TCRLA_Public/060822.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 22, 2006, Vol. 7, Issue 166

                          Headlines

A R G E N T I N A

A. PROASI: Reorganization Proceeding Concluded
ALPARGATAS: ARS106,587 Claimant Gets Approval from Court
ARDITI &: Verification of Proofs of Claim Is Until Nov. 10
BALLY TECH: Inks Casion Systems Pact with Philadelphia Park
BALLY TECH: To Restate 2003 Through 2005 Financial Statements

BANCO HIPOTECARIO: Will Repay US$268 Million in Notes
BANCO RIO: Completes Issuance of Letras Hipotecarias for ARS94M
CENTRAL PUERTO: Reports ARS190.3-Million Profit for First Sem.
EQUIPOS MAGNETICOS: Claims Verification Deadline Is on Oct. 17
ENDESA CHILE: Argentine Unit Incurs ARS19-Mil Loss for First Sem

ESTRELLA FEDERAL: Seeks for Court Approval to Restructure Debts
FILE NET: Deadline for Verification of Claims Is Set for Nov. 6
GAS NATURAL: Incurs US$1.3-Million Loss for First Six Months
IMEX INT'L: Trustee Verifies Proofs of Claim Until Sept. 29
INDUSTRIAS ANTES: Verification of Claims Is Until Oct. 9

TELECOM ARGENTINA: Launches Internet Service for Small Business
TELEFONICA DE ARGENTINA: Launches Internet Service for SME

* BUENOS AIRES: Fitch Ups Unsecured Debt Ratings to B from B-
* ARGENTINA: Electric Utilities Continue to Enjoy Positive Trend

B A H A M A S

WINN-DIXIE: Wants to Sell Seven Florida Stores & Equipment

B E R M U D A

CONCORD RE: S&P Rates US$375 Million Term Loan Facility at BB+
QUANTA CAPITAL: Posts US$42.9 Million Net Loss in 2nd Quarter
SCOTTISH RE: S&P Cuts Counterparty Credit Rating to B+ from BB+

B O L I V I A

PETROBRAS ENERGIA: Consult Sistem to Audit Bolivian Fields

B R A Z I L

AES SUL: Will Invest BRL678 Million Through 2011
BANCO DO BRASIL: Posts BRL3.89 Bil. First Half 2006 Net Profits
BANCO DO BRASIL: Analysts Say Firm's Second Quarter Results Weak
CIA SIDERURGICA: Gets Regulatory Approval to Build Cement Unit
MRS LOGISTICA: Buys 137 Railroad Wagons from Amsted Maxion

NOSSA CAIXA: Analysts Expect Bank to Recover Before Year-End
PETROLEO BRASILEIRO: Evaluates Agreements with Venezuelan Firm
PETROLEO BRASILEIRO: Tops Gulf of Mexico Lease Sale 2000
PETROLEO BRASILEIRO: Inks Exploration & Prod'n Pact With Turkyye
VARIG SA: Volo Seeks US$2 Billion Loan to Buy 50 Embraer Planes

VARIG SA: Returns Five Aircraft Engines to Willis Lease Finance

* BRAZIL: Electric Utilities Continue to Enjoy Positive Trend
* BRAZIL: Fitch Comments on Local Banks Adaptability to Crisis

C A Y M A N   I S L A N D S

ASAKUSA: Will Hold Final Shareholders Meeting on Sept. 8
ELECTROGUAYAS INC: Last Shareholders Meeting Is Set for Sept. 8
HARPOON (ADVISORS): Final Shareholders Meeting Is on Sept. 7
HARPOON (HOLDINGS): Last Shareholders Meeting Is on Sept. 7
HARPOON (PARALLEL): Final Shareholders Meeting Is on Sept. 7

LION2 LDC: Calls Shareholders for a Final Meeting on Sept. 8
LION3 LDC: Invites Shareholders for a Final Meeting on Sept. 8
LION4 LDC: Shareholders Convene for a Final Meeting on Sept. 8
LION5 LDC: Final Shareholders Meeting Is Scheduled for Sept. 8
PRAETORIAN EUROPE: Last Day to File Proofs of Claim Is Sept. 20

QUICK ACCESS: Calls Shareholders for Final Meeting on Sept. 8
RUBY CAPITAL: Schedules Final Shareholders Meeting on Sept. 7

C H I L E

EMPRESAS IANSA: S&P Holds BB Long-Term Issuer Credit Ratings

* CHILE: Electric Utilities Continue to Enjoy Positive Trend

C O L O M B I A

BANCOLOMBIA: Fitch Raises Foreign Currency Issuer Rating to BB+
BBVA COLOMBIA: Fitch Ups Foreign Currency Issuer Rating to BB+

* COLOMBIA: Central Bank Raises Benchmark Lending Rate to 6.75%
* COLOMBIA: Electric Utilities Continue to Enjoy Positive Trend

C O S T A   R I C A

* COSTA RICA: Fitch Talks on Real Estate Risks & Opportunities

C U B A

* CUBA: Purchases 80 Freight Cars from Iran for IRR4,353,280

E C U A D O R

PETROECUADOR: Investing US$127MM to Upgrade Esmeraldas Refinery
PETROECUADOR: Starts Talks with Suppliers to Restructure Debts
PETROECUADOR: Unit Implements Fuel Terminal Contingency Plan

G U A T E M A L A

* GUATEMALA: Electric Utilities Continue to Enjoy Positive Trend

J A M A I C A

DIGICEL LTD: Expands CaribFlex Credit Transfer Service to US
SUGAR COMPANY: Workers Await Gov't to Disclose Plans for Sector

M E X I C O

DESC SA: S&P Says Ratings Are Limited by Tight Fin. Flexibility
FORD MOTOR: Cuts North American Output to Hasten Turnaround
FORD MOTOR: Cutbacks Prompt Fitch to Lower Issuer Rating to B
FORD MOTOR: Production Cutbacks Cue Moody's to Review Ratings
FORD CREDIT: Moody's Reviews Debt Rating for Likely Downgrade

FORD MOTOR: Production Cuts Cues S&P to Put Ratings on NegWatch
VISTEON CORP: Fitch Says Won't be Affected by Ford's Cutbacks
SATELITES MEXICANOS: Asks US Court to Set Confirmation Hearing
SATELITES MEXICANOS: Gets Extension of Schedules Filing Deadline
VOLKWAGEN: Mexican Workers Went on Strike Over Failed Wage Talks

* HUIXQUILUCAN: Moody's Retains B1 Global Scale Rating
* MEXICO: Electric Utilities Continue to Enjoy Positive Trend

P A N A M A

SOLO CUP: S&P Lowers Corporate Credit Rating to B from B+

P E R U

TELEFONICA DEL PERU: Will Invest in Coverage Expansion

P U E R T O   R I C O

ADELPHIA COMMS: Files Fifth Amended Plan of Reorganization
ADELPHIA COMMUNICATIONS: Posts US$11.2 Mil Net Loss in June 2006
PILGRIM'S PRIDE: Proposes to Buy Gold Kist for US$1 Bil. in Cash

T R I N I D A D   &   T O B A G O

DIGICEL LTD: Telecoms Experts Veto Interconnection Fee Proposal

U R U G U A Y

* URUGUAY: President Affirms Paper Mill Construction in Border

V E N E Z U E L A

PETROLEOS DE VENEZUELA: Evaluates Agreements with Petrobras
PETROLEOS DE VENEZULA: Investing in Kingston Plant Upgrade

* VENEZUELA: Electric Utilities Continue to Enjoy Positive Trend

* Fitch Says Latin America's Wireless Industry Remains Stable
* Fitch Discusses Revised Issuer Default & Recovery Ratings


                          - - - - -



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


A. PROASI: Reorganization Proceeding Concluded
----------------------------------------------
A. Proasi y B. Yanichevsky S.R.L.'s reorganization proceeding
has ended.  Data published by Infobae on its Web site indicated
that the process was concluded after a Court in Buenos Aires
approved the debt agreement signed between the company and its
creditors.


ALPARGATAS: ARS106,587 Claimant Gets Approval from Court
--------------------------------------------------------
Alpargatas S.A.I.C. said that only of the three claims presented
against the company has gotten court approval.

The creditor whose name was not disclosed by Infobae, is owed
ARS106,587.43, an amount which represents about 0.02% of the
company's total liabilities.  

On July 10, Juzgado Comerical Numero 19 approved the agreement
to restructure Alpargatas' US$272 million debts.

The total debt includes the liabilities of companies controlled
by Alpargatas:

     -- Alpargatas Textil;
     -- Alpargatas Calzados;
     -- Alpaline;
     -- Confecciones Textiles;
     -- Textil Catamarca and
     -- Calzado Catamarca.

                      About Alpargatas

Created in 1883, Alpargatas S.A.I.C. is a group of companies
which participate in the textile sector having well recognized
brands.  The shares of the company are located between creditors
who capitalized their credits in 2000 and minor shareholders in
the Buenos Aires stock market, with participations for no more
than 20%.

Alpargatas filed for the local equivalent of the United States'
Chapter 11 bankruptcy in December 2001 and presented its debt
restructuring offer in court in March 2004.  


ARDITI &: Verification of Proofs of Claim Is Until Nov. 10
-------------------------------------------------------------
Jose Abuchdid, the court-appointed trustee for Arditi &
Menechino S.R.L.'s bankruptcy proceeding, verifies creditors'
proofs of claim until Nov. 10, 2006.

Under Argentine Bankruptcy Law, Mr. Abuchdid is required to
present the validated claims in court as individual reports.
Court No. 9 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 Arditi & and its
creditors.

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

Mr. Abuchdid will submit a general report that contains an audit
of Arditi &'s accounting and banking records.

Court No. 9 declared the company bankrupt at the request of
Carlos Ferrari, whom it owes US$34,978.40.

Clerk No. 17 assists the court in the case.

The debtor can be reached at:

           Arditi & Menechino S.R.L.
           Avellaneda 4080
           Buenos Aires, Argentina

The trustee can be reached at:

           Jose Abuchdid
           Avenida de los Incas 3624
           Buenos Aires, Argentina


BALLY TECH: Inks Casion Systems Pact with Philadelphia Park
-----------------------------------------------------------
Bally Technologies, Inc., has signed a contract to provide a
complete casino management system for the under-development
Philadelphia Park Casino in Bensalem, Pa.

Philadelphia Park Casino plans to utilize technology from the
Bally Casino Management Systems and Bally Slot Management
Systems product divisions and other system features yet to be
announced at its casino tentatively scheduled to open this
winter.

"We looked at a variety of vendors who could help us create an
exciting and rewarding slot floor for our players and came away
impressed with Bally's long-term commitment to the systems
business and its proven track record of stability and
performance in a high-volume slot environment," said Dave Jonas,
President and COO of Philadelphia Park Casino.  "We also feel we
have the best partner in terms of a commitment to advanced
technological development and a team of systems experts
dedicated to the highest levels of service."

"As the Pennsylvania market continues to progress along, we're
very pleased one of the first locations scheduled to open has
selected Bally as its partner," said Ramesh Srinivasan,
Executive Vice President of Bally's systems division.  "It's
gratifying to see how customers in a variety of casino markets
are recognizing our commitments to and investments in our
systems business.  By partnering with Bally, our customers are
also acknowledging how our lineup of Bally Power Bonusing
products can enhance the player experience while driving
additional revenue."

Recognized as the industry systems leader with more than 345,000
machines and 625 casino, bingo, Class II, central determination
and lottery locations worldwide -- including more than 165
locations currently running Bally eTICKET on more than 178,000
slot machines -- the Bally Technologies systems product line
offers:

   -- slot machine cash monitoring,
   -- table management,
   -- cashless accounting,
   -- security,
   -- maintenance,
   -- marketing, and
   -- promotional and bonusing capabilities;

enabling operators to accurately analyze performance and
accountability while providing an enhanced level of customer
service.

                  About Bally Technologies

Headquartered in Las Vegas, Bally Technologies, Inc., --
http://www.BallyTech.com/-- designs, manufactures, operates and  
distributes advanced gaming devices, systems and technology
solutions worldwide.  Bally's product line includes reel-
spinning slot machines, video slots, wide-area progressives and
Class II, lottery and central determination games and platforms.  
Bally also offers an array of casino management, slot
accounting, bonusing, cashless and table management solutions.  
The company also owns and operates Rainbow Casino in Vicksburg,
Miss. Additional.  Bally Technologies' South American operations
is located in Argentina.

                        *    *    *

As reported in the Troubled Company Reporter-Latin America on
Aug. 18, 2006, Standard & Poor's Ratings Services held its
ratings on Bally Technologies Inc., including the 'B' corporate
credit rating, on CreditWatch with negative implications.

Ratings were initially placed on CreditWatch Sept. 9, 2005,
following the company's announcement that it had not completed
its accounting and financial reporting process for the fiscal
year ended June 30, 2005, due to several transactions that came
under review from a revenue recognition perspective.  The
company's 10-K was subsequently filed on Dec. 31, 2005.


BALLY TECH: To Restate 2003 Through 2005 Financial Statements
-------------------------------------------------------------
Bally Technologies, Inc., has completed its review of certain
transactions that affect the timing of revenue recognition
during the periods from 2003 to 2005 and the company's Audit
Committee of the Board of Directors has made a determination
that the company's 2003 through 2005 fiscal years' results and
certain quarterly results within such fiscal periods should be
restated.

As a result, the company's existing financial statements for its
fiscal years ended June 30, 2003, 2004 and 2005 and for each of
the quarterly periods in the years ended June 30, 2004, and 2005
and the related independent auditor's report included in its
2005 Form 10-K should no longer be relied upon.  The company
announced the commencement of this review on April 28, 2006.

With the assistance of its outside consultants, the company is
determining the appropriate specific adjustments that need to be
made to each of the periods affected.  Generally, the effect of
the adjustments is expected to shift revenue and operating
income from earlier periods into more recent periods.

Robert Caller, the company's Chief Financial Officer, said, "We
expect to file the restatements of our financial statements for
fiscal years 2003, 2004 and 2005 (and the 2004 and 2005
quarterly periods affected within such years) with the
Securities and Exchange Commission during September 2006.  Upon
filing of the restated financial statements, we will be in a
position to proceed with the completion and filing of our Form
10-Qs for the quarters ended September 30, 2005, December 31,
2005 and March 31, 2006, which have not, as of this date, been
filed with the SEC.  We currently anticipate that these Form 10-
Qs will be filed approximately 30 to 60 days after the restated
financial statements are filed.  All of these documents are
subject to review and approval by our Audit Committee and no
assurance of timing can be made. As a result of these continuing
efforts, we do not expect to file our 2006 Form 10-K by the
Sept. 13, 2006, deadline and are currently targeting filing in
November 2006."

Mr. Caller added, "We are sensitive to investors' lack of
information due to these delays in filing and are working
diligently to remedy this situation.  We will provide additional
information as to the expected filing dates after we complete
the restatement."

Richard Haddrill, the company's Chief Executive Officer, said,
"We are pleased with our product development initiatives and our
commercialization efforts for fiscal year 2006.  We achieved our
2006 revenue-growth objectives, driven by slot sales, new
participation initiatives and a healthy Systems business.  
However, we did not achieve our profitability objectives due
principally to lower gross margins on our game sales related to
introductory pricing and the manufacturing costs of our newly
commercialized slot machine platforms that remain in early
deployment, high legal and accounting costs associated with our
ongoing litigation and restatement activities and increased
interest costs.  We enter fiscal 2007 with strong product
momentum and expect both our gross margins to improve and our
legal and accounting costs to return to more normal levels as
the year progresses."

Bally can report several anticipated business metrics for fiscal
2006 year as:

   -- Sales of more than 15,000 new gaming devices, which is
      driven by the market acceptance of the ALPHA OS platform
      and the strength of the S9000 five-reel mechanical slot,
      CineVision wide-screen video and M9000 video products.
      This unit total excludes additional game sales that do not
      carry full margins and that support our OEM customers.

   -- Hot Shot Progressive -- 600 installed participation units
      as of June 30, 2006, with a backlog of an additional 750
      participation units.

   -- Mexico bingo products -- Installed base of approximately
      1,800 bingo units as June 30, 2006, and orders in addition
      to the initial contract of 2,000 units.  However, revenue
      recognized in fiscal 2006 has been modest.


                  About Bally Technologies

Headquartered in Las Vegas, Bally Technologies, Inc., --
http://www.BallyTech.com/-- designs, manufactures, operates and  
distributes advanced gaming devices, systems and technology
solutions worldwide.  Bally's product line includes reel-
spinning slot machines, video slots, wide-area progressives and
Class II, lottery and central determination games and platforms.  
Bally also offers an array of casino management, slot
accounting, bonusing, cashless and table management solutions.  
The company also owns and operates Rainbow Casino in Vicksburg,
Miss. Additional.  Bally Technologies' South American operations
is located in Argentina.

                        *    *    *

As reported in the Troubled Company Reporter-Latin America on
Aug. 18, 2006, Standard & Poor's Ratings Services held its
ratings on Bally Technologies Inc., including the 'B' corporate
credit rating, on CreditWatch with negative implications.

Ratings were initially placed on CreditWatch Sept. 9, 2005,
following the company's announcement that it had not completed
its accounting and financial reporting process for the fiscal
year ended June 30, 2005, due to several transactions that came
under review from a revenue recognition perspective.  The
company's 10-K was subsequently filed on Dec. 31, 2005.


BANCO HIPOTECARIO: Will Repay US$268 Million in Notes
-----------------------------------------------------
Banco Hipotecario S.A. will be paying Obligaciones Negociables
and other debts with banks amounting to US$268 million.

Currenty, the bank has repaid about 45% of its debts since it
began restructuring debts for US$454 million a year ago.

Banco Hipotecarion was the first company to restructure debts
for US$1.3 billion, garnering 97% acceptance from its creditors.  
The restructuring enabled the bank to gain access to
international credits.

Banco Hipotecario has repaid its ARS400 million with the central
bank and its US$604 million Boden 2012.

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.


BANCO RIO: Completes Issuance of Letras Hipotecarias for ARS94M
---------------------------------------------------------------
Banco Rio de la Plata S.A. has completed the issuance of Letras
Hipotecarias for ARS93.5 million on Friday, at a price of
US$98.67 with annual rate of 2.75%.

The issuance was made through the Fideicomiso Financiero Super
Letras Hiptecarias Clase II.  This is the largest emission done
since 2002.  The certificates have a minimum rate of 6% and a
maximum of 25%.

The titles will pay monthly interest rates.

Deutche Bank serves as the fiduciary or trustee for the
transaction.  Fitch puts a triple-A rating on the Tranche A
paper.

Headquartered in Buenos Aires, Argentina, Banco Rio de la Plata
is an Argentinean private bank providing a range of financial
services, including retail, corporate, and merchant banking,
insurance, credit cards and fund management, to individuals,
companies of all sizes, financial institutions and the public
sector (both provincial and national).  The company has a
network of approximately 280 branches and employs over 5,000
serving over 1 million customers.  It is part of the Latin
American franchise of Banco Santander Central Hispano, which
holds over 80% of the bank's share capital.

                        *    *    *

Moody's Investor Service assigns Caa1 ratings to Banco Rio de la
Plata's Issuer Rating and Long-Term Bank Deposits.

                        *    *    *

As reported in the Troubled Company Reporter on May 17, 2006,
Fitch Ratings affirmed these ratings of Banco Rio de la
Plata:

   -- Individual 'E'; and
   -- Support '5'.


CENTRAL PUERTO: Reports ARS190.3-Million Profit for First Sem.
--------------------------------------------------------------
Central Puerto SA reported ARS190.3 million profit for the first
six months.  The company attributed the gain to the
restructuring of its debts.

The company reported losses of ARS107.2 million during the first
quarter of 2006.

Central Puerto announced in June the reduction of its total
liabilities by 55%.  After the restructuring, the company is
left with ARS184.9 million in debts, including capital and
interests.

At June 30, 2006, Central Puerto's balance sheet showed
ARS1,079,110,854 in total assets and ARS686,847,321 in total
liabilities.

Central Puerto SA generates around 9% of Argentina's electricity
consumption.  It reported losses of ARS86,085,121 for the year
ended Dec. 31, 2005.  In 2004, the company registered losses of
ARS26.8 million.


EQUIPOS MAGNETICOS: Claims Verification Deadline Is on Oct. 17
--------------------------------------------------------------
Eva Gords, the court-appointed trustee for Equipos Magneticos
Viorason S.A.'s bankruptcy case, verifies creditors' proofs of
claim until Oct. 17, 2006.

Under Argentine Bankruptcy Law, Ms. Gords is required to present
the validated claims in court as individual reports.  Court
No. 11 in Buenos Aires will determine if the verified claims are
admissible, taking into account the trustee's opinion and the
objections and challenges raised by Equipos Magneticos and its
creditors.

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

Ms. Gords will submit a general report that contains an audit of
Equipos Magneticos' accounting and banking records.

Court No. 11 declared the company bankrupt at the behest of
Susana Niselewicz, whom it owes US$24,000.

Clerk No. 21 assists the court in the case.

The debtor can be reached at:

           Equipos Magneticos Viorason S.A.
           Ramon Freire 4876/80
           Buenos Aires, Argentina

The trustee can be reached at:

           Eva Gords
           Paraguay 1225
           Buenos Aires, Argentina


ENDESA CHILE: Argentine Unit Incurs ARS19-Mil Loss for First Sem
----------------------------------------------------------------
Endesa Costanera SA, a subsidiary of Endesa Chile, incurred a
ARS19,291,311 loss for the six months ended June 30, 2006,
compared with a ARS14,260,000 profit in the same period last
year.  

The company's results showed the increase in the amount needed
to cover unpaid debts with Companhia de Interconexao Energetica
and Comercializadora del Mercosur, totaling ARS51.8 million.

At June 30, 2006, Endesa Costanera's balance sheet showed
ARS1,699,781,161 in total assets and ARS895,202,062 in total
liabilities.

                   About Endesa Costanera

Endesa Costanera generates 10% of Argentina's electrial nees,
and supplies 5% of the country's electrical requirement.  The
company is part of Endesa Chile, controlled by the Chilean group
Enersis, which is part of the Spanish Endesa.

                     About Endesa Chile

Empresa Nacional de Electricidad S.A. aka Endesa Chile and its
subsidiaries generate and supply electricity.  The company owns
and operates generating plants, and offers civil, mechanical,
and electrical engineering, architectural environmental, and
project management services.

                        *    *    *

Moody's Investor Service assigned a Ba1 foreign currency long-
term debt rating to Empresa Nacional de Electricidad SA (Chile)
on Jan. 26, 2005.


ESTRELLA FEDERAL: Seeks for Court Approval to Restructure Debts
---------------------------------------------------------------
Court No. 14 in Buenos Aires is studying the merits of Estrella
Federal Seguridad Privada Integral S.R.L.'s petition to
restructure its debts after it ceased payments on June 30, 2006.

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

Clerk No. 27 assists the court in the proceeding.

The debtor can be reached at:

           Estrella Federal Seguridad Privada Integral S.R.L.
           Avenida Callao 157
           Buenos Aires, Argentina


FILE NET: Deadline for Verification of Claims Is Set for Nov. 6
---------------------------------------------------------------
Court-appointed trustee Marcos Livszyc verifies creditors'
proofs of claim against bankrupt company File Net S.A. until
Nov. 6, 2006.

Under Argentine Bankruptcy Law, Mr. Livszyc is required to
present the validated claims in court as individual reports.
Court No. 9 in Buenos Ares will determine if the verified claims
are admissible, taking into account the trustee's opinion and
the objections and challenges raised by File Net and its
creditors.

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

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

Court No. 9 declared File Net bankrupt at the behest of
Nazionale del Lavoro S.A., which it owes US$3,748.81.

Clerk No. 17 assists the court in the proceeding.

The debtor can be reached at:

           File Net S.A.
           Salta 1008
           Buenos Aires, Argentina

The trustee can be reached at:

           Marcos Livszyc
           Nunez 6387
           Buenos Aires, Argentina


GAS NATURAL: Incurs US$1.3-Million Loss for First Six Months
------------------------------------------------------------
Gas Natural Ban S.A. reported US$1.3 milion loss for the six-
month period ended June 30, 2006, compared with the US$3.8
million profit for the same period last year.  The company
attributed the loss to changes in the currency and higher
operating costs.

At June 30, 2006, Gas Natural's balance sheet showed
US$1,370,036,944 in total assets and US$576,095,666 in total
liabilities.

GasBan was created in 1992 with the privatization of the estate-
owned gas company, Gas del Estado.  One of the eight gas
distribution companies in Argentina, it has operations in the
north area of Buenos Aires Province, the area in Argentina with
the healthiest population by income.  Gas Ban is controlled by
Invergas (51%) and Gas Natural SDG Argentina (19%).  In turn,
both companies are controlled by Gas Natural SDG Spain.

On June 19, 2006, Moody's Investors Service assigned a B2 global
local currency rating to Gas Natural Ban S.A. and A1.ar national
scale rating for Gas Ban's announced notes, with a stable
outlook.  This is the first time that Moody's has rated Gas Ban.  
After issuance of the announced notes, which will not increase
Gas Ban's total indebtedness, the company will have eliminated
its exposure to dollar denominated debt. The ratings reflect Gas
Ban's success at generating cash flows and reducing debt but
also the risk posed by its uncertain regulatory environment.


IMEX INT'L: Trustee Verifies Proofs of Claim Until Sept. 29
-----------------------------------------------------------
Court-appointed trustee Elisa Esther Tomattis verifies
creditors' proofs of claim against bankrupt company Imex
Internacional S.R.L. until Sept. 29, 2006.

Ms. Tomattis will present the validated claims in court as
individual reports on Nov. 17, 2006.  A court in Buenos Ares
will determine if the verified claims are admissible, taking
into account the trustee's opinion and the objections and
challenges raised by Imex International and its creditors.

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

A general report that contains an audit of Imex Internacional's
accounting and banking records will follow on Feb. 15, 2007.

The trustee can be reached at:

           Elisa Esther Tomattis
           Avenida Callao 215
           Buenos Aires, Argentina


INDUSTRIAS ANTES: Verification of Claims Is Until Oct. 9
--------------------------------------------------------
Miriam Gladys Colmegna, the court-appointed trustee for
Industrias Antes S.A.'s bankruptcy proceeding, verifies
creditors' proofs of claim until Oct. 9, 2006.

Ms. Colmegna will present the validated claims in court as
individual reports on Nov. 21, 2006.  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 Industrias Antes and its creditors.

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

A general report that contains an audit of Industrias Antes'
accounting and banking records will follow on Feb. 6, 2007.

Court No. 22 declared the company bankrupt at the behest of Obra
Social de Empleados de Comercio y Actividades Civiles or Osecac,
which it owes US$105,141.05.

Clerk No. 43 assists the court in the case.

The debtor can be reached at:

           Industrias Antes S.A.
           General Urquiza 2248
           Buenos Aires, Argentina

The trustee can be reached at:

           Miriam Gladys Colmegna
           Sarmiento 1179
           Buenos Aires, Argentina


TELECOM ARGENTINA: Launches Internet Service for Small Business
---------------------------------------------------------------
Telecom Argentina said in a statement that it has launched an
Internet package for small to medium-sized enterprises through
Arnet, its ISP division.

Business News Americas relates that the new broadband portfolio
is called Arnet Business.  It includes various products
depending on the amount of personal computers connected to the
network.  

BNamericas states that there are systems for firms requiring
broadband connections for up to 20 computers.  These include:

    -- own domain,
    -- mailboxes, and
    -- the possibility for clients to manage their own servers
       through a web-control panel.

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%).

                        *    *    *

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'.


TELEFONICA DE ARGENTINA: Launches Internet Service for SME
----------------------------------------------------------
Telefonica de Argentina said in a statement that it has launched
a 5Mb Internet service geared toward the small to medium-sized
enterprise (SME) segment.

Telefonica de Argentina told Business News Americas that it
plans to offer its Speedy LAN Office service through Telefonica
Negocios, its corporate communications service unit.

BNamericas reports that the solution will entitle SMEs to link
up to five computers with a single 5Mb Internet connection.  It
also includes WiFi connectivity.

Telefonica Negocios disclosed earlier this year that it will
invest ARS78 million in 2006 to develop products and services
for the SME segment, BNamericas relates.

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

                        *    *    *

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

                        *    *    *

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


* BUENOS AIRES: Fitch Ups Unsecured Debt Ratings to B from B-
-------------------------------------------------------------
Fitch Ratings has upgraded the global scale foreign and local
currency unsecured debt ratings, including the euro medium-term
note program, of the City of Buenos Aires to 'B' from 'B-'.
Fitch has also upgraded the city's foreign and local currency
issuer default ratings from 'B-' to 'B'. The Rating Outlook is
Stable.

The rating action followed the upgrade of the Argentinean
sovereign rating, which was limiting the credit quality of the
city.  Currently, the city continues strengthening its credit
profile, through the achievement of an adequate internal saving
level, despite the expected increase in current and capital
expenditures and the increase of debt service payments due to
the initiation of amortization on Eurobonds series II and III.  
The city continues showing a strong financial situation due to
its high liquidity position, sustainable debt levels and as well
manageable debt repayment schedule.  The main concerns regarding
the City of Buenos Aires's credit profile are mainly risks
associated with the federal government's economic policies --
particularly exchange rate levels and capital controls. A s of
June 2006, the results indicate that budgetary surplus (after
capital expenditures and debt services) reached the equivalent
of US$60 million (5% of total revenues).  After two years of
tight expenditure control and recovering revenues, which allowed
the city to achieve a strong financial position, expenditures
have increased mainly through salary increases and higher
capital investment.  Even so, the city has maintained fiscal
stability and expects to end 2006 with a cash balance of
approximately US$360 million.

According to conservative projections of the City, the fiscal
situation reached as of June 2006 would be reverted at the end
of the year when the total impact of the increase on salaries
and the total expansion on capital expenditures were accounted
(the city projects a raise of 41.7% in personnel expenditures
and of 16.5% in capital expenditures). Consequently, the city
estimates to reach a deficit before amortization payments of
US$50 million in 2006, which added to the amortization payments
planned for the year, would imply a budgetary deficit of US$180
million in 2006, to be funded with the current cash balance.
Notwithstanding this situation, the city's cash balance position
will allow it to meet 2007 debt services of approximately US$157
million (US$32 million in interests and US$125 million of
principal), representing 8.2% of 2005 current revenues, and to
finance an expected budgetary deficit on that year.

Total debt of US$623.6 million as of June 2006 is comprised
mostly by the EMTN program series 1 to 5 (US$471 million) and
debt with multi- and bilateral agencies (US$111.7 million).  
Debt represents 24% of expected current revenues for 2006 and
continues the trend of net debt reduction observed since 2003.  
As 82% of debt is denominated in foreign currency, exchange
volatility remains the city's main risk in terms of financial
performance.


* ARGENTINA: Electric Utilities Continue to Enjoy Positive Trend
----------------------------------------------------------------
In the first half of 2006, the ratings on Latin American
electric utilities continued enjoying the positive trend that
started in 2003, mainly as a result of the ongoing favorable
economic conditions in the region.  First, demand for power grew
3% to 8% in many countries, including Argentina, Brazil, Chile,
Colombia, Mexico, and Peru.  Second, the companies' higher power
sales, combined with the persistent strength of local currencies
against the U.S. dollar, resulted in better debt service
coverage ratios mainly because of stronger local-currency-linked
cash flow generation and lower debt levels.  The exceptions
among the currencies were the Colombian and Chilean pesos, which
lost about 13% and 5% of their value, respectively, in the first
half of 2006.  Third, the better market environment allowed many
companies to improve their financial profile, by raising local
currency debt in the domestic markets, improving their debt
maturity profiles and reducing financing costs.  Standard &
Poor's Ratings Services upgraded various electric utilities in
the region in the past 12 months, mainly because of better
financial risk profiles, including:

   -- Argentine electric utilities that completed their debt
      restructuring following massive defaults in early 2002;

   -- Brazilian companies that benefited from the country's
      better economic and financial environment; and

   -- Chilean power generators after the passage of the Short
      Law II in May 2005, which triggered regulated electricity
      prices to levels of about US$60 per megawatt-hour in the
      largest Chilean electric system, the Central
      Interconnected System or SIC.

While Latin American electric utilities continue to take
advantage of these positive market conditions by improving their
financial profiles, they remain exposed to the region's volatile
politics and economics. However, the companies' financial
profiles are becoming more solid in the face of a potentially
more difficult market environment deriving from increasing
interest rates worldwide and/or a potential economic slowdown.

The Argentine power sector faces uncertainty regarding supply
mainly for large users in the 2006-2007 period. Reserve capacity
is decreasing because of strong domestic demand (with peak
demand reaching a record 17,935 MW on July 31, 2006) and very
few capacity additions during the past five years.  As a result,
the Argentine electric system remains highly exposed to
unexpected events such as droughts (about 40% of the roughly
24,000 MW of power generation capacity is hydro-based) and very
cold winters.

Standard & Poor's does not expect relevant capacity additions
from the private sector in the next few years, due to low prices
for power generation; tariffs for transmission and distribution;
high political and regulatory risk; and the weak financial
condition of most companies in the sector.  To deal with this
situation, the Argentine government has taken the following
steps:

   -- Subsidizing the consumption of fuel oil for dual-fuel
      power generators to improve the availability of those
      units, which are being affected by natural gas shortages.

   -- Creating incentives to slow down the increasing
      consumption by small users by penalizing higher
      consumption through higher tariffs.

   -- Importing power, mainly from Brazil when possible.

   -- Negotiating with local power generators to contribute of
      a portion of their sales on the spot market in the
      2004-2006 period to finance two new natural-gas-fired
      plants of 800 MW each.  There are some uncertainties
      regarding the timing of the completion of these plants
      and natural gas supply.

   -- Financing an increase in the availability of Yacireta's
      3,000 MW hydro power plant.

   -- Planning the completion of Atucha II, a 745 MW nuclear
      plant, although that would take at least three to four
      years.

   -- Financing certain expansions in transmission capacity.

Standard & Poor's rates on the global scale four companies in
Argentina that have completed their debt restructuring in the
2005-2006 period. The outlooks on those ratings, which are in
the 'CCC' to 'B-' categories, are stable.  In addition, on the
Argentine domestic scale Standard & Poor's rates two companies
as 'D' because they have not yet completed restructuring their
defaulted debt.




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


WINN-DIXIE: Wants to Sell Seven Florida Stores & Equipment
----------------------------------------------------------
Winn-Dixie Stores, Inc., and its debtor-affiliates seek
authority from the U.S. Bankruptcy Court for the Middle District
of Florida to sell the Additional Stores and assume and assign
the applicable leases for the highest or best offer, which the
Debtors receive and find acceptable at or before the Auction on
Aug. 29, 2006, at 10:00 a.m.  

D.J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP,
in New York, tells the Court that to date, the Debtors have sold
or rejected more than 361 leases.  The Debtors have now
determined that seven additional stores located in Florida
should be closed and the leases either sold or rejected.

The Debtors have extensively marketed the Additional Stores
through The Food Partners and DJM Asset Management.  These
brokers have directly contacted more than 2,500 potential
purchasers.

On July 27, 2006, the Debtors posted information on the
Additional Stores on an Internet Web site as part of their
efforts to market the Additional Stores.  Potential purchasers
who have signed a confidentiality agreement may access the
Merrill Site.  The Merrill Site includes financial performance
information, copies of the applicable leases and amendments, a
site and fixture plan for each store, a summarized environmental
assessment, a form asset purchase agreement, and, when
available, real property title information.

The Debtors propose to pay the cure amounts related to the
assumed leases.

                                                       Proposed
   Store No.   Location                                  Cure
   ---------   --------                                --------
      124     2910 Kerry Forest Parkway, Tallahassee  US$8,915
      162     14286 Beach Boulevard, Jacksonville        8,410
      202     13841 Wellington Trace, West Palm Beach    6,685
      380     12141 Pembroke Road, Pembroke Pines       24,908
      565     400 North Navy Boulevard, Pensacola            0
      605     1199 East Bay Drive, Largo                15,466
     2308     2820 Doyle Road, Deltona                  50,932

If no bid is received for any one or more of the Additional
Stores, upon notice to the Creditors' Committee, the Debtors
will ask the Court to approve the Debtors' rejection of those
leases effective on the Rejection Date and to establish a claims
bar date for any rejection damage claims at 30 days after the
Rejection Date.

The Debtors will comply with the Court-approved bidding
procedures.  Bids for any one or more of the Additional Stores
must be submitted by 5:00 p.m. E.T. on Aug. 23, 2006.  A
qualified bidder must execute an asset purchase agreement, which
provides for the assumption and assignment of the relevant lease
to the Purchaser.

Landlords who dispute the proposed cure amount for their lease
are required to file with the Court and serve on the Debtors an
objection on or before Aug. 23, 2006.

The Debtors will hold the Auction at the Omni Hotel, 225 Water
Street, Jacksonville, Florida 32202, for any of the Additional
Stores on which the Debtors have received an acceptable bid.

At the conclusion of the Auction, the Debtors will determine,
after consultation with the DIP Lender Agent Representatives and
the Committee's Professionals, which, if any, is the highest or
best offer for any particular store or group of stores.

A hearing to approve the Successful Bid(s) will be held at 1:00
p.m. E.T. on Sept. 7, 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,
http://bankrupt.com/newsstand/).




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


CONCORD RE: S&P Rates US$375 Million Term Loan Facility at BB+
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB+' senior
secured debt rating to Concord Re Ltd.'s term loan debt facility
of up to US$375 million.

Concord is a limited-life, special-purpose, Class 3 reinsurance
company domiciled in Bermuda and set up specifically to offer
quota share reinsurance to Lexington Insurance Co. (Lexington;
AA+/Negative/--).

"The rating reflects the application of our criteria for single-
event risk," explained Standard & Poor's credit analyst James
Brender. "Ratings for securities that expose investors to a loss
of principal or interest from a single natural peril are capped
at 'BB+'."  

Perils that could impair Concord's debt include a New Madrid
earthquake or a very severe hurricane in either Florida or along
the northern part of the East Coast.  Output from modeling
agencies indicates the probability of any of these events
occurring is extremely remote.

Concord has a very strong-modeled cumulative probability of
attachment of 25 basis points over at least three years and an
investment-grade adjusted probability of attachment of 62 bps.  
The difference between the modeled and adjusted probabilities is
mainly because of charges for:
  
   -- modeling risk,
   -- operational risk, and
   -- the possibility of unfavorable attritional losses.

It is important to the financial strength of any sidecar that it
accepts business from a cedent capable of attracting quality
submissions within appropriate risk tolerances.  The quota share
treaty between Concord and Lexington is a good example of such a
relationship and one from which Concord will in fact benefit
from Lexington's strong competitive position, thorough risk
management, and strong alignment of interests with Concord.  The
alignment of interest encourages the cedent to attempt to
maximize the sidecar's risk-adjusted profit. Standard & Poor's
views the ratio of risk retained by the cedent to risk assumed
by the sidecar as the best measure of the alignment of interest
between the sidecar and its cedent.  This ratio for Lexington
and Concord's relationship will be at least 2, which is higher
(better) than previously rated sidecars.

Concord may borrow up to US$375 million from a consortium of
lenders for up to five and a half years.  The entity's capital
structure will include an equal amount of equity.  The net
proceeds from capital-raising transactions will be placed in a
collateral account, which will provide Lexington with a source
of indemnity cover for losses relating to its domestic
commercial property lines of business.  The duration of
Concord's assets will be consistent with that of its
obligations.

Lexington will cede a pro rata portion of the premium from
specified lines of its domestic commercial property business --
excluding exposures from program business, terrorism, personal
lines, and boiler and machinery -- to Concord through a policy
attaching quota share reinsurance treaty.  The agreement covers
policies incepting between July 15, 2006, and Jan. 15, 2008, but
Concord will continue reinsuring Lexington until all covered
policies cancel or expire.  If Concord has suffered a cumulative
net loss as of Oct. 15, 2007, Concord can elect to extend the
quota share treaty for an additional 18 months.  The sidecar
will follow Lexington's fortunes for the first US$10 million of
coverage (US$5 million for the line of construction services).  
The agreement provides for the periodic testing of the level of
Concord's capital and adjustment of the quota share cession
downward if capital is inadequate.  The tests are based on both
projected premium in force and probable maximum losses.


QUANTA CAPITAL: Posts US$42.9 Million Net Loss in 2nd Quarter
-------------------------------------------------------------
Quanta Capital Holdings Ltd. reported financial results for the
second quarter ended June 30, 2006.  Quanta's book value per
share at June 30, 2006, was US$4.63 per share as compared with
book value per share at March 31, 2006, of US$5.25 per share and
its net loss for the second quarter of 2006 was US$42.9 million,
or US$0.61 per diluted share.  This compares with a net income
of US$8.5 million, or US$0.15 per diluted share, for the second
quarter of 2005.

Net loss excluding net realized losses on investments for the
second quarter of 2006 was US$36.2 million, compared with net
income excluding realized gains on investments for the second
quarter of 2005 of US$7.7 million.

Second quarter 2006 results include additional provision for
employee severance of approximately US$10.7 million which is a
direct result of the Company's decision to place most of its
specialty insurance and reinsurance lines into orderly run-off
and US$3.6 million in additional losses from the 2005
hurricanes.  The Company also recognized US$12.6 million as
goodwill impairment expense related to its investment in ESC as
Quanta's insurance companies are no longer writing environmental
policies that complement ESC's ongoing business.

                    Strategic Alternatives

The Company continues to pursue strategic alternatives, which
may include:

   -- the sale of the Company or some or all of its businesses;

   -- the commutation of certain contracts;

   -- sale of renewal rights of certain business lines;

   -- the engagement of an administrator to run-off all or a
      portion of its book of business; or

   -- a combination of one or more of these alternatives.

Key developments during the second quarter of 2006 also included
the decision to cease underwriting or seeking new business and
to place most of its remaining specialty insurance and
reinsurance lines into orderly run-off following A.M. Best
rating actions and the subsequent withdrawal of its ratings.
Quanta's Lloyd's syndicate and environmental consulting
business, ESC, are not included in the run-off plan and will
continue to seek new business.

Gross written premiums for the second quarter of 2006 were
US$32.9 million and net written premiums were US$10.1 million.  
This includes US$23.3 million and US$15.8 in gross and net
written premium from Lloyd's and US$24.9 million and US$10.4
million in gross and net written premium from the Company's
homebuilder's program, known as HBW.  The company expects that
HBW will continue to generate premium until December 2006 when
it will be terminated.  The Company also returned US$27.7
million in gross written premium to policyholders following
policy cancellation and commutations.  In future periods, the
Company believes that comparisons versus prior year results are
not meaningful as the Company is underwriting a limited amount
of new policies.

Net premiums earned in the second quarter were US$60.4 million.  
Specialty insurance contributed US$51.2 million of the net
premiums earned and specialty reinsurance contributed US$9.2
million.  Technical services revenues for the second quarter of
2006 were US$7.8 million compared to revenues of US$7.2 million
for the second quarter of 2005.

The company also disclosed that it has started the process of
communicating its run-off plan with its regulators during the
second quarter of 2006.

                      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 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.

                        *     *     *

As reported in the Troubled Company Reporter on Aug. 15, 2006,
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.

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


SCOTTISH RE: S&P Cuts Counterparty Credit Rating to B+ from BB+
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its counterparty
credit rating on Scottish Re Group Ltd. to 'B+' from 'BB+'.

In addition, Standard & Poor's lowered its counterparty credit
and financial strength ratings on Scottish Re's operating
subsidiaries to 'BBB-' from 'BBB+'.  All of these ratings remain
on CreditWatch with negative implications, where they were
placed on July 31, 2006.

In addition, the ratings on several securitization transactions
related to Scottish Re have been lowered and remain on
CreditWatch with negative implications.

"The ratings were lowered reflecting our concerns that the
group's access to credit facilities is more limited thanwe had
previously believed," explained Standard & Poor's credit analyst
Neil Strauss. This conclusion was acknowledged by the company in
its recent representations in its recently filed second-quarter
2006 10-Q. Liquidity sources have decreased such that the
holding company's liquidity situation has been impaired.  "It is
our belief that without additional capital, the company is
likely to be unable to satisfy future needs, including potential
debt redemption in December 2006," added Mr. Strauss.

The company disclosed in their recently filed 10-Q that while as
of June 30, 2006, there was significant unused commitment under
a US$200 million bank credit facility, in light of second-
quarter results and recent downgrades, there was uncertainty
whether the lenders under this facility, and other facilities,
would honor commitments to fund any borrowing requests and if so
whether they would insist upon collateral for funding.  The
holding company's liquidity is further strained by the existing
credit facility, which contains restrictions on the ability of
Scottish Annuity & Life Insurance Co. (Cayman) Ltd. and certain
of its operating subsidiaries to pay dividends or make loans to
the holding company.  This means that although the operating
coverage may be generating strong cash flows, and has strong
current liquid assets, dividends to the holding company are
severely restricted, given current conditions.

The operating companies' liquidity position is better than that
of the holding company.  In fact, the inability to dividend from
the operating companies to the holding company makes the
operating company's financial position somewhat more protected.  
However, financial stress at the group level will indirectly
adversely impact the operating company's ability to write new
business until Scottish Re's longer term financial security
situation is more certain.  Thus, our downgrade at the operating
companies was two notches versus three for the holding company
ratings.

Standard & Poor's continues to believe that there is substantial
value in the underlying businesses in the operating companies,
however, the franchise has been impaired by the continuing
recurring disclosures of the operational issues at Scottish Re
and the company will need to find funding sources to fund
ongoing business.

The ratings will remain on CreditWatch until capital has been
raised, the tight liquidity situation has been mitigated, and
the company's strategic alternatives have been clarified.  As a
result, the ultimate ratings will depend on the resulting
capital, liquidity, and competitive position of the company.




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B O L I V I A
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PETROBRAS ENERGIA: Consult Sistem to Audit Bolivian Fields
----------------------------------------------------------
Consult Sistem, a firm hired by the Bolivian hydrocarbons
ministry, will audit Petrobras Energia SA's Colpa and Caranda
fields in Bolivia, Business News Americas reports.

According to the report, the audit is designed to determine:

    -- investments made,
    -- amortizations,
    -- operating costs, and
    -- profitability of the fields.

BNamericas notes that the Bolivian ministry will base the
negotiation for a new contract with Petrobras Energia on the
details that Consult Sistem will gather.

The Bolivian ministry said in a statement that Consult Sistem
was the only firm of seven that purchased the audit reference
terms to submit an offer.

The ministry had said in a previous statement that Consult
Sistem will conduct the audit for BOB2.56 million.

Petrobras Energia is an Argentine operating unit of Petroleo
Brasileiro, Brazil's state-run energy firm.

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

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




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


AES SUL: Will Invest BRL678 Million Through 2011
------------------------------------------------
A spokesperson of AES Sul Distribuidora Gaucha de Energia S.A.
told Business News Americas that the firm will invest BRL678
million through the end of 2011.

AES Sul told BNamericas that most of the investments will be on
the expansion and maintenance of the company's distribution
network.  The firm also plans to improve service quality as well
as its subtransmission system.

AES Sul's 2006-11 budget includes BRL103 million for this year.  
Of the amount, BRL65.4 million was invested in the first half of
2006, BNamericas reports.

AES Sul is controlled by US energy company AES Corp.  It
distributes power 118 towns in the southern state of Rio Grande
do Sul.

                        *    *    *

As reported in the Troubled Company Reporter-Latin America on
April 17, 2006, Standard & Poor's Ratings Services placed a brCC
long-term rating on AES Sul Distribuidora Gaucha de Energia S.A.  
The Outlook is Negative.


BANCO DO BRASIL: Posts BRL3.89 Bil. First Half 2006 Net Profits
---------------------------------------------------------------
Banco do Brasil's first half net profits increased 96.5% to
BRL3.89 billion in 2006, compared with the BRL1.98 billion
recorded in the first half of 2005, Business News Americas
reports.

BNamericas relates that the increase is due to one-time gains
from tax credits.  Banco do Brasil "factored into its latest
balance sheet" about BRL1.5 billion in extraordinary gains from
tax creditors and BRL880 million related to an accord with the
workers' union regarding the employees' closed pension fund
Previ.

According to the report, Return on Equity in the first half of
2006 increased 47.8% from 28.6% in the first half of 2005.  
Meanwhile, the efficiency ration improved to 45.5% in the first
half of this year, compared with the 49% in the same period last
year.

BNamericas notes that Banco do Brasil's net profits increased
52.4% to BRL1.55 billion in the second quarter of 2006, compared
with the BRL1.01 billion recorded in the same quarter of 2005.  
Return on Equity in the second quarter of this year was 36.3%,
while in the same period of last year it was 29.6%; in the first
quarter of 2006, ROE was 63%.  Meanwhile, the efficiency ration
was 43.3% in the second quarter of 2006, compared with the 47.6%
recorded in the second quarter of 2005.

Banco do Brasil's operating income in the first half of 2006
dropped 5.4% to BRL3.07 billion, from the one recorded in the
first half of 2005, BNamericas relates.  In the second quarter
of 2006, the bank's operating income increased 21% to BRL2.10
billion, compared with the same period of 2005.

BNamericas underscores that the service fee income of Banco do
Brasil rose 17.7% to BRL4.35 billion in the first half of 2006,
compared with the first half of 2005.

Banco do Brasil, says BNamericas, led the country's lending
sector at the end of June 2006 with a 16.3% market share.  Banco
do Brasil's loan book increased 17.7% to BRL113 billion,
compared with the same month of June 2005.

BNamericas reports that Banco do Brasil's total lending in June
2006 in Braziil's banking sector increased 21.7% on average.  
Lending to individual borrowers rose 21.1% to BRL21.6 billion.  
Commercial lending grew 12.8% to BRL41.7 billion at the end of
June 2006.  Loans to small to medium-sized enterprises increased
15.3% to BRL 16.6 billion.

Banco do Brasil told BNamericas that agribusinesses funding
increased 24.1% to BRL39.9 billion at the end of the first half
of 2006, after the bank freed funds for the 2005-06 harvest.  
There was an increase in the agribusiness loan book due to:

   -- renegotiated debts stemming from the drought in southern
      Brazil,

   -- reduction in commodity prices on the international market,
      and

   -- appreciation of the Brazilian real against the dollar.

According to BNamericas, the non-performing loan ratio for
transactions overdue for more than 15 days increased to 5% in
the first half of 2006, compared with 4.6% in the first half of
2005.  In the second half of 2005, the ratio was 5.6%.

Banco do Brasil's loan-loss provisions increased about 63.3%
during the first half of 2006 to BRL4.06 billion, compared with
the first half of 2005, BNamericas states.

                        *    *    *

As reported on Mar. 3, 2006, Standard & Poor's Ratings Services
raised its foreign currency counterparty credit ratings on Banco
do Brasil S.A. to 'BB' from 'BB-'.  The foreign and local
currency ratings of this bank are now equalized at 'BB'.  S&P
said the outlook is stable.


BANCO DO BRASIL: Analysts Say Firm's Second Quarter Results Weak
----------------------------------------------------------------
Analysts have described Banco do Brasil's results for the second
quarter of 2006 as weak, Business News Americas reports.

According to the report, while Brazilian President Lula da Silva
praised Banco do Brasil for its second quarter 2006 results,
analysts have been unimpressed with the bank's profit.

BNamericas relates that Banco do Brasil's profit increased 52.4%
to BRL1.55 billion in the second quarter of this year, compared
with the same period of last year.

Mario Pierry, an analyst at Deutsche Bank, told BNamericas that
Banco do Brasil's latest financial results was 21% below
forecast.  

Mr. Pierry said that a non-recurring gain of BRL899 million from
an accord with Previ -- the worker pension fund -- and a tax
credit of BRL186 million propped up Banco do Brasil's second
quarter net profits, according to BNamericas.  

The report says that the second quarter 2006 net profits --
excluding the two non-recurring gains -- totaled BRL647 million,
which was 39% below Deutsche Bank's predictions and 36% below
the results in the second quarter of 2005.

Pedro Guimaraes, an analyst at Banco Pactual, told BNamericas
that Banco do Brasil had to pay heavily for higher provision
charges.

BNamericas notes that loan-loss provisions have increased 63.3%
to BRL4.06 billion by the end of June 2006, compared with the
same month in 2005.  Banco do Brasil had to set aside about
BRL1.4 billion in provisions for loans to agribusinesses in the
first half of 2006.

BNamericas underscores that many agribusinesses renegotiated
debts with Banco do Brasil due to an agricultural crisis caused
by:

    -- drought in the south,
    -- lower international commodity prices, and
    -- appreciation of the Brazilian real against the dollar.

Mr. Guimaraes told BNamericas that about 95% of the
agribusinesses with overdue loans agreed to refinance their
debts with Banco do Brasil before the July 31 deadline.  Banco
do Brasil is losing some BRL150 million every quarter on the
agricultural sector, although the bank will likely bring the
tide of debts under control in the next three quarters.

BNamericas says that lending to agribusinesses increased 24.1%
to BRL39.9 billion in the first half of 2006, compared with the
one recorded in the same period in 2005.

Meanwhile, service fee income grew 17.7% in the first half of
2006 to BRL4.35 billion, compared with the first half of 2005,
surpassing Banco do Brasil's main rivals in the local banking
sector.

                        *    *    *

As reported on Mar. 3, 2006, Standard & Poor's Ratings Services
raised its foreign currency counterparty credit ratings on Banco
do Brasil S.A. to 'BB' from 'BB-'.  The foreign and local
currency ratings of this bank are now equalized at 'BB'.  S&P
said the outlook is stable.


CIA SIDERURGICA: Gets Regulatory Approval to Build Cement Unit
--------------------------------------------------------------
Companhia Siderurgica Nacional aka CSN disclosed that the State
Environmental Control Commission or CECA and the State
Environmental Engineering Foundation or FEEMA of the State of
Rio de Janeiro, granted CSN Cimentos S.A., the installation
permit to develop a cement manufacturing unit, which will
produce 3 million tons per year, based on iron and steel
aggregate for blast furnace, in the district of Volta Redonda,
in the State of Rio de Janeiro.

Concerning this important license, Marcos Paim, CSN's Officer,
in charge of the project execution said, "The Cement Project has
stuck to its schedule, with the approval of the 3Mtpy and the
beginning of the construction works in Volta Redonda, as of
August 07, 2006.  We stick to our goal in order to start
operating in the last quarter of 2007."

                          About CSN

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

                        *    *    *

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

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

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


MRS LOGISTICA: Buys 137 Railroad Wagons from Amsted Maxion
----------------------------------------------------------
Iochpe-Maxion -- a metal working company -- told Comissao de
Valores Mobiliarios, Brazil's securities regulator, that MRS
Logistica, a railroad operator, bought 137 railroad wagons from
Amsted Maxion, Iochpe's joint venture with Amsted Industries,
Business News Americas reports.

Amsted Maxion will deliver the wagons to MRS Logistica between
September and December, Bnamericas says.

Amsted Maxion has delivered 2,174 wagons in the first half of
2006.  The company has sold up to 3,020 wagons for a total of
BRL562 million this year, including the recent purchase,
BNamericas states.  

MRS Logistica operates 1,700km of track in Sao Paulo, Minas
Gerais, and Rio de Janeiro.  It primarily transports cargo for
major shareholders.

                        *    *    *

As reported on Nov. 10, 2005, Standard & Poor's Ratings Services
revised the outlook on the BB- long-term foreign currency rating
of MRS Logistica S.A. to positive from stable, following the
revision of the foreign currency outlook of the Federative
Republic of Brazil.


NOSSA CAIXA: Analysts Expect Bank to Recover Before Year-End
------------------------------------------------------------
Analysts expect Banco Nossa SA to recover before the end of
2006, despite the bank's failure to meet second quarter net
profit expectations, Business News Americas reports.

According to BNamericas, Nossa Caixa's net profits dropped 60.4%
to BRL115 million in the second quarter of 2006, compared with
the BRL291 million recorded in the same period of 2005.

Victor Martins, an analyst from Banco Safra, told BNamericas,
"Results were a bit disappointing.  It was more of a pause than
a drop."

BNamericas notes that Mr. Martins said he expected Nossa Caixa
to report net profit growth over 30%, surpassing Unibanco, the
third largest private sector bank in Brazil.

However, Unibanco's second quarter net profits increased 21% to
BRL548 million, BNamericas underscores.

A sharp increase in loan-loss provisions and BRL15 million in
losses from stock market investments conspired to bring down
second quarter earnings of Nossa Caixa, BNamericas relates,
citing Mr. Martins.

The report says that loan-loss provisions of Nossa Caixa rose
46% to BRL736 million in the second quarter of 2006.  Non-
performing loan ratio grew almost two percentage points to 8.6%.  
Nossa Caixa decreased loan growth forecasts up to 25% for the
rest of 2006, from 30%.

Mr. Martins told BNamericas, "Faced with a rising non-performing
loan ratio, [Nossa Caixa] decided to step on the brakes."

BNamericas notes that Nossa Caixa boosted hiring in the second
quarter of 2006, in preparation for the migration of new
customers by January next year when Sao Paulo state workers
start to receive their paychecks through the bank.

Mr. Martins, says BNamericas, stated that hiring more employees
increased costs during the second quarter of 2006.  However,
increased business should make up for the expenses in the next
quarters.  Revenues from services also increased in the quarter,
proving that Nossa Caixa is benefiting from a wider range of
services offered and greater cross selling.  Nossa Caixa's
credit card issues will continue to rise and could surpass
forecasts of 1.2 million cards in circulation by the end of
2006.  Results should improve in the next quarters.

Nossa Caixa's net profits in the second quarter of 2006 was 29%
below forecasts and blamed higher provision charges and
expenses, BNamericas says, citing Mario Pierry of Deutsche Bank.  
However, Mr. Pierry told BNamericas that the best is yet to come
as increased revenues from services fees proved that Nossa
Caixa's strategy of revenue diversification is "bearing fruit".

                        *    *    *

On Oct. 19, 2005, Moody's Investors Service upgraded Banco Nossa
Caixa S.A.'s long-term foreign currency deposit rating to B1
from B2 with a positive outlook.

At the same time, the ratings agency upgraded Banco Nossa
Caixa's long-term foreign currency debt rating to Ba1 with a
stable outlook.

The action followed Moody's upgrade of Brazil's foreign currency
ceiling for deposits to B1, from B2, and the foreign currency
country ceiling for bonds and notes to Ba3, from B1.  Moody's
said the country ceilings have a positive outlook.


PETROLEO BRASILEIRO: Evaluates Agreements with Venezuelan Firm
--------------------------------------------------------------
Minister of Energy and Oil and President of Petroleos de
Venezuela SA, Rafael Ramirez, and the President of Petroleo
Brasileiro S.A., Jose Sergio Gabrielli, met in Caracas to
evaluate the progress of the agreements signed between the
governments of Venezuela and Brazil, and between the two
companies, in 2005.

       Carabobo I -- Abreu de Lima Refinery (Pernambuco)

The highlight was placed on the joint work carried out between
PDVSA and Petrobras to quantify the Carabobo I field reserves
and on the ceremony held at a well being drilled in the field
with Venezuelan President Hugo Chavez aiming at commencing the
certification of the reserves in the Orinoco Heavy Oil Belt.

As far as the Pernambuco Refinery is concerned, it was decided
that a joint office would be established in Rio de Janeiro,
bringing Petrobras and PDVSA technicians together to follow-up
on the project's engineering studies on an ongoing manner.

During the event, the state government donated the plot of land
where the refinery will be constructed, and the Federal
University of Pernambuco was hired to carry out the
environmental impact studies required by the Brazilian norms.

                       Mariscal Sucre

Regarding Mariscal Sucre, the representatives agreed that during
the coming couple of months, all of the economic, technical, and
commercial variables would be revised for Petrobras' definitive
participation in the project.

                        Mature fields

Petrobras and PDVSA have concluded the required studies on the
project for the exploitation of five mature fields in Venezuela.  
The technical groups will evaluate the results that have been
obtained jointly in order to prepare a development plan for
these fields and the terms for the establishment of the future
Mixed Company.

                          Ethanol

Both companies agreed to set-up a long-term agreement for
Petrobras to supply ethanol to PDVSA while a project for
production in Venezuela is being elaborated.

                About Petroleos de Venezuela

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

                  About Petroleo Brasileiro

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

                        *    *    *

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

                        *    *    *

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

  Foreign Currency:

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

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

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


PETROLEO BRASILEIRO: Tops Gulf of Mexico Lease Sale 2000
--------------------------------------------------------
Petroleo Brasileiro S.A. aka Petrobras purchased the most tracts
auctioned in the Western Gulf of Mexico Lease Sale 2000.  The US
Minerals Management Service conducted the sale on Aug. 16, 2006.  
Petrobras was the top bidder with a total offering of US$45,483
million for 34 tracts.

Petrobras' next step will be carrying out detailed geological
studies in the region to locate possible exploratory well
drilling areas.  In this auction, Petrobras sought to
consolidate its position in two of the areas where it is
currently focusing its activities - ultra-deepwaters in the
Keathley Canyon quadrant and deepwaters in the Garden Banks
area.

Participation in the Lease Sale 2000 is in line with Petrobras'
Strategic Plan to determine strong international growth in focus
areas, among which is the Gulf of Mexico's ultra-deepwaters.

                  About Petroleo Brasileiro

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

                        *    *    *

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

                        *    *    *

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

  Foreign Currency:

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

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

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


PETROLEO BRASILEIRO: Inks Exploration & Prod'n Pact With Turkyye
----------------------------------------------------------------
Petroleo Brasileiro S.A. aka Petrobras and the Turkish national
oil company, Turkyye Petrollery Anonym Ortaklidi, signed two
agreements for exploration in the Black Sea deepwaters.

Petrobras and Turkyye Petrollery will have a 50/50 partnership,
exploring and producing in blocks 3920 (Kirklarelli) and 3922
(Sinop).  The blocks present major geological potential, with
the possibility of large volumes of hydrocarbons being found.

In the Kirklarelli block, located in the western Turkish sector
of the Black Sea, average water depth is 1,200.  Meanwhile,
Sinop, located in the easternmost area, has a depth around 2,200
meters.

The Turkish region of the Black Sea remains largely unexplored,
but presents perspectives of good results.  Turkey is surrounded
by important producing basins and its territory is cut by a
large network of oil and gas pipelines that supply Europe.

Petrobras' entry in Turkey is in line with its Strategic Plan to
work as an integrated energy company with a selective expansion
in its international activities.

                  About Petroleo Brasileiro

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

                        *    *    *

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

                        *    *    *

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

  Foreign Currency:

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

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

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


VARIG SA: Volo Seeks US$2 Billion Loan to Buy 50 Embraer Planes
---------------------------------------------------------------
Volo do Brasil plans to apply for a US$2,000,000,000 loan from
Banco Nacional de Desenvolvimento Economico e Social, Brazil's
government-run national development bank, to finance its
purchase of up to 50 E190 jets from Empresa Brasileira de
Aeronautica S.A., Reuters reports.

According to Reuters, Embraer Chief Executive Officer Mauricio
Botelho told analysts at an earnings conference call on
Aug. 14, 2006, that his company and Volo are very close to a
deal.

An E190 jet can accommodate up to 100 passengers.

Reuters relates that BNDES President Demian Fiocca said the bank
is willing to offer special credit lines to help local airline
operators purchase Embraer planes.  Mr. Fiocca said BNDES could
provide up to 85% of the cost of each plane.

VARIG intends to use the Embraer planes for domestic flights and
Boeing or Airbus planes for international operations, Reuters
reports.

Bloomberg News, citing O Estado de S. Paulo newspaper, says
VARIG is also in talks with Boeing and Airbus to acquire 245-
seater commercial aircraft.

VARIG is currently flying 12 planes and a portion of its
original routes.  VARIG plans to expand its fleet to 45 planes
by the end of the year and up to 75 aircraft by 2008, according
to The Associated Press.

Volo acquired VARIG's operating assets at an auction in July
2006.  Volo has pledged to infuse more than US$500,000,000 to
allow the airline to pay debts and return to profitability.  The
sale is still subject to regulatory approval by the National
Civil Aviation Authority in Brazil.

                         About VARIG

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

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

Each of the Debtors' Boards of Directors authorized Vicente
Cervo as foreign representative.  In this capacity, Mr. Cervo
filed a Sec. 304 petition on June 17, 2005 (Bankr. S.D.N.Y. Case
Nos. 05-14400 and 05-14402).  Rick B. Antonoff, Esq., at
Pillsbury Winthrop Shaw Pittman LLP represents Mr. Cervo in the
United States.  As of March 31, 2005, the Debtors reported
BRL2,979,309,000 in total assets and BRL9,474,930,000 in total
debts.  (VARIG Bankruptcy News, Issue No. 30; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


VARIG SA: Returns Five Aircraft Engines to Willis Lease Finance
---------------------------------------------------------------
Willis Lease Finance Corp. discloses in a regulatory filing
with the U.S. Securities and Exchange Commission that VARIG S.A.
has returned five leased aircraft engines.

Willis leased nine engines to VARIG and Rio-Sul Linhas Aereas,
S.A., pursuant to prepetition lease agreements.  All of the
leases have terminated.

Willis reports that, of the five returned engines, one has been
sold for a gain, three have been placed on lease and one is off-
lease.

Willis relates that the remaining four engines have a
US$16,000,000 net book value and are in various stages of the
lease return process.  Rents on the nine engines were paid
through May 2006 and security deposits are adequate to cover
most rents through June 2006, according to Willis.

Willis leases spare commercial aircraft engines, rotable parts
and aircraft to commercial airlines, aircraft engine
manufacturers and overhaul/repair facilities worldwide.  The
leasing activities are integrated with the purchase and resale
of used and refurbished commercial aircraft engines.

                         About VARIG

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

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

Each of the Debtors' Boards of Directors authorized Vicente
Cervo as foreign representative.  In this capacity, Mr. Cervo
filed a Sec. 304 petition on June 17, 2005 (Bankr. S.D.N.Y. Case
Nos. 05-14400 and 05-14402).  Rick B. Antonoff, Esq., at
Pillsbury Winthrop Shaw Pittman LLP represents Mr. Cervo in the
United States.  As of March 31, 2005, the Debtors reported
BRL2,979,309,000 in total assets and BRL9,474,930,000 in total
debts.  (VARIG Bankruptcy News, Issue No. 30; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


* BRAZIL: Electric Utilities Continue to Enjoy Positive Trend
-------------------------------------------------------------
In the first half of 2006, the ratings on Latin American
electric utilities continued enjoying the positive trend that
started in 2003, mainly as a result of the ongoing favorable
economic conditions in the region.  First, demand for power grew
3% to 8% in many countries, including Argentina, Brazil, Chile,
Colombia, Mexico, and Peru.  Second, the companies' higher power
sales, combined with the persistent strength of local currencies
against the U.S. dollar, resulted in better debt service
coverage ratios mainly because of stronger local-currency-linked
cash flow generation and lower debt levels.  The exceptions
among the currencies were the Colombian and Chilean pesos, which
lost about 13% and 5% of their value, respectively, in the first
half of 2006.  Third, the better market environment allowed many
companies to improve their financial profile, by raising local
currency debt in the domestic markets, improving their debt
maturity profiles and reducing financing costs.  Standard &
Poor's Ratings Services upgraded various electric utilities in
the region in the past 12 months, mainly because of better
financial risk profiles, including:

   -- Argentine electric utilities that completed their debt
      restructuring following massive defaults in early 2002;

   -- Brazilian companies that benefited from the country's
      better economic and financial environment; and

   -- Chilean power generators after the passage of the Short
      Law II in May 2005, which triggered regulated electricity
      prices to levels of about US$60 per megawatt-hour in the
      largest Chilean electric system, the Central
      Interconnected System or SIC.

While Latin American electric utilities continue to take
advantage of these positive market conditions by improving their
financial profiles, they remain exposed to the region's volatile
politics and economics. However, the companies' financial
profiles are becoming more solid in the face of a potentially
more difficult market environment deriving from increasing
interest rates worldwide and/or a potential economic slowdown.

The Brazilian electric sector is experiencing growing demand
(3.4% in the first five months of 2006), a consolidation of the
regulatory environment, new public bids to expand generation and
transmission capacity, and some still-timid acquisition
activity.  In May 2006, electric utility CPFL Energia S.A.
acquired from U.S.-based PSEG Energy Holdings LLC a 32.7% stake
in southern electric distributor Rio Grande Energia S.A. for
US$185 million, which gave it control of this company. In June
2006, the Sao Paulo state government privatized a controlling
equity stake in transmission company Companhia de Transmissao de
Energia Eletrica Paulista.  Colombia-based Interconexion
Electrica S.A. ESP was the winner in the bid process, offering
US$1.2 billion.  More acquisition news in the second half of
2006 and in 2007 will not be a surprise, due to the sector's
natural consolidation, especially in the distribution segment.

The government-related entity Empresa de Pesquisa Energetica,
responsible for planning in the electric sector, published in
March 2006 a 10-year plan pointing out that the transmission
segment in Brazil would demand an average US$1.8 billion a year
in investments. This would increase the country's
interconnection, especially with the isolated systems in the
north, allowing it to gradually reduce subsidies that cover the
higher costs deriving from dispatching inefficient thermo
generation capacity.

The Brazilian government manages development in the power sector
by selling permits to build new capacity through public
auctions.  The next auction to expand transmission capacity is
scheduled for August 18, 2006, when the government will tender
the construction of 2,200 kilometers of lines with an estimated
investment of about US$500 million. The latest auction to expand
generation capacity took place in June 2006 (after an earlier
one in December 2005).  Those investors were awarded permits to
build 1,682 MW of power capacity, with power deliveries starting
from 2009.  Two-thirds of this new capacity will come from hydro
generation, and the remainder from thermo plants. Prices were
about US$57 per MWh for hydro-based electricity and some US$60
per MWh for thermal generation.  Another capacity auction is
scheduled for October 2006, with power deliveries starting from
2011. In addition, the Brazilian government is developing two
huge--and controversial -- hydroelectric generation projects in
the northern region, the Madeira River complex (6,450 MW) and
Belo Monte (11,000 MW).  Due to the plants' size, cost, and
complexity, traditional private players are not very interested
in developing this new type of project, which has been carried
out by state-owned companies in the past.  Given the track
record for state-owned companies in building this type of asset,
such capacity may be delayed, which could ultimately be a risk
for the country's power supply in the next five to 10 years.

Rated companies continue to take advantage of the favorable
macroeconomic conditions by focusing their efforts on liability
management to improve their financial risk profile.  Coupled
with better cash flow generation, that has resulted in better
debt service coverage ratios and several positive rating actions
in the past eight months.  Of the 23 rated entities, including
those rated on the global and national scales, we have upgraded
13 during this period.  The outlooks on the company ratings are:

   -- 18 stable,
   -- four positive,
   -- and only one negative.


* BRAZIL: Fitch Comments on Local Banks Adaptability to Crisis
--------------------------------------------------------------
Nineteen months after the Central Bank of Brazil's intervention
in a medium-sized Brazilian bank plunged the market into a
period of heavy turbulence, which was further aggravated by the
political crisis unleashed in May 2005, Fitch believes small and
medium-sized local banks have once again demonstrated their
capability and agility in adjusting to crisis situations.  In
Fitch's opinion, these disturbances were broad ranging and
impelled greater utilization of the loan assignment mechanism.  
In addition, the turbulence generated good opportunities for
large retail and corporate banks to penetrate the small- and
middle-market segment, which, in fact, occurred due to the
retraction of the smaller banks, that were faced with reduced
funding available at the time.

Fitch considers the posture of the Brazilian financial system in
the face of these crises to be positive, since the large banks
provided funding and, consequently, liquidity to the smaller
ones, even though the small and medium-sized banks paid
handsomely for such resources. These disturbances tested and
proved the loan portfolio quality of the small and medium-sized
banks, as they had to reduce the size of their portfolios
substantially in a relatively short period of time to be able to
honor their commitment, given the short-termnature of Brazilian
bank liabilities.  Nevertheless, Fitch also has seen negative
aspects, such as the greater leveraging of some banks active in
consumer financing, due to the ready supply of funding and local
prudential norms that allow greater leveraging for the same risk
exposure.  Fitch is closely tracking such banks and could have
their ratings adjusted, should the high leveraging scenario
persist.

The aforementioned Central Bank intervention in November 2004
induced certain institutional investors to make major deposit
withdrawals from small and medium-sized banks, channeling their
resources to institutions considered to have a stronger credit
profile, such as large retail and foreign banks.  In the period
of heaviest withdrawals (i.e., fourth-quarter 2004), deposits of
the small and medium-sized banks analyzed by Fitch declined on
average 21%.  Fourth-quarter 2004 deposits declined on average
21%, reaching a loss of 39% in two cases.  From Sept. 30, 2004,
to June 30, 2005, deposits declined 25%, reaching a loss of 51%
in one case.  The political crisis in 2005 had a more limited
impact on funding, mainly affecting two banks, which continued
to lose relevant deposits in the second half of 2005 due to
negative press exposure regarding their alleged involvement in
the crisis. Excluding such institutions, deposits of small and
medium-sized banks presented a nominal increment of 18% in
second-half 2005, which was above the 12% observed in the
system, demonstrating that investors had resumed placing their
resources in this segment of banks and that the effects of the
disturbances had been virtually remedied.  Some of these banks,
generally those with lower leverage and strong liquidity, were
less affected by the events described earlier, recovering
resources sooner than the others.  These banks are also
recognized as those with the best ratings from Fitch in this
segment.

In this turbulent period, two mechanisms contributed strongly to
maintaining the liquidity of small and medium-sized banks, at
least at acceptable levels -- the reduction in loan portfolios
and loan assignment agreements with banks.  The first measure
strongly benefited from the short tenors of the banks' loan
portfolios and, mainly, portfolio quality.  In one instance, the
portfolio contracted 27% in fourth-quarter 2004 and an
accumulated 46% at June 30, 2005.  Nevertheless, it is important
to note that in most banks of this segment, including the case
mentioned earlier, loan production remained intense, with the
portfolio reduction occurring primarily from loan assignments.  
This movement was particularly seen in banks focused more on
consumer finance, mainly consignment lending and vehicles.
Consignment lending is a type of personal loan in which the
payments are deducted directly from the employee's payroll or
the pension of retirees and pensioners of the Instituto Nacional
do Seguro Social or INSS, the Brazilian social security agency.  
The banks' credit risk in such lending is lower than other forms
of personal loans.  Due to the great demand for this product,
coupled with the perceived good quality of the loans generated
and the fact that contracts are standardized, such banks were
able to celebrate ample assignment agreements with the large
retail banks and, in this manner, emerge from the turbulence
more satisfactorily, maintaining loan production and even
matching assets and liabilities in terms of maturities.  In
addition, the acceleration of revenue recognition generated by
the assignments provided strong growth in accounting profits,
reflected in returns on equity of up to 98% in 2005.  Meanwhile,
niche banks that engage primarily in lending to small and
medium-sized companies, where financial margins are lower, had
to reduce their portfolios as they had less flexibility and
opportunities for loan sales and, consequently, reported lower
revenues and earnings in the period.  

With the recovery of deposits in the second half of 2005, the
small and medium-sized banks once again increased the credit
operations booked on their balance sheets (12% until
June 30, 2005, excluding the two banks that continued to lose
deposits, 15% considering loans sold; both cases were above the
11.5% observed in the system).  Several small and medium-sized
banks also began to access the international market for
issuances more often, benefiting from the ample liquidity in the
external market.  Small institutions that had little
international presence up to then were also able to raise funds
in satisfactory volumes at adequate rates and maturities.  In
some cases, they are even structuring mechanisms to sell
consignment portfolios directly to the overseas market and/or
issuing securities backed by these assets.  Fitch believes the
funding diversification is positive, mainly for smaller sized
banks that are more susceptible to fluctuations in the economy.  
In addition, Fitch looks favorably on the growing external
issuances, despite being alert to the effects of this funding
concentration in the banks' portfolio since the willingness of
international investors and/or the cost of exchange hedging
could change.

With the recovery of their sources of financing, some banks
engaged in consignment lending have strategically diminished the
volume of their loan sales, which is also expected to reduce
their earnings, due to lower accelerated revenue recognition
from such loans.  Fitch considers this procedure positive, since
interest revenues will tend to be greater over the long run
because the banks will no longer be sharing their margins with
their funding banks, thus benefiting future earnings.  In
addition, Fitch understands that earnings will continue to be
solid for those banks with a defined focus and an efficient
control over costs.  In general, provided current market
conditions continue, small and medium-sized banks are expected
to report better recurring operating income in 2006 due to an
increased loan portfolio and funding availability.

Other beneficial consequences of the turbulence, such as greater
concern with diversifying funding and matching assets and
liabilities, were also visible in banks of this niche.  A large
number of them used to consider that just maintaining
satisfactory liquidity (measured as a percentage of funding)
would be sufficient to cope with periods of stress, and they
showed less concern with matching the maturities of their
operations.  Since then, they have been obliged to increase
their focus on this aspect and have used loan sales and medium-
and long-term international issues to fund consignment lending
and longer term consumer financing.  Deposits, which are
generally short term, have been directed more to finance shorter
term operations, such as working capital and bills discounted
for companies.  Nevertheless, Fitch continues to be concerned
with the reduced liquidity of some banks, mainly those that
understand the mechanism of loan sales is always available,
independent of market conditions, and would immediately benefit
their cash positions, a procedure that we do not consider
conservative.  Fitch will continue to monitor these banks.

The disturbances generated by the Central Bank's intervention
and the political crisis also caused a shortage of credit for
small and medium-sized companies from November 2004 to mid-2005
at a time when the large retail banks and some wholesale-
oriented institutions were seeking to increase their presence in
this market to improve their return on assets.  Market
conditions thus offered increased opportunities for such banks
to operate more consistently with smaller companies.  Fitch has
also been monitoring the effects arising from the banks' more
intense pursuit of business in the small and medium-sized
company niche since mid-2005.  Although the spreads in this
segment remain attractive, they have been falling since the
beginning of 2005 due to greater competition and lower funding
costs of the larger banks. Nevertheless, Fitch believes there is
room for small and medium-sized banks in this market, even
though many will have to increase their low leveraging to
maintain financial margins and perhaps incur greater risks.  
Essential for the survival of these banks is the maintenance of
a low-cost base, in addition to specialization and customization
of their products, to enable them to sustain the differentials
of greater agility and autonomy to meet the growing competition
from the larger banks.

In Fitch's opinion, another negative effect for some banks
active in consumer financing, especially consignment lending,
has been their increased leveraging.  With ample funding sources
at hand, primarily due to assignment agreements, these
institutions significantly increased their loan production.  
Such banks are being closely observed by Fitch, which includes
loans sold, with and without recourse, in calculating their
capitalization ratios (Basel).  On loans sold with recourse, the
selling bank remains responsible for 100% of the credit risk,
but it only has to assign this risk a 50% weight in the
calculation of its capitalization ratio.  Although non-recourse
assignments have no weighting for capital adequacy purposes, in
some cases there are indirect recourse mechanisms in place and
the seller bank continues to administer the portfolio.  In
addition, as we have verified in other countries, the seller
bank might have to absorb losses to maintain the relationship,
which is generally with a larger bank that offers the seller
bank other lines and products.  Thus, Fitch has observed
declining capitalization ratios, in some cases to slightly above
the limit imposed by local rules and even below it.  As already
mentioned, should the high leveraging continue, these banks
could have their risk classification altered to reflect the
additional risks incurred.




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


ASAKUSA: Will Hold Final Shareholders Meeting on Sept. 8
--------------------------------------------------------
Asakusa's final shareholders meeting will be at 10:00 a.m. on
Sept. 8, 2006, at the company's registered office.

These agenda will be taken during the meeting:

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

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

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

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

The liquidators can be reached at:

           John Cullinane
           Derrie Boggess
           c/o Walkers SPV Limited
           Walker House
           P.O. Box 908, George Town
           Grand Cayman, Cayman Islands


ELECTROGUAYAS INC: Last Shareholders Meeting Is Set for Sept. 8
---------------------------------------------------------------
Electroguayas Inc.'s final shareholders meeting will be at 10:00
a.m. on Sept. 8, 2006, at:

           Q & H Nominees Ltd.
           Third Floor, Harbour Centre
           P.O. Box 1348, George Town
           Grand Cayman, Cayman Islands

These agenda will be taken during the meeting:

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

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

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

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

The liquidators can be reached at:

           Q & H Nominees Ltd.
           Third Floor, Harbour Centre
           P.O. Box 1348, George Town
           Grand Cayman, Cayman Islands


HARPOON (ADVISORS): Final Shareholders Meeting Is on Sept. 7
------------------------------------------------------------
Harpoon Offshore Advisors, Inc.'s final shareholders meeting
will be at 10:00 a.m. on Sept. 7, 2006, at:

           Athena Capital Advisors
           55 Old Bedford Road
           3rd Floor Lincoln
           MA 01773, USA

These agenda will be taken during the meeting:

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

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

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

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

The liquidator can be reached at:

           Phil Cooper
           Attn: Robert Gardner
           P.O. Box 265GT, George Town
           Grand Cayman, Cayman Islands
           Tel: (345) 914-6332
           Fax: (345) 814-8332


HARPOON (HOLDINGS): Last Shareholders Meeting Is on Sept. 7
-----------------------------------------------------------
Harpoon Offshore Holdings Advisors, Inc.'s final shareholders
meeting will be at 10:00 a.m. on Sept. 7, 2006, at:

           Athena Capital Advisors
           55 Old Bedford Road
           3rd Floor Lincoln
           MA 01773, USA

These agenda will be taken during the meeting:

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

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

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

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

The liquidator can be reached at:

           Phil Cooper
           Attn: Robert Gardner
           P.O. Box 265GT, George Town
           Grand Cayman, Cayman Islands
           Tel: (345) 914-6332
           Fax: (345) 814-8332


HARPOON (PARALLEL): Final Shareholders Meeting Is on Sept. 7
------------------------------------------------------------
Harpoon Parallel Fund SPV Advisors, Inc.'s final shareholders
meeting will be at 10:00 a.m. on Sept. 7, 2006, at:

           Athena Capital Advisors
           55 Old Bedford Road
           3rd Floor Lincoln
           MA 01773, USA

These agenda will be taken during the meeting:

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

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

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

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

The liquidator can be reached at:

           Phil Cooper
           Attn: Robert Gardner
           P.O. Box 265GT, George Town
           Grand Cayman, Cayman Islands
           Tel: (345) 914-6332
           Fax: (345) 814-8332


LION2 LDC: Calls Shareholders for a Final Meeting on Sept. 8
------------------------------------------------------------
Lion2 LDC's final shareholders meeting will be at 9:30 a.m. on
Sept. 8, 2006, at the company's registered office.

These agenda will be taken during the meeting:

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

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

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

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

The liquidators can be reached at:

           John Cullinane
           Derrie Boggess
           c/o Walkers SPV Limited
           Walker House
           P.O. Box 908, George Town
           Grand Cayman, Cayman Islands


LION3 LDC: Invites Shareholders for a Final Meeting on Sept. 8
--------------------------------------------------------------
Lion3 LDC's final shareholders meeting will be at 10:00 a.m. on
Sept. 8, 2006, at the company's registered office.

These agenda will be taken during the meeting:

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

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

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

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

The liquidators can be reached at:

           John Cullinane
           Derrie Boggess
           c/o Walkers SPV Limited
           Walker House
           P.O. Box 908, George Town
           Grand Cayman, Cayman Islands


LION4 LDC: Shareholders Convene for a Final Meeting on Sept. 8
--------------------------------------------------------------
Lion4 LDC's final shareholders meeting will be at 10:30 a.m. on
Sept. 8, 2006, at the company's registered office.

These agenda will be taken during the meeting:

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

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

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

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

The liquidators can be reached at:

           John Cullinane
           Derrie Boggess
           c/o Walkers SPV Limited
           Walker House
           P.O. Box 908, George Town
           Grand Cayman, Cayman Islands


LION5 LDC: Final Shareholders Meeting Is Scheduled for Sept. 8
--------------------------------------------------------------
Lion5 LDC's final shareholders meeting will be at 11:00 a.m. on
Sept. 8, 2006, at the company's registered office.

These agenda will be taken during the meeting:

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

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

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

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

The liquidators can be reached at:

           John Cullinane
           Derrie Boggess
           c/o Walkers SPV Limited
           Walker House
           P.O. Box 908, George Town
           Grand Cayman, Cayman Islands


PRAETORIAN EUROPE: Last Day to File Proofs of Claim Is Sept. 20
---------------------------------------------------------------
Praetorian Europe's creditors are required to submit proofs of
claim by Sept. 20, 2006, to the company's liquidators:

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

Creditors who are not able to comply with the Sept. 20 deadline
won't receive any distribution that the liquidators will make.
Creditors are required to present proofs of claim personally or
through their solicitors.

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

Parties-in-interest may contact:

           Jyoti Choi
           P.O. Box 258, George Town
           Grand Cayman, Cayman Islands
           Tel: (345) 914 8657
           Fax: (345) 949 4237


QUICK ACCESS: Calls Shareholders for Final Meeting on Sept. 8
-------------------------------------------------------------
Quick Access International (Cayman) Limited's final shareholders
meeting will be at 11:30 a.m. on Sept. 8, 2006, at:

           Q & H Nominees Ltd.
           Third Floor, Harbour Centre
           P.O. Box 1348, George Town
           Grand Cayman, Cayman Islands

These agenda will be taken during the meeting:

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

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

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

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

The liquidator can be reached at:

           Quin & Hampson
           c/o P.O. Box 1348, George Town
           Grand Cayman, Cayman Islands
           Tel: (+1) 345 949 4123
           Fax: (+1) 345 949 4647


RUBY CAPITAL: Schedules Final Shareholders Meeting on Sept. 7
-------------------------------------------------------------
Ruby Capital One Limited's shareholders will convene for a final
meeting on Sept. 7, 2006, at:

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

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

The liquidators can be reached at:

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




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


EMPRESAS IANSA: S&P Holds BB Long-Term Issuer Credit Ratings
------------------------------------------------------------
Empresas Iansa S.A. holds these ratings by Standard & Poor's:

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

The ratings on the Chilean sugar producer Empresas Iansa S.A.
reflect the challenges the company faces to adjust raw material
costs and improve profitability to compensate for the upcoming
decline in price protection levels in the sugar market in Chile
starting in 2008.  This situation and certain clien
concentration and sugar imports competition are mitigated by the
company's good competitive position as the only sugar producer
in the protected Chilean market, and the sound ties with Chilean
farmers.

Sugar in Chile is sold under a price stabilization mechanism
called "price band," which sets a minimum cost for imported
sugar in the domestic market.  This mechanism was established in
1986 and modified in late 2003, as the old system failed to
properly guarantee the minimum established cost.  The prior 10-
year moving average caps and floors were replaced with a new
band price of fixed maximums and minimums, with gradual declines
beginning in 2008 (of 2% per year up to 2011, and of 6% per year
between 2012 and 2014).  These percentages are important when
compared with IANSA's current EBITDA margin of 11.2% (for the 12
months ended June 30, 2006).  In 2014, the President will
evaluate the future of the price support mechanisms, taking into
account the international environment, the local industry, the
consumers, and the country's commercial commitments.

Although the current system gives some predictability to the
company's cash generation in the short term, IANSA would need to
further improve its cost competitiveness in order to compensate
the declining protection and to face potential adverse sugar
price scenarios.  In turn, margin evolution depends on the
increase in the productivity of sugar beet crops and the ability
of the company to translate such increases into lower raw
material prices paid to sugar beet growers.  In Standard &
Poor's Ratings Services' opinion, the productivity of the sugar
beet fields is likely to continue increasing, but the
possibility of the company continuing to fully transfer such
increases into lower raw material prices remains a concern.

IANSA's financial profile has recovered since 2004 as a result
of the improved sugar prices and protection levels (after the
law amendments in December 2003), lower raw material costs
thanks to the increased productivity of sugar beet fields, and
the reduction in IANSA's structural debt with the proceeds from
non-core asset sales.  As a result, EBITDA interest coverage
(including the financial cost from the financing to sugar beet
growers) and funds from operations to debt improved to 4.7x and
39.6%, respectively, in the 12 months ended June 30, 2006 (from
1.3x and 4.1%, respectively, during fiscal 2003). Prospects are
favorable over the short to medium term given the increased
prices in the international sugar markets.

In addition, we expect IANSA to have a structural debt level of
between US$100 million and US$120 million (that mainly
corresponds to 144A notes for US$100 million with bullet
maturity in 2012, out of which US$10 million were repurchased in
the first quarter of 2006) and to finance seasonal working
capital requirements-which peak in September-with short-term
bank lines.

With annual sales of US$403 million in 2005, IANSA is one of the
largest agribusiness companies in Chile and the only sugar
producer in the country, providing about 78% of the sugar
consumed in the domestic market.  Sugar is the group's core
business, accounting for 81% of total revenues in fiscal 2005,
including related business lines such as sugar supplies and
technical assistance to farmers and animal balanced food.  IANSA
also participates in other businesses such as concentrated fruit
juice, tomato paste (in Peru), and frozen food.

Since November 2005, ED&F Man has indirectly controled IANSA
(with about a 22% stake in the company, through its
participation in Sociedad de Inversiones Campos Chilenos S.A.).  
Stock agencies, pensions funds, and other minority shareholders
hold the remainder of the stocks. In June 2006, Sociedad de
Inversiones Campos Chilenos S.A. (which in total holds a 45.13%
in IANSA) announced its intention to sell up to 10% of the
stocks in the company.  This should not result in a change in
the current controlling shareholder structure and strategic
plans of the company.  U.K.-based ED&F Man specializes in
sourcing, delivering, and distributing commodities such as
sugar, molasses, cocoa, coffee, and alcohol.

IANSA's liquidity position and financial flexibility improved as
a result of the refinancing of most of its financial debt in the
long term with the issue of US$100 million notes in July 2005.  
While the issuance of these notes significantly lowers
refinancing risk in the short to medium term, IANSA's financial
performance and the ability to refinance the bonds at maturity
will depend on its success in adapting to the decreasing price
environment as described above, and the use of its cash
holdings.

As of June 30, 2006, IANSA registered a cash and short-term
investment position of about US$24 million, compared with short-
term debt of US$12 million.

The company is relatively protected from foreign-exchange risk.
While all the company's debt is U.S. dollar-denominated, almost
all revenues are U.S.-dollar linked (although collected in
Chilean pesos), providing for some natural hedge.

The stable outlook assumes that the company's good competitive
position, attractiveness of the crop to farmers, and improved
farmer productivity should allow IANSA to improve profitability
levels to at least partly offset the declining prices in the
sugar price protection system in Chile, should international
prices fall below the band price floor.  It also assumes that
the company will maintain a relatively modest investment program
(and in lines related to the company's core business) and the
current dividend policy (with a 50% payout ratio) with no
additional extraordinary dividends.  Current ratings could be
raised if the company achieves greater-than-expected margin
levels (with a consistent increase in EBITDA margins at about
12%) and maintains a moderate financial policy.  In contrast, a
more aggressive than expected investment and dividend policy
could result in a rating downgrade.


* CHILE: Electric Utilities Continue to Enjoy Positive Trend
------------------------------------------------------------
In the first half of 2006, the ratings on Latin American
electric utilities continued enjoying the positive trend that
started in 2003, mainly as a result of the ongoing favorable
economic conditions in the region.  First, demand for power grew
3% to 8% in many countries, including Argentina, Brazil, Chile,
Colombia, Mexico, and Peru.  Second, the companies' higher power
sales, combined with the persistent strength of local currencies
against the U.S. dollar, resulted in better debt service
coverage ratios mainly because of stronger local-currency-linked
cash flow generation and lower debt levels.  The exceptions
among the currencies were the Colombian and Chilean pesos, which
lost about 13% and 5% of their value, respectively, in the first
half of 2006.  Third, the better market environment allowed many
companies to improve their financial profile, by raising local
currency debt in the domestic markets, improving their debt
maturity profiles and reducing financing costs.  Standard &
Poor's Ratings Services upgraded various electric utilities in
the region in the past 12 months, mainly because of better
financial risk profiles, including:

   -- Argentine electric utilities that completed their debt
      restructuring following massive defaults in early 2002;

   -- Brazilian companies that benefited from the country's
      better economic and financial environment; and

   -- Chilean power generators after the passage of the Short
      Law II in May 2005, which triggered regulated electricity
      prices to levels of about US$60 per megawatt-hour in the
      largest Chilean electric system, the Central
      Interconnected System or SIC.

While Latin American electric utilities continue to take
advantage of these positive market conditions by improving their
financial profiles, they remain exposed to the region's volatile
politics and economics. However, the companies' financial
profiles are becoming more solid in the face of a potentially
more difficult market environment deriving from increasing
interest rates worldwide and/or a potential economic slowdown.

The combination of a favorable and improved regulatory
environment--resulting from the passage of Short Law I and II in
2004 and 2005 -- and the continuing strength of the Chilean
economy provides favorable prospects for the power sector.  
These circumstances are expected to encourage sizable
investments in the three main business segments --generation,
transmission, and distribution -- to meet the growing demand for
power in Chile.  However, until these expected investments
mature, the uncertainty regarding natural gas supply for a
significant portion of the existing generation capacity in the
SIC and Northern Interconnected System will somewhat tarnish the
overall positive outlook, especially for power generators.  The
severe natural gas shortages mean natural-gas-fired generators
face big increases in operating costs when they replace natural
gas for more expensive fuels, such as diesel.

In addition, the Argentine government recently increased the tax
on natural gas exports significantly, resulting in much higher
generation cost even when natural gas is burned, because the tax
increase markedly raises the cost of natural gas purchases.  
However, that cost is still much lower than when diesel fuel is
used.

The main risk for the SIC is a combination of natural gas
shortages with a drought, especially in 2007 and 2008, because
we expect new plants (e.g., coal-fired or liquefied-natural-gas-
fired plants) won't come online until 2009.  In addition, we
expect Chile to partly reduce dependence on natural gas from
Argentina by 2008 by instead importing LNG produced by a new
regasification plant that the Chilean government is sponsoring.

These factors were contemplated somewhat in the spirit of the
Short Law II, promulgated in May 2005, which led to a
significant increase in the regulated node prices to levels of
above US$60 per MWh in the SIC. Standard & Poor's expects that
the higher electricity prices, coupled with the possibility of
signing new long-term contracts at a relatively fixed price that
can be passed through to end users, will result in sizable
investments in the sector.  Standard & Poor's rates seven
companies in Chile.  It recently raised the rating on one
company by a notch and gives three companies stable outlooks,
three companies positive outlooks, and one company a CreditWatch
listing with negative implications.




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


BANCOLOMBIA: Fitch Raises Foreign Currency Issuer Rating to BB+
---------------------------------------------------------------
Fitch has upgraded the foreign currency Issuer Default Rating of
Bancolombia.  These rating actions follow the recent Country
Ceiling upgrades for various countries, including Colombia to
'BB+' from 'BB'.

Fitch has taken these rating actions:

   -- foreign currency long-term issuer default rating upgraded
      to 'BB+' from 'BB' and  revised Outlook to Stable from
      Positive;

   -- foreign currency short-term rating affirmed at 'B';

   -- Local currency long-term IDR affirmed at 'BBB-' with
      Stable Outlook;

   -- Local currency short-term rating affirmed at 'F3';

   -- Individual affirmed at 'C';

   -- Support affirmed at '3'.

Bancolombia's IDRs are driven by the financial strength implicit
in its Individual rating.


BBVA COLOMBIA: Fitch Ups Foreign Currency Issuer Rating to BB+
--------------------------------------------------------------
Fitch has upgraded the foreign currency Issuer Default Rating of
BBVA Colombia.  These rating actions follow the recent Country
Ceiling upgrades for various countries, including Colombia to
'BB+' from 'BB'.

Fitch has taken these rating actions:

   -- foreign currency long-term issuer default rating upgraded
      to 'BB+' from 'BB' and revised Outlook to Stable from
      Positive;

   -- foreign currency short-term rating affirmed at 'B';

   -- Local currency long-term IDR affirmed at 'BBB-' with
      Stable Outlook;

   -- Local currency short-term rating affirmed at 'F3';

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

   -- Support affirmed at '3'.

BBVA's IDRs reflect the ownership of the bank by a strong
parent.


* COLOMBIA: Central Bank Raises Benchmark Lending Rate to 6.75%
---------------------------------------------------------------
Colombia's central bank increased the benchmark lending rate on
August 18 to 6.75% to curb inflation, Bloomberg News reports.  
Inflation rate in July was 4.32%, the highest in six months.

In a statement, the bank said it may continue to raise rates to
keep inflation from ballooning next year, Bloomberg says.

According to analysts asked by Bloomberg in a survey, gradually
increasing rates will allow Colombia to maintain current growth
levels.

"The central bank is concerned about the buildup in inflationary
pressures because the economy is operating close to its
potential," Carola Sandy, an economist at Credit Suisse Group,
was quoted by Bloomberg as saying.

                        *    *    *

On July 25, 2006, Fitch rated the Republic of Colombia's US$1
billion issue of fixed-rate Global Bonds maturing January 27,
2017, 'BB'.  The rating is in line with Fitch's long-term
foreign currency rating on Colombia.  Fitch said the Rating
Outlook is Positive.


* COLOMBIA: Electric Utilities Continue to Enjoy Positive Trend
---------------------------------------------------------------
In the first half of 2006, the ratings on Latin American
electric utilities continued enjoying the positive trend that
started in 2003, mainly as a result of the ongoing favorable
economic conditions in the region.  First, demand for power grew
3% to 8% in many countries, including Argentina, Brazil, Chile,
Colombia, Mexico, and Peru.  Second, the companies' higher power
sales, combined with the persistent strength of local currencies
against the U.S. dollar, resulted in better debt service
coverage ratios mainly because of stronger local-currency-linked
cash flow generation and lower debt levels.  The exceptions
among the currencies were the Colombian and Chilean pesos, which
lost about 13% and 5% of their value, respectively, in the first
half of 2006.  Third, the better market environment allowed many
companies to improve their financial profile, by raising local
currency debt in the domestic markets, improving their debt
maturity profiles and reducing financing costs.  Standard &
Poor's Ratings Services upgraded various electric utilities in
the region in the past 12 months, mainly because of better
financial risk profiles, including:

   -- Argentine electric utilities that completed their debt
      restructuring following massive defaults in early 2002;

   -- Brazilian companies that benefited from the country's
      better economic and financial environment; and

   -- Chilean power generators after the passage of the Short
      Law II in May 2005, which triggered regulated electricity
      prices to levels of about US$60 per megawatt-hour in the
      largest Chilean electric system, the Central
      Interconnected System or SIC.

While Latin American electric utilities continue to take
advantage of these positive market conditions by improving their
financial profiles, they remain exposed to the region's volatile
politics and economics. However, the companies' financial
profiles are becoming more solid in the face of a potentially
more difficult market environment deriving from increasing
interest rates worldwide and/or a potential economic slowdown.

The Colombian National Interconnection System, which links the
country's main consumption centers, has a total installed
generating capacity of about 13,500 MW.  This provides a
relatively large reserve capacity margin of about 40%
(considering peak demand of around 8,600 MW in 2005), although
the almost 70% hydro-based system requires large capacity
reserves to protect against periods of drought.  This margin
should continue gradually decreasing in the next few years as a
result of the growing demand for power and the lack of
significant capacity additions, which are partly due to
electricity prices that are still relatively low but increasing.  
Power demand rose 4.1% during 2005 because of the country's
growing economy and increasing exports to Ecuador.  Standard &
Poor's rates two electric companies in Colombia.  One has a
stable outlook, and the other is on CreditWatch with negative
implications.




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


* COSTA RICA: Fitch Talks on Real Estate Risks & Opportunities
--------------------------------------------------------------
Costa Rican real estate investment funds are specialized
vehicles that control a portfolio of rental income producing
properties. These investments funds are established as close-end
separate entities that belong to a number of investors whose
ownership rights are represented through certificates of
participation that are publicly traded on the domestic stock
market.  Authorized asset management companies called sociedades
administradoras de fondos de inversion -- SAFI, administer these
funds.

Introduced to the Costa Rican capital market in 1999, these
investment vehicles have grown into more diversified real estate
portfolios, moving from a portfolio of free-zone parks worth
US$19.4 million as of year-end 1999, to 11 portfolios with an
aggregated value of US$450 million and a net rentable area of
558,190 square meters as of May 2006.  The portfolios are
composed of:

   -- office buildings,
   -- commercial and industrial properties,
   -- warehouses and
   -- restaurants.

Costa Rican real estate funds have become a successful
alternative investment product, and some of them are also listed
on the Panamanian Stock Exchange, driven by the increasing
interest of Panamanian investors in this vehicle.

In response to greater regulation and market demand for an
independent opinion on the risks of real estate funds, Fitch
developed a scoring approach to assessing risks of equity
investments in real estate funds. The analysis focuses on the
funds' ability to generate cash flows from the underlying real
estate assets and the potential volatility in returns during an
adverse business cycle.  The main risks of real estate funds
come from:

   -- the properties' quality, location, versatility and
      diversification;

   -- quality and distribution of tenants; and

   -- lease contracts' characteristics (i.e., terms, collateral
      and conditions).

Relevant aspects such as sensitivity to the business cycle,
dependency on regional economies, legal issues and property
management are also considered.  Opportunities to reduce the
sector's risks will come as the domestic real estate market
develops and the financial market widens the understanding of
this type of investment.  In addition, improvements of the
regulatory framework are desirable to reduce the sector's risks.  

Fitch currently scores four Costa Rican real estate funds on
both a Costa Rican and Panamanian national scale basis, as these
funds are listed on each countries' stock markets. Fitch-scored
real estate funds are:

   -- Fondo de Inversion Inmobiliario Gibraltar,
   -- Fondo de Inversion Inmobiliario VISTA,
   -- Fondo de Inversion Inmobiliario VISTA Siglo XXI and
   -- Fondo de Inversion Inmobiliaria de Renta y Plusvalia.

          Asset Quality and Cash Flow Generation

Almost all real estate investments (96.3%) are located in the
Costa Rica's four main cities and surrounding areas, together
referred to as the Great Metropolitan Area or GAM.  GAM is the
most densely populated area, and it comprises most of the
country's economic activity.  In general, properties are
considered adequate in terms of accessibility, proximity to
services and economic activity vis-a-vis the purpose of each
property.  Likewise, the construction qualities are good overall
and in accordance to the type of property and the tenants'
needs.

In general, office and commercial building segments are highly
competitive due to low protective barriers against early
termination of lease contracts, relatively low dependency of
tenants to the properties and sensitivity to the economic cycle.  
These elements expose the funds to certain volatility in
occupancy levels (occupancy has remained at more than 90%).  
However, the overall high level of demand in the market
mitigates the adverse effects of this volatility.

The warehouse segment has shown high occupancy levels due to the
properties' construction and location attributes, though some
warehouses have limited loading areas, which could negatively
affect the buildings' occupancy levels in the future.

Occupancy levels in the free zones are highly related to the
country's ability to attract foreign direct investments;
therefore, the approval of the U.S. Central American Free Trade
Agreement or CAFTA by the Costa Rican Legislative Assembly could
underpin the demand for this property type.  Consequently, non-
approval of CAFTA could undermine new investments.  
Additionally, the free-trade zone incentive regime will have to
be phased out by 2009, which in turn could negatively affect the
sector's investments.

                       Opportunities

The funds' aggregate capacity to acquire properties is still
high, as reflected in the ratio of issued capital to authorized
capital of about 55%.  In addition, the use of leverage (with a
regulatory upper limit of 60% of the funds' total assets)
increases the probability for diversification and growth, but
this opportunity should be managed carefully.

Although relatively new, the existing real estate funds market
has begun to propel greater development of the real estate
sector, as disclosure of funds' transactions prices and real
estate asset valuations schemes has led to a better market price
formation of the properties; however, Fitch believes this
process is ongoing.  Alternatively, interest of foreign private
investors to acquire properties in Costa Rica has entailed more
competition for domestic real estate funds.  In this sense, the
challenge for real estate asset managers is to attract foreign
investors and increase participation of local institutional
investors.

                      Diversification

Costa Rica's size and socioeconomic characteristics have
naturally induced geographic concentration of acquisitions in
certain areas within the GAM, exposing the funds to risks
associated with changes in the socioeconomic conditions of the
areas.  Nonetheless, the recent development in the economic
activity of areas outside the GAM should represent an
opportunity for the funds to diversify their portfolios further.  
Examples of this are the coast areas, where growing tourism
activity and infrastructure demand are signaling investing
opportunities.

In addition, Costa Rican real estate funds were recently allowed
to purchase properties located in other Central American
countries, which represents an opportunity to diversify the
fund's portfolios.  However, this could be a slow process as
asset managers gain knowledge on neighboring real estate
sectors.  Additionally, the existing funds may not experience
the benefits of geographical diversification as it is possible
that asset management companies opt to establish new Costa Rican
real estate funds that target real estate assets located abroad.

                         Regulation

Effective in May 2006, new rules governing Costa Rican real
estate funds bring about additional investing opportunities.  In
addition to the aforementioned alternative to invest in real
estate assets abroad, the funds are now allowed to leverage
their portfolios up to 60% of total assets (from the previous
35% limit) and assets managers are able to sponsor real estate
development funds (i.e., funds that invest in real estate
projects prior to or during early stages of construction).  
Basically, these reforms may lead to changes in the portfolio
and capital structures of the funds.  Until recently, real
estate funds have remained cautious on the use of leverage,
exhibiting an average debt-to-total assets ratio of about 7.5%.  
However, Fitch believes leverage will be used for the most part
by real estate development funds.

                          Valuation

A low development in the Costa Rican real estate sector had
caused poorly standardized information of properties' values.  
However, the launch of the real estate funds into the capital
markets has brought about the opportunity to implement more
standardized valuation systems that have began to reduce
differences in the valuation and, therefore, in the sector's
price formation as well.

Fitch recognizes that the use of independent appraisers and
financial valuators with national and international expertise
and a proven track record in the field is essential to achieve
methodological consistency when valuating properties and an
adequate price formation, which is a fundamental factor in the
analysis of the portfolios' risks.




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


* CUBA: Purchases 80 Freight Cars from Iran for IRR4,353,280
------------------------------------------------------------
Cuba has finalized a deal with Iran on the purchase of 80
freight cars for IRR4,353,280, according to a report by Mehr
News Agency.

As reported in the Troubled Company Reporter-Latin America on
Aug. 15, 2006, 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.  Minister Garcia said
that Cuba is interested in intensifying cooperation with Iran in
various areas.  The two officials studied previous cooperation
accords on sectors:

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

Merhr News relates that under the accord, the Islamic Republic
of Iran's Railroad Co. will ship second-hand freight cars, which
are designed for cement transportation, to Cuba.  The freight
cars had been used by Iran's rail network to ship cement.

According to Merhr News, about 40 of the freight cars will be
delivered from Bandar Abbas port in Southern Iran to Havana,
Cuba, within the next five months.  Delivery of the remaining 60
freight cars would be in the next 10 months.

Cuba has also entered an accord with Iran's Pars Wagon Co. of
Arak on the delivery of 500 freight cars, Merhr News 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




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


PETROECUADOR: Investing US$127MM to Upgrade Esmeraldas Refinery
---------------------------------------------------------------
PetroEcuador president Galo Chiriboga said in an interview with
Bloomberg News that the company will invest US$127 milion to
upgrade and expand its largest refinery, known as Esmeraldas.  
The move is aimed at cutting refined fuel import costs.

According to Cesar Hidalgo, Petroindustrial's vice president,
the plant's expansion will result to annual import savings of up
to US$250 million, Bloomberg relates.  Petroindustrial is a
subsidiary of PetroEcuador.

Additionally, PetroEcuador aims to step up daily oil output to
322,000 barrels.  

Bloomberg says Ecuador's nationwide oil output totals 530,000
barrels per day.  Oil accounts for two-thirds of Ecuador's
exports.

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.


PETROECUADOR: Starts Talks with Suppliers to Restructure Debts
--------------------------------------------------------------
PetroEcuador, Ecuador's state-owned oil firm, said it will begin
this week a series of talks with its suppliers to lay out a
payment schedule of about US$270 million in arrears, Bloomberg
News reports.

Galo Chiriboga, who became president of PetroEcuador very
recently, told Bloomberg there are several hundred suppliers
demanding payment from the company.

"I want to reach an agreement that I know we can honor," Mr.
Chiriboga, said in an interview with Bloomberg at the company's
headquarters in downtown Quito.  "That's how we'll show the
market that when we have a problem, we will deal with it."

According to Bloomberg, PetroEcuador is losing money partly
because it has to import expensive refined fuels to meet
domestic demand.

Ecuador's refining agreement with Venezuela went down the drain
last month after the parties failed to reach terms favorable to
both.  

An analyst quoted by Bloomberg said the oil firm, having been
badly run for years, needs financial support.  According to Mr.
Chiriboga, the Finance Ministry will help cobble together the
funds needed to make the payments to suppliers.

Meanwhile, finance minister Armando Rodas clarified that the
government will examine first PetroEcuador's books before
deciding how much money it will give the company, Bloomberg
relates.  However, the finance minister emphasized that funds
will be given in accordance with the company's performance.

The new company president told Bloomberg that PetroEcuador needs
more autonomy from the government.

"It's a problem of stability in the company," Mr. Chiriboga
underscored to Bloomberg.  "We are trying to reform the company
so that it allows us to be less politicized.  The company is
involved politically and in this country, politics are
unstable."

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.


PETROECUADOR: Unit Implements Fuel Terminal Contingency Plan
------------------------------------------------------------
Petroecuador's transport and distribution division,
Petrocomercial, has implemented its fuel terminal contingency
plan for terminals Ambato and Riobamba, Business News Americas
reports.

Petroecuador said in a statement that the implementation of the
plan resulted from the eruption of the Tungurahua volcano,
located 135 kilometers south of Quito.

BNamericas reports that under the plan, dealers of gasoline will
be supplied with gasoline extra and diesel from the Esmeraldas
plant.

According to the report, the Ambato terminal is partially
sending off derivatives to distributors, mainly to attend to the
requirements of organizations helping the local population like
the Army and Red Cross.

Meanwhile, the Riobamba center has closed down operations,
BNamericas notes.

Petrocomercial has also temporarily stopped transporting fuels
through the Quito-Ambato oil pipeline, 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.




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


* GUATEMALA: Electric Utilities Continue to Enjoy Positive Trend
----------------------------------------------------------------
In the first half of 2006, the ratings on Latin American
electric utilities continued enjoying the positive trend that
started in 2003, mainly as a result of the ongoing favorable
economic conditions in the region.  First, demand for power grew
3% to 8% in many countries, including Argentina, Brazil, Chile,
Colombia, Mexico, and Peru.  Second, the companies' higher power
sales, combined with the persistent strength of local currencies
against the U.S. dollar, resulted in better debt service
coverage ratios mainly because of stronger local-currency-linked
cash flow generation and lower debt levels.  The exceptions
among the currencies were the Colombian and Chilean pesos, which
lost about 13% and 5% of their value, respectively, in the first
half of 2006.  Third, the better market environment allowed many
companies to improve their financial profile, by raising local
currency debt in the domestic markets, improving their debt
maturity profiles and reducing financing costs.  Standard &
Poor's Ratings Services upgraded various electric utilities in
the region in the past 12 months, mainly because of better
financial risk profiles, including:

   -- Argentine electric utilities that completed their debt
      restructuring following massive defaults in early 2002;

   -- Brazilian companies that benefited from the country's
      better economic and financial environment; and

   -- Chilean power generators after the passage of the Short
      Law II in May 2005, which triggered regulated electricity
      prices to levels of about US$60 per megawatt-hour in the
      largest Chilean electric system, the Central
      Interconnected System or SIC.

While Latin American electric utilities continue to take
advantage of these positive market conditions by improving their
financial profiles, they remain exposed to the region's volatile
politics and economics. However, the companies' financial
profiles are becoming more solid in the face of a potentially
more difficult market environment deriving from increasing
interest rates worldwide and/or a potential economic slowdown.

The regulatory framework for the electric sector in Guatemala is
considered attractive and business-friendly, modeled after
Chile's proven approach.  Current regulations limit the
government's discretionary interventions, promote competition
among generators, and allow distributors to operate as natural
monopolies while limiting their exposure to inflation and
exchange rate fluctuations. Distribution and transmission
businesses are regulated monopolies.  The former have a 50-year
privilege to provide services under a nonexclusive concession,
but the business' natural monopoly characteristics make the
entrance of potential competitors difficult. The distributors
have the right to pass through the energy costs to their
tariffs.  Standard & Poor's rates on the global scale one of the
three main electric distribution companies in Guatemala, Empresa
Electrica de Guatemala S.A.  The outlook is stable.




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


DIGICEL LTD: Expands CaribFlex Credit Transfer Service to US
------------------------------------------------------------
Digicel Ltd. has expanded its CaribFLEX credit transfer service
to the United States.

CaribFLEX is the company's latest top up initiative that allows
customers in the UK and USA to send credit to the accounts of
friends and family in Jamaica and the Cayman Islands or top up
their own phones while roaming.

The service became available in the US from 18 Jamaica National
Money Transfer agents in New York City in early July, with
another 10 South Florida agents following in early August.  The
service was first launched in London in December 2005.

There are now a combined 30 designated JN Money Transfer and
Swift Cash branches across Greater London at which customers
will be able to access CaribFLEX, including locations in:

      -- Manchester,
      -- Surrey,
      -- Bristol,
      -- Leeds, and
      -- Nottingham.

Trevor Wright, the Recharge Manager of Digicel, said, "With
CaribFLEX available to Digicel customers at Jamaica National
Money Transfer locations in New York City and South Florida it
is now easier for the Diaspora to send credit to their friends
and family back in Jamaica.  Also, prepaid customers vacationing
in the US will have another means to top-up their credit."

Digicel prepaid roaming is available in the Caribbean, the
United Kingdom, and the US.

Customers visiting one of the select JN Money Transfer or Swift
Cash locations may purchase a Jamaican equivalent airtime
denomination of US$100, US$200, US$500, and US$1000, which is
then sent directly to the Digicel number that the client
indicates to the cashier.  

Features that make CaribFLEX an attractive option to prepaid
customers are:

    -- no charge for sending or receiving credit;
    -- credit is sent within seconds; and
    -- credit transfers are confirmed through text message.

According to Mr. Wright, Digicel would soon be forging
additional CaribFLEX partners in the UK and US markets, as well
as introducing the product to Canada and the Cayman Islands.

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

                        *    *    *

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

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


SUGAR COMPANY: Workers Await Gov't to Disclose Plans for Sector
---------------------------------------------------------------
Workers of the Sugar Company of Jamaica are restive as they wait
for the government to disclose plans for the sugar sector, Radio
Jamaica reports.

Radio Jamaica relates one of the workers' unions demanded a
clear message from Roger Clarke, Jamaica's agriculture minister.

The workers want details of the government's plan to divest the
Sugar Company's assets, Radio Jamaica says, citing Clifton Grant
-- the vice president of the University and Allied Workers
Union.

According to the report, P.J. Patterson -- Jamaica's former
prime minister -- disclosed in 2005 the government's plan to
divest some sugar factories while shutting down others.

However, the government has given no clear indication regarding
the divestment since then, The Gleaner says.

The Gleaner notes that the government has been trying to sell
its shares in the sugar industry since last year.

Minister Clarke recently said that the team established to
supervise the divestment of the factories was unimpressed with
the offers investors made.  According to the minister, the
period for bidding could be extended, The Gleaner states.

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




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


DESC SA: S&P Says Ratings Are Limited by Tight Fin. Flexibility
---------------------------------------------------------------
Desc S.A. de C.V. holds these ratings by Standard & Poor's:

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

The ratings on Desc S.A. de C.V. are limited by its tight
financial flexibility due to its debt's terms and conditions,
volatile results from its auto parts business, weakening results
from its food operation, and the inherent risks of commodity
price volatility across its core business lines.  The ratings
are supported by the favorable operating environment for
chemical producers in North America and the success of the
company's asset sale program. Overall, Desc is showing a stable
operating performance, with some indicators signaling
improvements while others still do not.

Desc is a diversified holding company and one of the largest
companies in Mexico.  Through its subsidiaries, it participates
in the auto parts, chemical, food, and real estate sectors.  
Standard & Poor's Ratings Services anticipates that Desc will
continue with its asset sale program, particularly in the auto
parts and real estate businesses, to strengthen its financial
position and financial flexibility, as evidenced by the
announcement made in November 2005 regarding a letter of intent
to acquire Dana Corp.'s 49% stake in the manual transmission
business, as well as the joints and seals aftermarket
businesses, while selling to Dana its 51% stake in the axle,
propeller shaft, gear, and forging businesses and its 67% stake
in the foundry business, an agreement materialized in July 6,
2006, after a delay caused by Dana's Chapter 11 registration.  
Further proof of this focus is the company's subsequent
announcement of a letter of agreement to sell its piston
business, Pistones Moresa S.A. de C.V., to Kolbenschmidt
Pierburg AG.  These disposals represent approximately 40% of
Desc's automotive business sales, and 30% of its EBITDA.  
Standard & Poor's expects the company to use the majority of the
funds resulting from such transactions toward debt payment and
the strengthening of its main businesses.

A stronger balance sheet could set the stage for a new business
strategy aimed at pursuing growth opportunities in Mexico's
industrial sector; nevertheless, in light of Desc's funds from
operations and working capital evolution, its growing capex
could compromise the efforts to improve its financial
flexibility and the conditions required by its debt structure.

Desc's consolidated results reflect the progress of the
company's efforts to improve its operating performance and
strengthen its financial position, if considered in light of its
overall financial conditions during 2002 and 2003.  Through the
successful completion of a capital increase of Mexican pesos 2.7
billion (about US$240 million) and other sources of liquidity,
Desc reduced its total debt by US$454 million since year-end
2003, with a positive impact on Desc's key financial ratios.  
For the 12 months ended June 2006, the company posted EBITDA
interest coverage, total debt-to-EBITDA, and FFO-to-total debt
ratios of 2.7x, 3.0x, and 17.6%, respectively, a clear
improvement from the ones reported for the same period ended
June 2004 (2.0x, 4.4x, and 7.2%, respectively).  Nevertheless,
the most recent figures are very similar to the ones reported a
year ago (2.6x, 3.2x, and 21.7%, respectively), influenced by a
reactivated automotive sector that put pressure on the company's
operating and financial performance during second-quarter 2006,
due to unexpected stoppages, and a food sector that was expected
to build on the growing exports and improvement trend in place
since 2003, but that has not been able to sustain the trend so
far during the 12 months ended June 2006 at the EBITDA level.

Despite these pressures, the company's auto parts business
should help offset the weaker results in food and stable results
in the chemicals division, which along with planned asset sales
should allow the company to continue to reduce its debt and
improve its financial performance. Standard & Poor's believes
that by year-end 2006, Desc could post EBITDA interest coverage,
total debt-to-EBITDA, and FFO-to-total debt ratios with slight
improvements from the ones shown for the 12 months ended June
2006.  Nevertheless, weakness in the company's top line and
asset sales program could prevent further improvements in Desc's
financial performance.

Liquidity

Desc's liquidity has improved.  Desc's liquidity is supported by
US$43 million in cash, and a comfortable debt maturity profile
of US$51 million for the next 12 months as of the end of second-
quarter 2006. Liquidity should also be supported by the
continued success of the company's asset sale program.

The company completed the refinancing of its bank debt through a
US$375 million syndicated loan, representing almost 60% of
Desc's total consolidated debt, improving its debt profile,
though with annual US$100 million scheduled maturities since
2007, starting with approximately US$50 million payable in the
second half of the year.  The company is currently in compliance
with its financial covenants, and covenant headroom should
improve as its debt reduction plans move forward.  Desc's
ability to tap new sources of liquidity is limited given the
heavy liens on the company's assets under its syndicated
facilities, but is actively looking for alternatives to improve
these situations.

Outlook

The stable outlook reflects our expectations of a moderate
improvement in Desc's operating performance, which Standard &
Poor's believes has still not materialized, and debt reduction
through asset sales.  The aforementioned, if coupled with an
improvement in the company's liquidity, particularly its debt
maturity schedule and a release of liens, could lead to a
positive rating action.  Conversely, deterioration in the
company's key financial ratios (particularly if its EBITDA
interest coverage ratio moves below 2.0x or its total debt-to-
EBITDA ratio reverses its current gradual improving trend, and
heads towards 4.0x), and/or further weakness in the company's
liquidity would lead to a negative rating action.


FORD MOTOR: Cuts North American Output to Hasten Turnaround
-----------------------------------------------------------
Ford Motor Company reported an aggressive reduction of North
American production as part of its broader efforts to accelerate
the pace of its Way Forward turnaround.

The Company is reducing North American fourth-quarter production
by 21% -- or 168,000 units -- compared with the fourth quarter a
year ago.  The revised plan also reduces the company's third-
quarter plan by 20,000 units.

Bill Ford, the company's chairman and CEO, outlined the decision
to cut production in a note to employees, explaining the
decision is part of broader efforts to accelerate the Company's
North American turnaround and saying full details of additional
actions will be disclosed in September.

"We know this decision will have a dramatic impact on our
employees, as well as our suppliers," Bill Ford told employees.  
"This is, however, the right call for our customers, our dealers
and our long-term future."

For full-year 2006, Ford now plans to produce 3.048 million
vehicles at its North American assembly plants -- 1.134 million
cars and 1.914 million trucks -- a 9% reduction from 2005.

The revised production plan is expected to sharply reduce the
supply of several models and reduce pressure on sales incentives
and dealer inventory carrying costs.  The plan also reflects
expectations for lower industry sales of light trucks and truck-
based sport utility vehicles, as high gasoline prices are
expected to continue to encourage demand for more fuel-efficient
passenger cars and crossovers.

Mark Fields, executive vice president and Ford's president of
The Americas, said the "tough-but-important" reduction in
production plans underscores the seriousness with which the
company is approaching its North American turnaround.

"We are basing our business plans on the customer, and we are
determined to match production and inventories with consumer
demand," Mr. Fields said.  "In doing so, we'll reduce incentive
spending and inventory carrying costs for our dealers -- with
the intent to improve residual values for our customers and
stabilize operating patterns for our plants and our suppliers."

The new production plan will result in downtime at several
assembly plants between now and the end of the year, including:
St. Thomas, Ontario (Ford Crown Victoria and Mercury Grand
Marquis), Chicago (Ford Five Hundred and Freestyle and Mercury
Montego), Wixom, Michigan (Lincoln Town Car), Louisville,
Kentucky (Ford Explorer and Mercury Mountaineer), Michigan Truck
in Wayne, Michigan (Ford Expedition and Lincoln Navigator), Twin
Cities, Minnesota (Ford Ranger) and all F-Series truck plants
(Kansas City, Missouri; Norfolk, Virginia, Dearborn and Kentucky
Truck in Louisville).

These plants are expected to operate on straight time or
overtime based on consumer demand: Hermosillo, Mexico (Ford
Fusion, Mercury Milan and Lincoln MKZ), AutoAlliance
International in Flat Rock, Michigan (Ford Mustang), Oakville,
Ontario (Ford Edge, Lincoln MKX and Ford Freestar), Wayne,
Michigan (Ford Focus), Kansas City, Missouri (Ford Escape and
Mercury Mariner), Ohio Assembly in Avon Lake, Ohio (Ford
Econoline) and Atlanta (Ford Taurus).

                       About Ford Motor

Headquartered in Dearborn, Michigan, Ford Motor Company
-- http://www.ford.com/-- manufactures and distributes
automobiles in 200 markets across six continents.  Ford Motor
has two assembly plants and an engine plant in Mexico.  With
more than 324,000 employees worldwide, the company's core and
affiliated automotive brands include Aston Martin, Ford, Jaguar,
Land Rover, Lincoln, Mazda, Mercury and Volvo.  Its automotive-
related services include Ford Motor Credit Company and The Hertz
Corp.

                        *    *    *

As reported in the Troubled Company Reporter on July 31, 2006,
Dominion Bond Rating Service lowered on July 21, 2006, Ford
Motor Company's long-term debt rating to B from BB, and lowered
its short-term debt rating to R-3 middle from R-3 high.  DBRS
also lowered Ford Motor Credit Company's long-term debt rating
to BB(low) from BB, and confirmed Ford Credit's short-term debt
rating at R-3(high).  DBRS maintained a negative outlook for
Ford Motor Company and Ford Credit.

As reported in the Troubled Company Reporter on July 24, 2006,
Moody's Investors Service lowered the Corporate Family and
senior unsecured ratings of Ford Motor Company to B2 from Ba3
and the senior unsecured rating of Ford Motor Credit Company to
Ba3 from Ba2.  The Speculative Grade Liquidity rating of Ford
has been confirmed at SGL-1, indicating very good liquidity over
the coming 12 month period.  The outlook for the ratings is
negative.

As reported in the Troubled Company Reporter on June 12, 2006,
Fitch downgraded long-term ratings for both Ford Motor Company
and Ford Motor Credit Company with a Negative Rating Outlook,
and Assigned an Issuer Default Rating of 'B+' from 'BB' and a
Senior unsecured rating of 'BB-/RR3' from 'BB'.  Fitch also
lowered FMCC's Issuer Default Rating to 'B+' from 'BB'.

As reported in the Troubled Company Reporter on July 3, 2006,
Standard & Poor's Ratings Services lowered its corporate credit
rating on Ford Motor Co. and related units to 'B+' from 'BB-'
and affirmed its 'B-2' short-term rating.  The ratings were
removed from CreditWatch, where they were placed on
May 25, 2006, with negative implications.  S&P said the outlook
is negative.


FORD MOTOR: Cutbacks Prompt Fitch to Lower Issuer Rating to B
-------------------------------------------------------------
Fitch Ratings has downgraded the Issuer Default Rating of Ford
Motor Company and Ford Motor Credit Company to 'B' from 'B+'.  
Fitch also lowers the Ford's senior unsecured rating to 'B+/RR3'
from 'BB-/RR3' and Ford Credit's senior unsecured rating to 'BB-
/RR2' from 'BB/RR2'. The Rating Outlook remains Negative.

The downgrade is based on the significant production cutbacks in
the third and fourth quarter that reflect persistent share
losses across key product categories.  Negative cash flows,
including restructuring costs, could exceed US$7 billion in
2006, including working capital and restructuring outflows.  
Cash outflows related to restructuring actions will continue in
2007, although operating losses could moderate as cost reduction
efforts are realized.  Sustained market share losses or a
decline in economic conditions through 2007 would result in
continued high levels of cash outflows and erosion of liquidity.  
Although liquidity remains adequate, progress in achieving
structural cost reductions and maintaining the confidence of
trade creditors will remain critical over the near term.

Implicit in the production cutbacks are expectations of
continued weak pickup sales that have resulted in extended
inventories.  Volume declines in Ford's pickup segment, along
with continued declines in mid-size and large SUVs, are likely
to accelerate revenue declines and negative cash flows in 2006.  
Although continued share losses and price erosion were
anticipated as a result GM's upcoming refreshed pickup line and
the start-up of Toyota's new pickup plant, vulnerability to this
segment has increased as a result of high gas prices, a
potential slowdown in economic conditions, and a contracting
construction segment.  Ford has demonstrated recent growth in
certain car segments, where industry sales have been migrating,
but volumes and profitability in these segments will be
insufficient in the short-term to offset the decline in higher-
margin mid-size and large SUVs and pickups.  Ford's product
pipeline is modest over the near term, although two crossover
products to be introduced in 2006 (the Ford Edge and Lincoln
MKX) are expected to partially offset continued share erosion.

Ford's 'RR3' Recovery Rating reflects good recovery prospects of
50-70% in the event that the company is forced to seek
protection under Chapter 11.  Recovery values benefit from
Ford's holdings in Mazda, operations in Asia and South America,
very modest recoveries from Premier Automotive Group operations,
and 100% ownership in Ford Credit. Recovery for senior unsecured
holders also benefits from being in a superior position to the
Capital Trust II securities (which represents approximately 29%
of consolidated debt).  Recovery values associated with Ford
Credit are likely to decline as Ford Credit's balance sheet
shrinks and repatriated capital is used to finance operating
losses.  Fitch's recovery analysis also projects that due to
declining market share and low current capacity utilization, at
least one additional assembly plant will be shut down (in
addition to those already announced).

Fitch's recovery scenario incorporates a Chapter 11 filing of
North American operations only, and would result in significant
claims from working capital liabilities (trade creditors,
dealers, fleet customers, etc.) in addition to unsecured
debtholders.  Fitch also factored in liabilities related to on
and off-balance sheet liabilities that could augment claims.  
Fitch did not factor in claims related to potential termination
or alteration of legacy OPEB and pension costs.  In the event of
a filing, Fitch anticipates that Ford would not attempt to
terminate its pension plans.  Changes to OPEB liabilities, are
expected to be negotiated as part of a new labor agreement in
the event of a Chapter 11 filing (as is taking place at Delphi),
without resulting in claims against the estate.  The
restructured enterprise value includes reduced production
volumes, and structural cost reductions to an extent that a 3%
operating margin could be achieved in North America.

Declining revenues are unlikely to reverse through 2007 due to
market share losses and declining mix. Despite modest progress
on the cost side, the pace of cost reductions is not expected to
keep up with revenue losses (assuming continued high commodity
costs), thereby continuing negative cash flows.  Over the
intermediate-term, reducing inventories and producing closer to
demand will enhance even-flow production and production
efficiencies, and reduce reliance on ruinous incentive programs.  
However, lower production levels, coupled with already weak
capacity utilization, ill increase short-term cash outflows and
heighten the urgency of achieving substantive structural cost
reductions.

Ford's production cutbacks will also heighten operating and
financial stresses throughout the supply chain, increasing the
risks of further bankruptcies or other supply disruptions.  
Supply chain stresses are expected to result in increased risks
of financial support and will limit the potential for any cost
savings to accrue to Ford over the near term from the
restructuring of the supply base.

Ford Credit or FMCC's IDR remains linked to those of Ford due to
the close business relationship between them.  Fitch expects
FMCC's earnings and dividends to decline noticeably in 2006
primarily due to lower receivables outstanding and margins.  
FMCC has benefited from lower provision expense, as the quality
of its receivables pool has increased, but the pace of these
improvements is expected to slow going forward.  Fitch believes
that FMCC maintains a good degree of liquidity relative to its
rating.  Supporting this is FMCC's ability to sell or securitize
a broad spectrum of assets such as retail finance, lease, and
wholesale loans.  Moreover, FMCC continues to hold high cash
balances and its assets mature faster than its debt.  FMCC's
'RR2' Recovery Rating indicates superior recovery prospects on
unsecured debt resulting from solid unencumbered asset
protection, although discounted to account for stressed
performance and/or disposition.

Fitch downgrades these ratings with a Negative Rating Outlook:

    Ford Motor Co.

      -- Issuer Default Rating to 'B' from 'B+';
      --Senior debt to 'B+' from 'BB-'.

   Ford Motor Credit Co.

      -- Issuer Default Rating to 'B' from 'B+';
      -- Senior debt to 'BB-' from 'BB'.

   FCE Bank Plc

      -- Issuer Default Rating to 'B' from 'B+-';
      -- Senior debt to 'BB-' from 'BB'.

   Ford Capital B.V.

      -- Issuer Default Rating to 'B' from 'B+';
      -- Senior debt to 'BB-' from 'BB'.

   Ford Credit Canada Ltd.

      -- Issuer Default Rating to 'B' from 'B+';
      -- Senior debt to 'BB-' from 'BB'.

   Ford Motor Capital Trust II

      -- Preferred stock to 'CCC+/RR6' from 'B-/RR6'.

   Ford Holdings, Inc.

      -- Issuer Default Rating to 'B' from 'B+';
      -- Senior debt to 'B+' from 'BB-'.

   Ford Motor Co. of Australia

      -- Issuer Default Rating to 'B' from 'B+';
      -- Senior debt to 'B+' from 'BB-'.

   Ford Credit Australia Ltd.

      -- Issuer Default Rating to 'B' from 'B+'.
      -- Senior debt to 'BB-' from 'BB'.

   PRIMUS Financial Services (Japan)

      -- Issuer Default Rating to 'B' from 'B+'.

   Ford Credit de Mexico, S.A. de C.V.

      -- Issuer Default Rating to 'B' from 'B+'.

   Ford Motor Credit Co. of New Zealand

      -- Issuer Default Rating to 'B' from 'B+';
      -- Senior debt to 'BB-' from 'BB'.

   Ford Credit Co S.A. de CV

      -- Issuer Default Rating to 'B' from 'B+'.
      -- Senior debt to 'BB-' from 'BB'.

Fitch also affirms these short-term ratings:

   Ford Motor Credit Co.

      -- Commercial Paper 'B'.

   FCE Bank Plc

      -- Commercial Paper and short-term debt 'B'.

   Ford Credit Canada Ltd.

      -- Commercial Paper 'B'.

   Ford Credit Australia Ltd.

      -- Commercial Paper 'B'.

   Ford Motor Credit Co. of New Zealand

      -- Commercial Paper 'B'.


FORD MOTOR: Production Cutbacks Cue Moody's to Review Ratings
-------------------------------------------------------------
Moody's Investors Service is reviewing the ratings of Ford Motor
Company (B2 corporate family, B2 senior unsecured and Caa1
subordinate) and Ford Motor Credit Company (Ba3 corporate family
and Ba3 senior unsecured) for possible downgrade.  The company's
Speculative Grade Liquidity Rating has been affirmed at SGL-1,
indicating very good liquidity over the next 12-month period.  

The review follows Ford's announcement that as part of the
acceleration of its Way Forward restructuring program it will
significantly reduce production levels in its North American
operations for the second half of 2006 in response to the
continued erosion in the truck and SUV markets.  Moody's also
expects that a more aggressive employee attrition program will
be an important element of the Way Forward plan.  The rating
agency believes that the announced production cuts, in
combination with an accelerated attrition program and a
continuing market shift away from trucks and SUVs, will
contribute to a significantly negative cash flow during 2006.  
Nevertheless, the company's current cash position and available
bank credit facilities provide good liquidity relative to the
company's near term cash requirements.

Moody's review of Ford is focusing on the degree to which the
company's accelerated Way Forward plan will reestablish the
competitiveness of its North American operations and preserve
liquidity in the face of significant near-term cash requirements
and more aggressive competition from Asian manufacturers.  The
review will consider the company's rating relative to those of
key peers, and to the extent a rating downgrade is necessary it
is unlikely to be more than one rating notch.

Ford expects to announce the details of the revised
restructuring plan in September, and Moody's anticipates that
the resolution of the review will coincide with the announcement
of the revised plan.  Key elements of the plan could include
initiatives to pull forward new product introductions in the car
and crossover segments, optimize the number of vehicle
platforms, accelerate material costs reduction plans, and pursue
options for various asset sales.  Bruce Clark, a senior vice
president with Moody's said, "The truck and SUV markets are
falling out from under Ford much more quickly than it expected
and consequently the company will have to accelerate almost
every aspect of the original Way Forward plan.  But during the
near-term, a significant amount of cash will likely be consumed
until the plan begins to gain any real traction."  The rating
agency notes that Ford has approximately US$23.6 billion cash
and short-term VEBA balances to help cover future cash
requirements.

Moody's review of Ford Credit's long-term ratings (Senior at
Ba3) reflects the linkages that exist between it and its parent.  
A further weakening at Ford would have a negative impact on Ford
Credit's stand-alone credit profile.  Moody's currently
maintains a two notch rating differential between Ford and Ford
Credit based upon Moody's view that loss severity in the event
of default for Ford Credit would be meaningfully lower than for
Ford.  This two notch rating differential is not expected to be
reduced as a result of this ratings review.

Ford Motor Company, headquartered in Dearborn, Michigan, is a
leading global auto manufacturer.  Ford Motor Credit Company is
one of the world's largest captive finance companies.


FORD CREDIT: Moody's Reviews Debt Rating for Likely Downgrade
-------------------------------------------------------------
Moody's de Mexico put on review for possible downgrade the A3.mx
long-term Mexican National Scale debt rating assigned to Ford
Credit de Mexico, S.A. de C.V. SOFOL.  At the same time, Moody's
affirmed Ford Credit de Mexico's short-term Mexican National
Scale debt rating of MX-2.

This rating action is the result of Moody's decision to place on
review for downgrade the Ba3 senior unsecured debt ratings of
Ford Motor Credit Company (Ford Credit), Ford Credit de Mexico's
direct parent.  Ford Credit de Mexico's debt rating is based on
irrevocable and unconditional guarantees provided by Ford
Credit.

These actions were taken:

   -- Mexican National Scale long-term debt rating of A3.mx:
      Review for Possible Downgrade; and

   -- Affirms Mexican National Scale short-term debt
      rating of MX-2.


FORD MOTOR: Production Cuts Cues S&P to Put Ratings on NegWatch
---------------------------------------------------------------
Standard & Poor's Ratings Services has placed its 'B+' long-term
and 'B-2' short-term ratings on Ford Motor Co., Ford Motor
Credit Co., and related entities on CreditWatch with negative
implications.  The 'BB-' long-term rating and 'B-2' short-term
ratings on FCE Bank PLC, Ford Motor Credit's European bank, were
also placed on CreditWatch with negative implications,
reflecting its linkage to the Ford rating.

The Ford CreditWatch placement reflects our decision to review
the ratings in light of the sharply lower production schedule
just announced for light trucks in the fourth quarter (down
155,000 units, or 28%, versus fourth-quarter production in
2005).  These cuts, along with the very likely significant cost
reductions to be announced in September, reveal the magnitude of
turnaround efforts needed to deal with Ford's deteriorating
product mix, lower market share, and excess production capacity
in North America.

"The lower production will have a significant negative effect on
Ford's cash flow in the fourth quarter," said Standard & Poor's
credit analyst Robert Schulz.  Although Ford's North American
automotive operations are cash-flow negative, Ford's liquidity
should still be sufficient relative to near-term requirements,
as the company has a large liquidity position.

Standard & Poor's plans to resolve this review by the end of
September. As part of this review, the rating agency will meet
with Ford's management to discuss the company's evolving plans
to address the heightened challenges it faces in North America.


VISTEON CORP: Fitch Says Won't be Affected by Ford's Cutbacks
-------------------------------------------------------------
The announcement by Ford regarding significant cutbacks to the
fourth quarter production schedule should adversely affect
Visteon Corp.'s operating and cash flow performance for 2006.  
Although Visteon continues to reduce its exposure to global Ford
production volumes, financial results over the near term will
remain leveraged to Ford production in North America and Europe.  
Fitch believes Visteon will be free cash flow negative in 2006
and challenged to produce free cash flow in 2007 owing to lower
sustained production levels at Ford, Visteon's extended
restructuring program, and industry pressures.  Visteon's Issuer
Default Rating of 'CCC' is unaffected, as the risk of
unanticipated Ford production cuts had already been factored
into the rating.

Visteon's recent bank agreements have addressed near-term
maturity and liquidity issues.  Non-Ford contract wins will help
to support revenues over the near term, but are unlikely to
offset the impact of Ford production cuts.  Given revenue
pressures, high commodity costs, an extended restructuring
program (financed in part by a Ford-financed trust), and an
uncertain cost structure, a reversion to sustained positive cash
flow will be a challenge.


SATELITES MEXICANOS: Asks US Court to Set Confirmation Hearing
--------------------------------------------------------------
Satelites Mexicanos, S.A. de C.V., asks the Honorable Robert D.  
Drain, of the U.S. Bankruptcy Court for the Southern District of  
New York to convene a hearing to consider confirmation of its  
Chapter 11 Plan of Reorganization seven days after the Voting  
Deadline.  
  
The Debtor proposes that, the Confirmation Hearing may be  
continued from time to time by the Court or the Debtor without  
further notice other than adjournments announced in open Court
or as indicated in any notice of agenda of matters scheduled for  
hearing filed with the Court.  
  
The Debtor will provide notice of any continuance of the  
Confirmation Hearing to counsel for the Ad Hoc Existing  
Bondholders' Committee, and the Ad Hoc Senior Secured
Noteholders' Committee.  
  
In accordance with the terms of the Restructuring Agreement,   
the Debtor notes, confirmation of the Chapter 11 Plan will not  
occur more than 120 days from the Petition Date without the  
consent of the Ad Hoc Committees.  
  
The Debtor also asks the Court to direct that objections, if
any, to the Plan must be filed seven days before the
Confirmation Hearing.  Confirmation objections must:  
  
   (a) be in writing;  
  
   (b) state the name and address of the objecting party and the  
       amount and nature of the claim or interest of the party;  
       and  
  
   (c) state with particularity the basis and nature of any  
       objection.  
  
The Debtor also seeks permission to publish the Confirmation  
Hearing Notice once in The New York Times (National Edition) and  
Reforma, a Mexican newspaper, on or within three days after it  
commences solicitation of Plan votes.  
  
The Court will convene a hearing to consider the Debtor's
request on Sept. 6, 2006, at 10:00 a.m.  Objections, if any,
must be filed by Aug. 31, 2006.  

                 About Satelites Mexicanos

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 Bankruptcy
News, Issue No. 2; Bankruptcy Creditors' Service, Inc.,  
http://bankrupt.com/newsstand/or 215/945-7000).  


SATELITES MEXICANOS: Gets Extension of Schedules Filing Deadline
----------------------------------------------------------------
The Honorable Robert D. Drain, of the U.S. Bankruptcy Court for  
the Southern District of New York, granted the request of  
Satelites Mexicanos, S.A. de C.V., to extend the deadline to
file its Schedules and Statement to Oct. 25, 2006.  
  
Pursuant to Section 521 of the Bankruptcy Code and Rule 1007 of  
the Federal Rules of Bankruptcy Procedure, the Debtor is
required to file within 15 days of the filing for chapter 11
protection, a statement of financial affairs as well as
schedules of (i) assets and liabilities, (ii) current income and
expenditures and (iii) executory contracts and unexpired leases.  
  
Rule 1007(c) further provides that "Any extension of the time
for the filing of schedules [and] statements" may be granted "on  
motion for cause shown."  
  
On the date of filing for chapter 11 protection, in partial  
satisfaction of requirements of Rule 1007, the Debtor filed with  
the Court lists of all:  
  
   (i) creditors holding claims against its estate and  
  
  (ii) equity holders.  
  
Luc A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in  
New York, relates that given the size and complexity of its  
business, the Debtor has a significant amount of information to  
accumulate to prepare its Schedules and Statement.   
  
While the Debtor, with the help of its professional advisors, is  
mobilizing its employees to work diligently and expeditiously on  
the preparation of the Schedules and Statement, resources are  
strained and the Debtor has not had ample time to gather and  
analyze the necessary information to prepare and file its  
Schedules and Statement, Mr. Despins explains.  
  
Unavoidably, the Debtor's primary focus thus far has been  
negotiating the terms of the Chapter 11 Plan and the Disclosure  
Statement, and preparing for the filing of its Chapter 11 case,  
Mr. Despins avers.  
  
In view of the amount of work entailed in completing the
Schedules and Statement, and the competing demands upon the
Debtor's employees and professionals to assist in efforts to
stabilize business operations during the initial postpetition
period, the Debtor will likely not be able to properly and
accurately complete the Schedules and Statement within the
required 15-day time period, Mr. Despins tells Judge Drain.  
  
The Debtor estimates that an extension of the filing deadline to  
75 days, from the filing for chapter 11 protection, is necessary  
for it to prepare and file the Schedules and Statement, if  
necessary, while focusing on the filing of the Chapter 11 Plan
and related Disclosure Statement, and solicitation of votes to
accept or reject the Plan.   
  
                  About Satelites Mexicanos

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 Bankruptcy
News, Issue No. 2; Bankruptcy Creditors' Service, Inc.,  
http://bankrupt.com/newsstand/or 215/945-7000).


VOLKWAGEN: Mexican Workers Went on Strike Over Failed Wage Talks
----------------------------------------------------------------
Volkswagen AG's 9600 factory workers in Mexico went on strike
Friday after rejecting the company's offer of a 4% pay rise plus
a 0.5% increase in food coupons.

As widely reported, the Mexican workers demanded an 8.5% salary
increase.  

"We will look for a better offer on both salaries and benefits,"
union leader Jose Luis Rodriguez was quoted by Reuters as
saying.

"If the company invests in state-of-the-art technology, it also
has to invest in the quality of our jobs. The workers want to be
working, but we also want salaries to improve our quality of
life," the union leader underscored.

In an interview with Bloomberg News, Volkswagen's director of
corporate relations Thomas Karig said that the company will
attempt to resolve the issue as soon as it can to resume
production of about 1,450 cars per day.

The plant, which makes the New Beetles, produced approximately
300,000 vehicles last year.  If the strike drags on, it could
affect Mexico's industrial output, which is dependent on the
automobile sector.

Meanwhile, not all workers are happy with the strike.

"Some of us are not happy because there were people who agreed
with the percentage increase," said one worker outside the plant
who asked not to be named by Reuters.  About 46% of union
members voted in favor of Volkswagen's offer.

Headquartered in Wolfsburg, Germany, the Volkswagen Group
-- http://www.volkswagen.de/-- is one of the world's leading
automobile manufacturers and the largest carmaker in Europe.
With 47 production plants in eleven European countries and a
further seven countries in the Americas, Asia and Africa,
Volkswagen has more than 343,000 employees producing over 21,500
vehicles or are involved in vehicle-related services on every
working day.

                        *    *    *

Volkswagen has been carrying out measures to cut costs and raise
profits, which could affect up to 30,000 jobs.  The potential
job cuts represent about a third of the carmaker's workforce and
three times higher than initial estimates made by Chief
Executive Bernd Pischetsrieder and Volkswagen brand head,
Wolfgang Bernhard.

In November last year, Volkswagen maintained its 2005 earnings
guidance amid rumors it may lower targets.  The company predicts
a year-on-year improvement in both operating profit after
special items and profit before tax this year.  Rumors flew that
the company would slash full-year earnings forecast due to
higher restructuring costs.  The company said the impact of its
workforce reduction measures, which will be charged as special
items in the fourth quarter, will be lower than last year's.

The company also admitted there were no significant improvements
in the economic environment in the first nine months of 2005,
and the overall situation in the important automotive markets
remained difficult.  It also expected tougher competition in the
Chinese and U.S. markets, and the rise in fuel prices to
influence consumer confidence.


* HUIXQUILUCAN: Moody's Retains B1 Global Scale Rating
------------------------------------------------------
Moody's has lowered the issuer rating of the Municipality of
Huixquilucan to Baa3.mx (Mexico National Scale), from Baa2.mx,
while maintaining the municipality's global scale rating at B1.
The outlook for the ratings remains negative.

The issuer rating downgrade was prompted by the municipality's
large operating and financing deficits of recent years, which
have substantially weakened its liquidity.  The downgrade also
takes into account heightened budget pressures posed by the
increase in debt service costs required for the municipality's
recent borrowing. The rating outlook remains negative.

In the three years 2003-2005, Huixquilucan posted financing
deficits (total revenue less total expenditures, before debt
principal payments) that averaged 24% of revenue.  Even though,
in 2005, municipal revenues increased and cost-cutting measures
were introduced, that year's financing deficit reached a still-
high 13.5% of revenues.  As a result, by the end of 2005 the
municipality's net working capital was extremely negative, in an
amount equal to 37% of that year's expenditures.  The high level
of current liabilities recorded at year-end reflected an
accumulation of accounts payable, including a substantial amount
owed to the state pension system, ISSEMyN.

Moody's expects that 2006 will mark another deficit year for
Huixquilucan.  Although revenues through May show an impressive
30% increase over the same period last year, total spending has
grown even more rapidly, owing in part to a substantial increase
in capital spending.

The municipality paid off its short-term debt in early August
with the change in administration, but will likely require new
short term borrowing before year-end, as revenue collections are
strongest in the first half of the year while spending is
heaviest in the second half.

With its latest long-term borrowing, the municipality's debt now
approximates 45% of revenue and debt service requirements are
expected to surpass 10% of revenue in 2007.  These levels are
notably high relative to other rated issuers in Mexico.


* MEXICO: Electric Utilities Continue to Enjoy Positive Trend
-------------------------------------------------------------
In the first half of 2006, the ratings on Latin American
electric utilities continued enjoying the positive trend that
started in 2003, mainly as a result of the ongoing favorable
economic conditions in the region.  First, demand for power grew
3% to 8% in many countries, including Argentina, Brazil, Chile,
Colombia, Mexico, and Peru.  Second, the companies' higher power
sales, combined with the persistent strength of local currencies
against the U.S. dollar, resulted in better debt service
coverage ratios mainly because of stronger local-currency-linked
cash flow generation and lower debt levels.  The exceptions
among the currencies were the Colombian and Chilean pesos, which
lost about 13% and 5% of their value, respectively, in the first
half of 2006.  Third, the better market environment allowed many
companies to improve their financial profile, by raising local
currency debt in the domestic markets, improving their debt
maturity profiles and reducing financing costs.  Standard &
Poor's Ratings Services upgraded various electric utilities in
the region in the past 12 months, mainly because of better
financial risk profiles, including:

   -- Argentine electric utilities that completed their debt
      restructuring following massive defaults in early 2002;

   -- Brazilian companies that benefited from the country's
      better economic and financial environment; and

   -- Chilean power generators after the passage of the Short
      Law II in May 2005, which triggered regulated electricity
      prices to levels of about US$60 per megawatt-hour in the
      largest Chilean electric system, the Central
      Interconnected System or SIC.

While Latin American electric utilities continue to take
advantage of these positive market conditions by improving their
financial profiles, they remain exposed to the region's volatile
politics and economics. However, the companies' financial
profiles are becoming more solid in the face of a potentially
more difficult market environment deriving from increasing
interest rates worldwide and/or a potential economic slowdown.

Following the conclusion of the electoral process in Mexico,
Standard & Poor's will focus its attention on the new
administration's proposals for the electric industry.  However,
it is too early to predict with confidence if the next six years
will generate more reform and the passage of more laws than the
last six years have.  Standard & Poor's rates the country's
primary vertically integrated electric utility, the federal-
government-owned Comision Federal de Electricidad.  The outlook
is stable.




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


SOLO CUP: S&P Lowers Corporate Credit Rating to B from B+
---------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on Solo
Cup Co. and placed them on CreditWatch with negative
implications.  The corporate credit rating was lowered to 'B'
from 'B+'.

These rating actions follow several quarters of weak
performance, with funds from operations to total adjusted debt
of 7.4% and total adjusted debt to EBITDA of 6.6x as of
April 2, 2006.  Standard & Poor's adjusts debt to include about
US$200 million of capitalized operating leases and tax-effected,
unfunded postretirement obligations.  Its rating actions also
factor in significant recent management changes, and the
company's announcement that it will delay filing its second-
quarter 2006 financial statements pending an internal review of
certain accounting practices and procedures related to the
current and/or prior periods.  The primary issues identified so
far relate to the timely recognition of certain customer
credits, accounts payable, and accrued expenses, and the
valuation of certain tangible and intangible assets.

"We will monitor events and expect to resolve the CreditWatch
once the outcome of the accounting review is known and the
company has reported its second-quarter results," said Standard
& Poor's credit analyst Cynthia Werneth.  "However, we could
lower the ratings again before then if there are significant
negative developments such as rapid raw material cost escalation
or weaker-than-expected general business conditions."

Standard & Poor's ratings incorporate expectations that the
company will obtain waivers from its banks for the reporting
delay, and that the delay will not precipitate a default under
its bonds.  Although the rating agency believes that the company
has made meaningful changes to improve its ability to pass on
raw material cost increases to customers and should maintain
sufficient liquidity to meet near-term obligations, these remain
key concerns.  In addition, Standard & Poor's now expects the
financial profile to remain weak in the near term as the company
continues to face issues related to the integration of the 2004
acquisition of Sweetheart Holdings Inc.  These include the
planned launch of a new information technology platform later
this year.

With annual revenues of US$2.4 billion, Solo, based in Highland
Park, Ill., is a leading provider of disposable paper and
plastic cups, plates, and cutlery to foodservice distributors,
quick-service restaurants, and retailers.




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


TELEFONICA DEL PERU: Will Invest in Coverage Expansion
------------------------------------------------------
Telefonica del Peru will make investments in coverage expansion,
according to the local press.

Business News Americas reports that Osiptel has proposed to
lower the quarterly tariff reductions as long as Telefonica del
Peru promises to expand coverage.

Edwin San Roman, the head of Osiptel, told Gestion, "Osiptel's
goal with this initiative is to ensure more people have access
to fixed telephony and not to benefit the more privileged
classes by granting them lower phone rates."

There are eight fixed phones for every 100 residents, BNamericas
says, citing Mr. San Roman.  

BNamericas notes that Osiptel usually decreases fixed telephony
rates on a quarterly basis, based on the Peru's macroeconomic
situation and Telefonica del Peru's productivity levels.

Telefonica del Peru's rates have dropped for five consecutive
years at an average rate of up to 12%, BNamericas states.  

Telefonica del Peru is one of the world leaders in the
telecommunications sector 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.




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


ADELPHIA COMMS: Files Fifth Amended Plan of Reorganization
----------------------------------------------------------
Adelphia Communications Corp. filed drafts of its Fifth  
Amended Joint Chapter 11 Plan of Reorganization and the related  
Supplement to its Fourth Amended Disclosure Statement with the  
U.S. Bankruptcy Court for the Southern District of New York.   

Adelphia and the Official Committee of Unsecured Creditors are
co-proponents of the Fifth Amended Plan, which embodies the
framework agreed upon by Adelphia, its Official Committee of
Unsecured Creditors, and certain ad hoc committees representing
most of Adelphia's major bondholders and trade creditors, as
well as significant individual bond funds, and reflects the
compromise among these important creditor groups pursuant to
which approximately US$1.08 billion in value will be transferred
from certain unsecured creditors of various Adelphia
subsidiaries to certain unsecured senior and trade creditors of
the Adelphia Communications parent corporation, subject, in some
cases, to reimbursement from contingent sources of value,
including the proceeds of a litigation trust to be established
under the plan to pursue claims against third-parties that are
alleged to have damaged Adelphia.

Adelphia and the Official Committee of Unsecured Creditors are  
seeking an order of the Bankruptcy Court approving the
Supplement to the Disclosure Statement as containing "adequate
information" to enable Adelphia's Chapter 11 bankruptcy
creditors and equity holders to make an informed judgment about
the Fifth Amended Plan.  Adelphia's proposal and prosecution of
confirmation of the Fifth Amended Plan is subject in all
respects to entry of such an order, as well as Bankruptcy Court
authorization for Adelphia to propose and seek votes in respect
of the Fifth Amended Plan.  Absent entry of such an order and
authorization, Adelphia's filing of the Fifth Amended Plan and
related Supplement to the Disclosure Statement will not be
deemed to be a proposal by the Debtors with respect to the
proposed treatment of any claims against equity interests  
in Adelphia or its subsidiaries.  If this order is entered and  
such authorization is granted, Adelphia and the Official
Committee of Unsecured Creditors will begin the process of
soliciting creditors and equity holders to vote on the Fifth
Amended Plan.

A full-text copy of Fifth Amended Joint Plan of Reorganization
is available for free at http://ResearchArchives.com/t/s?ff8

A full-text copy of the Disclosure Statement is available for
free at http://ResearchArchives.com/t/s?ff9

                 About Adelphia Communications

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

Adelphia Cablevision Associates of Radnor, L.P., and 20 of its
affiliates, collectively known as Rigas Manged Entities, are
entities that were previously held or controlled by members of
the Rigas family.  In March 2006, the rights and titles to these
entities were transferred to certain subsidiaries of Adelphia
Cablevision, LLC.  The RME Debtors filed for chapter 11
protection on March 31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622
through 06-10642).  Their cases are jointly administered under
Adelphia Communications and its debtor-affiliates chapter 11
cases.


ADELPHIA COMMUNICATIONS: Posts US$11.2 Mil Net Loss in June 2006
----------------------------------------------------------------

               Adelphia Communications Corp., et al.
           Unaudited Condensed Consolidated Balance Sheet
                          At June 30, 2006
                       (Dollars in thousands)

                               ASSETS

Cash and cash equivalents                             US$734,447
Restricted cash                                           3,893
Accounts receivable, less allowance
    for doubtful accounts                               108,094
Receivable for securities                                 7,167
Other current assets                                     89,222
                                                    -----------
Total current assets                                 US$942,823

Noncurrent assets:
Restricted cash                                        US$2,751
Property and equipment, net                           4,223,605
Intangible assets, net                                7,479,647
Other non-current assets, net                           126,741
                                                    -----------
Total assets                                      US$12,775,567
                                                    ===========
                LIABILITIES AND STOCKHOLDERS' DEFICIT

Accounts payable                                     US$115,871
Subscriber advance payments and deposits                 34,020
Accrued liabilities                                     543,672
Deferred revenue                                         19,115
Parent and subsidiary debt                              959,427
                                                    -----------
Total current liabilities                          US$1,672,105

Non-current liabilities:
    Other liabilities                                 US$32,119
    Deferred revenue                                     56,149
    Deferred income taxes                               904,135
                                                    -----------
Total non-current liabilities                           992,403

Liabilities subject to compromise                    18,423,946
                                                    -----------
Total liabilities                                 US$21,088,454

Commitments and contingencies

Minority's interest                                      60,201

Stockholders' deficit:
    Series preferred stock                                  397
    Class A Common Stock                                  2,297
    Convertible Class B Common Stock                        251
    Additional paid-in capital                       12,024,695
    Accumulated other comprehensive loss, net            (2,851)
    Accumulated deficit                             (20,369,940)
    Treasury stock                                      (27,937)
                                                    -----------
Total stockholders' deficit                          (8,373,088)
                                                    -----------
Total liabilities and stockholders' deficit       US$12,775,567
                                                    ===========


               Adelphia Communications Corp., et al.
      Unaudited Condensed Consolidated Statement of Operations
                  Three Months Ended June 30, 2006
                       (Dollars in thousands)

Revenue                                            US$1,198,279

Costs and expenses:
    Direct operating and programming                    704,560
    Selling, general and administrative                  90,164
    Investigation, re-audit and
       sale transaction costs                             9,626
    Depreciation                                        191,780
    Amortization                                         33,231
    Provision for uncollectible
       amounts due from the Rigas Family
       and Rigas Family Entities                              -
    Loss (gain) on disposition of
       long-lived assets                                   (394)
                                                    -----------
Total costs and expenses                              1,028,967
                                                    -----------
Operating income                                        169,312
                                                    -----------

Other income (expense), net:
    Interest expense, net                              (219,642)
    Other income (expense), net                         (34,436)
                                                    -----------
Total other income (expense), net                      (254,078)
                                                    -----------
Income (loss) before reorganization
    income (expenses), income taxes,
    share of income (losses) of equity
    affiliates and minority's interest                  (84,766)

Reorganization income (expenses), net                    84,623
                                                    -----------
Income (loss) before income taxes,
    share of income (losses) of equity
    affiliates and minority's interest                     (143)
Income tax expense                                      (21,418)
Share of income (losses) of equity
    affiliates, net                                          92
Minority's interest in loss of
    subsidiary                                           10,173
                                                    -----------
Net income (loss)                                    (US$11,296)
                                                    ===========


               Adelphia Communications Corp., et al.
      Unaudited Condensed Consolidated Statement of Cash Flows
                 Six Months Ended June 30, 2006
                       (Dollars in thousands)

Cash flows from operating activities:
    Net income (loss)                               (US$182,912)
    Adjustments to reconcile net income (loss)
    to net cash provided by operating activities:
       Depreciation                                     379,907
       Amortization                                      66,531
       Provision for uncollectible amounts due from
          the Rigas Family and Other Rigas Entities           0
       Gain on disposition of long-lived assets          (1,358)
       Settlement with the Rigas Family and Rigas
       Family Entities, net                                   0
       Impairment of receivable for securities            2,862
       Amortization/write-off of deferred
          financing costs                                 1,520
       Provision for settlements                         44,915
       Other noncash charges, net                         1,424
       Reorganization (income) expenses due to
          bankruptcy, net                               (62,639)
       Deferred income tax expense                       70,600
       Share of losses of equity affiliates, net            818
       Minority's interest in loss of subsidiary        (11,106)
       Change in operating assets and liabilities         9,205
                                                     -----------
Net cash provided by operating activities
    before payment of reorganization expenses           319,767

Reorganization expenses paid during
    the period                                          (58,680)
                                                     -----------
Net cash provided by operating activities               261,087
                                                     -----------
Investing activities:
    Capital expenditures for property &
       equipment                                       (284,621)
    Proceeds from the sale of long-lived assets
       and investments                                    1,586
    Acquisition of minority interests                         0
    Change in restricted cash                           281,532
    Other                                                (4,605)
                                                     -----------
Net cash used in investing activities                    (6,108)
                                                     -----------
Financing activities:
    Proceeds from debt                                1,023,000
    Repayments of debt                                 (932,471)
    Payments of deferred financing costs                   (900)
                                                     -----------
Net cash provided by financing activities                89,629
                                                     -----------
Increase (decrease) in cash & cash equivalents          344,608
                                                    -----------
Cash & cash equivalents at beginning of period          389,839
                                                     -----------
Cash & cash equivalents at end of period             US$734,447
                                                     ===========

A full-text copy of Adelphia Communications Corp.'s quarterly
report for the period ended June 30, 2006, is available for free
at http://ResearchArchives.com/t/s?fcd

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

Adelphia Cablevision Associates of Radnor, L.P., and 20 of its
affiliates, collectively known as Rigas Manged Entities, are
entities that were previously held or controlled by members of
the Rigas family.  In March 2006, the rights and titles to these
entities were transferred to certain subsidiaries of Adelphia
Cablevision, LLC.  The RME Debtors filed for chapter 11
protection on March 31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622
through 06-10642).  Their cases are jointly administered under
Adelphia Communications and its debtor-affiliates chapter 11
cases.  (Adelphia Bankruptcy News, Issue Nos. 145; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or  
215/945-7000)


PILGRIM'S PRIDE: Proposes to Buy Gold Kist for US$1 Bil. in Cash
----------------------------------------------------------------  
Pilgrim's Pride Corp. sent a proposal to Gold Kist, Inc.,  
offering to purchase all of the outstanding shares of Gold Kist  
common stock for US$20 per share in cash.  The transaction is
valued at approximately US$1 billion, plus the assumption of
Gold Kist's debt of US$144 million.  Pilgrim's Pride's offer
represents a premium of approximately 55% over Gold Kist's
closing stock price of US$12.93 on Friday, Aug. 18, 2006.  

Using consensus earnings estimates for fiscal 2007, Pilgrim's  
Pride expects that the transaction will be accretive to earnings  
per share in the first full year after the completion of the  
transaction, including approximately US$50 million of
anticipated synergies expected to come primarily from the
optimization of production and distribution facilities and cost
savings in purchasing, production, logistics and SG&A.  

"We believe the combination of Pilgrim's Pride and Gold Kist
will create the world's leading chicken producer and result in  
substantial value creation for our respective shareholders,  
employees, business partners and other constituencies," O.B.  
Goolsby, Jr., President and Chief Executive Officer of Pilgrim's  
Pride, said.  "The combined company will maintain a balanced  
portfolio of fresh chicken and value-added products and expand
its geographic reach and customer base, enabling it to compete
more efficiently in the industry and provide even better service
to its customers.  

"Our proposal provides Gold Kist's shareholders with a
substantial approximately 55% premium for their shares in cash.  
We look forward to sitting down with the members of Gold Kist's
Board of Directors as soon as possible to work jointly with them
to quickly close this transaction," added Mr. Goolsby.  

Pilgrim's Pride noted that it has substantial current liquidity  
and has received further assurances from its financial advisors  
that it has the ability to finance the transaction.  Pilgrim's  
Pride believes that the combined company will have a strong  
financial position and substantial cash flow, enabling it to  
consistently reduce debt and return to historical debt levels.  

Baker & McKenzie LLP and Morris, Nichols, Arsht & Tunnell, LLP
are acting as legal counsel to Pilgrim's Pride.  Credit Suisse
and Legacy Partners Group LLC are acting as financial advisors
to Pilgrim's Pride.  

                       About Gold Kist

Based in Atlanta, Georgia, Gold Kist Incorporated (NASDAQ: GKIS)  
-- http://www.goldkist.com/-- operates a fully integrated  
chicken production, processing and marketing business.  Gold
Kist's production operations include nine divisions located in
Alabama, Florida, Georgia, North Carolina and South Carolina.

                     About Pilgrim's Pride

Headquartered in Pittsburg, Texas, Pilgrim's Pride Corp.
(NYSE: PPC) -- http://www.pilgrimspride.com/-- produces,   
distributes and markets poultry processed products through  
retailers, foodservice distributors and restaurants in the
United States, Mexico and in Puerto Rico.  Pilgrim's Pride
employs approximately 40,000 people and has major operations in
Texas, Alabama, Arkansas, Georgia, Kentucky, Louisiana, North
Carolina, Pennsylvania, Tennessee, Virginia, West Virginia,
Mexico and Puerto Rico, with other facilities in Arizona,
Florida, Iowa, Mississippi and Utah.

                        *    *    *

Standard & Poor's Ratings Services affirmed its 'BB' long-term
corporate credit and senior secured debt ratings on Pilgrim's  
Pride Inc., on March 6, 2006.
      
In addition, the ratings were removed from CreditWatch with
positive implications where they were originally placed on
Oct. 11, 2005.  About US$595 million of debt (adjusted for
capitalized operating leases) of Pilgrim's Pride was outstanding  
at Dec. 31, 2005.  The outlook is stable.




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


DIGICEL LTD: Telecoms Experts Veto Interconnection Fee Proposal
---------------------------------------------------------------
Experts hired by the Technical Institute of Trinidad and Tobago
or TATT -- the nation's telecoms regulator -- has turned down
Digicel Limited's proposal to raise the interconnection fee of
Telecommunications Services of Trinidad and Tobago Limited, the
incumbent operator in the country.

According to Business News Americas, Digicel had proposed in
January that TSTT pay higher fees than the former would have to
pay to TSTT for the same service.

BNamericas says that TATT, in response to the request, has set
up a panel of experts.

However, the experts decided that the degree of network build
out as well as the client acquisition costs applicable to each
firm did not guarantee the use of separate cost structures,
BNamericas relates, citing TSTT.

BNamericas notes that if TATT would agree to the experts'
decision, it would be up to TSTT and Digicel to restart
negotiations based on narrower parameters that the experts have
set.

Digicel and TSTT are currently exchanging traffic without
charging interconnection fees.

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

                        *    *    *

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

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




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


* URUGUAY: President Affirms Paper Mill Construction in Border
--------------------------------------------------------------
Uruguay's president Tabare Vazquez has affirmed the construction
of two paper mills along the River Uruguay, Merco Press reports.

President Vazquez told Merco Press, "The paper mills represent
development, production but also respect for the environment.  
We don't defend all investments, because business deals to be
good don't have to be shady."

Meanwhile, Argentina was making a presentation before the
Mercosur Tribunal -- which will decide on Uruguay's complaint
regarding the blockade conducted by Argentines on "binational
bridges", Merco Press relates.

As reported in the Troubled Company Reporter-Latin America on
Aug. 14, 2006, Uruguay filed a suit against Argentina in the
Southern Common Market Claims Court due to roadblocks on
international routes.  Argentina's citizens have 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 claims that the
roadblocks in Gualeguaychu caused the country:

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

However, Argentina described Uruguay's claim as "abstract",
Merco Press says.  It also said that the administration had
tried to stop the blockades but failed.

President Vazquez told Merco Press, "We're not defending
investments merely because they generate employment but also
because they project and advance productive development with
respect for the environment."

A group of Gualeguaychu environmentalists told Merco Press that
they will be going to Finland to hinder the funding of Botnia
pulp mill.  They would be sponsored by:

     -- an Argentine NGO,
     -- Human Rights and Environment Studies Centre, and
     -- Cedha.

Edgardo Moreira, one of the activists, told Merco Press, "We've
been invited to Finland to make a presentation on the issue and
the financing of the plants."

                        *    *    *

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: Evaluates Agreements with Petrobras
-----------------------------------------------------------
Minister of Energy and Oil and President of Petroleos de
Venezuela SA, Rafael Ramirez, and the President of Petroleo
Brasileiro S.A. aka Petrobras, Jose Sergio Gabrielli, met in
Caracas to evaluate the progress of the agreements signed
between the governments of Venezuela and Brazil, and between the
two companies, in 2005.

       Carabobo I -- Abreu de Lima Refinery (Pernambuco)

The highlight was placed on the joint work carried out between
PDVSA and Petrobras to quantify the Carabobo I field reserves
and on the ceremony held at a well being drilled in the field
with Venezuelan President Hugo Chavez aiming at commencing the
certification of the reserves in the Orinoco Heavy Oil Belt.

As far as the Pernambuco Refinery is concerned, it was decided
that a joint office would be established in Rio de Janeiro,
bringing Petrobras and PDVSA technicians together to follow-up
on the project's engineering studies on an ongoing manner.

During the event, the state government donated the plot of land
where the refinery will be constructed, and the Federal
University of Pernambuco was hired to carry out the
environmental impact studies required by the Brazilian norms.

                       Mariscal Sucre

Regarding Mariscal Sucre, the representatives agreed that during
the coming couple of months, all of the economic, technical, and
commercial variables would be revised for Petrobras' definitive
participation in the project.

                       Mature fields

Petrobras and PDVSA have concluded the required studies on the
project for the exploitation of five mature fields in Venezuela.  
The technical groups will evaluate the results that have been
obtained jointly in order to prepare a development plan for
these fields and the terms for the establishment of the future
Mixed Company.

                          Ethanol

Both companies agreed to set-up a long-term agreement for
Petrobras to supply ethanol to PDVSA while a project for
production in Venezuela is being elaborated.

                  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 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.


PETROLEOS DE VENEZULA: Investing in Kingston Plant Upgrade
----------------------------------------------------------
Petroleos de Venezuela SA, Venezuela's state-owned oil company,
will invest US$265 million for modernization works of a refinery
in Kingston, Jamaica, Business News Americas reports.

Petroleos de Venezuela owns a 49% stake in the Kingston plant
while Jamaica's refiner Petrojam holds 51%.  

Petroleos de Venezuela signed in 2005 an accord with the
Petroleum Corp. of Jamaica -- its Jamaican counterpart -- and
Petrojam for refinery works, BNamericas notes.

BNamericas relates that the upgrade Petroleos de Venezuela plans
on the Kingston refinery will allow the plant to process extra-
heavy crude and boost capacity.  Modernization works will
conclude in 2008.

"All those works are generating a system of refining,
distribution and storage in the Caribbean region," Rafael
Ramirez, Veenzuela's energy and oil minister and the head of
Petroleos de Venezuela, told BNamericas.

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.


* VENEZUELA: Electric Utilities Continue to Enjoy Positive Trend
----------------------------------------------------------------
In the first half of 2006, the ratings on Latin American
electric utilities continued enjoying the positive trend that
started in 2003, mainly as a result of the ongoing favorable
economic conditions in the region.  First, demand for power grew
3% to 8% in many countries, including Argentina, Brazil, Chile,
Colombia, Mexico, and Peru.  Second, the companies' higher power
sales, combined with the persistent strength of local currencies
against the U.S. dollar, resulted in better debt service
coverage ratios mainly because of stronger local-currency-linked
cash flow generation and lower debt levels.  The exceptions
among the currencies were the Colombian and Chilean pesos, which
lost about 13% and 5% of their value, respectively, in the first
half of 2006.  Third, the better market environment allowed many
companies to improve their financial profile, by raising local
currency debt in the domestic markets, improving their debt
maturity profiles and reducing financing costs.  Standard &
Poor's Ratings Services upgraded various electric utilities in
the region in the past 12 months, mainly because of better
financial risk profiles, including:

   -- Argentine electric utilities that completed their debt
      restructuring following massive defaults in early 2002;

   -- Brazilian companies that benefited from the country's
      better economic and financial environment; and

   -- Chilean power generators after the passage of the Short
      Law II in May 2005, which triggered regulated electricity
      prices to levels of about US$60 per megawatt-hour in the
      largest Chilean electric system, the Central
      Interconnected System or SIC.

While Latin American electric utilities continue to take
advantage of these positive market conditions by improving their
financial profiles, they remain exposed to the region's volatile
politics and economics. However, the companies' financial
profiles are becoming more solid in the face of a potentially
more difficult market environment deriving from increasing
interest rates worldwide and/or a potential economic slowdown.

Although the Venezuelan government approved the Electric Service
Law in 1999, its implementation is not fully complete.  Many
terms of the law have not gone to schedule, including the
formalization of concession contracts between utilities and the
government, the creation of a regulatory agency, and the setting
of a definitive tariff regime and rules to reset tariffs every
four years.  However, the Ministry of Energy and Mines has been
regulating the sector through executive measures, and the
companies have been able to post adequate results. The purpose
of the new regulatory framework is to instill efficiency,
transparency, and reliability in the power industry as a way to
attract private investment.  However, due to several economic
adversities in Venezuela, those directives have not yet been
implemented in full, and the MEM continues to oversee the
electric sector's operation. Standard & Poor's rates on the
global scale one vertically integrated utility in Venezuela,
C.A. La Electricidad de Caracas.  The outlook is stable.


* Fitch Says Latin America's Wireless Industry Remains Stable
-------------------------------------------------------------
The Latin American wireless industry outlook continues to be
stable, as wireless providers benefit from the economic recovery
in the region, supporting subscriber growth.  Penetration rates
are expected to continue increasing beyond their already high
levels as a result of strong prepaid subscriber growth.  While
competition in the wireless sector remains high, industry
consolidation has somewhat rationalized the market.  Migration
to global system for mobile communications or GSM continues, and
this technology is the most widely used in the region.  Credit
profiles of the main wireless operators are expected to remain
stable over the medium term, with profiles being sustained by
low or moderate leverage, positive free cash flow generation and
support from incumbent fixed-line providers with wireless
operations.

Wireless penetration is expected to increase further over the
next few years as subscriber growth continues at a healthy, but
slower, pace.  In 2005, mobile subscriber growth rates in Latin
America reached a five-year high as the region continued its
recovery from the economic slowdown that began in 2002.  
Penetration levels for the region have grown rapidly and reached
the mid-30% to low-40% range by the end of last year; by
comparison, fixed-line penetration rates currently range between
the high-teens and low-20% range.  Higher wireless penetration
levels are being driven by prepaid plan offerings, a calling-
party-pays or CPP revenue structure, low fixed-line penetration
levels, long waiting periods to get fixed-lined connections and
good network coverage by wireless service providers.  During
2005, prepaid subscribers accounted for more than 80% of the
subscriber base and represented approximately 85% of net
additions.  This has negatively affected blended average revenue
per user or ARPU over the past several years as the aggregate
subscriber base grows more with prepaid customers, which usually
have lower ARPU than postpaid customers. Prepaid customers
primarily use phone service to receive calls, rather than place
them.  Therefore, most of the ARPU for this type of user comes
from interconnection fees received from incoming calls.  
Operators are now focusing on data and value-added services to
prepaid and postpaid customers in order to enhance ARPU.

Competition in most countries of the region remains intense, as
current players try to expand market share and penetration
continues to increase.  Competition has caused a reduction in
tariffs and is also contributing to lower ARPUs in most Latin
American countries, a trend that is expected to continue as
lower usage prepaid subscribers grow faster than postpaid
subscribers with higher minutes of use or MOU. Increased
advertising and subscriber acquisition cost or SAC associated
with higher growth have negatively affected the profitability of
most companies over the past couple of years as they grow their
subscriber bases.  Fitch expects market participants will tend
to be more rational with SAC in the next few years as subscriber
growth slows, although Fitch acknowledges there is a risk of
some operators aggressively attempting to gain market share as
growth slows.  While new market entrants are not anticipated to
add to competition, regulators may start playing a more active
role in regulating CPP tariffs, which could reduce the implicit
subsidies provided by fixed to wireless services through
interconnection fees, negatively affecting the revenues of
wireless operators.

Industry consolidation is expected to slow following the mergers
and acquisitions of the past few years, which should help
stabilize the competitive landscape.  Over this period, several
players, including:

   -- Bell South,
   -- AT&T Wireless,
   -- Cingular and
   -- Verizon,

exited the market and disposed of their assets to existing
operators. The major beneficiaries of this consolidation process
have been America Movil and Telefonica Moviles.  These two
companies now account for more than two-thirds of total
subscribers in the region.  America Movil has been gaining a
presence in countries where it does not have operations by
buying local players on an opportunistic basis, such as:

   -- Smartcom S.A. in Chile,
   -- TIM Peru S.A.C. and
   -- Hutchison Telecommunications Paraguay S.A.

Most recently, America Movil announced it has entered into
agreements to acquire certain international assets from Verizon
Communications Inc., which includes fixed and wireless
operations, in Puerto Rico and the Dominican Republic.  In
addition, the company plans to acquire, jointly with Telefonos
de Mexico, a 28.5% share in Compania Anoima Nacional Telefonos
de Venezuela.  In 2004, Telefonica Moviles added six new
countries to its existing operations by acquiring businesses in
10 different countries in the region from Bell South.  Fitch
believes limited consolidation opportunities still exist over
the medium term, especially in Brazil.  For the next few years,
Fitch expects America Movil may continue to pursue the
acquisition of companies or licenses in Latin American countries
where it currently does not have operations, although this may
slow in the short term, given the recent announcements to
acquire three operations from Verizon.  Due to expected growth
in free cash flow and the potential limited size of such
investments, Fitch believes America Movil can accomplish this
without jeopardizing its financial profile.

Over the past three years, GSM has been the fastest growing
technology adopted by operators and subscribers in the region
and is now the most used technology in Latin America.  GSM
surpassed time division multiple access or TDMA technology,
which is being phased out due to its lack of an upgrade to more
enhanced services.  Code division multiple access or CDMA
accounted for approximately 25% of subscribers and is growing at
a slower pace than GSM.  Few operators have started offering 3G
applications, and its deployment is currently very limited.  
Operators with regional footprints have followed diverse paths
in terms of technology for 3G applications.  While America Movil
has been upgrading most of its networks to GSM, Telefonica
Moviles has a mix of CDMA and GSM within the countries where
services are offered.

Regional players and local incumbent wireless operators should
maintain stable credit profiles over the medium term as business
and competitive risks are balanced against strong financial
profiles.  The financial profile of the main wireless operators
is sustained by low or moderate leverage and strong free cash
flow generation from some business units or related business,
such as America Movil's Mexican operations, Telefonica Moviles'
Spanish operations or the local fixed-line operations of
incumbent local-exchange carriers that also offer wireless
services.  Competitors with weaker financial profiles or low
market shares will have a tougher time facing increased
competition and growth than regional or incumbent operators.  
Weak operators may attempt to merge with other operators or may
be put up for sale, as they may experience difficulties facing
the competitive environment and finding the necessary funding to
continue investing in their expansion as subscriber growth
continues in the region.


* Fitch Discusses Revised Issuer Default & Recovery Ratings
-----------------------------------------------------------
Fitch launched issuer default ratings or IDRs and recovery
ratings or RRs in the second half of 2005 to enhance the
informational value of its ratings to investors worldwide.  
Within the new framework, the ratings of corporate debt
issuances now reflect both the probability of default, as
derived from the company's IDR, and loss given default.

On April 24, 2006, Fitch announced IDRs and RRs for
approximately 100 corporates in Latin America. The rollout of
these ratings, in conjunction with rating actions on a select
group on companies in Argentina and Brazil on the same date,
resulted in rating changes that affected US$16.1 billion of
debt.

                    Issuer Default Ratings

The IDR reflects the ability of an issuer to meet all of its
financial obligations on a timely basis.  It serves as the
benchmark probability of default.  For most Latin America
corporates, Fitch assigned both a local currency IDR and a
foreign currency IDR.  The former rating addresses the default
probability of a company's debt obligations that are denominated
in its local currency.  This rating captures the idiosyncratic
default risk of a company, which is closely linked to its
capital structure and business position.  The latter rating
indicates the default probability of a corporate on the debt
that it has issued in a hard currency.  The FC IDR reflects the
higher of two risks -- an idiosyncratic default by the issuer or
a default on foreign currency obligations due to sovereign-
imposed currency controls.  When an issuer's FC IDR is below its
LC IDR, the company's ability to repay its foreign creditors
vis-a-vis domestic creditors is being constrained by the risk
that local authorities will impose capital and exchange controls
that would prevent or impede the company's ability to convert
local currency into foreign currency or transfer foreign
currency abroad to creditors.  This risk is measured by the
country ceiling rating of the country in which the company is
domiciled.

                       Recovery Ratings

Fitch uses an ordinal rating scale to differentiate the
different prospects for recovery given default.  The scale
ranges from 'RR1' (recovery prospects are anticipated to be more
than 90%) through 'RR6' (recovery levels are expected to be less
than 10%).  For companies with an IDR of 'B+' or lower, Fitch's
credit analysts perform a custom recovery analysis for each
company.  This consists of determining the enterprise value or
EV and the creditor mass and distributing the EV to the
creditors based upon priority of claim to determine anticipated
recovery levels.  After this process is complete, explicit RRs
are assigned to all of the company's debt issuances.  

Fitch does not assign public RRs to the debt of companies with
an IDR of 'BB-' or higher.  At this level, the companies'
capital structures remain quite flexible, meaning an assignment
of EV to a particular debt instrument in an effort to determine
recovery prospects would be quite arbitrary.  Secondly, most
corporates at this level are quite removed from the possibility
of default.  When looking at debt instruments of corporates with
IDRs of 'BB-' or higher, Fitch will review historical recovery
prospects for a given instrument based upon issues such as
subordination or the level and type of collateralization.  A
review of existing internal and external market data suggests
the average expected recovery for senior unsecured debt is
consistent with Fitch's 'RR4' recovery category, which
encompasses a range of between 30% and 50%.  

                       Debt Issuances

Fitch's ratings of specific debt issuances now combine both the
probability of default and the prospects for recovery, as
determined by the IDR and RR, in a very systematic and
transparent manner.  The starting point for an issue rating is
the FC IDR.  It serves as the anchor for issue ratings, with
notching up and down from the IDR based upon the level of the
expected recovery.  For companies with an investment-grade IDR,
debt instruments can be notched up or down by two notches from
the related IDR based upon the historical recovery prospects of
a given debt instrument.

In contrast, the debt of companies with an IDR that is non-
investment grade can be notched up or down by three notches
based upon the RR that was calculated through a custom recovery
analysis.  As previously mentioned, these debt issuances will
also have an explicit RR assigned to them.

             Debt Issuances by Companies with
               LC IDRs Higher than FC IDRs

The country ceiling ratings of Brazil ('BB') and Argentina ('B')
have constrained the FC IDR of several blue-chip companies in
these markets multiple notches below the related LC IDR.  Given
the incorporation of recovery in the definition of Fitch's issue
ratings, the debt issuances ratings of companies in these
markets do not have to be capped by the FC IDR, which is only a
measure of the probability of default. Consequently, the debt of
11 corporates was upgraded beyond the related FC IDR on April
24.

When determining issue ratings for companies under this
scenario, Fitch used a multistep approach to recovery analysis.  
The first step involves assigning recovery prospects for the two
main types of defaults:

   1) defaults that are systemic only and in which the company
      does not go through the local bankruptcy process and

   2) defaults that are due to idiosyncratic risk, in which the
      company goes through the local bankruptcy process.

Under the first scenario, Fitch expects recoveries to be about
80%, as reflected by a post-mortem study of the top-tier
Argentine corporates. Consistent with the aggregate data that
was used for corporates in the United States and Europe,
defaults that result from a company's unique business position
and financial profile will lead to an average recovery of about
40%.  The second step in the process involves assigning a
probability to the two different types of defaults for each
company.  This figure can be derived for the LC IDR and FC IDR
that have been assigned from Fitch's historical 10-year default
rates.  Once these two steps have been completed, a weighted-
average recovery for a company with an FC IDR that is
constrained can be calculated.  In general, this process has led
Fitch to assign issue ratings one notch above a corporate FC IDR
when that corporate's LC IDR is two or three notches higher than
its FC IDR.  For corporates with an LC IDR that is four or more
notches higher than its FC IDR, the debt issuance may be rated
two notches above the FC IDR.  


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S U B S C R I P T I O N   I N F O R M A T I O N

Troubled Company Reporter - Latin America is a daily newsletter
co-published by Bankruptcy Creditors' Service, Inc., Fairless
Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick,
Maryland USA.  Marjorie C. Sabijon, Sheryl Joy P. Olano, Stella
Mae Hechanova, and Christian Toledo, Editors.

Copyright 2006.  All rights reserved.  ISSN 1529-2746.

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without
prior written permission of the publishers.

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

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members of the same firm for the term of the initial
subscription or balance thereof are US$25 each.  For
subscription information, contact Christopher Beard at 240/629-
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