the United
States, Honduras now has access to the US market, where nearly 1
million Hondurans reside.  El Heraldo says that the US markets
provide the opportunity for Honduran producers to commercialize
their production.

                        *    *    *

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


KAISER ALUMINUM: Supplies Fabricated Aluminum to Lockheed Martin
----------------------------------------------------------------
Kaiser Aluminum entered into an agreement with Transtar Metals
to supply Lockheed Martin and its partners Northrop-Grumman and
BAE Systems with high-quality fabricated aluminum plate products
for the Department of Defense's F-35 Joint Strike Fighter, the
Lightning II. The long-term contract will run through 2016,
commencing with the production debut of the new aircraft in
2009.

"This is a revolutionary aircraft with specifications that call
for the highest-quality fabricated aluminum products," said Jack
A. Hockema, chairman, president and CEO, Kaiser Aluminum.

"We welcome Kaiser Aluminum's participation in the important
role of supplying high-strength aluminum plate products to this
critical defense program," said Steve Scheinkman, president and
CEO of Transtar Metals.

The Joint Strike Fighter is a single-seat, single-engine
military supersonic stealth aircraft used to perform close air
support, tactical bombing and air-to-air combat.  Scheduled to
make its maiden flight this year, the F-35 is the United States
Department of Defense's focal point for defining next-generation
strike aircraft weapon systems for the Navy, Air Force, Marines,
and allied countries.

Lockheed Martin is principally engaged in the research, design,
development, manufacture, integration and sustainment of
advanced technology systems, products and services.  Transtar
Metals is an industry-leading supplier of high-performance
metals to the aerospace and defense industries.

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


NATIONAL COMMERCIAL: S&P Assigns B Issuer Credit Ratings
--------------------------------------------------------
Standard & Poor's assigned these ratings on National Commercial
Bank Jamaica Ltd. or NCB:

   -- long-term foreign issuer credit rating: B;
   -- long-term local issuer credit rating: B;
   -- short-term foreign issuer credit rating: B; and
   -- short-term local issuer credit rating: B.

The ratings on NCB are constrained by the sovereign ratings on
Jamaica, as sovereign bonds and loans to public entities
represent most of NCB's assets.  The ratings are also
constrained by NCB's larger-than-peer loan concentration in its
main clients, and its operating in a relatively small, highly
indebted, and non-diversified economy.  The ratings are
supported by the bank's relevant market presence in the Jamaican
banking system and consistent improvements in its operating
performance.

NCB maintains a large exposure to Jamaica's government,
represented by investments in government bonds.  In addition, an
important portion of the loan portfolio is concentrated in
Jamaican public-sector companies in which the government is the
ultimate payer.  Concentration in NCB's loan portfolio is higher
than that observed in other Central American and Caribbean banks
because the loan portfolio is relatively small, there is a
reduced number of clients, and loans are larger than those of
other institutions.  Although NCB is increasing its consumer
loans to improve margins and to diversify its loan portfolio,
its main business is commercial lending and it will take time to
decrease concentrations and change the business mix.

NCB is one of the leading institutions in Jamaica with 29% of
loans and 33% of deposits at March 31, 2006.  The bank benefits
from strong brand-name recognition, maintains an important
presence in retail banking, and holds a leading position in the
island's credit card business. The bank benefited in the past
two years from a stable foreign exchange market and improved
economic conditions.  In addition, it strengthened credit risk
underwriting by centralizing and focusing processes, updating
credit limits, and strengthening credit approval processes for
consumer loans.

While growth in the loan portfolio continues, gross loans still
represent a small 20% of the group's total assets as of June
2006.  The non-performing asset ratio was maintained at 3.9% at
June 2006 and has reduced from the 5% reported in 2003.  On the
same positive trend, reserve coverage was maintained at an
adequate 1.4x the balance of NPAs.  As credit underwriting has
strengthened, Standard & Poor's Ratings Services expects asset
quality to remain at current levels, barring any major event in
Jamaica's economy.

Improvements in NCB's financial profile have been achieved in
loan growth, higher participation of consumer loans, and
improving asset quality.  The bank's cost-to-income ratio, which
has shown a positive trend in the past two years, was 59% at
June 2006.  Efforts to reduce this ratio further may pose a
challenge as the bank follows its expansion strategy.  In our
view, the bank maintains a high regulatory capital ratio that
allows loan growth.

The stable outlook mirrors the outlook on the sovereign credit
ratings on Jamaica, and reflects NCB's significant exposure to
that country, with most of the bank's assets represented by
government securities. NCB has improved its financial profile,
but it is challenged to further increase its loan portfolio,
maintaining adequate asset quality and reducing loan
concentration.  The positive developments concerning
profitability are expected to continue; however, an improvement
in efficiency has to be implemented to maintain the trend.
Standard & Poor's believes that NCB can maintain adequate
profitability ratios as a consequence of its important market
share, and the increasing focus on growing its consumer loan
portfolio under prudent underwriting standards.




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


ALERIS INTERNATIONAL: Board of Directors Okay Aurora Merger Pact
----------------------------------------------------------------
Aleris International, Inc.'s Board of Directors unanimously
approved the Agreement and Plan of Merger with Aurora
Acquisition Merger Sub, Inc..

On Aug. 7, 2006, the Company entered into an Agreement and Plan
of Merger pursuant to which Aurora Acquisition Holdings, Inc.'s
wholly-owned subsidiary, Aurora Merger, will merge with and into
Aleris.  Aleris will continue as the surviving corporation and
becoming a wholly-owned subsidiary of Aurora Holdings.  Aurora
Holdings is owned by affiliates of Texas Pacific Group.

Pursuant to the Merger Agreement:

    * each outstanding share of common stock of Aleris other
      than shares owned by Aurora Holdings, Aurora Merger Sub or
      any subsidiary of Aurora Holdings or Aleris,

    * shares held in the treasury of Aleris, and

    * shares held by any stockholders who are entitled to and
      who properly exercise appraisal rights under Delaware law,

will be cancelled and converted into the right to receive
US$52.50 in cash, without interest.

The Merger Agreement also provides for a post-signing "go-shop"
period which permits Aleris to solicit competing acquisition
proposals until 12:01 a.m. on Sept. 7, 2006 from any person
who directly or indirectly through a controlled entity
manufactures or fabricates metals and is not a discretionary
private equity fund or other discretionary investment vehicle.

A full text-copy of the Agreement and Plan of Merger, dated as
of August 7, 2006, is available for free at:

             http://ResearchArchives.com/t/s?f6b

                  About Aleris International

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

                        *    *    *

As reported in the Troubled Company Reporter on July 18, 2006,
Standard & Poor's Ratings Services affirmed its 'BB-' corporate
credit rating on Aleris International Inc. and removed it from
CreditWatch, where it was placed with negative implications on
March 21, 2006.  The CreditWatch placement followed Aleris'
announcement that it would acquire the downstream aluminum
assets of Corus Group PLC (BB/Stable/B) for USUS$880 million in
cash and assumed debt.  S&P said the outlook is negative.

At the same time, Standard & Poor's assigned its 'BB-' and '2'
recovery ratings to the company's proposed USUS$650 million
senior secured term loan B.  The '2' recovery rating indicates
the expectation of a substantial recovery of principal in the
event of a payment default.  The ratings are based on
preliminary terms and conditions and are predicated on the
completion of the Corus transaction and related financings
substantially in the form currently anticipated.

As reported in the Troubled Company Reporter on July 12, 2006,
Moody's Investors Service confirmed Aleris International, Inc.'s
B1 corporate family rating.  In a related rating action, Moody's
assigned a Ba3 rating to the company's proposed 7 year senior
secured guaranteed term loans aggregating USUS$650 million,
which Aleris is issuing to partially finance its EUR691 million
acquisition of certain aluminum assets from Corus Group plc and
refinance its existing debt.

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


BALLY TOTAL: Anticipates Lower Cash Contribution for 2006
---------------------------------------------------------
Bally Total Fitness Holding Corp. reported that due in
substantial part to continued softness in member joins compared
to prior periods, the Company's prior indication as to potential
growth in "cash contribution" in 2006 versus 2005 will not be
achieved.  The company anticipates the amount for 2006 will be
10 to 20% lower than the US$120 million cash contribution
previously disclosed for 2005.

However, the company continues to anticipate that its cash flow
and availability under its senior secured credit facility will
be sufficient to meet its liquidity needs for working capital
and other cash requirements through the first quarter of 2007.

Bally Total Fitness also stated that its previously announced
process to evaluate strategic alternatives, which had focused on
a sale or merger of the company, is now expected to focus on
exploring other financing alternatives, such as:

   -- recapitalization,
   -- private placement,
   -- underwritten rights offering or
   -- other corporate restructuring.

In light of the developments noted above, and the fact that its
discussions with potential interested parties have not to date
resulted in any proposal, agreement or transaction involving a
sale or merger of the company, the Strategic Alternatives
Committee of Bally Total Fitness has determined, after
consultation with its outside financial advisors, that other
alternatives should now be pursued.

Bally Total Fitness cautions that there can be no assurance as
to the outcome of the strategic alternatives process, and Bally
does not undertake any obligation to provide further updates.

Bally also disclosed that while the company will not be filing
its Quarterly Report on Form 10-Q for the three months ended
June 30, 2006 in a timely manner, it expects to file that report
before the September 11, 2006 expiration of the initial waiver
period previously obtained from the Company's senior bank
lenders and bondholders.  On August 10, 2006, the Company filed
a Form 12b-25 pertaining to this delay in filing the second
quarter Form 10-Q.

Bally Total Fitness Holding Corp.
-- http://www.Ballyfitness.com/-- is the largest and only
nationwide commercial operator of fitness centers, with over 400
facilities located in 29 states, Mexico, Canada, Korea, the
Caribbean, and China under the Bally Total Fitness, Bally Sports
Clubs and Sports Clubs of Canada brands.  Bally offers a unique
platform for distribution of a wide range of products and
services targeted to active, fitness-conscious adult consumers.

                        *    *    *

As reported in the Troubled Company Reporter on March 17, 2006,
Standard & Poor's Ratings Services held its ratings on Bally
Total Fitness Holding Corp., including the 'CCC' corporate
credit rating, on CreditWatch with developing implications,
where they were placed on Dec. 2, 2005.


BALLY TOTAL: Paul Toback Resigns as Chairman, President & CEO
-------------------------------------------------------------
Bally Total Fitness Holding Corp. disclosed the resignation,
effective immediately, of Paul A. Toback as Chairman, President
and CEO pursuant to a Separation Agreement dated August 10,
2006.  The company said that Don R. Kornstein has been appointed
interim Chairman, and Barry R. Elson has been appointed acting
CEO.

"Our primary near-term focus at Bally remains addressing the
Company's capital structure," said Mr. Kornstein.  "At the same
time, we are continuing to aggressively execute our business
plan to enhance the company's prospects for long-term success.
Bally has a strong brand franchise and customer base, and we
look forward to building on this platform to create value for
shareholders," said Mr. Kornstein.

Mr. Kornstein further stated, "On behalf of the Board of
Directors, I wish to recognize the commitment and energy Paul
Toback devoted to this Company as a director and officer and
acknowledge his strong leadership of our management team and
workforce during his tenure at Bally Total Fitness.  We wish him
well in his future endeavors."

Mr. Toback stated, "I appreciate the opportunity I have had over
nearly a decade in leadership roles at Bally.  Through our
efforts, we put the Company on a path of progress.  Now is the
time for others to bring their ideas and energy to the next
phase of the Company's development."

The Board of Directors of Bally intends to explore options for a
permanent replacement for Mr. Toback.

Mr. Kornstein was elected to the Bally Board of Directors in
January 2006.  He is founder and managing partner of Alpine
Advisors LLC, a strategic, financial and management consulting
firm serving a broad range of companies. Prior to founding
Alpine Advisors, Mr. Kornstein served as Chief Executive
Officer, President and Director of Jackpot Enterprises Inc., a
New York Stock Exchange-listed company.  Mr. Kornstein was also
a Senior Managing Director in the investment banking department
of Bear, Stearns & Co. Inc. for 17 years.

Mr. Elson was elected to the Bally Board of Directors in January
2006 and is a member of the Strategic Alternatives Committee.
He served as Acting Chief Executive Officer and Director of
Telewest Global, Inc., a provider of entertainment and
communication services.  Mr. Elson earlier also held the posts
of Chief Operating Officer of Urban Media, President of Conectiv
Enterprises, Executive Vice President at Cox Communications and
Vice President of the New York Nets, New York Islanders and
Colorado Rockies.

Bally Total Fitness Holding Corp.
-- http://www.Ballyfitness.com/-- is the largest and only
nationwide commercial operator of fitness centers, with over 400
facilities located in 29 states, Mexico, Canada, Korea, the
Caribbean, and China under the Bally Total Fitness, Bally Sports
Clubs and Sports Clubs of Canada brands.  Bally offers a unique
platform for distribution of a wide range of products and
services targeted to active, fitness-conscious adult consumers.

                        *    *    *

As reported in the Troubled Company Reporter on March 17, 2006,
Standard & Poor's Ratings Services held its ratings on Bally
Total Fitness Holding Corp., including the 'CCC' corporate
credit rating, on CreditWatch with developing implications,
where they were placed on Dec. 2, 2005.


BOWNE & CO: Earns US$6.5 Million for Quarter Ended June 30
----------------------------------------------------------
Bowne & Co., Inc., reported net income for the quarter ended
June 30, 2006 of US$6.5 million, compared to net income of
US$2.4 million for the same period in the prior year.

Bowne's net income for the six months ended June 30, 2006,
was US$8 million, versus US$5 million in the same period of
2005.

Bowne reported 2006 second quarter earnings from continuing
operations of US$10.4 million as compared to US$5.4 million for
the second quarter of 2005.  Revenue was US$260.3 million in the
second quarter of 2006, compared to US$197.6 million in the
comparable quarter of 2005.

For the six months ended June 30, 2006, Bowne's income from
continuing operations was US$11.9 million versus US$8.3 million
for the same period last year.  Revenue for the six months ended
June 30, 2006, was US$466 million, up 30% from US$357.6 million
reported in 2005.

Cash used in Bowne's operations for the quarter ended
June 30, 2006, increased US$24 million to US$56 million, from
net cash used in operations of US$32 million in 2005.

"Our focus on our core businesses resulted in a solid
performance this quarter," Philip E. Kucera, chairman and chief
executive officer, said.  "Overall, revenue growth was
impressive, driven by strong organic growth in Financial Print
and the revenue generated by the Vestcom business we acquired."

David J. Shea, president and chief operating officer, added,
"This was a great quarter for Bowne.  Financial Print revenue is
up in all categories, with transactional revenue reaching its
highest level since 2002.  Total Financial Print revenue was at
its highest level since 2000.  Marketing & Business
Communications substantially completed the integration of its
two businesses ahead of schedule and is well-positioned for the
second half of the year."

Bowne disclosed that, in keeping with its strategy of
focusing on its core businesses, it reclassified DecisionQuest
and JFS Litigators Notebook(R), which are being held for sale,
as discontinued operations.  Its 2006 discontinued operations
results include a US$9.9 million gain on the sale of CaseSoft, a
joint venture investment held by DecisionQuest and a US$13.3
million goodwill impairment charge related to DecisionQuest.

Bowne repurchased, from December 2004 through June 30, 2006, 7.6
million shares at an average price per share of US$14.75.  For
the first six months, it has repurchased 2.4 million shares at
an average price per share of US$14.51, of which approximately
1.6 million shares were purchased in the second quarter of 2006.
As of August 4, 2006, the company had US$74.4 million remaining
for share repurchases.

Based in New York City, Bowne & Co., Inc. (NYSE: BNE)
-- http://www.bowne.com/-- is a printing company, which
specializes in financial documents such as prospectuses, annual
and interim reports, and other paperwork required by the SEC.
Bowne also handles electronic filings via the SEC's EDGAR system
and provides electronic distribution and high-volume mailing
services.  The financial printing business accounts for the bulk
of the company's sales.  Bowne also offers marketing and
business communications services and litigation support
software.  The company has 3,500 employees in 78 offices around
the globe.  The company's Latin American offices are located in
Argentina, Brazil and Mexico.

                        *    *    *

As reported in the Troubled Company Reporter on Feb. 8, 2006,
Moody's Investors Service affirmed the rating on Bowne & Co.,
Inc.'s US$75 million Convertible Subordinated Debentures due
2033 at B2 and affirmed Bowne's Corporate Family Ba3 rating.
Moody's changed the outlook to positive from stable.


EL POLLO: Reports US$65.9M in Revenues for Quarter Ended June 30
----------------------------------------------------------------
El Pollo Loco reported operating revenues for the 13 weeks ended
June 30, 2006 of US$65.9 million, which is an increase of US$4.7
million, or 7.7%, over operating revenues for the 13 weeks ended
June 30, 2005 of US$61.2 million.  Operating revenues include
both sales at company-operated stores and franchise revenues.

Same store sales for the system, which includes sales from both
company-operated and franchised stores, increased 4.1% in the
second quarter of fiscal 2006; company-operated restaurant same
store sales increased 1.9% and franchise restaurant same store
sales increased 6.0%.  For company-operated restaurants, the
components of the same store sales increase are an increase in
transactions of 1.1%, a decrease in average check of 1.4%, an
increase in price of 1.9%, and an increase attributed to the
chicken meal restructuring of our menu of 0.3%.

Operating income for the second quarter of fiscal 2006 was
US$9.1 million, an increase of US$2.1 million, or 33.2%, from
the second quarter of 2005 operating income of US$7.0 million.
The prior year operating income was impacted by an impairment
charge of US$0.9 million, which was recorded by the company for
one under-performing company-operated store.

Interest expense for the second quarter of fiscal 2006 was
US$7.1 million, an increase of US$2.3 million, or 49.0%, from
the second quarter of 2005 interest expense of US$4.8 million
due to higher levels of debt incurred in conjunction with the
November 2005 acquisition of the Company by affiliates of
Trimaran Capital Partners.

Our provision for income taxes consisted of income tax expense
of US$0.8 million for each of the 13 weeks ended June 30, 2006
and 2005.

As a result of the above, net income for the second quarter of
fiscal 2006 was US$1.2 million, which was a decrease of US$0.2
million, or 13.8% from the second quarter 2005 net income of
US$1.4 million.

EBITDA for the second quarter of fiscal 2006 was US$11.6
million, an increase of US$1.0 million, or 10.2%, from second
quarter 2005 EBITDA of US$10.6 million.  EBITDA represents net
income before interest, taxes, depreciation and amortization.

Operating revenues for the 26-week period ended June 30, 2006
were US$129.0 million, which was an increase of US$13.2 million,
or 11.4%, over operating revenues for the 26 weeks ended June
30, 2005 of US$115.8 million.  Same store sales for the system
increased 7.5% for the 26 weeks ended June 30, 2006; company-
operated restaurant same store sales increased 5.8% and
franchise restaurant same store sales increased 9.1%.  For
company-operated restaurants, the components of the same store
sales increase are an increase in transactions of 5.5%, a
decrease in average check of 2.2%, an increase in price of 1.8%,
and an increase attributed to the chicken meal restructuring of
our menu of 0.7%.

Operating income for the 26 weeks ended June 30, 2006 was
US$16.3 million, which was an increase of US$4.4 million, or
36.7% over operating income of US$11.9 million for the 26 weeks
ended June 30, 2005.

Interest expense for the 26 weeks ended June 30, 2006 was
US$14.2 million, which was an increase of US$4.7 million, or
49.6% over interest expense of US$9.5 million for the 26 weeks
ended June 30, 2005 due to higher levels of debt incurred in
conjunction with the November 2005 acquisition of the company by
affiliates of Trimaran Capital Partners.

Net income for the 26 weeks ended June 30, 2006 was US$1.3
million, a decrease of US$0.3 million, or 19.6%, from net income
for the 26 weeks ended June 30, 2005 of US$1.6 million.

EBITDA for the 26 weeks ended June 30, 2006 was US$21.2 million,
an increase of US$2.2 million, or 11.5%, over EBITDA of US$19.0
million for the 26 weeks ended June 30, 2005.

                    About El Pollo Loco

El Pollo Loco -- http://www.elpolloloco.com/-- pronounced "L
Po-yo Lo-co" and Spanish for "The Crazy Chicken," is the United
States' leading quick-service restaurant chain specializing in
flame-grilled chicken and Mexican-inspired entrees.  Founded in
Guasave, Mexico, in 1975, El Pollo Loco's long-term success
stems from the unique preparation of its award-winning "pollo"
-- fresh chicken marinated in a special recipe of herbs, spices
and citrus juices passed down from the founding family.

                        *    *    *

As reported in the Troubled Company Reporter on May 23, 2006,
Standard & Poor's Ratings Services expects to raise its
corporate credit rating on El Pollo Loco Inc. to 'B+' from 'B'
upon the successful completion of the company's planned IPO.
S&P said the outlook is stable.  Standard & Poor's also assigned
a 'B+' rating, same as the expected corporate credit rating, to
the company's planned US$200 million senior secured bank loan.
A recovery rating of '2' is also assigned to the loan,
indicating the expectation for substantial recovery of principal
in the event of a payment default.

Moody's Investors Service upgraded El Pollo Loco, Inc.'s
corporate family rating to B1 from B3 and assigned B1 ratings to
the company's proposed US$200 million senior secured credit
facility following the company's proposed initial public
offering of shares of its common stock and planned refinancing
of its existing debt.  At the same time, the SGL-2 Speculative
Grade Liquidity rating was affirmed.  Moody's said the outlook
remains stable.


ENESCO GROUP: Continues to Seek Long-Term Debt Financing
--------------------------------------------------------
Enesco Group, Inc., is continuing to aggressively pursue
long-term debt financing.  Enesco previously had agreed to
obtain a commitment for long-term financing by Aug. 7, 2006.
Because Enesco has not obtained a commitment, the Company is in
default of its current credit facility agreement.

The Company is working with the lenders for possible additional
loans or terms and conditions, but has been advised that the
lenders are not committing to waive the default.

As reported on the Troubled Company Reporter on Aug. 4, 2006,
On May 17, 2005, the Company terminated its license agreement
with Precious Moments, Inc., to sell Precious Moments(R)
products in the U.S.  On July 1, 2005, the Company we began
operating under an agreement with PMI where Enesco provided PMI
transitional services related to its licensed inventory through
Dec. 31, 2005.  In conjunction with the PMI agreement, in June
2005 the Company incurred a loss of US$7.7 million equal to the
cost of inventory transferred to PMI.  The Company has not
recorded any revenues for transition services in 2006, as PMI
has exercised its option to perform the services in-house
beginning Jan. 1, 2006.

During the transition period, Enesco maintained inventories of
PMI products on a consignment basis and processed sales orders
on PMI's behalf.  Enesco recorded the gross sale and cost of
sale of PMI products and, additionally, recorded a charge to
cost of sales for the sale amounts to be remitted to PMI, net of
the amounts due from PMI for inventory purchases.  Enesco also
earned sales commissions and service fees from PMI for product
fulfillment, selling and marketing costs.  In the three months
ended June 30, 2006, Enesco and PMI reconciled the amounts owed
to each other and, as a result, the Company recorded an
additional charge of US$355,000 to cost of sales to properly
reflect amounts due to PMI.

At June 30, 2006, the net amount owed PMI was US$1 million,
payable in three equal installments in July, August and
September.

Enesco Group, Inc. --- http://www.enesco.com/-- is a world
leader in the giftware, and home and garden decor industries.
Serving more than 44,000 customers worldwide, Enesco distributes
products to a wide variety of specialty card and gift retailers,
home decor boutiques, as well as mass-market chains and direct
mail retailers.  Internationally, Enesco serves markets
operating in the United Kingdom, Canada, Europe, Mexico,
Australia and Asia.  With subsidiaries located in Europe and
Canada, and a business unit in Hong Kong, Enesco's international
distribution network is a leader in the industry.  Enesco's
product lines include some of the world's most recognizable
brands, including Border Fine Arts, Bratz, Circle of Love,
Foundations, Halcyon Days, Jim Shore Designs, Lilliput Lane,
Pooh & Friends, Walt Disney Classics Collection, and Walt Disney
Company, among others.


FLEXTRONICS INTL: Post Net Sales of US$4.1 Billion for 1Q2006
-------------------------------------------------------------
For the first quarter ended June 30, 2006, Flextronics
International Ltd. reported net sales from continuing operations
of US$4.1 billion, which represents an increase of US$236
million, or 6%, over the first quarter ended June 30, 2005.

"There has been a reacceleration of significant growth in our
core EMS business, which includes design, vertically-integrated
manufacturing services, components and logistics," Mike
McNamara, Flextronics' chief executive officer said.  "Fiscal
2006 was a very strong year in terms of incremental business
wins from both new and existing customers.  As a result, we
exceeded revenue and earnings expectations in the June quarter
and have increased our revenue growth rate expectations for
fiscal 2007 to approximately 25%."

Excluding intangibles amortization, restructuring and other
charges which includes stock based compensation, net income for
the first quarter ended June 30, 2006 increased 4% to US$104
million, compared to US$100 million, in the year ago quarter.

After-tax amortization, restructuring and other charges which
includes stock based compensation amounted to US$19 million in
the current quarter compared to US$41 million in the year ago
quarter.  GAAP net income amounted to US$85 million, in the
first quarter ended June 30, 2006, compared to US$59 million, in
the year ago quarter.

                About Flextronics International

Headquartered in Singapore, Flextronics International Ltd. --
http://www.flextronics.com/-- provides electronics
manufacturing services through a network of facilities in over
30 countries worldwide.  Its global locations include operations
in Brazil and Mexico.

                        *    *    *

Moody's Investors Service assigned a Ba2 rating to Flextronics
International Ltd.'s new US$500 million 6.25% senior
subordinated notes, due 2014.  At the same time, the company was
assigned a liquidity rating of SGL-1, reflecting Flextronics'
significant on-hand liquidity, unfettered access to the sizeable
US$1.1 billion revolver and the expectation for generating
moderately positive free cash flow (pre-Nortel payments) over
the next twelve months.

Standard & Poor's Ratings Services assigned its 'BB-' rating to
Flextronics' private offering of US$500 million, senior
subordinated notes due 2014.  The notes were offered under Rule
144A, with registration rights.  Proceeds of the offering will
be used to repay outstanding debt under its revolving credit
facilities and for general corporate purposes.  The company's
'BB+/Stable/--' corporate credit rating was affirmed.


METROFINANCIERA: Moody's Affirms B1 Local Currency Issuer Rating
----------------------------------------------------------------
Moody's de Mexico revised Metrofinanciera, S.A. de C.V.'s
Baa2.mx national scale rating outlook to positive, from stable.
The company's MX-2 national scale and Not Prime global local
currency short-term ratings, and B1 global scale local currency
issuer ratings, were also affirmed with a stable outlook.

Metrofinanciera is a Sociedad Financiera de Objeto Limitado --
Sofol, a special-purpose financial company whose main function
is to extend mortgage loans to low-income individuals under the
auspices of Sociedad Hipotecaria Federal or SHF financing
programs, and to provide construction financing to developers of
low-income housing.  SHF is one of Mexico's most important
government-sponsored programs for low to low-middle income
housing.

The national scale rating outlook revision reflects
Metrofinanciera's greater size, market leadership and brand
awareness, leadership in technology and servicing, and continued
earnings growth, efficiencies and portfolio performance.
Furthermore, the positive outlook incorporates Metrofinanciera's
standing as one of the leading sofoles in accessing capital
markets and diversifying funding sources.  One key credit
concern is that Metrofinanciera's portfolio diversity is limited
-- the majority of the portfolio consists of bridge loans to
housing developers.  Nearly two-thirds of the firm's portfolio
is focused on bridge construction financing, which Moody's sees
as a more concentrated risk.  The outlook revision is also based
on the expectation of a shift towards a more balance portfolio
between individual mortgages and construction lending.

A rating upgrade will reflect individual loans as a percentage
of total loans moving above 50% of the lending book, and
maintenance of current operating margins in mid 70% range.
Additional steps supporting a rating upgrade include continued
progress with regional expansion.  A return to a stable outlook
would result individual loans to total loans remaining above
half of total loans, with a drop in operating margins --
EBITDA/Revenues below 70%.  Additional negative ratings pressure
would result from an increase in delinquent loans to more than
3% of the total portfolio, an increase in leverage to 90% or an
adverse shift in governmental housing policy.

These ratings were affirmed with a positive outlook:

   -- Baa2.mx national scale issuer rating; and

   -- (P)Baa2.mx National Scale senior unsecured long-term
      debt rating

These ratings were affirmed with a stable outlook:

   -- B1 global scale local currency issuer rating,

   -- (P)B1 global local currency senior unsecured long-term
      debt rating -- MTN Program; and

   -- commercial paper MX-2 national scale rating; Not Prime
      global scale local currency.

Moody's last rating action for Metrofinanciera took place in
March 2006, when a (P)Baa2.mx senior unsecured long-term debt
rating and a (P)B1 global local currency senior unsecured long-
term debt rating were assigned to the MXP$5 Billion MTN Program.

Metrofinanciera, based in Monterrey, Mexico, started operations
in 1998 as a non-bank financial institution/Sofol Mortgage
Company. Metrofinanciera's main activity consists of extending
mortgages financed by monies from SHF to low-income individuals
and builders of low-income housing.  As of June 30, 2006, the
company had a loan portfolio of MXN$15 billion, composed of
MXN$5.3 billion in individual mortgages and MXN$9.5 billion in
bridge loans to low-income housing developers.


NEWPARK RESOURCES: S&P Rates US$150MM Sr. Secured Loan at BB-
-------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB-' rating and
'1' recovery rating to oil field services company Newpark
Resources Inc.'s (B+/Watch Neg/--) planned US$150 million senior
secured term loan.  The 'BB-' rating was also placed on
CreditWatch with negative implications. All the ratings on the
company are on CreditWatch.

Pro forma for the term loan closing, the Metarie, La.-based
company is anticipated to have about US$210 million of debt
outstanding.

Standard & Poor's expects Newpark to use the proceeds of the
term loan in part to repay US$125 million senior subordinated
notes due 2007.

The company received a notice of default on July 20, 2006, from
its subordinated noteholders due to Newpark's delay in filing
financial statements.  Standard & Poor's lowered its ratings on
the company to 'B+' from 'BB-' following the announcement.

"Finalization of the term loan reduces our concern that Newpark
lacks the financial resources to retire the subordinated notes
in the event that noteholders accelerate repayment," said
Standard & Poor's credit analyst Ben Tsocanos.

"However, the CreditWatch with negative implications still
reflects the continued uncertainty regarding Newpark's filing of
restated financial statements," said Mr. Tsocanos.

Newpark's ability to file restated financial statements and to
file statements for the first quarter of 2006 is crucial to
maintaining the current ratings.  Standard & Poor's expects the
company to file within the waiver period provided by the
revolver lenders and that adjustments to the statements will be
manageable.

Conversely, findings of material or widespread accounting
problems, extended delays in the process, or deterioration in
relations with its credit counterparties would almost certainly
lead to a downgrade.


ODYSSEY RE HOLDINGS: Earns US$202 Mil. in Quarter Ended June 30
---------------------------------------------------------------
Odyssey Re Holdings Corp. reported net income available to
common shareholders of US$202.4 million for the quarter ended
June 30, 2006, compared to US$51.1 million for the quarter ended
June 30, 2005.

Net income available to common shareholders for the six months
ended June 30, 2006 was US$361.8 million, compared to US$82.6
million for the comparable period of 2005.

Total shareholders' equity was US$1.83 billion at June 30, 2006,
an increase of US$208.5 million compared to total shareholders'
equity of US$1.62 billion at Dec. 31, 2005.

Commenting on the second quarter, Andrew A. Barnard, the
Company's president and chief executive officer, stated, "We
achieved the highest level of earnings this quarter in our
history as we continued to benefit from solid underwriting and
investment performance. Book value per share has increased 13.6%
to date in 2006, allowing us to continue the momentum in
compounding book value by 15% over the long term."

Odyssey Re Holdings Corp. is an underwriter of property and
casualty treaty and facultative reinsurance, as well as
specialty insurance.  OdysseyRe operates through its
subsidiaries, Odyssey America Reinsurance Corporation, Hudson
Insurance Company, Hudson Specialty Insurance Company,
Clearwater Insurance Company, Newline Underwriting Management
Limited and Newline Insurance Company Limited.  The Company
underwrites through offices in the United States, London, Paris,
Singapore, Toronto and Mexico City.  Odyssey Re Holdings Corp.
is listed on the New York Stock Exchange under the symbol ORH.

                        *    *    *

Odyssey Re Holdings Corp.'s preferred stock rating carries Ba2
from Moody's and BB from Fitch.  The Company's senior unsecured
debt and long-term issuer default ratings also carry BB+ from
Fitch.  Moody's placed its rating on Oct. 12, 2005 with a stable
outlook.  Fitch placed its ratings on March 23, 2006.


SATELITES MEXICANOS: Files Plan and Disclosure Statement in NY
--------------------------------------------------------------
Satelites Mexicanos, S.A. de C.V., submitted its Chapter 11 Plan
of Reorganization and accompanying Disclosure Statement to the
U.S. Bankruptcy Court for the Southern District of New York on
Aug. 11, 2006.

The Chapter 11 Plan provides, among other things, for an
equitable distribution of the value of, and ownership interests
in, Satmex's business to parties in interest.  The Chapter 11
Plan permits Satmex to emerge from chapter 11 substantially
deleveraged, enabling the Company to operate as an economically
viable competitor and leader in the fixed satellite services
industry.

Implementation of the Chapter 11 Plan is anticipated to result
in a reduction of Satmex's outstanding indebtedness primarily
through the restructuring of secured and unsecured debt as well
as the conversion of a portion of the Debtor's unsecured debt
securities to equity in the reorganized company.

Under the Chapter 11 Plan, allowed administrative expense
claims, federal, state and local tax claims, other priority
claims, other general unsecured claims and secured claims are
unimpaired.

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 claims of holders of the Senior Secured Notes will be
converted into US$234,400,000 of senior secured notes, to be
issued by Satmex on the Effective Date.

The claims of holders of the Existing Bonds will be converted
into:

    (i) US$140,000,000 of second priority senior secured notes,
        to be issued by Satmex on the Effective Date; and

   (ii) interests in a trust formed to hold the new common stock
        to be issued by Satmex on the Effective Date under the
        Chapter 11 Plan to the holders of the Existing Bonds
        consisting of shares of the series B common stock of
        reorganized Satmex and shares of series N common stock
        of reorganized Satmex that represent 78% of the total
        equity economic interests and 43% of the total equity
        voting rights of reorganized Satmex on a fully diluted
        basis.

Principia, S.A. de C.V. and Loral Skynet Corporation, as holders
of Satmex's Existing Preferred Stock, will receive, on the
Effective Date, shares of New Series B Common Stock and the New
Series N Common Stock to be distributed so that:

    (i) Principia will receive interests in the Equity Trust
        representing 0.67% of the total equity economic
        interests and 0.67% of the total equity voting rights of
        reorganized Satmex on a fully diluted basis; and

   (ii) Loral will receive interests in the Equity Trust
        representing 1.33% of the total equity economic
        interests and 1.33% of the total equity voting rights of
        reorganized Satmex on a fully diluted basis.

In addition, Loral and its affiliates will receive certain other
concessions from Satmex in return for their participation in
Satmex's restructuring, including, without limitation:

    (i) the grant to certain affiliates of Loral of a
        "usufructo" under Mexican law in certain transponders on
        Satmex 5 and Satmex 6;

   (ii) a right of first offer with respect to the construction
        of Satmex's next satellite, and

  (iii) the assumption pursuant to Section 365 of the Bankruptcy
        Code by Satmex of that certain global settlement
        agreement and related agreements between Satmex and
        certain affiliates of Loral.

The Government of United Mexican States and Servicios
Corporativos Satelitales, S.A. de C.V., as holders of Satmex's
Existing Common Stock, will receive, on the Effective Date,
shares of the series A common stock of reorganized Satmex and of
the New Series N Common Stock, to be apportioned as:

    -- the Mexican Government will receive interests in the
       Equity Trust representing 4% of the total equity economic
       interests and 10% of the total equity voting rights of
       reorganized Satmex on a fully diluted basis; and

    -- Servicios will receive interests in the Equity Trust
       representing 16% of the total equity economic interests
       and 45% of the total equity voting rights of reorganized
       Satmex on a fully diluted basis.

A copy of Satmex's Chapter 11 Plan of Reorganization is
available for a fee at:

   http://www.researcharchives.com/bin/download?id=060813215708


A copy of the Disclosure Statement explaining the Chapter 11
plan is available for a fee at:

   http://www.researcharchives.com/bin/download?id=060813215920

                        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).


URBI DESARROLLOS: S&P Outlines Factors that Constrain BB Ratings
----------------------------------------------------------------
Standard & Poor's assigned these ratings on URBI Desarrollos
Urbanos S.A. de C.V.:

   -- long-term foreign issuer credit rating: BB; and
   -- long-term local issuer credit rating: BB.

The ratings assigned to URBI are limited by:

   -- an aggressive financial policy;

   -- the concentration of mortgage origination in public
      housing entities and seasonality derived from that
      dependence;

   -- increasing competition; and

   -- significant working capital needs for project
      construction and land purchases for future developments.

The ratings are supported by URBI's

   -- operating efficiency, particularly related to collection;
   -- positive free operating cash-flow generation; and
   -- adequate liquidity and credit ratios.

Moreover, the ratings reflect the company's position as one of
the largest homebuilders in Mexico and its leadership in the
northern states of the country.

URBI's aggressive financial policy is reflected in the group's
target growth rates.  Standard & Poor's Ratings Services
believes that the homebuilder's plans to maintain a double-digit
growth rate in revenues for the following five years and the
strong investment in working capital required for that purpose
could pressure its main financial measures and weaken the
company's liquidity in case of a slowdown in its collections.
Nevertheless, we believe that the group's current cash balances
and credit metrics provide the company room to weather the
aforementioned.

URBI develops and markets projects through strategic business
units. These are separate cost centers into which the company
divides its operations and through which it develops and markets
its projects.  With these, the company can replicate its
business model rapidly when it starts operations in a new city
or project, centralizing certain functions but establishing a
local presence.  URBI currently subcontracts approximately 75%
of its homebuilding process.  Standard & Poor's expects that by
the end of 2006, third parties will execute 100% of the
company's construction works.  It believes that this business
model gives the group high flexibility in its operating
processes.  The company has signed an agreement for developing
its affordable constructions with concrete molds.  In Standard &
Poor's opinion, the learning curve for this construction system
could slightly lower the homebuilder's margins.

The company maintains about three years of future sales in
midsize cities and up to seven years in large metropolitan
areas.  The homebuilder concentrates its land banks in the state
of Baja California and in the Mexico City metropolitan area with
about 39% and 30% in terms of total projected units,
respectively.  These are two of the most dynamic markets in
Mexico; nevertheless, those also have the highest competition
across the country, exposing the company to slow collections and
thus demanding large cash positions to support its working
capital needs.  Standard & Poor's expects URBI to consolidate
its presence in the cities where it currently has operations and
to start operations in selected cities near existing ones,
reflecting a moderate geographic diversification.  Based on the
company's preference to purchase land well in advance, the
rating agency doesn't expect any joint venture vehicle for land
acquisition in the near future.

URBI's financial results for the 12 months ended June 30, 2006,
are adequate for the current rating.  URBI posted EBITDA
interest coverage, total debt-to-EBITDA, and funds from
operations-to-total debt ratios of 4.9x, 1.0x, and 80.0%,
respectively.  URBI's EBITDA margin has experienced consistent
growth, posting on June 30, 2006, a figure of 26.0%, reflecting
its focus on profitability, operating efficiencies, and a
favorable industry environment.

The company reported on June 30, 2006, a slower collection cycle
of 148 days and a longer accounts receivable-to-sales ratio of
41% when compared to the ones posted the previous year, due to
an increase of middle-income and residential housing in its
sales mix.  The receivables turnover could reach 150 days by the
end of the year as we expect middle-income and residential
contributions to reach 50% of consolidated revenues from the
current 48%.  Standard & Poor's estimates that URBI titled about
11,780 units of the 13,067 houses sold during the first half of
2006.

Founded in 1981 in Mexicali, Baja California, URBI is the third-
largest homebuilder in Mexico, with US$817 million in revenues
and 26,537 units built for the 12 months ended June 30, 2006,
representing a 17.7% and 14.0% growth, respectively, versus that
of the previous year.  It is engaged in the development,
construction, marketing, and sale of affordable entry-level,
middle-income, and residential housing.  The company currently
operates in nine northeastern cities and the three largest
metropolitan areas in the country with a land inventory capacity
for about 151,000 units, of which 92% is intended for housing
below a price of US$50,000.

Liquidity

URBI's liquidity is adequate.  As of June 30, 2006, the company
reported cash position and equivalents for US$143 million and
around US$500 million available in uncommitted credit lines,
which compares positively to its short-term debt of US$34
million.  URBI's improvements in operations have resulted in
free operating cash flow generation during all four quarters of
2005 and first-quarter 2006. With the US$150 million 8.50% 144A
notes issued on April 2006, URBI improved its maturity profile,
extending about 60% of its maturities up to 10 years and leaving
outstanding about US$60 million of its domestic MTNs that mature
in 2008 and 2010; short-term debt is comprised of bank lines and
land payables.  As the group's revenues are 100% peso
denominated, the company is hedging the principal and first five
years coupon of the U.S. dollar-denominated issued notes with a
foreign currency swap.  All these factors should allow the
company to generate operating cash flow to support its growth
plans.  The aforementioned, coupled with a minimal use of its
short-term bank lines, is expected to fund working capital
needs, including land purchases, estimated at US$150 million per
year.

Outlook

The stable outlook reflects our expectations that URBI will
continue to show an adequate liquidity position and credit
metrics.  The weakening of the group's liquidity and/or its key
financial ratios, especially a total debt-to-EBITDA ratio of
more than 1.2x and interest coverage of less than 4.3x, as well
as a more aggressive financial policy, could pressure ratings
downward.


VITRO SA: S&P Says B- Ratings Reflect High Financial Leverage
-------------------------------------------------------------
Standard & Poor's assigned these raings on Vitro S.A. de C.V.:

    -- long-term foreign issuer rating: B-; and
    -- long-term local issuer rating: B-.

The ratings on Vitro reflect the company's high financial
leverage and tight liquidity and the challenging business
environment it faces. The ratings also reflect the company's
leading position in glass containers and important share in flat
glass in Mexico, and its export activities and international
operations (particularly in the U.S.), which contribute about
50% of total revenues.

Monterrey, Mexico-based Vitro, through its subsidiary companies,
is Mexico's leading glass producer.  Vitro is a major
participant in two principal businesses -- flat glass and glass
containers.  Vitro also produces raw materials and equipment and
capital goods for industrial use.

Vitro's high leverage is reflected in its key financial
indicators, which Standard & Poor's Ratings Services determines
using a convenience translation to the U.S. dollar based on the
exchange rate at the end of the quarter.  For the 12 months
ended June 30, 2006, Vitro posted EBITDA interest coverage,
total debt to EBITDA, and funds from operations-to-total debt
ratios of 1.5x, 4.0x, and 9.3%, respectively, which compare
favorably to the figures posted for the 12 months ended March
2006.  The group's two divisions posted strong EBITDA growth,
which prompted an upward revision in the issuer's consolidated
EBITDA guidance to between US$300 million and US$330 million,
from between US$280 million and US$300 million.  During the
second quarter, the group completed the sale of VitroCrisa and
the acquisition of Vidrios Panamenos S.A. In regards to the
strategic plan, the group has indicated that initiatives will
continue to be announced individually over time. Among the
pending items under the plan are two undisclosed transactions
for a total of US$150 million and the sale of the company's
headquarters.

Liquidity

Vitro's liquidity is tight.  As of second-quarter 2006, the
group had about US$118 million in unrestricted cash and
equivalents.  The company's cash balance and refinancing efforts
should allow it to meet its debt maturities in the second half
of the year (about US$156 million as of June 30, 2006).  The
group's new EBITDA guidance leads us to believe that the group's
operating cash flow generation by year-end could exceed our
initial expectations, which pointed to a negative free operating
cash generation.  Nevertheless, the group's debt maturities in
2007 (US$414 million as of June 30, 2006) remain a concern, and
we continue to believe that the group's ability to meet upcoming
debt maturities relies on its refinancing efforts and asset
sales (US$15 million pending during 2006.)

Outlook

The negative outlook reflects our concerns about Vitro's
reliance on its refinancing efforts and asset sales to meet
upcoming debt maturities.  Further weakness in the group's
liquidity and financial performance would lead to a negative
rating action. If the company takes actions to effectively
reduce its debt burden or makes a significant improvement in its
operating and financial performance, we could take a positive
rating action.


* MEXICO: Saving US$350M After Prepaying World Bank & IDB Debts
---------------------------------------------------------------
Mexican Deputy Finance Minister Alonso Garcia Tames told
Bloomberg News that his country will be able to save up to
US$350 million after it pays US$9 billion of debts to the World
Bank and Inter-American Development Bank, and repurchases US$3.4
billion of dollar-denominated bonds.

"Exchanging foreign debt for local debt reduces currency-related
risks," Arnulfo Rodriguez, head of fixed-income research at
Citigroup Inc.'s Banamex unit in Mexico, told Bloomberg.

The government sold Thursday local bonds to pay its debts.
Bloomberg says Mexico raised more than the US$7 million it
originally sought from the sale of the bonds.

"This transaction has contributed to the perception that the
outlook for Mexican debt is positive," Mr. Garcia Tames told
Bloomberg in an interview.  "This will improve the conditions
for Mexican debt, and that translates into savings."

                        *    *    *

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: Importing Beans, Rice from Honduras
------------------------------------------------
Nicaragua will be importing basic grains, like beans and rice,
from Honduras.

Honduran farmers have increased their grain productions through
the help of the Ministry of Agriculture, which provided the
growers with technical and credit assistance.  The increased
output lowered prices.

Honduras is also able to commercialize their production after
gaining entrance to the United States' market after signing a
free trade accord in April.

                        *    *    *

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 E R U
=======


IIRSA NORTE: Fitch Assigns BB Corporate Credit Rating
-----------------------------------------------------
Fitch Ratings has assigned a 'BB' rating to IIRSA Norte Finance
Limited, a Peruvian securitization of government payment
obligations in connection with a toll road concession.  The
US$213 million in transaction proceeds will be used to cover the
costs of expansion and improvements on IIRSA Amazonas Norte, a
960 kilometer network of existing toll roads in northern Peru.
The transaction also benefits from a US$60 million partial
guarantee provided by the Inter-American Development Bank.

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

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


IIRSA NORTE: S&P Rates US$213MM Senior Secured Notes at BB
----------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB' rating to
IIRSA Norte Finance Ltd.'s US$213 million 8.75% senior secured
notes due 2024.

The 'BB' rating is based on these factors:

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

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

   -- An irrevocable US$60 million partial credit guarantee
      provided by the Inter-American Development Bank to cover
      any unpaid amounts by the GOP on the outstanding CRPAOs
      (certificates issued by the GOP), which complies with
      Standard & Poor's multiple-credit-dependent obligation
      criteria;

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

         -- The 'BB' rating of the GOP;

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

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

         -- An expense reserve account that initially will have
            an amount equal to US$1.083 million to cover
            maintenance expenses on the securities, including a
            semiannual payment of the IDB's partial guarantee
            fees.

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


PAXAR CORP: Earns US$14.6 Million in Second Quarter of 2006
-----------------------------------------------------------
Paxar Corp. reported net income of US$14.6 million for the
second quarter of 2006, compared to net income of US$14.4
million, for the second quarter of 2005.

The Company's sales for the second quarter of 2006 is US$233.3
million, compared with sales of US$214.5 million for the second
quarter of 2005.

                  Six Months 2006 Results

For the first six months of 2006, the Company reported sales of
US$432.9 million compared with sales of US$401.7 million for the
first six months of 2005.

Net income of US$19.8 million was reported for the first six
months of 2006, versus net income of US$19.7 million for the
first six months of 2005.

Commenting on the results, Rob van der Merwe, the Company's
president and chief executive officer, said, "Our strong second
quarter growth was a continuation of demand for our
merchandising and supply chain solutions globally, and I am
pleased to report excellent continuing organic growth throughout
the first half of 2006.  I am also pleased with the underlying
strength of volumes flowing through our businesses and regions
as well as progress made to realign our resources to better
service our customers."

Mr. van der Merwe continued, "During the second quarter we made
good progress in the realignment of apparel identification
production in our European operations and initiated further
steps to shift US-based apparel capacity offshore.  This program
will continue throughout the balance of the year and into the
latter part of 2007, resulting in Paxar being better able to
support its customers, globally.  Due to progress made in
executing the initial phase of our global realignment plan, as
anticipated, we incurred some up-front costs, which along with
costs associated with the rapid expansion in our Asia Pacific
operations, negatively impacted reported margins in the quarter.
We also experienced lower margins on certain new products which
are in their initial ramp-up phase."

Paxar Corp. -- http://www.paxar.com/-- provides
identification solutions to the retail and apparel industry,
worldwide.  In Latin America, Paxar operates in Brazil,
Colombia, Dominican Republic, El Salvador, Honduras, Mexico and
Peru.

                        *    *    *

Paxar Corp.'s senior unsecured debt carries Moody's B1 rating.
Moody's placed the rating on Dec. 23, 1996.


PETROLEO BRASILEIRO: Inks MoU With Petroperu and Perupetro
----------------------------------------------------------
Petroleo Brasileiro aka Petrobras' president, Jose Sergio
Gabrielli de Azevedo, and Peruvian President, Alan Garcia,
agreed to sign a Memorandum of Understanding in the coming weeks
between the Brazilian company and Peruvian national oil
companies Petroperu and Perupetro, the sector's regulator.  The
goal is to detail, in the following three months, joint projects
in the Exploration & Production, Natural Gas, Biofuel, Refining,
and Petrochemical areas, in addition to a possible association
between Petrobras and Petroperu.

"We have identified several cooperation and association
opportunities between the companies, not only in the oil and gas
production area, but also in other activities Petrobras develops
both in Brazil and abroad using our state-of-the-art technology
and maintaining our strong concern with social responsibility,"
said Mr. Gabrielli in a press conference.

President Alan Garcia told reporters it was "an honor" to
receive Petrobras' president, with whom his government intends
to establish the necessary dialogue in order to carry out a
joint project with Petroperu.   "We are confident with opening
our doors to Brazilian companies in order to consolidate Peru's
economic development," he said.

"We believe there is a great possibility that we can increase
our investments in Peru, including in association with
Peroperu," Mr. Gabrielli said.  "Our idea is not only to be
technical cooperators. As we are on the oil-producing company,
we want to discuss possibilities with investors, sharing risks,"
he explained.

Petrobras international area director, Nestor Cevero, noted that
the 2007-2011 Investment Plan Petrobras recently disclosed does
not foresee new investments in Peru.  "New projects will have to
be incorporated to the plan later, if they are approved," he
clarified.

Petrobras has operated in Peru since the mid-1990s, and as of
2002 through a Petrobras Energia S.A. subsidiary headquartered
in Argentina. The company has production activities in Lot X, in
Talara, northeastern Peru, near the border with Ecuador, in
addition to exploration activities in six slots that, together,
add up to 57,500 square kilometers.

Petrobras current production in Peru is 15,000 barrels of oil
and gas a day.  Aiming at expanding its activities in that
country, the Company has been positioning itself strategically
in the Camisea Field region, in southern Peru, since last year.
This field's total gas reserves surpass 15 TCF (Trillium Cubic
Feet).

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: Deploying IP Network for Peru's Tax Office
---------------------------------------------------------------
Telefonica del Peru will deploy an IP network for SNAT, Peru's
tax office, according to the local press.

Business News Americas reports that Telefonica del Peru beat
three other entities bidding for the contract.  The company will
be implementing a solution to link about 5,000 workers of SNAT
throughout Peru.

According to BNamericas, Telefonica del Peru offered a "scalable
solution", which includes an integrated service to monitor all
the traffic in the network.  Through, the service, SNAT will
know the amount each taxpayer is spending.

Telefonica del Peru reported about 406,000 broadband connections
in July.  Its new subscribers almost reached 26,000.  Telefonica
del Peru aims to have about 480,000 connections by the end of
the year, BNamericas relates.

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: Inks MOU to Keep Trade Benefits with Venezuela
------------------------------------------------------
Peru, along with other members of the Andean Community of
Nations or CAN trade group, signed a memorandum of understanding
with Venezuela to maintain programmed trade preferences, Dow
Jones Newswires reports.

Other CAN members are:

     -- Ecuador,
     -- Bolivia, and
     -- Colombia.

As reported in the Troubled Company Reporter-Latin America on
April 27, 2006, Venezuela's President Hugo Chavez ratified his
withdrawal from after President Alvaro Uribe of Colombia decided
to continue negotiating a free trade deal with the US.

The memorandum would preserve the tradition of trading goods
-- amounting more than US$4.7 billion -- between Venezuela and
the other countries in the group, Alfredo Fuentes, the acting
secretary of CAN, told Dow Jones.

According to the report, the memorandum states that by Oct. 30,
both sides will sign an agreement to incorporate regulations
applying to free-trade policies, in terms of:

     -- origin,
     -- safeguards,
     -- dispute settlement,
     -- sanitary standards, and
     -- barriers to trade.

The memorandum said that by Oct. 30 at the latest both sides
will sign an accord that will incorporate regulations that apply
to free-trade policies, in terms of origin, safeguards, dispute
settlement, sanitary standards and barriers to trade.

CAN also told Dow Jones that it has formed a working group that
would propose norms to regulate trade between CAN and Venezuela
and find a way to settle trade disputes.

The group has up to 60 days to make the proposal, Dow Jones
relates, citing CAN.

                        *    *    *

Fitch Ratings assigned these ratings on Peru:

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




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


ADELPHIA: Wachovia To Pay US$1.25 Million in Securities Lawsuit
---------------------------------------------------------------
Wachovia Corp. is paying US$1.25 million as part a US$460
million settlement in "In Re Adelphia Communications Corp.
Securities and Derivative Litigation, Case No. 03 MD 1529 (LMM)
or MDL-1529," according to regulatory filings.

Banks involved in the proposed US$460 million settlement in "In
Re Adelphia Communications Corp. Securities and Derivative
Litigation, Case No. 03 MD 1529 (LMM) or MDL-1529," reached a
preliminary agreement to pay US$250 million to settle investor
lawsuits over losses from Adelphia's collapse.

The banks included in this settlement are:

      -- ABN AMRO Inc.,
      -- ABN AMRO Bank N.V.,
      -- Banc of America Securities, LLC,
      -- Bank of America, N.A. (successor by merger to Fleet
         National Bank),
      -- Bank of Montreal,
      -- Barclays Capital, Inc.,
      -- Barclays Bank, PLC,
      -- BNY Capital Markets, Inc.,
      -- The Bank of New York Co., Inc.,
      -- The Bank of New York,
      -- CIBC World Markets Corp.,
      -- CIBC, Inc.,
      -- Citigroup Global Markets Holdings, Inc. (f/k/a SSB
         Inc.),
      -- Citibank, N.A.,
      -- Citicorp U.S.A., Inc.,
      -- Calyon Securities (USA) Inc. (f/k/a Credit Lyonnais
         Securities (USA) Inc.),
      -- Calyon New York Branch (successor by operation of law
         to Credit Lyonnais, New York Branch),
      -- Credit Suisse Securities (USA) LLC (f/k/a Credit
         Suisse First Boston LLC),
      -- Credit Suisse, New York Branch (f/k/a Credit Suisse
         First Boston, New York Branch),
      -- Deutsche Bank Securities Inc. (f/k/a Deutsche Bank
         Alex. Brown Inc.),
      -- Deutsche Bank AG,
      -- Fleet Securities Inc.,
      -- Harris Nesbitt Corp. (f/k/a BMO Nesbitt Burns Corp.),
      -- JPMorgan Securities, Inc.,
      -- JPMorgan Chase & Co.,
      -- JPMorgan Chase Bank, N.A.,
      -- PNC Capital Markets, Inc.,
      -- PNC Bank Corp.,
      -- PNC Bank, National Association,
      -- Scotia Capital (USA), Inc.,
      -- The Bank of Nova Scotia,
      -- SG Cowen Securities Corp.,
      -- Societe Generale,
      -- SunTrust Capital Markets, Inc. (f/k/a SunTrust
         Equitable Securities),
      -- SunTrust Bank,
      -- TD Securities (USA) LLC (f/k/a TD Securities (USA)
         Inc.),
      -- Toronto Dominion (Texas) LLC (f/k/a Toronto Dominion
         (Texas) Inc.),
      -- Wachovia Capital Markets, LLC (f/k/a Wachovia
         Securities, Inc.), and
      -- Wachovia Bank, National Association.

The court will hold a fairness hearing on Nov. 10, 2006 at 2:15
p.m. for the proposed US$460 million settlement in the U.S.
District Court for the Southern District of New York, Courtroom
15D, 500 Pearl Street, New York, New York 10007-1312.

Deadline for submitting a proof of claim is March 10, 2007.

The settlement covers all persons and entities that purchased or
otherwise acquired securities issued by Adelphia Communications
Corp. or its subsidiaries between Aug. 16, 1999, and
June 10, 2002.  It consists of two separate settlements:

       -- the US$210,000,000 Deloitte & Touche Settlement; and
       -- the US$250,000,000 Banks Settlement.

Beginning in April 2002, more than 30 individual and class
actions were filed by purchasers of Adelphia debt and equity
securities against Adelphia, its officers and directors, its
outside counsel, Adelphia's auditors Deloitte & Touche, and/or
various of Adelphia's underwriters and lenders, the banks.

Most of those actions were filed in the U.S. District Court for
the Eastern District of Pennsylvania and were assigned to Judge
Herbert Hutton.  Among the cases filed in the Eastern District
of Pennsylvania were approximately 30 class actions asserting
claims under the U.S. Securities Act of 1933 and/or the U.S.
Securities Exchange Act of 1934.

In addition to the class actions, public pension funds and/or
fund managers seeking to recoup losses on behalf of their funds
commenced several individual actions.

On April 30, 2002, Judge Hutton entered an order consolidating
the then pending actions filed in the Eastern District of
Pennsylvania as, "In re Adelphia Communications Securities
Litigation, Master File No. 02 CV 1781," and providing for the
consolidation of all later-filed actions.

On or about June 25, 2002, Adelphia and its subsidiaries filed
voluntary petitions for relief under Chapter 11 of the
Bankruptcy Code in the U.S. Bankruptcy Court in the Southern
District of New York.  The Chapter 11 cases were assigned to
Hon. Robert E. Gerber and are being jointly administered in the
case, "In re Adelphia Communications Corp., et al., Case No. 02-
41729 (REG)."

Thereafter, by Order dated July 23, 2003, the class actions as
well as certain individual actions against the same defendants
were transferred by the Judicial Panel on Multi-District
Litigation to the Southern District of New York and are
currently pending before Judge McKenna as, "In re Adelphia
Communications Corp. Securities & Derivative Litigation, 03 MD
1529 (LMM)."

On Dec. 5, 2003, Eminence Capital, LLC, Argent Classic
Convertible Arbitrage Fund L.P., Argent Classic Convertible
Arbitrage Fund (Bermuda) L.P., Argent Lowlev Convertible
Arbitrage Fund Ltd., UBS O'Conner LLC f/b/o UBS Global Equity
Arbitrage Master Ltd. and UBS O'Conner LLC f/b/o UBS Global
Convertible Portfolio were appointed as lead plaintiffs in the
consolidated class actions and Abbey Gardy, LLP, (n/k/a Abbey
Spanier Rodd Abrams & Paradis, LLP) and Kirby McInerney & Squire
were appointed as co-lead counsel in accordance with the federal
securities laws.

On Dec. 22, 2003, lead plaintiffs filed a complaint, which
alleges claims for violations of Sections 11, 12(a)(2) and 15 of
the U.S. Securities Act, 15 U.S.C. Section 77k, 77l(a)(2) and
77o, and Sections 10(b) and 20(a) of the Exchange Act, 15 U.S.C.
Section 78j(b) and 78t(a), and Rule 10b-5, 17 C.F.R. Section
240.10b-5, the Trust Indenture Act of 1939, 15 U.S.C. Section
77jjj, 77mmm, 77ooo and 77www et seq. and state law against
various defendants including Deloitte & Touche and the Banks.

After filing the complaint, on March 8, 2004, the Settling
Defendants, along with other defendants, moved to dismiss the
complaint.  The court has not yet ruled on several of the issues
raised by the defendants' motions, but has partially granted and
partially denied some of the motions.

On or about June 30, 2005, at the suggestion of Judge McKenna,
various parties to the class action agreed to participate in
mediation to resolve the pending litigation.  The various
parties selected Judge Daniel Weinstein, a retired judge, to
serve as the mediator.

Pursuant to the court's directives, lead plaintiffs' counsel and
counsel for Deloitte & Touche and the Banks entered into
extensive negotiations under the supervision of Judge Weinstein.

As a result of such discussions and their involvement in the
extensive negotiation process, lead plaintiffs agreed to the
settlements with Deloitte & Touche and the Banks.

                 About Adelphia Communications

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

Adelphia Cablevision Associates of Radnor, L.P., and 20 of its
affiliates, collectively known as Rigas Managed Entities, are
entities that were previously held or controlled by members of
the Rigas family.  In March 2006, the rights and titles to these
entities were transferred to certain subsidiaries of Adelphia
Cablevision, LLC.  The RME Debtors filed for chapter 11
protection on March 31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622
through 06-10642).  Their cases are jointly administered under
Adelphia Communications and its debtor-affiliates chapter 11
cases.




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


BRITISH WEST: Excludes Cellphone Luggage Restriction
----------------------------------------------------
British West Indies Airlines aka BWIA has allowed passengers to
bring with them their cellphones during flights, Newsday
reports.

According to Newsday, the restriction on passenger's handheld
luggage only applies to UK and US flights.  Handheld bags of
passengers in these flights must be see-through.

The report relates that strict security measures have been
implemented for passengers of UK and US after British
authorities uncovered a plot on bombing ten passenger jets bound
for US.

Dionne Ligoure, the corporate communications manager of BWIA,
had assured that the airline's operations, including those to
the UK and US, were not affected, Newday says.

"We experienced some minor delays due to minor congestion at the
airport.  Out of Piarco and Crown Point airports every person
will be subject to additional security checks that the Civil
Aviation Authority has mandated which are along similar lines to
the directives of the Department of Transport (of the UK) and
the Department of Homeland Security (of the US)," Ms. Ligoure
told Newsday.

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


* URUGUAY: Ruling on Pulp Mill Conflict Expected by September 7
---------------------------------------------------------------
A ruling from Mercosur's arbitration court on the pulp mill
conflict between Uruguay and Argentina is expected by
Sept. 7, 2006, Merco Press reports.

According to Merco Press, the ruling could be appealed.

As reported in the Troubled Company Reporter-Latin America on
Aug. 14, 2006, Uruguay filed a complaint against Argentina in
the Southern Common Market Claims Court due to roadblocks on
international routes.  Argentina's citizens had been 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.  Uruguay claimed that the roadblocks in
Gualeguaychu caused the country losses of US$400 million, jobs,
and small businesses in the peak of the tourist season.  Jorge
Taiana, the Foreign Minister of Argentina, had rejected
Uruguay's plea to create a Binational Technical Monitoring
Commission, believing that it would be like accepting the
construction of the plants.

Merco Press relates that the Uruguayan government claimed that
Argentina made no efforts to end the demonstrations, demanding
that the latter be compelled to curb the same kind of protest in
the future.

The Uruguayan Foreign Affairs ministry said in a release that
Argentina did not fulfill its obligations under Mercosur norms
because of its refusal to adopt measures to prevent and/or cease
impediments to the free circulation.

Dozens of loaded trucks -- including those from Chile -- had to
change routes or appeal to maritime or fluvial transport, the
report states.  Many of those trucks were transporting equipment
and material for the two pulp mills.

Hearings at the Mercosur court in Montevideo started on
Wednesday with the presentation of witnesses from both Uruguay
and Argentina.  On Thursday, the government representatives made
their claims.  Discussions were made confidential, as
established in the Mercosur Olivos Protocol, Merco Press notes.

Merco Press underscores that Argentina said it did not hold back
protesters because they have the right to "freedom of speech"
and a right to circulate freely.

Argentine government told Merco Press that the protest did not
obstruct bilateral trade, adding that there was always at least
one of the three land passages open.

Merco Press emphasizes that Argentina said it would make an
appeal if it would lose the case.

Meanwhile, Argentina challenged one of the three judges in the
Mercosur court who has a Spanish nationality, as ENCE -- one of
the builders of the pulp mill -- was of the same citizenship,
Merco Press relates.  Other judges of the court were an
Argentine and a Uruguayan.

                        *    *    *

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


PETROLEOS DE VENEZUELA: In Talks with Petrobras to Form Company
---------------------------------------------------------------
Petroleos de Venezuela SA and Petroleo Brasileiro 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 Petroleo Brasileiro

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

                 About Petroleos de Venezuela

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

                        *    *    *

Standard & Poor's said on July 17 that it may lower Petroleos de
Venezuela'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.


PETROLEOS DE VENEZUELA: Forming New Ventures with Foreign Firms
---------------------------------------------------------------
Petroleos de Venezuela, the state-owned oil company of
Venezuela, told Reuters that it has entered into agreements with
Petroleo Brasileiro, Repsol YPF and Compania General de
Combustibles to finalize the conversion of subcontracting deals
to state majority joint ventures.

Reuters reports that Venezuela Petroleum Corp. -- a subsidiary
of Petroleos de Venezuela -- signed accords with Petroleo
Brasileiro for the creation of:

    -- Petroven-Bras,
    -- Petroritupano, and
    -- Petrokarina.

According to Reuters, the firms will operate fields producing
50,000 barrels of oil per day.

Reuters relates that Venezuela concluded the conversion of 32
oilfield subcontracting deals this year.

Meanwhile, Repsol YPF -- the parent company of YPF SA -- signed
for the creation of Petroquiriquire, which would run the
Quiriquire field, expected to produce about 14,500 barrels of
oil daily.

Compania General de Combustibles, an Argentine company, also
signed an accord with Venezuela to become a minority partner of
Petronado, which will run the Onado field, which has a capacity
of 4,500 barrels of oil per day.

The firms, says Reuters, had agreed to the new terms in March,
but had not signed the creation of joint ventures.

In 2005, energy authorities declared the operating accords
illegal and revised the accords.  The authorities told the
foreign operators to leave Venezuela if they would not accept
the new terms.  Fields from France's Total and Italy's Eni were
confiscated when talks with Petroleos de Venezuela failed,
Reuters states.

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

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 Inks Accord with Venezuela to Create Company
----------------------------------------------------------------
Repsol YPF -- the parent company of YPF SA -- signed an
agreement with Petroleos de Venezuela, the Venezuelan state-
owned oil company, for the creation of Petroquiriquire in
Venezuela, Reuters reports.

According to Reuters, Petroquiriquire would run the Quiriquire
field, which is expected to produce about 14,500 barrels of oil
daily.

Petroleos de Venezuela told Reuters that it has entered into
agreements with Petroleo Brasileiro, Repsol YPF and Compania
General de Combustibles to finalize the conversion of
subcontracting deals to state majority joint ventures.

The firms, says Reuters, had agreed to the new terms in March,
but had not signed the creation of joint ventures.

Reuters relates that Venezuela concluded the conversion of 32
oilfield subcontracting deals this year.

In 2005, energy authorities declared the operating accords
illegal and revised the accords.  The authorities told the
foreign operators to leave Venezuela if they would not accept
the new terms.  Fields from France's Total and Italy's Eni were
confiscated when talks with Petroleos de Venezuela failed,
Reuters states.

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.

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.

                        *    *    *

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: Fondafa Sets US$930 Million for Agricultural Loans
---------------------------------------------------------------
El Universal reports that the Venezuelan Fund for Development of
Agriculture, Cattle-raising, Fishery, Forestry and Related --
Fondafa -- is earmarks US$930 million to develop 685,000
hectares in 2006.

According to Fondafa President Alirio Rondon, the National
Agriculture Bank will invest US$325 million in the agricultural
sector, El Universal says.

Out of the total Fondafa investment:

   -- US$298 million will be for the cattle-raising sector;
   -- US$82 million for fisheries, and
   -- US$32 million for forestry development.

El Universal says that Fondafa grants loans to cooperatives with
a 3% yearly interest rate, while loans for individuals have a
yearly interest rate of 4%.

                        *    *    *

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


* VENEZUELA: 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.

                        *    *    *

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


* VENEZUELA: Will Keep Trade Benefits with Andean Community
-----------------------------------------------------------
Venezuela has signed a memorandum of understanding with the
Andean Community of Nations to maintain programmed trade
preferences, Dow Jones Newswires reports.

Other CAN members are:

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

As reported in the Troubled Company Reporter-Latin America on
April 27, 2006, Venezuela's President Hugo Chavez ratified his
withdrawal from after President Alvaro Uribe of Colombia decided
to continue negotiating a free trade deal with the US.

The memorandum would preserve the tradition of trading goods --
amounting more than US$4.7 billion -- between Venezuela and the
other countries in the group, Alfredo Fuentes, the acting
secretary of CAN, told Dow Jones.

According to the report, the memorandum states that by Oct. 30,
both sides will sign an agreement to incorporate regulations
applying to free-trade policies, in terms of:

     -- origin,
     -- safeguards,
     -- dispute settlement,
     -- sanitary standards, and
     -- barriers to trade.

The memorandum said that by Oct. 30 at the latest both sides
will sign an accord that will incorporate regulations that apply
to free-trade policies, in terms of origin, safeguards, dispute
settlement, sanitary standards and barriers to trade.

CAN also told Dow Jones that it has formed a working group that
would propose norms to regulate trade between CAN and Venezuela
and find a way to settle trade disputes.

The group has up to 60 days to make the proposal, Dow Jones
relates, citing CAN.

                        *    *    *

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


                         ***********


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

Troubled Company Reporter - Latin America is a daily newsletter
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Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick,
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Copyright 2006.  All rights reserved.  ISSN 1529-2746.

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