/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/070504.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 Friday, May 4, 2007, Vol. 8, Issue 88 Headlines A R G E N T I N A ACEROMET SA: Proofs of Claim Verification Deadline Is May 29 BANCO CREDICOOP: Moody's Ups Fin'l Strength Rating to D from D- BANCO DE VALORES: Moody's Raises Financial Strength Rating to D+ BANCO HIPOTECARIO: Moody's Lifts Financial Strength Rating to D BANCO PATAGONIA: Moody's Ups Fin'l Strength Rating to D from E+ BANCO SANTANDER: Moody's Ups Fin'l Strength Rating to D+ from D- ESHRIKE SRL: Files for Bankruptcy in Buenos Aires Court ESTRELLA LACTEA: Trustee Filing General Report in Court Monday GETTY IMAGES: Reports US$38 Million Net Income in First Quarter GETTY IMAGES: Robert W. Baird Holds Neutral Rating on Firm GIULIANO Y CIA: Proofs of Claim Verification Is Until May 24 GMAC LLC: S&P Affirms BB+/B-1 Counterparty Credit Rating HIDRO OBRAS: Proofs of Claim Verification Is Until June 21 LABORATORIOS SYSTEM: Claims Verification Deadline Is June 12 LATINA SRL: Trustee Verifies Proofs of Claim Until Aug. 24 MANYO SA: Trustee To File Individual Reports in Court on Aug. 13 NETOIR SA: Proofs of Claim Verification Deadline Is June 15 SANCOR COOPERATIVAS: Int'l Finance Corp. Balks at Debt Scheme SEPIA BEAUTY: Proofs of Claim Verification Moved to June 12 SISTEMAS INTEGRADOS: Trustee To File General Report on Monday TELECOM ARGENTINA: Opens Distribution Center at Ezeiza Airport TYSON FOODS: Davenport Maintains Buy Rating on Firm's Shares B E R M U D A ASPEN INSURANCE: Names Wieczorek as Structured Risk Underwriter ROYAL CARIBBEAN: Earns US$8.8 Million in 2007 First Quarter SCOTTISH RE: Provides Update on MassMutual & Cerberus Deal TEEKAY SHIPPING: Seeks to Continue Bermudan Businesses B O L I V I A PRIDE INTERNATIONAL: To Report First Quarter Results on May 10 B R A Z I L ARR-MAZ CUSTOM: S&P Lowers Corporate Credit Rating to B- from B BANCO NACIONAL: Names Luciano Coutinho as New President BLOCKBUSTER INC: Posts US$46.4 Mil. Net Loss in 2007 First Qtr. COMPANHIA DE SANEAMENTO: Plans Reverse Share Split CONSTRUTORA NORBERTO: S&P Affirms BB- Corporate Credit Rating GERDAU SA: Pedro Galdi Expects Increase in Firm's Net Profits DELPHI CORP: Court Records US$54 Mil. Claim Transfers in March DELPHI CORP: May Violate EU Policy Over Spanish Plant Closure FIAT SPA: Earns EUR376 Million in First Quarter 2007 FIAT SPA: Repurchases 700,000 Ordinary Shares HAYES LEMMERZ: Plans US$150-Million Offering of Senior Notes HAYES LEMMERZ: Discloses Rights Distribution to Stockholders HAYES LEMMERZ: Moody's Raises HLI Operating's Corp. Rating to B3 NRG ENERGY: Inks Deal with TEPCO to Expand South Texas Project NRG ENERGY: S&P Ups Rating on US$4.7 Bil. Unsecured Bonds to B PETROLEO BRASILEIRO: No Deal Yet on Petrochemical Consolidation PETROLEO BRASILEIRO: Reiterates Partnership with PDVSA TRW AUTOMOTIVE: S&P Puts BB+ Long-Term Corporate Credit Rating C A Y M A N I S L A N D S GOLDMAN SACHS: Sets Final Shareholders Meeting for June 1 ICGE SAILS: Proofs of Claim Filing Is Until May 31 KINGSNORTH HOLDINGS: Sets Final Shareholders Meeting for June 1 KS CAPITAL: Will Hold Final Shareholders Meeting on May 31 MAPLE COMPANY: Sets Final Shareholders Meeting for May 31 MULHOLLAND MASTER: Holding Final Shareholders Meeting on June 1 MULHOLLAND OFFSHORE: Sets Final Shareholders Meeting for June 1 OCTAGON INVESTMENT: Proofs of Claim Filing Is Until May 31 PANCRAS LTD: Proofs of Claim Must be Filed by May 31 PARMALAT SPA: Banca delle Marche Settles Suit for EUR22 Million PARMALAT SPA: Declares EUR0.025 Dividend Per Common Share PLUM FINANCE: Proofs of Claim Filing Deadline Is May 31 PREMIUM RISK: Will Hold Final Shareholders Meeting on May 31 QUARRY POINT: Sets Final Shareholders Meeting for June 1 QUARRY POINT OFFSHORE: Final Shareholders Meeting Is on June 1 SASCO NIM: Sets Final Shareholders Meeting for June 1 C H I L E AES GENER: Earns CLP17.1 Billion in First Quarter 2007 BANCO BICE: Moody's Withdraws Bank Financial Strength Rating GMAC LLC: Posts US$305 Million Net Loss in Qtr. Ended March 31 IMPSAT FIBER: Extends Tender Offer Expiration Date to May 4 NOVA CHEMICALS: Banc of America Downs Firm's Rating to Sell C O L O M B I A BANCOLOMBIA: Fitch Drops Rating to C/D After Banco Agricola Buy ECOPETROL: Alvaro Uribe Urges Acerias Workers to Invest in Firm C O S T A R I C A DENNY'S CORP: Morgan Joseph Reiterates Buy Rating on Firm D O M I N I C A N R E P U B L I C BANCO INTERCONTINENTAL: Central Bank Cancels Torre Auction BANCO LEON: Earns DOP36.3 Million in First Quarter 2007 CERVECERIA NACIONAL: Moody's Ups US$255MM Notes Rating to Ba3 HILTON HOTELS: Earns US$95 Million in 2007 First Quarter * DOMINICAN REPUBLIC: Moody's Lifts Ratings to B2 from B3 E C U A D O R PETROBRAS ENERGIA: Unveils Issuance of US$300-Mil. Series Notes * ECUADOR: Gets US$87.8-Mil. Financing from IDB for Dam Project E L S A L V A D O R MILLICOM INT'L: Moody's Assigns Loss-Given-Default Rating M E X I C O ADVANCED MICRO: Completes US$2.2 Bil. of 6% Sr. Notes Offering AMSCAN HOLDINGS: Gets Refinancing Commitments from Three Lenders AXTEL SAB: Revenues Increase 114% to MXN2.9B in First Quarter AXTEL SAB: Will Use Sycamore's Cross-Connect Platforms CELESTICA INC: Moody's Cuts Corporate Rating to B1 After Review GRUPO MEXICO: Local Unit's Miners to Resume Talks with Gov't GRUPO TMM: Incurs US$5.1 Million Net Loss in 2007 First Quarter FEDERAL-MOGUL: Creditors Vote to Accept Fourth Amended Plan KANSAS CITY SOUTHERN: Earns US$22.2 Mil. in First Quarter 2007 KRISPY KREME: Prudential Downs Firm's Rating to Neutral Weight PORTRAIT CORP: To Sell Assets to CPI Corp. for US$100 Million P A N A M A CHIQUITA BRANDS: Weak Quarter Results Cue S&P's Negative Watch P E R U DOE RUN PERU: Government Restarts Talks with Striking Miners NUTRO PRODUCTS: S&P Revises Watch to Positive on Mars Takeover * PERU: Government Restarts Talks with Striking Miners P U E R T O R I C O ALLIED WASTE: Earns US$39.9 Million in Quarter Ended March 31 CENTRAL PARKING: Moody's Puts (P)Ba2 Rating on US$355MM Facility DELTA AIR: S&P Lowers Rating on Corporate Certs. to D from B DORAL FINANCIAL: Liquidity Needs Cue PwC's Going Concern Doubt DORAL FINANCIAL: May Go Bankrupt If Cash Infusion Talks Fail DORAL FINANCIAL: Pays Dividend on Three Preferred Stock Series ROYAL CARIBBEAN: Guzman & Co. Reaffirms Outperform Rating U R U G U A Y FUCEREP: Fitch Upgrades Issuer Default Ratings to B- from CCC V E N E Z U E L A CERRO NEGRO: Bondholders Impose 45-Day Moratorium DAIMLERCHRYSLER AG: Earns US$3.7 Billion in Full Year 2006 DAIMLERCHRYSLER AG: Magna Tops List of Chrysler Contenders PEABODY ENERGY: Re-Elects Five Member to Board of Directors * VENEZUELA: To Formally Leave IMF & World Bank * VENEZUELA: Bonds, Currency Fall Over IMF Exit Talk * VENEZUELA: Says It Will Continue to Pay Foreign Debt - - - - - ================= A R G E N T I N A ================= ACEROMET SA: Proofs of Claim Verification Deadline Is May 29 ------------------------------------------------------------ Eduardo Hugo Caggiano, the court-appointed trustee for Aceromet S.A.'s bankruptcy proceeding, verifies creditors' proofs of claim until May 29, 2007. Mr. Caggiano will present the validated claims in court as individual reports on July 12, 2007. The National Commercial Court of First Instance in Buenos Aires will determine if the verified claims are admissible, taking into account the trustee's opinion, and the objections and challenges that will be raised by Aceromet 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 Aceromet's accounting and banking records will be submitted in court on Sept. 7, 2007. Mr. Caggiano is also in charge of administering Aceromet's assets under court supervision and will take part in their disposal to the extent established by law. The debtor can be reached at: Aceromet S.A. Ciudad de la Paz 550 Buenos Aires, Argentina The trustee can be reached at: Eduardo Hugo Caggiano Cramer 2175 Buenos Aires, Argentina BANCO CREDICOOP: Moody's Ups Fin'l Strength Rating to D from D- --------------------------------------------------------------- Moody's Investors Service has confirmed that it raised its bank financial strength rating on Banco Credicoop Cooperativo Limitado to D from D-, in connection with the rating agency's implementation of its refined joint default analysis and updated BFSR methodologies for banks in Argentina. Banco Credicoop's Local Currency Deposit Rating is upgraded to Ba1 from Ba3. Its Foreign Currency Deposit Rating is affirmed at Caa1, with positive outlook. The company's long term Argentine National Scale Rating for Local Currency Deposits is raised to Aa1.ar from Aa2.ar. and its long term Foreign Currency deposit rating in National Scale is affirmed at Ba1.ar. The BFSRs of 18 Argentine banks were upgraded, by one or two notches, as a result of their improving financial fundamentals and evolving franchises, combined with an improving regulatory environment. Many of the banks that were upgraded had had positive outlooks on their BFSRs. Moody's has assigned support levels to banks in Argentina using its high country support guideline. This guideline takes into consideration the recent evidence of support for banks, in addition to size, strength and degree of fragmentation of the Argentinean banking system. The implementation of the JDA methodology also led to the upgrade of the local currency deposit ratings of 15 banks by two notches, on average. Most of the national scale ratings, which are derived from the global local currency deposit ratings, were also upgraded as a result of the rise in deposit ratings. BFSRs evaluate the stand-alone or intrinsic financial strength of banks without reference to external support factors. BFSRs are the starting point of Moody's bank credit analysis, and are an important determinant of Moody's bank deposit and debt ratings. Moody's then uses its JDA methodology to incorporate the potential for external support into a bank's local currency deposit rating. The potential for external support can reduce the riskiness of a bank's deposit and debt obligations; however, such support is often uncertain. Moody's uses conservative support assumptions and a limited number of support levels to ensure that sufficient weight is given to a bank's intrinsic financial strength in its bank deposit and debt ratings. Moody's uses deposit ratings to determine bank debt ratings based on its notching guidelines for bank securities. Ratings for foreign currency obligations are determined after considering Moody's country ceilings for foreign currency ratings. Founded in 1979, Banco Credicoop Cooperativo Limitado is headquartered in Buenos Aires, Argentina. BANCO DE VALORES: Moody's Raises Financial Strength Rating to D+ ---------------------------------------------------------------- Moody's Investors Service has confirmed that it raised its bank financial strength rating on Banco de Valores S.A. to D+ from D-, in connection with the rating agency's implementation of its refined joint default analysis and updated BFSR methodologies for banks in Argentina. Banco de Valores' Local Currency Deposit Rating is upgraded to Ba1 from Ba2. Its Foreign Currency Deposit Rating is affirmed at Caa1 with positive outlook. The company's long term Argentine National Scale Rating for Local Currency Deposits is affirmed at Aaa.ar and its long term Foreign Currency deposit rating in National Scale is affirmed at Ba1.ar. The BFSRs of 18 Argentine banks were upgraded, by one or two notches, as a result of their improving financial fundamentals and evolving franchises, combined with an improving regulatory environment. Many of the banks that were upgraded had had positive outlooks on their BFSRs. Moody's has assigned support levels to banks in Argentina using its high country support guideline. This guideline takes into consideration the recent evidence of support for banks, in addition to size, strength and degree of fragmentation of the Argentinean banking system. The implementation of the JDA methodology also led to the upgrade of the local currency deposit ratings of 15 banks by two notches, on average. Most of the national scale ratings, which are derived from the global local currency deposit ratings, were also upgraded as a result of the rise in deposit ratings. BFSRs evaluate the stand-alone or intrinsic financial strength of banks without reference to external support factors. BFSRs are the starting point of Moody's bank credit analysis, and are an important determinant of Moody's bank deposit and debt ratings. Moody's then uses its JDA methodology to incorporate the potential for external support into a bank's local currency deposit rating. The potential for external support can reduce the riskiness of a bank's deposit and debt obligations; however, such support is often uncertain. Moody's uses conservative support assumptions and a limited number of support levels to ensure that sufficient weight is given to a bank's intrinsic financial strength in its bank deposit and debt ratings. Moody's uses deposit ratings to determine bank debt ratings based on its notching guidelines for bank securities. Ratings for foreign currency obligations are determined after considering Moody's country ceilings for foreign currency ratings. Headquartered in Buenos Aires, Argentina, Banco de Valores SA -- http://www.bancodevalores.com/rights.htm-- is owned by the Buenos Aires stock exchange. It was established in 1978 by Mercado de Valores de Buenos Aires to carry on activities inherent in investment banking, complementarily performing retailer bank activities. The bank specializes in providing banking and clearing services to the securities industry and capital market participants. BANCO HIPOTECARIO: Moody's Lifts Financial Strength Rating to D --------------------------------------------------------------- Moody's Investors Service has confirmed that it raised its bank financial strength rating on Banco Hipotecario S.A. to D from E+, in connection with the rating agency's implementation of its refined joint default analysis and updated BFSR methodologies for banks in Argentina. Banco Hipotecario's Local Currency Deposit Rating is upgraded to Ba1 from Ba3. Its Foreign Currency Deposit Rating is affirmed at Caa1 with positive outlook. The company's long term Argentine National Scale Rating for Local Currency Deposits is also affirmed at Aa1.ar. and its long term Foreign Currency deposit rating in National Scale is affirmed at Ba1.ar. The BFSRs of 18 Argentine banks were upgraded, by one or two notches, as a result of their improving financial fundamentals and evolving franchises, combined with an improving regulatory environment. Many of the banks that were upgraded had had positive outlooks on their BFSRs. Moody's has assigned support levels to banks in Argentina using its high country support guideline. This guideline takes into consideration the recent evidence of support for banks, in addition to size, strength and degree of fragmentation of the Argentinean banking system. The implementation of the JDA methodology also led to the upgrade of the local currency deposit ratings of 15 banks by two notches, on average. Most of the national scale ratings, which are derived from the global local currency deposit ratings, were also upgraded as a result of the rise in deposit ratings. BFSRs evaluate the stand-alone or intrinsic financial strength of banks without reference to external support factors. BFSRs are the starting point of Moody's bank credit analysis, and are an important determinant of Moody's bank deposit and debt ratings. Moody's then uses its JDA methodology to incorporate the potential for external support into a bank's local currency deposit rating. The potential for external support can reduce the riskiness of a bank's deposit and debt obligations; however, such support is often uncertain. Moody's uses conservative support assumptions and a limited number of support levels to ensure that sufficient weight is given to a bank's intrinsic financial strength in its bank deposit and debt ratings. Moody's uses deposit ratings to determine bank debt ratings based on its notching guidelines for bank securities. Ratings for foreign currency obligations are determined after considering Moody's country ceilings for foreign currency ratings. Headquartered in Buenos Aires, Argentina, Banco Hipotecario SA -- http://www.hipotecario.com.ar-- is an Argentinean commercial bank and specialty mortgage provider. Banco Hipotecario' business lines include credit lines for consumers, short-term financing for exporting companies, factoring services, deposit accounts, purchase and sale of foreign currency, custodial services, safe deposit box rentals, payroll bank accounts, securities brokerage services and sales of insurance through authorized agents and companies. The bank launched this new series of products and services as an alternative to its mortgage loans business, which as a result of the economic crisis, came to a temporary halt in 2002. In late 2003, and in the light of the favorable trends shown by economic variables, Banco Hipotecario started to offer new housing mortgage loans. The bank's subsidiaries consist of BHN Sociedad de Inversion Sociedad Anonima. BANCO PATAGONIA: Moody's Ups Fin'l Strength Rating to D from E+ --------------------------------------------------------------- Moody's Investors Service has confirmed that it raised its bank financial strength rating on Banco Patagonia S.A. to D from E+, in connection with the rating agency's implementation of its refined joint default analysis and updated BFSR methodologies for banks in Argentina. Banco Patagonia's Local Currency Deposit Rating is upgraded to Ba1 from Ba3. Its Foreign Currency Deposit Rating is affirmed at Caa1, with positive outlook. The company's long term Argentine National Scale Rating for Local Currency Deposits is raised to Aa1.ar from Aa2.ar. and its long term Foreign Currency deposit rating in National Scale is affirmed at Ba1.ar. The Foreign Currency Subordinated Debt Rating is upgraded to B2 from Caa1. The outlook on the debt rating is positive. The National Scale Rating for Foreign Currency Subordinated Debt is raised to Aa3.ar from Ba1.ar. The BFSRs of 18 Argentine banks were upgraded, by one or two notches, as a result of their improving financial fundamentals and evolving franchises, combined with an improving regulatory environment. Many of the banks that were upgraded had had positive outlooks on their BFSRs. The most notable debt upgrades, compared to pre-JDA levels, were for Banco Macro S.A.'s junior capital securities, which was upgraded to B2 and for Banco Patagonia's foreign currency subordinated debt, which rating was lifted by two notches to B2, from Caa1, Both actions reflect the upgrade of their respective BFSRs and resultant lift in their deposit ratings. Moody's has assigned support levels to banks in Argentina using its high country support guideline. This guideline takes into consideration the recent evidence of support for banks, in addition to size, strength and degree of fragmentation of the Argentinean banking system. The implementation of the JDA methodology also led to the upgrade of the local currency deposit ratings of 15 banks by two notches, on average. Most of the national scale ratings, which are derived from the global local currency deposit ratings, were also upgraded as a result of the rise in deposit ratings. BFSRs evaluate the stand-alone or intrinsic financial strength of banks without reference to external support factors. BFSRs are the starting point of Moody's bank credit analysis, and are an important determinant of Moody's bank deposit and debt ratings. Moody's then uses its JDA methodology to incorporate the potential for external support into a bank's local currency deposit rating. The potential for external support can reduce the riskiness of a bank's deposit and debt obligations; however, such support is often uncertain. Moody's uses conservative support assumptions and a limited number of support levels to ensure that sufficient weight is given to a bank's intrinsic financial strength in its bank deposit and debt ratings. Moody's uses deposit ratings to determine bank debt ratings based on its notching guidelines for bank securities. Ratings for foreign currency obligations are determined after considering Moody's country ceilings for foreign currency ratings. Banco Patagonia specializes in public offerings of securitizations. It became Argentina's fifth largest locally owned private bank through its purchase of Lloyds TSB Argentina in late 2004. The bank operates through 139 branches and has 202 ATM machines. BANCO SANTANDER: Moody's Ups Fin'l Strength Rating to D+ from D- ---------------------------------------------------------------- Moody's Investors Service has confirmed that it raised its bank financial strength rating on Banco Santander Rio S.A. to D+ from D-, in connection with the rating agency's implementation of its refined joint default analysis and updated BFSR methodologies for banks in Argentina. Banco Santander's Local Currency Deposit Rating is upgraded to Ba1 from Ba2. Its Foreign Currency Deposit Rating is affirmed at Caa1 with positive outlook. The company's long term Argentine National Scale Rating for Local Currency Deposits is affirmed at Aaa.ar and its long term Foreign Currency deposit rating in National Scale is affirmed at Ba1.ar. The Local Currency Senior Debt Rating is upgraded to Ba1 from Ba2. The National Scale Rating for Local Currency Debt is affirmed to Aaa.ar. The BFSRs of 18 Argentine banks were upgraded, by one or two notches, as a result of their improving financial fundamentals and evolving franchises, combined with an improving regulatory environment. Many of the banks that were upgraded had had positive outlooks on their BFSRs. Moody's has assigned support levels to banks in Argentina using its high country support guideline. This guideline takes into consideration the recent evidence of support for banks, in addition to size, strength and degree of fragmentation of the Argentinean banking system. The implementation of the JDA methodology also led to the upgrade of the local currency deposit ratings of 15 banks by two notches, on average. Most of the national scale ratings, which are derived from the global local currency deposit ratings, were also upgraded as a result of the rise in deposit ratings. BFSRs evaluate the stand-alone or intrinsic financial strength of banks without reference to external support factors. BFSRs are the starting point of Moody's bank credit analysis, and are an important determinant of Moody's bank deposit and debt ratings. Moody's then uses its JDA methodology to incorporate the potential for external support into a bank's local currency deposit rating. The potential for external support can reduce the riskiness of a bank's deposit and debt obligations; however, such support is often uncertain. Moody's uses conservative support assumptions and a limited number of support levels to ensure that sufficient weight is given to a bank's intrinsic financial strength in its bank deposit and debt ratings. Moody's uses deposit ratings to determine bank debt ratings based on its notching guidelines for bank securities. Ratings for foreign currency obligations are determined after considering Moody's country ceilings for foreign currency ratings. Banco Santander Rio S.A. is headquartered in Buenos Aires, Argentina. The bank had ARS16.2 billion (US$5.3 billion) in total assets and ARS12.6 billion (US$4.1 billion) in deposits as of December 2006. ESHRIKE SRL: Files for Bankruptcy in Buenos Aires Court ------------------------------------------------------- Eshrike S.R.L. has filed for bankruptcy before the National Commercial Court of First Instance in Buenos Aires after failing to pay its liabilities. The petition, once approved, will allow the transfer of control of Eshrike's assets to a court-appointed trustee who will supervise the liquidation proceedings. The debtor can be reached at: Eshrike S.R.L. Avenida Raul Scalabrini Ortiz 1550 Buenos Aires, Argentina ESTRELLA LACTEA: Trustee Filing General Report in Court Monday -------------------------------------------------------------- Norberto Bonesi, the court-appointed trustee for Estrella Lactea SA's bankruptcy case, will submit to court a general report containing an audit of the company's accounting and banking records on May 7, 2007. Mr. Bonesi verified creditors' proofs of claim until Feb. 6, 2007. He then presented the validated claims in court as individual reports on March 22, 2007. Court No. 12 in Buenos Aires, with the assistance of Clerk No. 24, will determine if the verified claims are admissible, taking into account the trustee's opinion and the objections and challenges raised by Estrella Lactea and its creditors. Inadmissible claims may be subject for appeal in a separate proceeding known as an appeal for reversal. The debtor can be reached at: Estrella Lactea SA Avenida Corrientes 554 Buenos Aires, Argentina The trustee can be reached at: Norberto Bonesi Avenida Juan B. Justo 5096 Buenos Aires, Argentina GETTY IMAGES: Reports US$38 Million Net Income in First Quarter --------------------------------------------------------------- Getty Images, Inc., reported preliminary results for the first quarter ended March 31, 2007. Results presented in this release are subject to change as a result of the matters described in the Restatement of Financial Statements section. Quarterly Highlights -- Revenue grew 6 percent to a record US$213 million compared to US$201 million in the first quarter of 2006 -- Royalty-free imagery revenue grew 13 percent -- Editorial imagery revenue grew 16 percent -- Earnings per diluted share were US$0.63. Excluding costs related to the company's review of its equity compensation grant practices and a terminated acquisition, earnings per diluted share were US$0.68 -- Cash and cash equivalents grew by US$47 million during the quarter to US$387 million -- Agreed to acquire WireImage, a leading creator of entertainment and event imagery "We continue to increase our lead in this dynamic industry and are taking significant and meaningful actions to drive future growth," said Jonathan Klein, Getty Images' co-founder and Chief Executive Officer. "Our recent operating achievements, partnerships and acquisitions, together with the formation of our footage and multimedia division, are all evidence of our commitment to innovation and growth. Additionally, our industry leading Web sites and customer service continue to ensure a best-in-class image licensing experience for our customers." Revenue grew 5.8 percent to US$212.7 million from US$200.9 million in the first quarter of 2006, or 1.6 percent on a currency-neutral basis. Cost of revenue of US$54.8 million was 25.8 percent of revenue. Selling, general and administrative expenses were US$81.4 million, or 38.3 percent of revenue. Excluding US$4.1 million in professional fees associated with the company's review of its equity compensation grant practices and a terminated acquisition, SG&A was US$77.3 million, or 36.3 percent of revenue. Income from operations was US$55.6 million, or 26.2 percent of revenue. Excluding the professional fees, income from operations was US$59.8 million, or 28.1 percent of revenue. Net income for the first quarter of 2007 was US$38.0 million with earnings per diluted share of US$0.63. Excluding the professional fees, net income was US$40.5 million and earnings per diluted share were US$0.68. Cash and cash equivalent balances were US$386.5 million at March 31, 2007, an increase of US$47 million during the quarter. The acquisition of property and equipment totaled US$16.6 million during the first quarter of 2007. Multi-Site Strategy Expansion Getty Images is executing on a strategy to offer all products to all customer segments on all platforms at all price points. In order to accelerate key parts of this strategy the company has acquired PunchStock, a leading distributor of royalty-free imagery, which will serve as an additional creative imagery Web site for our customers. "Customers have a wide array of projects with varying requirements for the quality of the imagery and the related budget," commented Mr. Klein. "The addition of PunchStock extends Getty Images' reach to a customer base that places high importance on value-priced, high-quality imagery coupled with simplified search and licensing. We look forward to further innovation with expanded licensing options, additional language capabilities, and many new products and services." The site joins http://www.gettyimages.comand http://www.istockphoto.comin serving distinct segments of the creative image buying marketplace. In addition to its editorial imagery products, services, and sites, Getty Images now has three creative imagery Web sites that address the variety of existing customer needs. -- http://www.gettyimages.comis the de facto home page for creative and publishing professionals with unparalleled breadth and depth, the highest quality imagery and world- class search technology. The company will continue to offer best in class products and services including some leading collections which cannot be found anywhere else. -- http://www.punchstock.comoffers high quality, value-priced imagery coupled with simplified search and licensing. Additional innovation will include expanded license options, additional language capabilities and many new products and services. -- http://www.istockphoto.comis the inventor and leader in community-based stock photography, showcasing the world's best, freshest, commercially-viable, user-generated content, while making imagery affordable to businesses that may not have licensed imagery otherwise. Business Outlook For the second quarter of 2007, the company expects revenue of approximately US$218 million and diluted earnings per share of US$0.58. This guidance includes approximately US$0.07 of dilution from the acquisition of WireImage and US$0.01 for the costs related to the company's review of its equity compensation grant practices in the second quarter. The company expects this acquisition to be accretive in 2008. For full year 2007, the company expects revenue of approximately US$880 million and earnings per share of approximately US$2.47. Earnings per share guidance includes approximately US$0.12 of dilution from the acquisition of WireImage and US$0.05 for the costs related to the company's review of its equity compensation grant practices and terminated acquisition costs. Guidance for 2007 assumes just over 60 million fully diluted shares for both the second quarter and for the full year. Financial Statements Restatement The financial results and outlook set forth in this press release do not take into account any adjustments for additional expenses that may be required in connection with the ongoing review of the company's historical equity compensation grant practices, as more fully discussed in the company's Current Report on Form 8-K dated April 16, 2007 and other filings with the SEC. The company is in the process of finalizing its accounting for any adjustments for additional expenses that may be required in connection with the ongoing review of the company's historical equity compensation grant practices including the tax impact and other related issues. Based on the company's current knowledge, management believes that the restatement will likely involve total pre-tax, non-cash equity-based compensation expense of approximately US$28 million to US$32 million, of which management expects approximately 95% to be expensed in 2002 and earlier fiscal years. As announced on April 16, 2007, the special committee concluded that the evidence obtained and reviewed in its investigation did not establish any intentional wrongdoing by current employees, officers or directors of the company, and the special committee continues to have confidence in the integrity of current management. The company's management has determined that, due to errors in the accounting for equity based compensation, the company's previously filed financial statements for the fiscal years ended 1998 to 2005, the interim periods contained therein, the quarters ended March 31, 2006, and June 30, 2006, together with all earnings and other press releases containing company financial information for those periods and the earnings releases for the quarters ended Sept. 30, 2006, and Dec. 31, 2006, respectively, should no longer be relied upon and will require restatement. The company's Board of Directors concurred with management's determination. The company intends to provide audited, restated financial statements and related disclosures in its Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2006, to be filed as soon as possible with the SEC, and otherwise to become current in its reporting obligations under the Securities Exchange Act of 1934, as amended. Other than the results for the quarter ended March 31, 2007, and the revenue comparables for the quarter ended March 31, 2006, the company has not included any historical results herein because management has determined, and the company's Board of Directors has concurred, that certain of the company's previously filed financial statements and earnings and other press releases containing company financial statements should no longer be relied upon. About Getty Images Headquartered in Seattle, Washington, Getty Images, Inc. is a leading creator and distributor of high quality imagery and related services to creative professionals at advertising agencies, graphic design firms, corporations, and film and broadcasting companies; editorial customers involved in newspaper, magazine, book, CD-ROM and online publishing; and corporate marketing departments and other business customers. Revenues are principally derived from licensing rights to use images that are delivered digitally over the Internet. Revenues for the year ended Dec. 31, 2006 are expected to be about US$807 million. The company has corporate offices in Australia, the United Kingdom and Argentina. * * * As reported in the Troubled Company Reporter-Latin America on March 30, 2007, Moody's Investors Service affirmed the Ba1 Corporate Family Rating and Ba2 rating on the US$265-million of convertible subordinated debentures of Getty Images, Inc. The rating outlook remains stable. Moody's affirmed these ratings: -- USUS$265-million series B convertible subordinated notes due 2023, Ba2 (LGD 5, 77% from LGD 5, 71%); -- Corporate family rating, Ba1; and -- Probability of default rating, Ba1. GETTY IMAGES: Robert W. Baird Holds Neutral Rating on Firm ---------------------------------------------------------- Robert W. Baird analysts have kept their rating on Getty Images' shares at "neutral," Newratings.com reports. Newratings.com relates that the target price for Getty Images' shares is set at US$55. The analysts said in a research note published on May 2 that Getty Images' first quarter 2007 results were marginally ahead of the estimates and the consensus. The "dilutive" WireLine acquisition and the professional service expenses related to the options pricing inquiry affected Getty Images' forward guidance, Newratings.com notes, citing the analysts. The earnings per share estimate for this year was reduced to US$2.47 from US$2.66, Newratings.com states. Headquartered in Seattle, Washington, Getty Images, Inc. is a leading creator and distributor of high quality imagery and related services to creative professionals at advertising agencies, graphic design firms, corporations, and film and broadcasting companies; editorial customers involved in newspaper, magazine, book, CD-ROM and online publishing; and corporate marketing departments and other business customers. Revenues are principally derived from licensing rights to use images that are delivered digitally over the Internet. Revenues for the year ended Dec. 31, 2006 are expected to be about US$807 million. The company has corporate offices in Australia, the United Kingdom and Argentina. * * * As reported in the Troubled Company Reporter-Latin America on March 30, 2007, Moody's Investors Service affirmed the Ba1 Corporate Family Rating and Ba2 rating on the US$265-million of convertible subordinated debentures of Getty Images, Inc. The rating outlook remains stable. Moody's affirmed these ratings: -- US$265-million series B convertible subordinated notes due 2023, Ba2 (LGD 5, 77% from LGD 5, 71%); -- Corporate family rating, Ba1; and -- Probability of default rating, Ba1. GIULIANO Y CIA: Proofs of Claim Verification Is Until May 24 ------------------------------------------------------------ Silvia A. Ganem, the court-appointed trustee for Giuliano y Cia.'s bankruptcy proceeding, verifies creditors' proofs of claim until May 24, 2007. Ms. Ganem will present the validated claims in court as individual reports on July 13, 2007. The National Commercial Court of First Instance in Casilda, Santa Fe, will determine if the verified claims are admissible, taking into account the trustee's opinion, and the objections and challenges that will be raised by Giuliano y Cia. 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 Giuliano y Cia.'s accounting and banking records will be submitted in court on July 13, 2007. Ms. Ganem is also in charge of administering Giuliano y Cia.'s assets under court supervision and will take part in their disposal to the extent established by law. The debtor can be reached at: Giuliano y Cia. 9 de Julio 1333 Arequito, Departamento Caseros Santa Fe, Argentina The trustee can be reached at: Silvia A. Ganem Buenos Aires 1854, Casilda Santa Fe, Argentina GMAC LLC: S&P Affirms BB+/B-1 Counterparty Credit Rating -------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB+/B-1' counterparty credit rating on GMAC LLC. The outlook was revised to negative from developing. At the same time, Standard & Poor's lowered its counterparty credit rating on GMAC's wholly owned subsidiary, Residential Cap LLC or ResCap, to 'BBB-/A-3' from 'BBB/A-3'. The outlook on ResCap is stable. "The revision of GMAC's outlook and the downgrade of ResCap reflect massive additional losses at ResCap's subprime mortgage business, totaling US$910 million after-tax in first-quarter 2007," said Standard & Poor's credit analyst Scott Sprinzen. These losses caused GMAC overall to be unprofitable (net loss of US$305 million), notwithstanding strong performance by GMAC's automotive finance, insurance, and other businesses. ResCap's loss was significantly worse than Standard & Poor's had anticipated. Standard & Poor's now believe that poor financial performance at ResCap could persist for at least the next year, and that this will depress GMAC's consolidated results, significantly dampening the potential for an upgrade of GMAC within the time period addressed by the outlook. The ratings on GMAC continue to reflect the benefits afforded by the diversity of its mortgage and insurance businesses, its generally high asset quality, and its significant long-range profit potential. The ratings also reflect the risks facing GMAC because of its close business ties to General Motors Corp. (GM; B/Negative/B-3), notwithstanding the completion of a transaction on Nov. 30, 2006, whereby GM sold a 51% stake in GMAC to a consortium headed by Cerberus Capital Management L.P. As a result of the transaction with Cerberus, GMAC was able to achieve a significant degree of ratings separation from GM. Despite the beneficial aspects of the transaction, GMAC will continue to face some GM-related risks. In particular, the value of GMAC's core automotive finance franchise will still be influenced by GM's fortunes. If GM's competitiveness deteriorates further, especially if GM were ultimately to declare bankruptcy, this could have a severe effect on the credit and residual loss levels associated with GMAC's retail, wholesale loan, and lease portfolios. There are limits on GMAC's ability to contain its GM-related credit exposure: GMAC is required to continue allocating capital to provide financing to GM customers and wholesale dealers, in accordance with historical practice. Although GMAC retains the right to make individual credit decisions, GMAC has committed to funding a broad credit spectrum of customers and dealers, largely consistent with historical practice. In addition, Standard & Poor's believe there is potential for future divisiveness among GMAC's owners from diverging business or economic interests. Moreover, potential further ownership changes in the long term are unknown because the consortium is required to retain its investment in GMAC for only five years. ResCap was the seventh-largest U.S. mortgage originator and servicer in 2006. U.S. nonprime loan production accounted for only 19% of its total loan production in 2006. The company is very well-diversified geographically and in terms of mortgage products. The differential between Standard & Poor's ratings on ResCap and GMAC reflects ResCap's ability to operate its mortgage businesses separately from GMAC's auto finance business, from which ResCap is partially insulated by financial covenants and governance provisions. However, Standard & Poor's expect to continue to link the ratings on ResCap with those on GMAC in view of the latter's full ownership of ResCap. The ratings on GMAC could be jeopardized given further deterioration at GM and/or ResCap that threatens to impinge on GMAC's financial performance and funding flexibility. While we believe GMAC could survive a bankruptcy filing by GM, the ratings on GMAC would likely be lowered -- possibly by several notches if this were to occur -- given the uncertainties such a development would entail for GMAC. Improvement in GM's prospects and/or a rapid rebound in ResCap's earnings would enhance GMAC's upgrade potential. However, Standard & Poor's would still need to consider uncertainty regarding GMAC's ownership structure beyond the next five years. About ResCap ResCap is a holding company for the real estate financing businesses of GMAC LLC, including GMAC-RFC Holding and GMAC Residential Holding Corp. About GMAC LLC GMAC LLC, headquartered in Detroit, Michigan, provides retail and wholesale auto financing, primarily in support of General Motors' auto operations, and is one of the world's largest non- bank financial institutions. GMAC LLC reported earnings of US$2.4 billion in 2005. Its Latin American operations are located in Argentina, Brazil, Chile, Colombia, Mexico and Venezuela. HIDRO OBRAS: Proofs of Claim Verification Is Until June 21 ---------------------------------------------------------- Maria Alejandra Barbieri, the court-appointed trustee for Hidro Obras S.A.'s bankruptcy proceeding, verifies creditors' proofs of claim until June 21, 2007. Ms. Barbieri will present the validated claims in court as individual reports on Aug. 30, 2007. The National Commercial Court of First Instance in Buenos Aires will determine if the verified claims are admissible, taking into account the trustee's opinion, and the objections and challenges that will be raised by Hidro Obras 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 Hidro Obras' accounting and banking records will be submitted in court on Oct. 17, 2007. Ms. Barbieri is also in charge of administering Hidro Obras' assets under court supervision and will take part in their disposal to the extent established by law. The debtor can be reached at: Hidro Obras S.A. Avenida Cordoba 1351 Buenos Aires, Argentina The trustee can be reached at: Maria Alejandra Barbieri Avenida Cabildo 2040 Buenos Aires, Argentina LABORATORIOS SYSTEM: Claims Verification Deadline Is June 12 ------------------------------------------------------------ Abella - Fernandez Martinez y Asociados, the court-appointed trustee for Laboratorios System S.A.'s bankruptcy proceeding, verifies creditors' proofs of claim until June 12, 2007. Abella - Fernandez will present the validated claims in court as individual reports on Aug. 13, 2007. The National Commercial Court of First Instance in La Plata, Buenos Aires, will determine if the verified claims are admissible, taking into account the trustee's opinion, and the objections and challenges that will be raised by Laboratorios System 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 Laboratorios System's accounting and banking records will be submitted in court on Sept. 25, 2007. Abella - Fernandez is also in charge of administering Laboratorios System's assets under court supervision and will take part in their disposal to the extent established by law. The debtor can be reached at: Laboratorios System S.A. Calle 23, Nro. 1428 La Plata, Buenos Aires Argentina The trustee can be reached at: Abella - Fernandez Martinez y Asociados Calle 39, Nro. 929 La Plata, Buenos Aires Argentina LATINA SRL: Trustee Verifies Proofs of Claim Until Aug. 24 ---------------------------------------------------------- Hugo Matias Vinolo, the court-appointed trustee for Latina S.R.L.'s reorganization proceeding, verifies creditors' proofs of claim until Aug. 24, 2007. The National Commercial Court of First Instance in Mendoza approved a petition for reorganization filed by Latina, according to a report from Argentine daily Infobae. Mr. Vinolo will present the validated claims in court as individual reports on Nov. 6, 2007. The court will determine if the verified claims are admissible, taking into account the trustee's opinion, and the objections and challenges that will be raised by Latina 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 Latina's accounting and banking records will be submitted in court on April 24, 2008. The informative assembly will be held on Nov. 5, 2008. Creditors will vote to ratify the completed settlement plan during the assembly. The trustee can be reached at: Hugo Matias Vinolo Agustin Alvarez 318, Ciudad de Mendoza Mendoza, Buenos Aires MANYO SA: Trustee To File Individual Reports in Court on Aug. 13 ---------------------------------------------------------------- Gustavo Ariel Fiszman, the court-appointed trustee for Manyo S.A.'s bankruptcy proceeding, will present creditors' validated claims as individual reports in the National Commercial Court of First Instance No. 19 in Buenos Aires on Aug. 13, 2007. The court will determine if the verified claims are admissible, taking into account the trustee's opinion and the objections and challenges raised by Manyo and its creditors. Inadmissible claims may be subject for appeal in a separate proceeding known as an appeal for reversal. As reported in the Troubled Company Reporter-Latin America on March 21, 2007, Mr. Fizman verifies creditors' proofs of claim until June 12, 2007. Mr. Fizman will also submit to court a general report containing an audit of Manyo's accounting and banking records on Oct. 1, 2007. Clerk No. 37 assists the court in the proceeding. The debtor can be reached at: Manyo SA Av. del Libertador 774 Buenos Aires, Argentina The trustee can be reached at: Gustavo Ariel Fiszman Avenida Santa Fe 5086 Buenos Aires, Argentina NETOIR SA: Proofs of Claim Verification Deadline Is June 15 ----------------------------------------------------------- Maria del Carmen Amandule, the court-appointed trustee for Netoir S.A.'s bankruptcy proceeding, verifies creditors' proofs of claim until June 15, 2007. Ms. Amandule will present the validated claims in court as individual reports on Aug. 29, 2007. The National Commercial Court of First Instance No. 8 in Buenos Aires, with the assistance of Clerk No. 16, will determine if the verified claims are admissible, taking into account the trustee's opinion, and the objections and challenges that will be raised by Netoir 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 Netoir's accounting and banking records will be submitted in court on Oct. 10, 2007. Ms. Amandule is also in charge of administering Netoir's assets under court supervision and will take part in their disposal to the extent established by law. The trustee can be reached at: Maria del Carmen Amandule 24 de Noviembre 1226 Buenos Aires, Argentina SANCOR COOPERATIVAS: Int'l Finance Corp. Balks at Debt Scheme ------------------------------------------------------------- The International Finance Corporation, the private sector arm of the World Bank, is raising objections to Argentine dairy cooperative SanCor Cooperativas Unidas's debt restructuring proposal for the second time. In mid 2006, the IFC blocked SanCor's first restructuring attempt, which ended up with the Venezuela's government's loan offer. Now that SanCor has US$80 million to settle US$190 million in debt, the IFC requests that SanCor pays it some US$15 million in overdue principal payments. Two weeks ago, the dairy company announced to all of its creditors that it would pay these overdue principal installments, which correspond to the period between September 30 and April 30, only to those who accept its debt-restructuring offer. SanCor told the stock exchange that it received a formal notification from the IFC compelling it to settle the overdue payments before April 30. Such demand complicates SanCor's plan. However, the company said it would continue holding negotiations, based on the already announced general repayment terms. The Venezuelan government agreed to lend SanCor US$135 million, of which US$15 million have already been given, but the rest will gradually come provided a series of goals are met. In order to access the US$80 million allocated to pay debts, SanCor needs to obtain agreement from at least 50% of creditors. The only creditor that respondedd so far is the IFC, but this entity usually takes the lead for other international banks such as Rabobank and Citibank. This group holds more than 50% of SanCor's debt. Meanwhile, majority of local banks have already given green light to SanCor's proposal. Nevertheless, as they are minority, their consent would not be enough. Headquartered in Santa Fe, Argentina, SanCor is a dairy milk cooperative and one of the largest milk processors and marketers in Argentina. Annual revenues for the fiscal year ended June 2006, are ARS1.4 billion. * * * As reported on Jan. 15, 2007, Standard & Poor's rated SanCor Coop. Unidas Ltda.'s debts at D: -- Obligaciones Negociables Serie 2, issued under the US$300 million program, for US$19,000,000, -- Obligaciones Negociables Serie 3, included under the US$300 million program, for US$75,800,000. SEPIA BEAUTY: Proofs of Claim Verification Moved to June 12 ----------------------------------------------------------- Hector Julio Grisolia, the court-appointed trustee for Sepia Beauty S.A.'s bankruptcy proceeding, verifies creditors' proofs of claim until June 12, 2007. As reported in the Troubled Company Reporter-Latin America on April 19, 2007, the claims verification deadline was initially set for May 12, 2007. Mr. Grisolia will present the validated claims in court as individual reports. The National Commercial Court of First Instance in Buenos Aires will determine if the verified claims are admissible, taking into account the trustee's opinion, and the objections and challenges that will be raised by Sepia Beauty 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 Sepia Beauty's accounting and banking records will be submitted in court. Infobae did not state the reports submission dates. The debtor can be reached at: Sepia Beauty S.A. Coronel Diaz 1466 Buenos Aires, Argentina The trustee can be reached at: Hector Julio Grisolia Jeronimo Salguero 2533 Buenos Aires, Argentina SISTEMAS INTEGRADOS: Trustee To File General Report on Monday ------------------------------------------------------------- Graciela Elena Lisarrague, the court-appointed trustee for Sistemas Integrados SA's bankruptcy proceeding, will submit to court a general report containing an audit of the company's accounting and banking records on May 7, 2007. Ms. Lisarrague verified creditors' proofs of claim until Feb. 9, 2007. She then presented the validated claims in court as individual reports on March 23, 2007. Court in Buenos Aires will determine if the verified claims are admissible, taking into account the trustee's opinion and the objections and challenges raised by Sistemas Integrados and its creditors. Inadmissible claims may be subject for appeal in a separate proceeding known as an appeal for reversal. Ms. Lisarrague is also in charge of administering Sistemas Integrados' assets under court supervision and will take part in their disposal to the extent established by law. The trustee can be reached at: Graciela Elena Lisarrague Juaan D. Peron 1509 Buenos Aires, Argentina TELECOM ARGENTINA: Opens Distribution Center at Ezeiza Airport -------------------------------------------------------------- Argentine paper La Nacion reports that Telecom Argentina has launched a logistics and distribution center at the Ezeiza international airport. Business News Americas relates that the center is in the facilities of cargo operator Terminal de Cargas Argentina. It will centralize logistics and distribution services for Telecom Argentina's mobile unit Telecom Personal. Telecom Argentina's Supply Director Jose Maria Pena Fernandez told La Nacion that the company will use the center to move from an in-house distribution scheme to an outsourcing model. According to BNamericas, Telecom Argentina has outsourced this business area to logistics company Simex International and telephony services and equipment provider Multiradio. Mr. Fernandez explained to BNamericas that at first, the only area to be outsourced is distribution and logistics for Telecom Personal. Other business areas will join the model at a later stage. Telecom Argentina expects to handle 250,000-350,000 mobile devices in the new center per month, BNamericas states. 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 on Oct 11, 2006, Standard & Poor's Ratings Services raised Telecom Argentina S.A.'s counterparty credit rating to B+/Stable/ from B/Stable following the upgrade of the Republic of Argentina to 'B+' from 'B'. TYSON FOODS: Davenport Maintains Buy Rating on Firm's Shares ------------------------------------------------------------ Newratings.com reports that Davenport & Company analyst Ann H. Gurkin has kept her "buy" rating on Tyson Foods' shares. According to Newratings.com, the 12-month target price for Tyson Foods' shares is set at US$28. Ms. Gurkin said in a research note on May 1 that Tyson Foods has reported that its second quarter earnings per share were significantly ahead of the estimates and the consensus. Ms. Gurkin told Newratings.com that Tyson Foods' beef, chicken and pork sales in the second quarter were ahead of the estimates, while prepared foods sales were short of the estimates The earnings per share estimate for fiscal year 2007 was increased to US$0.85 from US$0.75 to show higher margins for beef and pork as well as the second-quarter advantage. Based in Springdale, Arkansas, Tyson Foods, Inc. (NYSE:TSN) -- http://www.tysonfoods.com/-- is a processor and marketer of chicken, beef, and pork. The company produces a wide variety of protein-based and prepared food products, which are marketed under the "Powered by Tyson(TM)" strategy. It has operations in Argentina. * * * On Sept. 25, 2006, Moody's Investors Service took a number of rating actions in relation to Tyson, including the assignment of a Ba1 rating to the company's: -- US$1 billion senior unsecured bank credit facility; and -- US$345 million senior unsecured bank term loan for its Lakeside Farms Industries Ltd. subsidiary, under a full Tyson Foods, Inc. guarantee. ============= B E R M U D A ============= ASPEN INSURANCE: Names Wieczorek as Structured Risk Underwriter --------------------------------------------------------------- The Royal Gazette reports that Aspen Insurance Holdings has appointed Miroslaw (Mirek) Wieczorek as senior structured risk underwriter. According to the Royal Gazette, Mr. Wieczorek will be responsible for: -- the underwriting of structured risk transactions, from sourcing the business to developing an appropriate structure; -- associating risk modeling, and -- liasing with internal and external resources. The Royal Gazette notes that Mr. Wieczorek will create, develop and refine structured solutions to complex risk transfer transactions. He will report to Aspen Insurance's structured risk head, Victor Baillargeon. Mr. Wieczorek had been Ernst & Young's Senior Manager since 2005. Prior to that, he was ACE Tempest Re, USA's senior vice president, the Royal Gazette states. "We are delighted to welcome Mirek to Aspen Insurance Limited. Mirek's background advising clients on underwriting and structuring US property and casualty exposures complements our expertise. Mirek is a welcome addition to the structured reinsurance team and the capabilities we can offer our brokers and clients," Mr. Baillargeon commented to the Royal Gazette. Headquartered in Hamilton, Bermuda, Aspen Insurance Holdings Limited (NYSE: AHL) (BSX: AHL BH) is the holding company of the Aspen Group the principal operating entities of which are Aspen Insurance UK Limited and Aspen Insurance Limited, both rated A2 for insurance financial strength. At the end of September 2006, Aspen Group reported net income of US$259 million and shareholders' equity of US$2.3 billion. * * * As reported in the Troubled Company Reporter on Nov. 14, 2006, Moody's Investors Service assigned a Ba1 rating to the proposed US$200 million Perpetual Non-Cumulative Preference Shares to be issued by Aspen Insurance Holdings Limited, the existing perpetual "PIERS" of which were rated Ba1 by Moody's. ROYAL CARIBBEAN: Earns US$8.8 Million in 2007 First Quarter ----------------------------------------------------------- Royal Caribbean Cruises Ltd. recorded net income for the first quarter 2007 of US$8.8 million compared to USUS$119.4 million of net income for the same period in 2006. Pullmantur Impact As the company had anticipated, the acquisition of Pullmantur and other timing changes caused significant changes in the seasonality of company earnings. These changes make comparisons between individual quarters less meaningful (especially for the first year of the acquisition) but have little impact on the profitability of the year as a whole. In particular, Pullmantur's business is highly seasonal with very strong summer months but very weak winter months. In addition, the company is including Pullmantur results on a two-month lag. Together, these changes significantly diminished the company's reported earnings in the first quarter, and are expected to do so again in the second quarter, but are expected to commensurately improve earnings in the third and fourth quarters. Pullmantur's Tour Division adds revenues and costs without any corresponding capacity, and, as such, inflates Yeild and Net Cruise Cost figures. Weaker Revenues Offset by Lower Costs The demand environment, especially in the Caribbean, has been weaker than expected. At the same time, cost control has been good, offsetting the revenue decline. First quarter 2007 Net Yields on a comparable basis (i.e. excluding Pullmantur) decreased 4.2%, which was below guidance of down 2% to 3%. Commenting on the revenue environment, Richard D. Fain, chairman and chief executive officer said, "After a strong Fall performance, close-in bookings in the first quarter required more aggressive price promotions than we experienced throughout the last year." Mr. Fain continued, "On the other hand, cost performance was better than our prior guidance due to cost control initiatives." Net Cruise Costs per APCD, on a comparable basis and excluding fuel, increased 2.5% for the quarter versus previous guidance of an increase around 4%. Including fuel, these costs increased 1.5%. Previous guidance was for an increase of 2% to 3%. Fuel costs per APCD decreased 2.8% year-over-year, with "at-the-pump" fuel prices averaging US$372 per metric ton for the first quarter 2007, compared to the previously assumed figure of US$361 per metric ton and US$417 per metric ton in the first quarter 2006. "We continued several key strategic initiatives, including the revitalization of Majesty of the Seas, enhancing our international sales and marketing infrastructure, and expanding our fleet further into Europe and Latin America, while prudently finding ways to control our costs," Mr. Fain said. Including Pullmantur, the company's Net Yields decreased 3.4% and Net Cruise Costs increased 5.4%. Pullmantur's cruise division performed consistently with previous guidance, while the tour division generated higher revenue and higher expenses than previous guidance; however the net impact of these differences was immaterial. For the first quarter 2006, the company reported net income of US$119.5 million, which included a net gain of US$36 million related to the partial settlement of a lawsuit. Revenues for the first quarter 2007 increased to US$1.2 billion from revenues of US$1.1 billion in the first quarter 2006. Outlook The softer Caribbean pricing environment continues through the Spring, and is of a somewhat greater magnitude than forecasted back in February. However, the revenue picture for the balance of the year appears more encouraging. Although it is too early to provide specific predictions for the upcoming Fall/Winter season, load factors and pricing are both ahead of same time last year for the fourth quarter and into the first quarter of 2008. Fortunately, the company's cost control efforts have been more successful than forecasted, offsetting the revenue deterioration through reductions in operating and other expenses. Mr. Fain continued, "While we are disappointed that the revenue environment is more challenging than anticipated, I am very proud of the way our management team is mitigating the effect through improvements in efficiency. I am particularly pleased that we expect to reduce unit costs while still moving forward with some very important strategic initiatives. These efforts have allowed us to maintain our previous guidance despite lower revenues and higher fuel prices." The company provided the following estimates for the full year and second quarter 2007. The "Comparable" estimates exclude Pullmantur, while the "Including Pullmantur" estimates are for the entire combined group. Collectively, the company will have a 12.2% increase in capacity in 2007, driven by Pullmantur, the April delivery of Liberty of the Seas, and a full year of Freedom of the Seas. For the full year 2007, the company now forecasts that Net Yields will increase in the range around 2% compared to 2006, and on a comparable basis to be around flat. For the second quarter 2007, the company currently forecasts Net Yields to be around flat, and on a comparable basis to decrease in a range around 1%, compared to the second quarter 2006. Net Cruise Costs per APCD for the full year 2007 are expected to increase in a range around 3% compared to the prior year, and on a comparable basis to decrease in a range around 2%. Net Cruise Costs per APCD for the second quarter 2007 are expected to be around flat, and on a comparable basis to be down in a range around 3%. Net Cruise Costs per APCD, excluding fuel, for the full year 2007 are expected to increase in a range around 5% compared to the prior year, and on a comparable basis to be around flat. Net Cruise Costs per APCD, excluding fuel, for the second quarter 2007 are expected to increase in a range around 3%, and on a comparable basis to be down in a range around 1%. The company does not forecast fuel prices and its cost guidance for fuel is based on a current "at-the-pump" price of US$412 per metric ton. This is higher than the Feb. 5, 2007 figure, and represents a negative impact of US$0.05 per share versus the company's previous guidance. Additionally, the company is currently 50% and 56% hedged for the balance of the year and second quarter 2007, respectively. A 10% change in the market price of fuel results in US$18 million and US$5 million changes in fuel costs, for the full year and second quarter 2007, respectively, after taking into account existing hedges. Depreciation and amortization for the full year 2007 is expected to be US$490 million to US$510 million, and for the second quarter 2007 to be US$120 million to US$125 million. Interest expense for the full year 2007 is expected to be US$325 million to US$345 million, and for the second quarter 2007 to be US$83 million to US$88 million. Based on these estimates, and assuming that fuel prices remain at today's level, the company is maintaining its full year 2007 earnings per share guidance at US$3.05 to US$3.20, and expects second quarter 2007 earnings per share to be US$0.59 to US$0.63. As of March 31, 2007, liquidity was US$1.2 billion, comprised of US$0.2 billion in cash and cash equivalents and US$1.0 billion in available credit on the company's revolving credit agreement. Projected capital expenditures for 2007, 2008, 2009, 2010, and 2011 are estimated to be US$1.2 billion, US$1.8 billion, US$2.0 billion, US$2.1 billion, and US$0.3 billion, respectively. Projected capacity increases for the same five years are estimated at 12.2%, 8.4%, 7.5%, 11.6%, and 5.8%, respectively. About Royal Caribbean Royal Caribbean Cruises Ltd. -- http://www.royalcaribbean.com -- is a global cruise company that operates Royal Caribbean International and Celebrity Cruises with a combined total of 29 ships in service and six under construction. The company also offers unique land-tour vacations in Alaska, Canada and Europe through its cruise-tour division. * * * Moody's Investors Service has assigned on Jan. 11, 2007, a Ba1 rating on Royal Caribbean's new Euro senior unsecured notes, raised its Speculative Grade Liquidity rating to SGL-2 from SGL-3. SCOTTISH RE: Provides Update on MassMutual & Cerberus Deal ---------------------------------------------------------- Scottish Re Group Limited has provided an update with respect to the closing of its proposed transaction with MassMutual Capital Partners LLC and affiliates of Cerberus Capital Management, L.P., whereby each will invest US$300 million into the company, resulting in a total new equity investment of US$600 million. MassMutual Capital and Cerberus will have a controlling voting equity interest in the company after the closing. Scottish Re has received notice that the Delaware Department of Insurance approval hearing for the transaction is scheduled for April 26, 2007. Upon receiving final regulatory approval from the Delaware Department of Insurance, as well as the NASD and South Carolina Department of Insurance, all regulatory approvals needed to close the transaction will have been received. Paul Goldean, Scottish Re's chief executive officer, noted, "The regulatory approval process is proceeding as planned and we look forward to closing the transaction during the first part of May 2007." About Scottish Re Scottish Re Group Ltd. -- http://www.scottishre.com/-- is a global life reinsurance specialist. Scottish Re has operating businesses in Bermuda, Grand Cayman, Guernsey, Ireland, the United Kingdom, United States, and Singapore. Its flagship operating subsidiaries include Scottish Annuity & Life Insurance Company (Cayman) Ltd. and Scottish Re (US), Inc. Scottish Re Capital Markets, Inc., a member of Scottish Re Group Ltd., is a registered broker dealer that specializes in securitization of life insurance assets and liabilities * * * As reported on March 7, Standard & Poor's Ratings Services said that its ratings on Scottish Re Group Ltd. (B/Watch Dev/--) and affiliated operating companies remain on CreditWatch with developing implications following the announcement by the company that the shareholders have approved the transaction by which MassMutual Capital Partners LLC and affiliates of Cerberus Capital Management L.P. would provide an equity infusion of US$600 million in a transaction to close in the second quarter of 2007. Moody's Investors Service continues to review the ratings of Scottish Re Group Ltd. with direction uncertain following the announcement by the company that it has entered into an agreement to sell a majority stake to MassMutual Capital Partners LLC, a member of the MassMutual Financial Group and Cerberus Capital Management, L.P., a private investment firm. Ratings under review include Scottish Re Group Limited's senior unsecured debt, which is rated at Ba3 and preferred stock rated at B2. Fitch Ratings added that Scottish Re Group Ltd.'s ratings remain on Rating Watch Negative following the announcement that SCT has entered into an agreement, which will result in a new equity investment into the company of US$600 million. SCT's ratings were placed on Rating Watch Negative on July 31, due to concerns regarding the company's ability to repay US$115 million of senior convertible notes that are expected to be put to the company on Dec. 6. Ratings on Rating Watch Negative include the company's BB issuer default rating and the BB- rating on its 4.5% USUS$115 million senior convertible notes. A.M. Best Co. has downgraded the Financial Strength Rating to B from B+ and the issuer credit ratings to "bb+" from "bbb-" of the primary operating insurance subsidiaries of Scottish Re Group Limited. A.M. Best has also downgraded the ICR of Scottish Re to "b" from "bb-" and all of Scottish Re's debt ratings. All ratings remain under review with negative implications. TEEKAY SHIPPING: Seeks to Continue Bermudan Businesses ------------------------------------------------------ Teekay Shipping Corporation has proposed to continue from Bermuda the operations of a holding company as well as the operation of ships in transporting cargo internationally, pursuant to a permit issued under Section 134 of the Bermudan Companies Act 1981. Teekay Shipping's counsel can be reached at: Lynda Milligan-White & Associates Ram Re House, 2nd Floor, 46 Reid Street Hamilton, Bermuda Teekay Shipping Corp., a Marshall Islands corporation headquartered in Nassau, Bahamas, transports more than 10% of the world's sea borne oil and has expanded into the liquefied natural gas shipping sector through its publicly listed subsidiary, Teekay LNG Partners L.P., and into the offshore production, storage and transportation sector through its publicly-listed subsidiary, Teekay Offshore Partners L.P. With a fleet of over 140 tankers, offices in 17 countries and 5,100 seagoing and shore-based employees, Teekay provides a comprehensive set of marine services to the world's leading oil and gas companies, helping them seamlessly link their upstream energy production to their downstream processing operations. As reported in the Troubled Company Reporter-Latin America on April 23, 2007, Moody's Investors Service affirmed the debt ratings of Teekay Shipping Corporation (Ba3 senior unsecured, Ba2 corporate family, SGL-2 speculative grade liquidity rating, negative outlook) upon the announcement of the planned acquisition of OMI Corporation (B1 senior unsecured, Ba3 corporate family, stable outlook) through an acquisition vehicle jointly owned by Teekay and A/S Dampskibsselskabet TORM. The acquisition assigns an enterprise value to OMI of US$2.2 billion, including the assumption of the net debt of OMI, which stood at US$390 million at Dec. 31, 2006. ============= B O L I V I A ============= PRIDE INTERNATIONAL: To Report First Quarter Results on May 10 -------------------------------------------------------------- Pride International, Inc. will reschedule its reporting of financial results for the three months ended March 31, 2007, and associated conference call originally scheduled for May 2, 2007. The company is now planning to report its first quarter 2007 earnings on May 10, 2007. Conference call details, including dial in numbers and confirmation code will be provided. The company noted that additional time required to complete its quarterly review necessitated the delay. Headquartered in Houston, Texas, Pride International Inc. (NYSE:PDE) -- http://www.prideinternational.com/-- is a drilling contractor. The company provides onshore and offshore drilling and related services in more than 25 countries, operating a diverse fleet of 278 rigs, including two ultra- deepwater drillships, 12 semi submersible rigs, 28 jackup rigs, 18 tender-assisted, barge and platform rigs, and 218 land rigs. Pride also provides a variety of oilfield services to customers in Argentina, Venezuela, Bolivia and Peru. * * * As reported in the Troubled Company Reporter on Sept. 15, 2006, Standard & Poor's Ratings Services affirmed its 'BB' corporate credit rating on contract driller Pride International Inc. and removed the rating from CreditWatch with negative implications. S&P said the outlook is stable. As of June 30, 2006, Houston, Texas-based Pride had US$1.01 billion in adjusted debt. As reported in the Troubled Company Reporter on Aug. 17, 2006, Fitch Ratings raised Pride International's Issuer Default Rating to 'BB' from 'BB-'. Fitch also raised the ratings on Pride's senior secured revolving credit facility, senior unsecured notes and their convertible senior notes. =========== B R A Z I L =========== ARR-MAZ CUSTOM: S&P Lowers Corporate Credit Rating to B- from B --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Arr-Maz Custom Chemicals Inc. to 'B-' from 'B'. The outlook is stable. "The downgrade was prompted by Arr-Maz's plan to make an approximately US$44 million cash distribution to shareholders," said Standard & Poor's credit analyst Cynthia Werneth. "This transaction will result in a very highly leveraged financial profile, with total debt of US$220 million and total debt to EBITDA near 7x." At the same time, based on preliminary terms and conditions, Standard & Poor's assigned senior secured bank loan ratings to Arr-Maz's proposed US$15 million six-year revolving credit facility and US$154 million first-lien term loan. The loans are rated 'B-' (at the same level as the corporate credit rating) with a recovery rating of '2', indicating our expectation that lenders under these facilities would experience substantial (80% to 100%) recovery of principal in a payment default. Standard & Poor's also assigned ratings, based on preliminary terms and conditions, to Arr-Maz's proposed US$66 million 6.5- year second-lien term loan. The loan is rated 'CCC' with a recovery rating of '5' to reflect Standard & Poor's belief that second-lien lenders would experience negligible (0% to 25%) recovery of principal in a payment default. Proceeds from the proposed term loans will be used to make the cash distribution to all shareholders and to refinance existing debt. Standard & Poor's will withdraw the ratings on Arr-Maz's existing bank loans upon completion of the refinancing. The ratings on Arr-Maz reflect the limited size and scope of the company's operations as a producer of niche specialty chemicals and its very highly leveraged financial profile. Mulberry, Fla.-based Arr-Maz is a narrowly-focused producer of process chemicals and functional additives, including reagents and coatings, to the phosphate fertilizer and mining industries, which account for more than half of total sales. The company also manufactures additives for ammonium nitrate used in nitrogen fertilizers and explosives and additives for asphalt used in paving and roofing. These businesses, which are of approximately equal size, are much smaller. In addition, Arr- Maz makes other diversified industrial mineral flotation and surfactant chemicals and toll produces chemicals for third parties. Sales are concentrated in North America, but during the past few years the company established a manufacturing joint venture in Brazil (of which it currently owns 90%) and a presence in Europe through a tolling arrangement with a third- party manufacturer. Sales originating from overseas locations account for about 14% of revenues, which totaled US$153 million in 2005. BANCO NACIONAL: Names Luciano Coutinho as New President ------------------------------------------------------- Luciano Coutinho has assumed the office of president of Banco Nacional de Desenvolvimento Economico and Social aka BNDES during a ceremony held last week, at the Ministry of Development's seat, in Brasilia. Minister Miguel Jorge said that, under Mr. Coutinho's leadership, BNDES will be in charge of giving a vital support to the Growth Acceleration Program. "I wish professor Luciano all the success in this new and big challenge, mainly for the very important role that BNDES plays in the development of the Country," Minister Jorge said. The minister also said that one of the focus of the official policy is to stimulate innovation, and that BNDES participation in this area will also be important. The Minister of Planning, Paulo Bernardo, also attended the event. Mr. Jorge made a point of praising the "excellent work" Demian Fiocca did leading the Bank, and emphasized that BNDES's performance presented successful numbers during Fiocca's management, so deserving "all reverence and respect for his dedication, zeal, work and results obtained". About BNDES Banco Nacional de Desenvolvimento Economico e Social is Brazil's national development bank. It provides financing for projects within Brazil and plays a major role in the privatization programs undertaken by the federal government. * * * As reported on Nov. 27, 2006, Standard & Poor's Ratings Services changed the ratings outlook to Positive from Stable on Banco Nacional de Desenvolvimento Economico e Social SA's BB Foreign currency counterparty credit rating and BB+ Local currency counterparty credit rating. BLOCKBUSTER INC: Posts US$46.4 Mil. Net Loss in 2007 First Qtr. --------------------------------------------------------------- Blockbuster Inc. reported a net loss of US$46.4 million for the first quarter ended April 1, 2007, compared with a net loss of US$1.9 million, for the first quarter of 2006. Total revenues increased 5.4% to US$1.47 billion for the first quarter of 2007 from US$1.4 billion for the first quarter of 2006. "During the first quarter, we captured share of the overall rental market, continued to contain operating expenses and aggressively grew our BLOCKBUSTER Total Access(TM) subscriber base, which nearly doubled in a matter of five months and now exceeds 3 million total subscribers. I am extremely pleased with these accomplishments. Our results were impacted by our investment in the growth of BLOCKBUSTER Total Access and by an extremely tough in-store rental market," said John Antioco, Blockbuster chairman and chief executive officer. "The first quarter of 2007 was our highest subscriber growth quarter ever, surpassing even the initial success of the program and providing clear testimony to the consumer appeal of our integrated online and in-store offering, which we believe will allow us to achieve our year-end goal of well over 4 million subscribers. While this aggressive growth requires investment this year, we believe it's the right thing for the business and will contribute to our future profitability and to the long-term success of the Company." Total revenues for the first quarter of 2007 increased primarily as a result of strong merchandise sales and approximately US$20 million in revenues associated with the termination of Blockbuster's Brazilian franchise agreement. Rental revenues for the period remained essentially flat at US$1.05 billion reflecting growth in revenues from BLOCKBUSTER Total Access, which added approximately 800,000 subscribers during the first quarter of 2007 offsetting a larger than expected decline in the in-store rental industry. Operating loss for the first quarter of 2007 totaled US$18.4 million, compared to operating income of US$32.1 million for the same period last year. Gross profit decreased US$27.7 million primarily as a result of the decrease in rental gross margin, which was largely due to purchases of additional rental product in order to support in-store exchanges resulting from additional traffic generated by the significant growth of BLOCKBUSTER Total Access. Total selling, general and administrative expenses for the first quarter of 2007 increased US$24.3 million from the first quarter of 2006 largely due to a higher level of promotional activities, including an incremental US$35 million mass-media advertising campaign aimed at growing the BLOCKBUSTER Total Access subscriber base and increasing customers' awareness of the program. Cash flow provided by operating activities decreased by US$185 million from US$41 million for the first quarter of 2006 to a deficit of US$144 million for the first quarter of 2007. The decrease was driven primarily by a reduction in payables and accrued expenses and lower net income. This reduction resulted largely from the company returning to normalized credit terms with its vendors as compared to the same period last year. As of April 1, 2007, no balance was outstanding under the company's revolving credit facility and the company's borrowing capacity totaled approximately US$295 million. About Blockbuster Inc. Dallas-based Blockbuster Inc. (NYSE: BBI) -- http://www.blockbuster.com/-- is a leading global provider of in-home movie and game entertainment, with over 8,000 stores throughout the Americas, Europe, Asia and Australia. The company maintains operations in Brazil, Mexico, Denmark, Italy, Taiwan, Australia, among others. * * * As reported in the Troubled Company Reporter-Latin America on March 29, 2007, Standard & Poor's Ratings Services raised the ratings, including the Corporate Credit Rating, on Blockbuster Inc. to 'B' from 'B-'. This action reflects the improved operating performance and improved credit protection metrics for the company. At the same time, Standard & Poor's raised the recovery rating on the bank facility to '3' from '5', indicating the expectation for meaningful (50%-80%) recovery of principal in the event of payment default. Standard & Poor's affirmed the stable outlook. COMPANHIA DE SANEAMENTO: Plans Reverse Share Split -------------------------------------------------- Companhia de Saneamento Basico do Estado de Sao Paulo said in a statement that it will group its shares at a rate of 125 to 1. Business News Americas relates that Companhia de Saneamento's shareholders decided during their general meeting a reverse share split, effective as of June 1 "until which time shareholders are able to trade their shares at the current rate." According to BNamericas, the reverse split of shares signifies that Companhia de Saneamento's shareholders will have one share for every 125 they own, "with the newly established single share representing the same value as 125 shares under the redundant pricing arrangement." A Companhia de Saneamento spokesperson told BNamericas, "One of the objectives is to make the shares more negotiable and change the way they move on the stock exchange. This move makes the shares more accessible to smaller investors." A source at UBS Pactual financial management company said that previously shares could only be purchased in blocks of 1,000, BNamericas states. With the new arrangement, an investor will be able to buy just one share, reducing the cost of investment. Companhia de Saneamento Basico do Estado de Sao Paulo is one of the largest water and sewage service providers in the world based on the population served in 2005. It operates water and sewage systems in Sao Paulo, Brazil. * * * As reported in the Troubled Company Reporter-Latin America on June 23, 2006, Standard & Poor's Ratings Services has raised its Brazilian national-scale corporate credit rating on Companhia de Saneamento Basico do Estado de Sao Paulo to 'brA+' from 'brA'. At the same time, it affirmed the company's global-scale ratings at 'BB-'. S&P said the outlook is stable. As reported on Oct. 25, 2006, Fitch Ratings assigned local and foreign currency issuer default ratings of 'BB' and National Long-term Rating of 'A+(bra)' to Companhia de Saneamento Basico do Estado de Sao Paulo aka Sabesp. In addition, Fitch assigned a 'BB' to the company's US$250 million note issuance due 2016. CONSTRUTORA NORBERTO: S&P Affirms BB- Corporate Credit Rating ------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB-' corporate credit rating on Construtora Norberto Odebrecht or CNO. The outlook is positive. "The ratings reflect the company's exposure to the competitive, volatile, and cyclical heavy engineering and conctruction or E&C business; some backlog concentration in public works in economically and politically volatile countries (although projects are usually prefunded); and an aggressive dividend policy," said Standard & Poor's credit analyst Eduardo Chehab. These risks are partly offset by CNO's long-standing experience in the E&C business, the geographic and business diversification of its backlog, stronger margin stability, adequate financial liquidity, and consistent cash flow protection measures. The positive outlook on CNO reflects the upward rating potential if the company is able to preserve strong liquidity for any possible working capital swings, if it can sustain strong cash flow protection measures in the medium term, if it can maintain low debt levels relative to cash flows, and if it can manage its remarkable backlog expansion (while preserving profitability and sustaining geographic and project diversity over time). Standard & Poor's believe that CNO has significantly improved its debt management; however, raising the rating would depend on more permanent credit measure improvements in the medium term and a more limited transfer of resources to its parent companies, either through dividends or transfer of assets. On the other hand, a backlog deterioration could foreshadow a reversal in current trends. Along with adverse changes in profitability trends and cash generation, this could be a reason for an outlook revision or for the rating to be lowered in the future. Construtora Norberto Odebrecht is the largest heavy construction company in Brazil. GERDAU SA: Pedro Galdi Expects Increase in Firm's Net Profits ------------------------------------------------------------- ABN Amro Real Corretora analyst Pedro Galdi told Business News Americas that Gerdau SA would likely have BRL834 million net profits in the first quarter 2007, compared to BRL833 million net profits in the same period in 2006. Mr. Galdi said that Gerdau's first quarter 2007 net revenue would likely grow more substantially to BRL6.7 billion, from BRL5.6 billion in last year's first quarter, BNamericas notes. Ebitda would likely increase to BRL1.4 billion from BRL1.17 billion. BNamericas relates that Gerdau's sales volume is expected to increase to four million tons in the January-March 2007 period, from 3.7 million tons in the same period in 2006. The company's sales could grow 22% in North America and increase about 6% in South America. Shipments to Europe could increase quarter-over-quarter by 60% due to acquisition. Spanish steel group Sidenor signed a BRL834-million purchase contract for 100% of GSB Acero, Spanish industrial group CIE Automotive's unit. Gerdau holds a 40% stake in Sidenor, Mr. Galdi told BNamericas. Headquartered in Porto Alegre, Brazil, Gerdau SA -- http://www.gerdau.com.br/-- produces and distributes crude steel and related long rolled products, drawn products, and long specialty products. In addition to Brazil, Gerdau operates in Argentina, Canada, Chile, Colombia, Uruguay and the United States. * * * As reported in the Troubled Company Reporter on Jan. 19, 2007, Standard & Poor's Ratings Services placed its ratings, including its 'BB' corporate credit rating, on Tampa, Fla.-based Gerdau Ameristeel Corp. on CreditWatch with positive implications. DELPHI CORP: Court Records US$54 Mil. Claim Transfers in March -------------------------------------------------------------- The Clerk of the Bankruptcy Court for the Southern District of New York recorded roughly US$54,000,000 in claims changing hands for the period March 1 to 31. The investors who bought claims are: No. of Claims Aggregate Investor Bought Claim Amount -------- ------ ------------ Amroc Investments, LLC 12 US$304,967 APS Capital Corp. 3 3,780,996 Argo Partners 7 138,410 ASM Capital, L.P. 7 62,978 CF Special Situation Fund I LP 3 3,780,996 Contrarian Funds, LLC 37 3,579,891 Debt Acquisition Company of America V, LLC 2 677 Deutsche Bank Securities Inc. 1 771,893 Fair Harbor Capital, LLC 4 809,792 Goldman Sachs Credit Partners, L.P. 2 9,444,374 Hain Capital Holdings, LLC 1 - Integrated Quality Solutions, LLC. 1 7,725 JPMorgan Chase Bank, N.A. 5 1,388,766 Latigo Master Fund, Ltd. 2 1,403,452 Liquidity Solutions Inc. 3 1,020,254 Longacre Master Fund, Ltd. 16 3,328,774 Madison Investment Trust - Series 38 6 39,448 Madison Niche Opportunities, LLC 23 333,868 NXP Semiconductors USA, Inc. 1 5,486,881 Pumping Systems Inc. 1 6,045 Revenue Management 1 2,146 SPCP GROUP, L.L.C. 7 16,907,913 Stonehill Institutional Partners, LP 2 696,410 TPG Credit Opportunities Fund, L.P. 4 1,388,766 Trade-Debt.net 12 10,382 The largest claim transfers include those between these parties: Transferee Transferor Claim Amount ---------- ---------- ------------ APS Capital Linamar Corporation US$1,260,332 CF Special Situation APS Capital 1,260,332 Contrarian Funds Phillips Plastic Corporation 352,055 Contrarian Funds Phillips Plastic Corporation 751,116 Contrarian Funds GCI Technologies, Inc. 331,172 Deutsche Bank Yushin USA Ltd. 771,893 Goldman Sachs Analog Devices, Inc. 1,944,374 Goldman Sachs InPlay Technologies, Inc. 7,500,000 JPMorgan APS Clearing Corporation 1,347,829 Latigo Master Fund Deutsche Bank 1,403,132 Liquidity Solutions America Online, Inc. 969,142 Longacre Master Fund The Furukawa Electric Co. 498,651 Longacre Master Fund Otto Bock Polyurethane 389,744 Longacre Master Fund Xerox Corporation 485,244 Longacre Master Fund AMI Semiconductor, Inc. 459,592 NXP Semiconductors Phillips Semiconductors 5,486,881 SPCP GROUP Technical Materials, Inc. 407,748 SPCP GROUP ThyssenKrupp Waupaca Inc. 6,678,072 SPCP GROUP Stahl Specialty Company 1,384,397 SPCP GROUP ThyssenKrupp Stahl Co. 1,384,397 Stonehill Inst'l Frimo, Inc. 541,789 TPG Credit JPMorgan 620,001 TPG Credit JPMorgan 727,828 Troy, Mich.-based Delphi Corporation (OTC: DPHIQ) -- http://www.delphi.com/-- is the single largest global supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The company's technology and products are present in more than 75 million vehicles on the road worldwide. Delphi has regional headquarters in Japan, Brazil, and France. The company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represents the Official Committee of Unsecured Creditors. As of Aug. 31, 2005, the Debtors' balance sheet showed US$17,098,734,530 in total assets and US$22,166,280,476 in total debts. The Debtors' exclusive plan-filing period expires on July 31, 2007. DELPHI CORP: May Violate EU Policy Over Spanish Plant Closure ------------------------------------------------------------- The European Commission suggested that Delphi Corp. could be violating EU legislation with the planned closure of the firm's Puerto Real plant in Cadiz, Spain, The Financial Times reports, citing Expansion as its source. According to the report, the US car parts maker may have failed to: -- abide with rules protecting employees in the event of insolvency; and -- fully inform employees of the company's situation. In a report carried by the Troubled Company Reporter-Europe on Feb. 28, Delphi disclosed plans to shut down its Cadiz facility due to high operating costs. Delphi did not reveal the specific date of the planned closure. The site, which manufactures steering mechanisms and employs about 1,570 workers, has incurred up to US$196 million in losses in the last five years. Bloomberg News reported then that the company has informed its labor unions of the imminent closure. Among the labor unions representing Cadiz Facility workers are the Confederacion Sindical de Comisiones Obreras and the Union General de Trabajadores. Expansion relates, citing European ministers, the Commission also disclosed EU guidelines on collective redundancies, employees' rights in the event of deployment and those relating to works councils. Workers, whose jobs are going to Poland as the company capitalizes on lower labor costs, have conducted protests against the closure. About Delphi Corp. Troy, Mich.-based Delphi Corporation (OTC: DPHIQ) -- http://www.delphi.com/-- is the single largest global supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The company's technology and products are present in more than 75 million vehicles on the road worldwide. Delphi has regional headquarters in Japan, Brazil, and France. The company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represents the Official Committee of Unsecured Creditors. As of Aug. 31, 2005, the Debtors' balance sheet showed US$17,098,734,530 in total assets and US$22,166,280,476 in total debts. The Debtors' exclusive plan-filing period expires on July 31, 2007. FIAT SPA: Earns EUR376 Million in First Quarter 2007 ---------------------------------------------------- Fiat S.p.A. released its financial results for the first quarter ended March 31, 2007. The group reported EUR376 million in net profit on EUR13.7 billion in revenues for the first quarter 2007, compared with EUR151 million net profit on EUR12.6 billion in revenues for the same period in 2006. At March 31, 2007, the group's consolidated balance sheet showed EUR58.66 billion in total assets, EUR48.32 billion in total liabilities and EUR10.34 billion in stockholders equity. The group's net debt at March 31, 2007, is EUR11.62 billion. 2007 Outlook The sound results of the first quarter provide a solid foundation for the Fiat's commitment to growth and margin expansion over the 2007-10 period. The group will continue to deliver sequential improvements year- over-year, and confirms all of its 2007-10 targets announced in November 2006. For 2007, the Group's targets are: -- group trading profit between EUR2.5 and EUR2.7 billion; -- net income between EUR1.6 and EUR1.8 billion; and -- earning per share between EUR1.25 and EUR1.40. The Group is confirming 2007 guidance at the upper end of the indicated range. In addition, on the basis of strong industrial cash flow generation in the first quarter, the Group now expects year-end net industrial debt below EUR1 billion (excluding the impact of share buy-backs), less than half the previously announced target of EUR2 billion. While working on the achievement of these objectives, the Fiat Group will continue to implement its strategy of targeted alliances, in order to optimize capital commitments and reduce risks. A full-text copy of Fiat S.p.A.'s financial results is available at no charge at http://ResearchArchives.com/t/s?1e44 About Fiat S.p.A. Headquartered in Turin, Italy, Fiat S.p.A. -- http://www.fiatgroup.com/-- manufactures and sells automobiles, commercial vehicles, and agricultural and construction equipment. It also manufactures, for use by the company's automotive sectors and for sale to third parties, other automotive-related products and systems, principally power trains (engines and transmissions), components, metallurgical products and production systems. Fiat's creditors include Banca Intesa, Banca Monte dei Paschi di Siena, Banca Nazionale del Lavoro, Capitalia, Sanpaolo IMI, and UniCredito Italiano. Fiat operates in Argentina, Australia, Austria, Belgium, Brazil, Bulgaria, China, Czech Republic, Denmark, France, Germany, Greece, Hungary, India, Ireland, Italy, Japan, Lituania, Netherlands, Poland, Portugal, Romania, Russia, Singapore, Spain, among others. * * * As reported on April 10, Moody's confirmed its Ba2 Corporate Family Rating for Fiat S.p.A. Standard & Poor's Ratings Services raised its long-term corporate credit rating on Italian industrial group Fiat S.p.A. to 'BB' from 'BB-'. At the same time, Standard & Poor's affirmed its 'B' short-term rating on Fiat. S&P said the outlook is stable. Fitch Ratings changed Fiat S.p.A.'s Outlook to Positive from Stable. Its Issuer Default rating and senior unsecured rating are affirmed at BB-. The Short-term rating is affirmed at B. Around EUR6 billion of debt is affected by this rating action. FIAT SPA: Repurchases 700,000 Ordinary Shares --------------------------------------------- Within the frame of the buy back program announced on April 5, Fiat S.p.A. purchased 700,000 Fiat ordinary shares at the average price of EUR21.74 including fees on April 27. From the start of the buy back program on April 24, the total number of shares purchased by Fiat, amounts to 4,526,000 for a total invested amount of EUR95 million. About Fiat S.p.A. Headquartered in Turin, Italy, Fiat S.p.A. -- http://www.fiatgroup.com/-- manufactures and sells automobiles, commercial vehicles, and agricultural and construction equipment. It also manufactures, for use by the company's automotive sectors and for sale to third parties, other automotive-related products and systems, principally power trains (engines and transmissions), components, metallurgical products and production systems. Fiat's creditors include Banca Intesa, Banca Monte dei Paschi di Siena, Banca Nazionale del Lavoro, Capitalia, Sanpaolo IMI, and UniCredito Italiano. Fiat operates in Argentina, Australia, Austria, Belgium, Brazil, Bulgaria, China, Czech Republic, Denmark, France, Germany, Greece, Hungary, India, Ireland, Italy, Japan, Lituania, Netherlands, Poland, Portugal, Romania, Russia, Singapore, Spain, among others. * * * As reported on April 10, Moody's confirmed its Ba2 Corporate Family Rating for Fiat S.p.A. Standard & Poor's Ratings Services raised its long-term corporate credit rating on Italian industrial group Fiat S.p.A. to 'BB' from 'BB-'. At the same time, Standard & Poor's affirmed its 'B' short-term rating on Fiat. S&P said the outlook is stable. Fitch Ratings changed Fiat S.p.A.'s Outlook to Positive from Stable. Its Issuer Default rating and senior unsecured rating are affirmed at BB-. The Short-term rating is affirmed at B. Around EUR6 billion of debt is affected by this rating action. HAYES LEMMERZ: Plans US$150-Million Offering of Senior Notes ------------------------------------------------------------ Hayes Lemmerz International Inc. plans to offer approximately US$150 million, or the equivalent amount denominated in euros, of senior unsecured notes. The notes are expected to be issued by a European subsidiary. The issuance of the notes is subject to market and other customary conditions. The notes will be offered in the United States to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended, and outside the United States pursuant to Regulation S under the Securities Act. The notes have not been and will not be registered under the Securities Act and may not be offered or sold in the United States without registration or an applicable exemption from the registration requirements. Additionally, Hayes Lemmerz has launched the syndication of the new senior secured credit facilities in an amount of up to US$495 million. The proceeds of the new credit facilities will be used to refinance the company's obligations under its Amended and Restated Credit Agreement dated April 11, 2005. The refinancing of the Amended and Restated Credit Agreement and the placement of a portion of the company's debt outside the United States are conditions to the obligation of Deutsche Bank Securities Inc. and SPCP Group LLC, an affiliate of Silver Point Capital L.P., to backstop the Rights Offering. Additional proceeds will be used to replace existing letters of credit and to provide for working capital and other general corporate purposes, and to pay the fees and expenses associated with the new credit facilities. Bank meetings are scheduled Wednesday, May 2, 2007, in London, England and Thursday, May 3, 2007, in New York, NY. Citigroup Global Markets Inc. and Deutsche Bank AG, New York Branch and Deutsche Bank Securities Inc. will act as joint arrangers and joint book-runners for the syndication of the new credit facilities. About Hayes Lemmerz International Inc. Hayes Lemmerz International, headquartered in Northville, Michigan, is a global supplier of steel and aluminum automotive and commercial vehicle highway wheels, as well as aluminum components for brakes, powertrain, suspension, and other lightweight structural products. Worldwide revenues approximate US$2.2 billion. The company has 33 facilities worldwide including India, Brazil and Germany, among others. * * * As reported in the Troubled Company Reporter-Latin America on Feb. 7, 2007, Moody's Investors Service lowered HLI Operating company, Inc.'s ratings: * Corporate Family to Caa1 from B3; * first lien senior secured to B1 from Ba3; * second lien term loan to Caa1 from B3. HAYES LEMMERZ: Discloses Rights Distribution to Stockholders ------------------------------------------------------------ Hayes Lemmerz International, Inc. reported the distribution of rights in its previously announced US$180 million rights offering and the execution of a commitment letter for a new US$495 million senior secured credit facility. The company is distributing to stockholders of record as of April 10, 2007, non-transferable subscription rights to purchase shares of its common stock in connection with the Rights Offering. Stockholders on the record date will receive 1.3970 rights for each share of the company's common stock held on the record date. Each right entitles the holder to purchase one share of common stock at a price of US$3.25 per share until 5:00 p.m. Eastern Daylight Time, on May 21, 2007, unless extended by the company. Stockholders who receive rights through a bank or broker will receive instructions for exercising rights from their bank or broker and may be required to act prior to the stated expiration time. Hayes Lemmerz may terminate the Rights Offering for any reason prior to the expiration time. The Rights Offering and the related agreements are subject to the approval of the company's stockholders. A special meeting to approve the rights offering and certain other matters is scheduled to be held on May 4, 2007, at the company's headquarters in Northville, Michigan. Hayes Lemmerz also has executed a commitment letter with Citigroup Global Markets Inc. and Deutsche Bank AG, New York Branch and Deutsche Bank Securities Inc. to provide new senior secured credit facilities in an amount of up to US$495 million. Citigroup and Deutsche Bank will act as joint arrangers and joint book-runners for the syndication of the new credit facilities. The new credit facilities are expected to consist of a term loan facility of up to US$350 million, which will be denominated in euros and placed with a subsidiary in Europe, a revolving credit facility of up to US$125 million and a synthetic letter of credit facility of up to US$20 million. The proceeds of the new credit facilities will be used, together with the proceeds of other financing activities, to refinance the company's obligations under its Amended and Restated Credit Agreement dated April 11, 2005. The refinancing of the Amended and Restated Credit Agreement and the placement of a portion of the Company's debt outside the United States are conditions to the obligation of Deutsche Bank Securities Inc. and SPCP Group, LLC, an affiliate of Silver Point Capital, L.P., to backstop the Rights Offering. Additional proceeds will be used to replace existing letters of credit and to provide for working capital and other general corporate purposes, and to pay the fees and expenses associated with the new credit facilities. The company and its officers and directors may be deemed to be participants in the solicitation of proxies from the company's stockholders in connection with the approval of the Rights Offering and certain related proposals. Information about those officers and directors of the company and their ownership of the Company's common stock is set forth in the proxy statement for the special meeting, which was filed with the Securities and Exchange Commission on April 18, 2007. About Hayes Lemmerz International Inc. Hayes Lemmerz International, headquartered in Northville, Michigan, is a global supplier of steel and aluminum automotive and commercial vehicle highway wheels, as well as aluminum components for brakes, powertrain, suspension, and other lightweight structural products. Worldwide revenues approximate US$2.2 billion. The company has 33 facilities worldwide including India, Brazil and Germany, among others. * * * As reported in the Troubled Company Reporter-Latin America on Feb. 7, 2007, Moody's Investors Service lowered HLI Operating company, Inc.'s ratings: * Corporate Family to Caa1 from B3; * first lien senior secured to B1 from Ba3; * second lien term loan to Caa1 from B3. HAYES LEMMERZ: Moody's Raises HLI Operating's Corp. Rating to B3 ---------------------------------------------------------------- Moody's Investors Service raised to B3 from Caa1 the corporate family and probability of default ratings of Hayes Lemmerz International's wholly owned subsidiary, HLI Operating Company, Inc., and changed the rating outlook to stable from negative. Moody's also assigned a B2 (LGD3, 33%) to new senior secured bank facilities to be issued by HLI, a B2 (LGD3, 33%) to a secured term loan and synthetic letter of credit facility to be issued by HLI Luxembourg S.a.r.l. and a Caa2 (LDG5, 87%) to new senior unsecured notes also to be issued by HLI Luxembourg. In a related action, Moody's placed the Caa2 rating of the US$157 million of 10.5% senior unsecured notes under review for downgrade. The US$157 million of 10.5% senior unsecured notes are not callable until July 2007 and, thus are expected to be repurchased. The review will consider the degree to which covenants and rights are stripped from any notes not purchased. The rating will be withdrawn if substantially all of these notes are purchased. These rating actions are based upon the company successfully completing a series of transactions which include the closing of the announced US$180 million common stock rights offering, the issuance of the new senior secured bank debt, and the issuance of the new senior unsecured note. The common stock rights offering will be used to repay the company's existing 10.5% senior unsecured notes. As part of the transaction, the new senior secured term loan, senior secured letter of credit facility, and senior unsecured notes will be issued by a European holding company. The transaction will reduce leverage and better align Hayes Lemmerz's debt service requirements with its geographic cash generating capacity. The ratings also reflect the company's improved credit metrics resulting from the transaction and the continuing challenges of the automotive supplier industry. "The stable outlook reflects the company's progress in gaining operating flexibility through several recent actions, as well as the refinancing plan", noted Timothy Harrod of Moody's Investors Service. These include the restructuring actions taken last year, which have reduced wages and moved operations to low cost countries and asset sales in the automotive components segment. These actions combined with the lower leverage, improved interest coverage, and improved liquidity contemplated by the proposed transaction should support the company's ability to negotiate the current industry challenges of the automotive supplier sector at the currently assigned Corporate Family Rating. These challenges include market share losses of the North American Big-3 OEMs, and increasing raw material and energy cost. For the last twelve months ended Jan. 31, 2007, Hayes Lemmerz's total debt/EBITDA approximated 5.5x. EBIT/interest expense was approximately 0.5x. Free cash flow was approximately negative US$3 million with cash on hand of US$38 million. Availability under the existing revolving credit was approximately US$80 million at Jan. 31, 2007. Pro forma for the transaction Debt/EBITDA is expected to reduce to approximately 4.7x and EBIT/Interest expense will moderately improve to approximately 0.63x. Liquidity is expected to improve as part of the refinancing, as the new revolving credit will increase in size to US$125 million (and be largely unused over the near term) and the transaction will increase the amount of cash on hand. Ratings raised: -- Corporate Family Rating, to B3 from Caa1; and -- Probability of Default Rating to B3 from Caa1. Ratings assigned: -- B2 (LGD3, 33%) to the senior secured revolving credit facility; -- B2 (LGD3, 33%) to the senior secured term loan facility; -- B2 (LGD3, 33%) to the senior secured synthetic letter of credit facility; and -- Caa2 (LGD5, 87%) to the senior unsecured notes; These ratings will be withdrawn upon their repayment: -- B1 (LDG2, 20%) for the 1st lien senior secured revolving credit; -- B1 (LDG2, 20%) for the 1st lien senior secured term loan; and -- Caa1 (LDG3, 47%) for the 2nd lien term loan C. These rating is under review for downgrade: -- Caa2 (LGD5, 72%) for the existing 10.5% senior unsecured notes Outlook change: -- To Stable from Negative The ratings of the new issues reflect their priority of payout in Moody's Loss Given Default Methodology. As a result the proposed transaction's shift of the preponderance of debt to Hayes Lemmerz's European operations, the Europe, Middle East, and Africa or EMEA Loss Given Default Methodology is applied. The significant impact of the EMEA LGD Methodology compared to the US methodology is the senior secured treatment of trade payables. The EMEA LGD generally assumes that a consensual "out of court" restructuring will be pursued as opposed to court administered liquidations. In a consensual restructuring scenario management and financial creditors seek to ensure that the trade creditors remain current to avoid any local insolvency petition being invoked. The assumed outcome of a financial restructuring is that the trade creditors would be preserved and ultimately transferred to a new or restructured entity, without incurring losses. As a result, all trade payables are raised to level of the highest secured obligations. Hayes Lemmerz International, headquartered in Northville, Michigan, is a global supplier of steel and aluminum automotive and commercial vehicle highway wheels, as well as aluminum components for brakes, powertrain, suspension, and other lightweight structural products. Worldwide revenues approximate US$2.2 billion. The company has 33 facilities worldwide including India, Brazil and Germany, among others. NRG ENERGY: Inks Deal with TEPCO to Expand South Texas Project -------------------------------------------------------------- NRG Energy, Inc., through its agent, South Texas Project Nuclear Operating Company, has signed an agreement with The Tokyo Electric Power Company, Inc., or TEPCO to provide TEPCO's expertise and experience to support STP's planned two-unit expansion. TEPCO owns and operates two Advanced Boiling Water Reactor -- ABWR -- nuclear units in Japan and NRG has proposed building two ABWR units at the STP site to bring an additional 2,700 megawatts of clean nuclear power to Texas. "President Bush and Prime Minister Abe of Japan took an auspicious step today, underscoring the importance of expanding zero-emission nuclear power through the Joint Nuclear Energy Action Plan. We are proud of our agreement with TEPCO that strongly aligns with the principles of the Plan announced earlier this week," said David Crane, NRG President and Chief Executive Officer. "Technical cooperation within the business sector will be critical to renewed nuclear development in the United States. Combining STP's operational excellence with the tremendous experience TEPCO has in building and operating ABWR nuclear plants will make an unbeatable team." The NRG/TEPCO agreement calls for TEPCO to consult on the design, construction, operation and maintenance of the new ABWR units at STP, and to provide their expertise and experience in developing the application of a combined construction and operation license that NRG intends to submit to the Nuclear Regulatory Commission during the second half of this year. The General Electric Company's ABWR design has been certified by the U.S. Nuclear Regulatory Commission. "TEPCO will be an invaluable partner in ensuring STP units 3 and 4 come online on schedule and on budget to help meet Texas' growing energy needs through nuclear power," said Steve Winn, Executive Vice President, Strategy, and Environmental and New Business. "Nuclear power has shown its ability to produce much needed power reliably and safely and without adding greenhouse gases or other emissions into our atmosphere. We look forward to working with TEPCO to develop this proven technology that will power Texas' economy in an economical and environmentally friendly manner." Tokyo Electric TEPCO is the largest electric power company in Japan and one of the largest investor owned electric utilities in the world. TEPCO supplies electricity to meet the increasingly diversified and sophisticated demands of its over 27.7 million customers in the 39,500 square-kilometer service area that includes metropolitan Tokyo, the political, economic, and cultural center of Japan, and eight prefectures surrounding Tokyo. TEPCO has diversified major energy sources ranging from hydroelectric, oil, and liquefied natural gas to nuclear. South Texas Project STP supplies power to customers in Houston, Austin, San Antonio, Corpus Christi and surrounding areas. The plant is managed by the STP Nuclear Operating Company and is owned by NRG Texas, CPS Energy and Austin Energy. STP's twin reactors produce nearly 2,600 megawatts of electricity, enough to power approximately two million homes. For the last three years, the South Texas Project nuclear power plant has led the U.S. in electricity production by two-reactor facilities. STP unit 2 led all 103 reactors nationwide in production in 2006 and was the third highest of the 442 reactors worldwide. STP unit 1, which conducted a routine refueling and maintenance outage in 2006, ranked sixth in production in the country and seventeenth globally. About NRG Energy Headquartered in Princeton, New Jersey, NRG Energy Inc. (NYSE:NRG) owns and operates power generating facilities, primarily in Texas and the northeast, south central and western regions of the United States. NRG also owns generating facilities in Australia, Brazil, and Germany. * * * As reported in the Troubled Company Reporter on Nov. 14, 2006, Fitch Ratings assigned a rating of 'B+/RR3' on NRG Energy's issuance of US$1.1 billion senior notes due 2011. This issue will rank equally with NRG's other senior unsecured obligations. Fitch said the rating outlook is stable. NRG ENERGY: S&P Ups Rating on US$4.7 Bil. Unsecured Bonds to B -------------------------------------------------------------- Standard & Poor's Ratings Services raised its rating on NRG Energy, Inc.'s US$4.7 billion unsecured bonds to 'B' from 'B-' and assigned its 'B-' rating to the proposed US$1 billion delayed-draw term loan B at NRG Holdings Inc. or NHI, a newly created holding company that would own 100% of NRG's equity. In addition, Standard & Poor's affirmed the 'B+' corporate credit rating on NRG and affirmed the 'BB-' rating on NRG's US$3.148 billion term loan B; the 'CCC+' rating on the company's preferred stock, and the 'B-2' short-term rating. The outlook on all ratings is stable. NHI will be created, and the term loan B issued, only if NRG fails to obtain consent from its unsecured bondholders to institute a common dividend starting in first quarter 2008 of about US$100 million-US$150 million per year. The proceeds of the term loan B can only be used to pay down the existing term loan B debt at NRG, creating room for the planned dividends under the restricted payments basket of the unsecured bond indenture. "The raised rating on NRG's senior unsecured bonds is a result of our asset coverage test," said Standard & Poor's credit analyst Swami Venkataraman. "The term loan B at NHI is rated 'B-', reflecting its subordination to more than US$8.6 billion of debt at NRG." These rating actions follow NRG's announcement that it will create a new holding company to facilitate the payment of a common dividend of US$100 million-US$150 million per year starting in the first quarter of 2008. NHI will borrow up to US$1 billion from the term B market and pay the net proceeds to NRG as an equity contribution. NRG will use the net proceeds to prepay portion of its existing term B loan, resulting in no change to the company's consolidated debt levels. On completion, the restricted payments capacity under NRG's unsecured bond indentures will increase by an amount equal to the equity contribution from the holding company to NRG. The recovery rating of '5' on NHI's debt reflects its negligible recovery prospects since lenders are secured only by the equity interest in NRG and are effectively subordinated to all debt at NRG, including the US$4.7 billion unsecured bonds. If the funding occurs, Standard & Poor's expect to raise the rating on the remaining US$2.148 billion NRG term loan B to 'BB' from 'BB-', reflecting the greater overcollateralization of the term loan by NRG's assets and related stronger recovery in the event of a default. Headquartered in Princeton, New Jersey, NRG Energy Inc. (NYSE:NRG) owns and operates power generating facilities, primarily in Texas and the northeast, south central and western regions of the United States. NRG also owns generating facilities in Australia, Brazil, and Germany. PETROLEO BRASILEIRO: No Deal Yet on Petrochemical Consolidation --------------------------------------------------------------- Brazilian state-owned oil company Petroleo Brasileiro SA has not reached an accord with Unipar and Suzano Petroquimica to consolidate the petrochemical sector in Brazil's southeast region, Business News Americas reports, citing Unipar Vice President Vitor Mallmann. BNamericas says that the project is called Petroquimica do Sudeste. Mr. Mallmann explained to BNamericas, "In reality, each company has its own vision of how the business should be carried out." However, Mr. Mallmann assured BNamericas that the consolidation in the southeast region will eventually occur. Local paper Diario do Grande ABC relates that a potential consolidation of petrochemical plants and activities in the southeast region could generate at least BRL7 billion in new investments. Mr. Mallmann told BNamericas, "If we analyze the crucial and successful factors of the petrochemical industry [in Brazil], Sao Paulo has two major assets; market share and availability of raw materials." Suzano Petroquimica's Marketing Manager Sinclair Fittipaldi commented to BNamericas that the debated cooperation between the company, Petroleo Brasileiro and Unipar will form major synergies in the entire plastic manufacturing chain. Authorities' recent inspection of the acquisition of the assets oil refiner and distributor Ipiranga's assets by petrochemicals groups Ultrapar and Braskem, and Petroleo Brasileiro has slowed down talks towards the Petroquimica do Sudeste project, BNamericas notes, citing Mr. Fittipaldi. "[The recent events] put pressure on the companies to ensure that the same thing does not take place in the southeast region," Mr. Fittipaldi told BNamericas. Headquartered in Rio de Janeiro, Brazil, Petroleo Brasileiro SA aka Petrobras -- http://www2.petrobras.com.br/ingles/index.asp -- 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 Brazil. Petrobras has operations in China, India, Japan, and Singapore. Petroleo Brasileiro SA's long-term corporate family rating is rated Ba3 by Moody's. Fitch Ratings assigned these ratings on Petroleo Brasileiro's senior unsecured notes: Maturity Date Amount Rate Ratings ------------- ------ ---- ------- April 1, 2008 US$400,000,000 9% BB+ July 2, 2013 US$750,000,000 9.125% BB+ Sept. 15, 2014 US$650,000,000 7.75% BB+ Dec. 10, 2018 US$750,000,000 8.375% BB+ Fitch upgraded the foreign currency rating of Petrobras to BB+ from BB, with positive outlook, in conjunction with Fitch's upgrade of the long-term foreign and local currency IDRs of the Federative Republic of Brazil to BB, from BB- on June 29, 2006. PETROLEO BRASILEIRO: Reiterates Partnership with PDVSA ------------------------------------------------------ Petroleo Brasileiro SA aka Petrobras has reaffirmed that its projects in partnership with Petroleos de Venezuela, the Venezuelan National Oil Company -- has continued on course. Negotiations involving the construction of the Abreu Lima Refinery, in the Suape Port (state of Pernambuco, Northeastern Brazil), in association with the development of the Carabobo field, in Venezuela, are in progress. The company reiterates there is no threat the negotiations kicked-off nearly two years ago will be interrupted. It also announces that next Tuesday, International Area director, Nestor Cervero, and Supply director, Paulo Roberto Costa, will be in Caracas, Venezuela, to attend yet another normally-scheduled ordinary meeting of the joint Petrobras/PDVSA committee. Petrobras remains resolute to study the viability of the projects that are currently under discussion with PDVSA and the Venezuelan government, including mature field revitalization and Mariscal Sucre field development, both in Venezuela. Headquartered in Rio de Janeiro, Brazil, Petroleo Brasileiro SA aka Petrobras -- http://www2.petrobras.com.br/ingles/index.asp -- 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 Brazil. Petrobras has operations in China, India, Japan, and Singapore. Petroleo Brasileiro SA's long-term corporate family rating is rated Ba3 by Moody's. Fitch Ratings assigned these ratings on Petroleo Brasileiro's senior unsecured notes: Maturity Date Amount Rate Ratings ------------- ------ ---- ------- April 1, 2008 US$400,000,000 9% BB+ July 2, 2013 US$750,000,000 9.125% BB+ Sept. 15, 2014 US$650,000,000 7.75% BB+ Dec. 10, 2018 US$750,000,000 8.375% BB+ Fitch upgraded the foreign currency rating of Petrobras to BB+ from BB, with positive outlook, in conjunction with Fitch's upgrade of the long-term foreign and local currency IDRs of the Federative Republic of Brazil to BB, from BB- on June 29, 2006. TRW AUTOMOTIVE: S&P Puts BB+ Long-Term Corporate Credit Rating -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its bank loan and recovery ratings to TRW Automotive Inc.'s proposed US$2.5 billion senior secured credit facilities. The credit facilities were rated 'BBB-' with a recovery rating of '1', indicating a high expectation for full recovery of principal in the event of a payment default. At the same time, Standard & Poor's affirmed its ratings on the auto supplier, including its 'BB+' long- and 'A-3' short-term corporate credit ratings. The outlook is stable. TRW had US$3.2 billion in total balance sheet debt outstanding, pro forma for the proposed credit facility refinancing and recent unsecured debt refinancing, at Dec. 31, 2006. To lower its interest cost and extend maturities, TRW proposes to refinance its existing US$2.5 billion credit facilities with new facilities of the same total committed capacity. When the transaction is completed, Standard & Poor's will withdraw the rating on TRW's existing facilities. The new facilities will be comprised of a US$500 million multi-currency (US$, Sterling, Euro) revolving facility due in 2012, US$900 million U.S. revolving facility due 2012, US$600 million term loan A due 2013, and US$500 million term loan B due 2013. =========================== C A Y M A N I S L A N D S =========================== GOLDMAN SACHS: Sets Final Shareholders Meeting for June 1 --------------------------------------------------------- Goldman Sachs Global Equity Long/Short Partners Cayman Ltd. will hold its final shareholders meeting on June 1, 2007, at 10:30 a.m., at the office of the company. These matters will be discussed during the meeting: 1) accounting of the liquidation process showing how the winding up has been conducted during the preceding year, and 2) authorizing the liquidator to retain the company's records for a period of five years from its dissolution, after which they may be destroyed. A member entitled to attend and vote at the meeting will be allowed to appoint a proxy, who need not be a member, in his stead. The liquidator can be reached at: John Cullinane Derrie Boggess c/o Walkers SPV Limited Walker House, 87 Mary Street P.O. Box 908 Grand Cayman KY1-9002 Cayman Islands ICGE SAILS: Proofs of Claim Filing Is Until May 31 -------------------------------------------------- ICGE Sails Corp. V's creditors are given until May 31, 2007, to prove their claims to Hugh Thompson and Emile Small, the company's liquidators, or be excluded from receiving any distribution or payment. In their proofs of claim, creditors must indicate their full names, addresses, the full particulars of their debts or claims, and the names and addresses of their lawyers, if any. ICGE Sails' shareholders agreed on April 16, 2007, to place the company into voluntary liquidation under The Companies Law (2004 Revision) of the Cayman Islands. The liquidators can be reached at: Hugh Thompson Emile Small Maples Finance Limited P.O. Box 1093 George Town, Grand Cayman Cayman Islands KINGSNORTH HOLDINGS: Sets Final Shareholders Meeting for June 1 --------------------------------------------------------------- Kingsnorth Holdings (Cayman) Ltd. will hold its final shareholders meeting on June 1, 2007, at 11:00 a.m., at the office of the company. These matters will be discussed during the meeting: 1) accounting of the liquidation process showing how the winding up has been conducted during the preceding year, and 2) authorizing the liquidators to retain the company's records for a period of five years from its dissolution, after which they may be destroyed. A member entitled to attend and vote at the meeting will be allowed to 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, 87 Mary Street P.O. Box 908 Grand Cayman KY1-9002 Cayman Islands KS CAPITAL: Will Hold Final Shareholders Meeting on May 31 ---------------------------------------------------------- KS Capital Ltd. will hold its final shareholders meeting on May 31, 2007, at 10:00 a.m., at: Strathvale House 90 North Church Street, Grand Cayman, Cayman Islands These matters will be discussed during the meeting: 1) accounting of the liquidation process showing how the winding up has been conducted during the preceding year, and 2) authorizing the liquidator to retain the company's records for a period of six years from its dissolution, after which they may be destroyed. A member entitled to attend and vote at the meeting will be allowed to appoint a proxy, who need not be a member, in his stead. The liquidator can be reached at: Geoffrey Varga Attention: Bernadette Bailey-Lewis Kinetic Partners Cayman LLP P.O. Box 10387 Grand Cayman KY1-1004 Cayman Islands Telephone: (345) 623 9900 Fax: (345) 623 0007 MAPLE COMPANY: Sets Final Shareholders Meeting for May 31 --------------------------------------------------------- Maple Company will hold its final shareholders meeting on May 31, 2007, at the office of the company. These matters will be discussed during the meeting: 1) accounting of the liquidation process showing how the winding up has been conducted during the preceding year, 2) authorizing the liquidator to retain the company's records for a period of five years from its dissolution, after which they may be destroyed, and 3) hearing any explanation that may be given by the liquidator. A member entitled to attend and vote at the meeting will be allowed to appoint a proxy, who need not be a member, in his stead. The liquidator can be reached at: Commerce Corporate Services Limited P.O. Box 694 George Town, Grand Cayman Cayman Islands Telephone: 949 8666 Fax: 949 7904 MULHOLLAND MASTER: Holding Final Shareholders Meeting on June 1 --------------------------------------------------------------- Mulholland Master Fund Ltd. will hold its final shareholders meeting on June 1, 2007, at 10:05 a.m., at: Queensgate House, South Church Street Grand Cayman, Cayman Islands These matters will be discussed during the meeting: 1) accounting of the liquidation process showing how the winding up has been conducted during the preceding year, and 2) authorizing the liquidator to retain the company's records for a period of five years from its dissolution, after which they may be destroyed. A member entitled to attend and vote at the meeting will be allowed to appoint a proxy, who need not be a member, in his stead. The liquidator can be reached at: Ogier Attention: Martina de Lima Telephone: (345) 949 9876 Fax: (345) 949 1986 MULHOLLAND OFFSHORE: Sets Final Shareholders Meeting for June 1 --------------------------------------------------------------- Mulholland Offshore Investors Fund Ltd. will hold its final shareholders meeting on June 1, 2007, at 10:05 a.m., at: Queensgate House, South Church Street Grand Cayman, Cayman Islands These matters will be discussed during the meeting: 1) accounting of the liquidation process showing how the winding up has been conducted during the preceding year, and 2) authorizing the liquidator to retain the company's records for a period of five years from its dissolution, after which they may be destroyed. A member entitled to attend and vote at the meeting will be allowed to appoint a proxy, who need not be a member, in his stead. The liquidator can be reached at: Ogier Attention: Martina de Lima Telephone: (345) 949 9876 Fax: (345) 949 1986 OCTAGON INVESTMENT: Proofs of Claim Filing Is Until May 31 ---------------------------------------------------------- Octagon Investment Partners IV, Ltd.'s creditors are given until May 31, 2007, to prove their claims to Phillip Hinds and Emile Small, the company's liquidators, or be excluded from receiving any distribution or payment. In their proofs of claim, creditors must indicate their full names, addresses, the full particulars of their debts or claims, and the names and addresses of their lawyers, if any. Octagon Investment's shareholders agreed on April 16, 2007, to place the company into voluntary liquidation under The Companies Law (2004 Revision) of the Cayman Islands. The liquidators can be reached at: Phillip Hinds Emile Small Maples Finance Limited P.O. Box 1093 George Town, Grand Cayman Cayman Islands PANCRAS LTD: Proofs of Claim Must be Filed by May 31 ---------------------------------------------------- Pancras Limited's creditors are given until May 31, 2007, to prove their claims to Guy Major and Richard Gordon, the company's liquidators, or be excluded from receiving any distribution or payment. In their proofs of claim, creditors must indicate their full names, addresses, the full particulars of their debts or claims, and the names and addresses of their lawyers, if any. Pancras Limited's shareholders agreed on April 10, 2007, to place the company into voluntary liquidation under The Companies Law (2004 Revision) of the Cayman Islands. The liquidator can be reached at: Richard Gordon Maples Finance Limited P.O. Box 1093 George Town, Grand Cayman Cayman Islands PARMALAT SPA: Banca delle Marche Settles Suit for EUR22 Million --------------------------------------------------------------- Parmalat S.p.A and Banca delle Marche S.p.A. disclosed that the case involving revocatory action filed by Parmalat against Banca delle Marche has been settled. Banca delle Marche has committed to pay to Parmalat EUR22 million in settlement of the revocatory action and has undertaken to forego the right to file claims with the Parmalat bankruptcy court for a value equivalent to that returned in settlement of the revocatory action. Following the settlement, Parmalat and Banca delle Marche have undertaken to withdraw all the pending actions concerning the above revocatory action. About Parmalat Headquartered in Milan, Italy, Parmalat S.p.A. -- http://www.parmalat.net/-- sells nameplate milk products that can be stored at room temperature for months. It also has about 40 brand product lines, which include yogurt, cheese, butter, cakes and cookies, breads, pizza, snack foods and vegetable sauces, soups and juices. The Company's U.S. operations filed for chapter 11 protection on Feb. 24, 2004 (Bankr. S.D.N.Y. Case No. 04-11139). Gary Holtzer, Esq., and Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, represent the Debtors. When the U.S. Debtors filed or bankruptcy protection, they reported more than US$200 million in assets and debts. The U.S. Debtors emerged from bankruptcy on April 13, 2005. Parmalat S.p.A. and its Italian affiliates filed separate petitions for Extraordinary Administration before the Italian Ministry of Productive Activities and the Civil and Criminal District Court of the City of Parma, Italy on Dec. 24, 2003. Dr. Enrico Bondi was appointed Extraordinary Commissioner in each of the cases. The Parma Court has declared the units insolvent. On June 22, 2004, Dr. Bondi filed a Sec. 304 Petition, Case No. 04-14268, in the United States Bankruptcy Court for the Southern District of New York. Parmalat has three financing arms: Dairy Holdings Ltd., Parmalat Capital Finance Ltd., and Food Holdings Ltd. Dairy Holdings and Food Holdings are Cayman Island special-purpose vehicles established by Parmalat S.p.A. The Finance Companies are under separate winding up petitions before the Grand Court of the Cayman Islands. Gordon I. MacRae and James Cleaver of Kroll (Cayman) Ltd. serve as Joint Provisional Liquidators in the cases. On Jan. 20, 2004, the Liquidators filed Sec. 304 petition, Case No. 04-10362, in the United States Bankruptcy Court for the Southern District of New York. In May 2006, the Cayman Island Court appointed Messrs. MacRae and Cleaver as Joint Official Liquidators. Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP, and Richard I. Janvey, Esq., at Janvey, Gordon, Herlands Randolph, represent the Finance Companies in the Sec. 304 case. The Honorable Robert D. Drain presides over the Parmalat Debtors' U.S. cases. PARMALAT SPA: Declares EUR0.025 Dividend Per Common Share --------------------------------------------------------- Shareholders of Parmalat S.p.A. approved the 2006 financial statements, which show a net profit of EUR125.6 million and a consolidated net profit of EUR192.5 million and resolved to declare a dividend of 0.025 euros per common share payable to each of the eligible shares. The dividend will payable as of June 21 through intermediaries that belong to the Monte Titoli S.p.A. centralized clearing system. Acting pursuant to a duly justified motion submitted by the Board of Statutory Auditors, the Shareholders' Meeting, availing itself of its statutory powers, agreed to extend the audit assignment originally awarded to PriceWaterhouseCoopers until the date of the Shareholders' Meeting convened to approve the 2007 annual financial statements. The audit assignment will run until the date of the Shareholders' Meeting convened to approve the 2013 annual financial statements. As required by Article 5 of the Bylaws, the Extraordinary Shareholders' Meeting voted to increase the share capital earmarked for warrant conversions from EUR80 million to EUR95 million. As a result, the Company's approved share capital increased to EUR2.025 million, including EUR95 million reserved for the exercise of warrants. As of the date of this press release, the subscribed and paid-in share capital amounted to EUR1,649,171,671. The Extraordinary Shareholders' Meeting approved the professional qualifications required of the Officer responsible for the preparation of corporate accounting documents and required amendments to Article 20 bis of the Bylaws. Parmalat also communicates that, as required by article 2, para V of the regulation governing "Warrants Ordinary Shares Parmalat S.p.A. 2005-2015" the exercise of the warrants shall be suspended until June 15, 2007, and shall restart from June 18. About Parmalat Headquartered in Milan, Italy, Parmalat S.p.A. -- http://www.parmalat.net/-- sells nameplate milk products that can be stored at room temperature for months. It also has about 40 brand product lines, which include yogurt, cheese, butter, cakes and cookies, breads, pizza, snack foods and vegetable sauces, soups and juices. The Company's U.S. operations filed for chapter 11 protection on Feb. 24, 2004 (Bankr. S.D.N.Y. Case No. 04-11139). Gary Holtzer, Esq., and Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, represent the Debtors. When the U.S. Debtors filed or bankruptcy protection, they reported more than US$200 million in assets and debts. The U.S. Debtors emerged from bankruptcy on April 13, 2005. Parmalat S.p.A. and its Italian affiliates filed separate petitions for Extraordinary Administration before the Italian Ministry of Productive Activities and the Civil and Criminal District Court of the City of Parma, Italy on Dec. 24, 2003. Dr. Enrico Bondi was appointed Extraordinary Commissioner in each of the cases. The Parma Court has declared the units insolvent. On June 22, 2004, Dr. Bondi filed a Sec. 304 Petition, Case No. 04-14268, in the United States Bankruptcy Court for the Southern District of New York. Parmalat has three financing arms: Dairy Holdings Ltd., Parmalat Capital Finance Ltd., and Food Holdings Ltd. Dairy Holdings and Food Holdings are Cayman Island special-purpose vehicles established by Parmalat S.p.A. The Finance Companies are under separate winding up petitions before the Grand Court of the Cayman Islands. Gordon I. MacRae and James Cleaver of Kroll (Cayman) Ltd. serve as Joint Provisional Liquidators in the cases. On Jan. 20, 2004, the Liquidators filed Sec. 304 petition, Case No. 04-10362, in the United States Bankruptcy Court for the Southern District of New York. In May 2006, the Cayman Island Court appointed Messrs. MacRae and Cleaver as Joint Official Liquidators. Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP, and Richard I. Janvey, Esq., at Janvey, Gordon, Herlands Randolph, represent the Finance Companies in the Sec. 304 case. The Honorable Robert D. Drain presides over the Parmalat Debtors' U.S. cases. PLUM FINANCE: Proofs of Claim Filing Deadline Is May 31 ------------------------------------------------------- Plum Finance Ltd.'s creditors are given until May 31, 2007, to prove their claims to Hugh Thompson and Joshua Grant, the company's liquidators, or be excluded from receiving any distribution or payment. In their proofs of claim, creditors must indicate their full names, addresses, the full particulars of their debts or claims, and the names and addresses of their lawyers, if any. Plum Finance's shareholders agreed on April 19, 2007, to place the company into voluntary liquidation under The Companies Law (2004 Revision) of the Cayman Islands. The liquidator can be reached at: Joshua Grant Maples Finance Limited P.O. Box 1093 George Town, Grand Cayman Cayman Islands PREMIUM RISK: Will Hold Final Shareholders Meeting on May 31 ------------------------------------------------------------ Premium Risk Insurance Co. SPC will hold its final shareholders meeting on May 31, 2007, at 10:00 a.m., at: 5th Floor, Zephyr House, Mary Street, Grand Cayman Cayman Islands These matters will be discussed during the meeting: 1) accounting of the liquidation process showing how the winding up has been conducted during the preceding year, and 2) authorizing the liquidator to retain the company's records for a period of five years from its dissolution, after which they may be destroyed. A member entitled to attend and vote at the meeting will be allowed to appoint a proxy, who need not be a member, in his stead. The liquidator can be reached at: Glen Trenouth P.O. Box 31118 Grand Cayman, KY1-1205 Cayman Islands Telephone: (345)943 8800 Fax: (345) 943 8801 QUARRY POINT: Sets Final Shareholders Meeting for June 1 -------------------------------------------------------- Quarry Point GP Cayman Ltd. will hold its final shareholders meeting on June 1, 2007, at 9:30 a.m., at the office of the company. These matters will be discussed during the meeting: 1) accounting of the liquidation process showing how the winding up has been conducted during the preceding year, and 2) authorizing the liquidators to retain the company's records for a period of five years from its dissolution, after which they may be destroyed. A member entitled to attend and vote at the meeting will be allowed to 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, 87 Mary Street P.O. Box 908 Grand Cayman KY1-9002 Cayman Islands QUARRY POINT OFFSHORE: Final Shareholders Meeting Is on June 1 -------------------------------------------------------------- The Quarry Point Offshore Fund, Ltd. will hold its final shareholders meeting on June 1, 2007, at 10:00 a.m., at the office of the company. These matters will be discussed during the meeting: 1) accounting of the liquidation process showing how the winding up has been conducted during the preceding year, and 2) authorizing the liquidators to retain the company's records for a period of five years from its dissolution, after which they may be destroyed. A member entitled to attend and vote at the meeting will be allowed to 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, 87 Mary Street P.O. Box 908 Grand Cayman KY1-9002 Cayman Islands SASCO NIM: Sets Final Shareholders Meeting for June 1 ----------------------------------------------------- Sasco Nim Company 2005-S3 will hold its final shareholders meeting on June 1, 2007, at 9:00 a.m., at the office of the company. These matters will be discussed during the meeting: 1) accounting of the liquidation process showing how the winding up has been conducted during the preceding year, and 2) authorizing the liquidators to retain the company's records for a period of five years from its dissolution, after which they may be destroyed. A member entitled to attend and vote at the meeting will be allowed to 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, 87 Mary Street P.O. Box 908 Grand Cayman KY1-9002 Cayman Islands ========= C H I L E ========= AES GENER: Earns CLP17.1 Billion in First Quarter 2007 ------------------------------------------------------ AES Gener said in a filing with the securities regulator Superintendencia de Valores y Seguros de Chile that its first quarter net profits declined 6.7% to CLP17.1 billion year-on- year. Business News Americas relates that AES Gener's operating profit decreased 14.9% to CLP31.6 billion in the first quarter 2007, compared to the first quarter 2006, due to higher fuel use and energy purchase costs in Chile's central grid (SIC). According to BNamericas, AES Gener's operating costs increased 41.9% to CLP107 billion in the first quarter 2007, compared to the same period in 2006. AES Gener's overall revenue grew 25% to CLP148 billion in this year's first quarter, compared to last year's first quarter, BNamericas notes. The company's Ebitda decreased 7.7% to CLP45.6 billion. The report says that AES Gener's non-operating losses increased 23.7% to CLP6.64 billion in the first quarter 2007, from the first quarter 2006. BNamericas underscores that AES Gener's sales rose 25.9% to 997 giga watt-hours in the northern grid (SING) in the first quarter 2007, compared to the first quarter 2006. Its sales in the SIC remained the same at 1.89 terra watt-hours. SIC income grew 19.3% to CLP77.2 billion. Sales to regulated customers in the SIC -- primarily distributors Chilectra and Chilquinta -- rose by CLP10.9 billion due to a raise in the node price and higher energy sales. SING income grew 68% to CLP33.8 billion. BNamericas states that AES Gener's generation in the SIC and SING increased 9.1% to 2.60 terra watt-hours in the first quarter 2007, compared to the first quarter 2006. Thermo generation rose 12.5% year-on-year, representing 80.6% of total generation in the first quarter. AES Gener accounted for 22% of SIC energy and 33% in the SING. AES Gener's Colombian unit Chivor's income grew 17.7% to CLP31.2 billion in the first quarter 2007, compared to the first quarter 2006, according to BNamericas. Its sales dropped 80 giga watt- hours year-on-year. Chivor represented 8% of Colombia's generation in the first quarter 2007. AES Gener's equity increased to CLP922 billion as of March 31, 2007, from CLP903 billion in the same period in 2006, BNamericas states. AES Gener is the second-largest electricity generation group in Chile in terms of generating capacity (20% market share) with an installed capacity of 2,428 megawatts. Gener serves both the Central Interconnected System or SIC and the Northern Interconnected System or SING through various subsidiaries and related companies, including affiliate Guacolda and the TermoAndes subsidiary. TermoAndes has a generation capacity of 642.8 megawatts, which while located in Argentina serves Chile's SING via InterAndes transmission line. Gener also participates in electricity generation in Colombia through Chivor hydroelectric plant of 1,000 megawatts, and a 25% participation in Itabo's facilities in the Dominican Republic (432.5 megawatts). Gener is 91.2% owned by AES (IDR rated 'B+' by Fitch). * * * On June 16, 2006, Fitch Ratings upgraded the local and foreign currency Issuer Default Ratings of AES Gener SA to 'BB+' from 'BB'. Fitch also upgraded Gener's senior unsecured debt rating, which consists of US$400 million senior notes due 2014, to 'BB+'. Moreover, Fitch revised Gener's Rating Outlook to Positive from Stable. On May 24, 2006, Moody's Investors Service upgraded the senior unsecured debt of AES Gener to Ba1 from Ba3, concluding a review for possible upgrade. Moody's said the rating outlook is stable. BANCO BICE: Moody's Withdraws Bank Financial Strength Rating ------------------------------------------------------------ Moody's Investors Service has withdrawn all of its ratings for Banco Bice for business reasons. The bank has no rated foreign currency debt outstanding. These ratings were withdrawn: -- Bank Financial Strength Rating: C-, with stable outlook -- Long Term Foreign Currency Deposit Rating: A2, with stable outlook -- Short Term Foreign Currency Deposit Rating: Prime-1, with stable outlook Banco Bice is Chile's tenth largest bank, with total assets of US$3 billion as of Dec. 31, 2006. GMAC LLC: Posts US$305 Million Net Loss in Qtr. Ended March 31 -------------------------------------------------------------- GMAC LLC reported a net loss for the first quarter of 2007 of US$305 million, compared to net income of US$495 million for the first quarter of 2006. The first quarter results reflect strong performance in GMAC's global automotive finance and insurance businesses; however, this performance was more than offset by a significant loss at Residential Capital LLC due to continued pressures in the U.S. mortgage market. GMAC's first quarter net income generated by auto finance, insurance and other operations -- excluding Residential Capital LLC -- amounted to US$605 million, more than twice the earnings generated by these same operations in the first quarter of 2006. Residential Capital LLC, however, incurred a net loss of US$910 million in the first quarter this year, driving a consolidated net loss at GMAC of US$305 million. Amid the sharp downturn in the U.S. mortgage market, many of Residential Capital's nonprime assets were liquidated at a loss or marked substantially lower to reflect the severe illiquidity and depressed valuations in the prevailing market environment. In addition, substantial incremental reserves were established during the quarter against various nonprime loans on the balance sheet. "In light of the major setback incurred by ResCap, we have already undertaken measures to significantly mitigate risk. ResCap has reduced its nonprime mortgage asset portfolio, decreased its warehouse lending against nonprime collateral, and sharply curtailed its new domestic nonprime loan production," said GMAC's chief executive officer Eric Feldstein. "As a result, ResCap should be far less vulnerable to further adverse developments in the nonprime space. "Meanwhile, we are pleased with the increased earnings in the first quarter at our auto finance and insurance units, which were able to partially offset the large earnings decline at ResCap," Feldstein said. "Underlying operating trends in the auto finance and insurance businesses show signs of continued strength. Credit losses remain near historical lows; auto lease residual performance remains positive; and strong insurance underwriting profitability continues to be underpinned by a favorable trend in loss levels and a very competitive combined ratio." Liquidity GMAC and ResCap both maintained ample liquidity through the first quarter. GMAC's consolidated cash and marketable securities totaled US$12.8 billion as of March 31, 2007, down from US$18.3 billion on Dec. 31, 2006. This decrease stems largely from GMAC's repayment of significant debt maturities in the first quarter. GMAC successfully completed more than US$11 billion of funding in the first quarter. In addition, the company established a US$6 billion bridge funding facility to provide added liquidity protection for wholesale auto finance securitizations. Of GMAC's consolidated cash and marketable securities position, ResCap held US$2.6 billion at the end of the first quarter, up from US$2 billion at year-end 2006. To further enhance its liquidity position, ResCap executed US$2.2 billion in new committed funding facilities during the first quarter this year. About GMAC LLC GMAC LLC -- http://www.gmacfs.com/formerly General Motors Acceptance Corporation, is a global, diversified financial services company that operates in approximately 40 countries in automotive finance, real estate finance, insurance and other commercial businesses. GMAC was established in 1919 and currently employs about 31,000 people worldwide. Its Latin American operations are located in Argentina, Brazil, Chile, Colombia, Mexico and Venezuela. At Dec. 31, 2006, GMAC held more than US$287 billion in assets and earned net income for 2006 of US$2.1 billion on net revenue of US$18.2 billion. * * * As reported in the Troubled Company Reporter-Latin America on March 19, 2007, Standard & Poor's Ratings Services affirmed its 'BB+/B-1' ratings on GMAC LLC. The outlook remains developing. At the same time, Standard & Poor's affirmed its ratings on GMAC LLC's 100%-owned subsidiary, Residential Capital LLC or ResCap (BBB/A-3). S&P said ResCap's outlook remains negative. IMPSAT FIBER: Extends Tender Offer Expiration Date to May 4 ----------------------------------------------------------- IMPSAT Fiber Networks, Inc., said in a statement that it has extended its cash tender offer for senior guaranteed convertible notes due 2011 to May 4. Business News Americas relates that IMPSAT Fiber has postponed the tender offer eight times. As reported in the Troubled Company Reporter-Latin America on April 27, 2007, IMPSAT Fiber's cash tender offer, consent solicitation and waiver for its Series A 6% Senior Guaranteed Convertible Notes due 2011 and its Series B 6% Senior Guaranteed Convertible Notes due 2011 was extended to May 1. The Offer is being made pursuant to an Offer to Purchase and Consent Solicitation Statement, dated Jan. 29, 2007, and an accompanying Letter of Transmittal and Consent, as amended by a supplement dated Feb. 15, 2007, and a second supplement dated Feb. 26, 2007. IMPSAT Fiber told BNamericas that it received valid tenders from holders of US$66.7 million, or 99% of the outstanding series A notes, and US$25.4 million, or almost 99% of the outstanding series B notes. IMPSAT Fiber Networks Inc. (OTC: IMFN.OB) -- http://www.impsat.com/-- provides private telecommunications networks and Internet services in Latin America. The company owns and operates 15 metropolitan area networks in some of the largest cities in Latin America and has 15 facilities to provide hosting services, providing services to more than 4,500 national and multinational client. IMPSAT has operations in Argentina, Colombia, Brazil, Venezuela, Ecuador, Chile, Peru and the United States. Going Concern Doubt In its audit report on the consolidated financial statements for year ended Dec. 31, 2006, auditors working for Deloitte & Touche LLP noted that IMPSAT Fiber Networks, Inc.'s current liquidity position, high debt obligations, and negative operating results raise substantial doubt as to its ability to continue as a going concern. NOVA CHEMICALS: Banc of America Downs Firm's Rating to Sell ----------------------------------------------------------- Newratings.com reports that Banc of America Securities analysts have downgraded Nova Chemicals Corp's shares to "sell" from "neutral." Newratings.com relates that the target price for Nova Chemicals' shares was increased to US$30 from US$26. The analysts said in a research note published on May 2 that Nova Chemicals' risk/reward profile has deteriorated due to several reasons, including an expected cyclical drop in the ethylene cycle beyond 2008 and significant appreciation in the firm's share price since April 24. According to Newratings.com, the analysts said that raw material costs for Nova Chemicals' styrenics division have increased significantly on account of the steep boost in benzene prices for this month. The earnings per share estimates for 2007 increased to US$2.50 from US$1.60, while estimates for 2008 was raised to US$2.40 from US$1.50, Newratings.com states. Headquartered in Calgary, Alberta, Canada, Nova Chemicals Co. (NYSE:NCX) (TSX:NCX) -- http://www.novachem.com/-- is a leading producer of ethylene, polyethylene, styrene, polystyrene, and expanded polystyrene. NOVA Chemicals' manufacturing sites are strategically situated throughout Canada, the US and South America. Its South American operations are located in Chile. * * * As reported in the Troubled Company Reporter on Feb. 5, 2007, Fitch has downgraded NOVA Chemicals Corp.'s Issuer Default Rating to BB- from BB; Senior unsecured notes and debentures to BB- from BB; Senior unsecured revolving credit facility to BB- from BB; Senior secured revolving credit facility to BB+ from BBB-; and Retractable preferred shares to 'BB+ from BBB-. In addition, Fitch has assigned a BB- rating to the US$100 million senior unsecured revolving credit facility due Dec. 2007. The ratings apply to approximately US$1.9 billion of debt. Fitch said the rating outlook is stable. =============== C O L O M B I A =============== BANCOLOMBIA: Fitch Drops Rating to C/D After Banco Agricola Buy --------------------------------------------------------------- Fitch Ratings has downgraded and removed from Rating Watch Negative Bancolombia's long-term and short-term local currency Issuer Default Ratings and Individual rating: -- Individual rating to 'C/D' from 'C'; -- Local currency long-term IDR to 'BB+' from 'BBB-'; and -- Local currency short-term rating to 'B' from 'F3'; In addition, Fitch affirms these ratings: -- Foreign currency long-term IDR at 'BB+'; -- Foreign currency short-term rating at 'B'; and -- Support rating at '3'. The Rating Outlook is Stable. The rating downgrade reflects the strain on Bancolombia's financial strength from the acquisition of Banco Agricola (El Salvador) and the financing of this acquisition. Banco Agricola's takeover will be partially financed by US$300 million subordinated debt and will create about US$370 million of goodwill in Bancolombia's consolidated books. Local regulatory definitions allow the plain subordinated debt to count as Tier II capital and do not require the deduction of the substantial goodwill from regulatory capital, as is common under most regulatory regimes. Fitch's globally consistent definition of capital deducts goodwill from stated equity and views the subordinated debt being issued by Bancolombia as part of its financing package as containing no equity content, as it does not allow deferral of interest. Under this view, the acquisition will put significant strain on the bank's capitalization, and Bancolombia will need to sustain strong performance over the medium term to return to pre-acquisition levels of capitalization, which had been achieved by a largely unencumbered Tier I capital base and were already lower than those of many regional peers in the 'C' individual rating category. About Banco Agricola Banco Agricola is El Salvador's largest bank with a market share of about 28% of the local market. It has assets of roughly US$3.7 billion and equity of US$478 million. It has adequate asset quality, and operates just above the local regulatory minimum for capital; it is currently rated 'BB+' by Fitch. About Bancolombia Bancolombia is Colombia's largest full-service financial institution, formed by a merger of three leading Colombian financial institutions. Bancolombia's market capitalization is over US$5.5 billion, with US$13.8 billion asset base and US$1.4 billion in shareholders' equity as of Sept. 30, 2006. Bancolombia is the only Colombian company with an ADR level III program in the New York Stock Exchange. ECOPETROL: Alvaro Uribe Urges Acerias Workers to Invest in Firm --------------------------------------------------------------- Colombia President Alvaro Uribe has urged steel company Acerias Paz de Rio's workers to invest in shares of state-run oil firm Ecopetrol, Business News Americas reports. The Colombian government said in a statement that President Uribe made the invitation after a 52% share of Acerias Paz was successfully sold to Brazil's Grupo Votorantim. According to BNamericas, Grupo Votorantim bought the 52% share of APR in March by offering US$489 million in an auction. APR workers had owned 33.4% of the steelmaker's total shares. President Uribe told BNamericas that as a result of the deal, the government wants steelworkers to use some of the proceeds from the sale towards turning Ecopetrol into one of the most important firms in the world. Ecopetrol is an integrated-oil company that is wholly owned by the Colombian government. The company's activities include exploration for and production of crude oil and natural gas, as well as refining, transportation, and marketing of crude oil, natural gas and refined products. Ecopetrol is Latin America's fourth-largest integrated-oil concern. Operations are organized into Exploration & Production, Refining & Marketing, Transportation, and International Commerce & Gas. * * * On June 27, 2006, Fitch Ratings revised the rating outlook of the long-term foreign currency issuer default rating of Ecopetrol SA to Positive from Stable. This rating action follows the recent revision in the Rating Outlook to Positive from Stable of the 'BB' foreign currency IDR of the Republic of Colombia. Ecopetrol's IDR remain strongly linked with the credit profile of the Republic of Colombia. =================== C O S T A R I C A =================== DENNY'S CORP: Morgan Joseph Reiterates Buy Rating on Firm --------------------------------------------------------- Morgan Joseph analysts have reaffirmed their "buy" rating on Denny's Corporation's shares, Newratings.com reports. Newratings.com relates that the target price for Denny's shares was reduced to US$6.50 from US$7.00. The analysts said in a research note published on May 2 that Denny's flat year-on-year earnings per share for the first quarter 2007 is short of the estimates. The analysts told Newratings.com that Denny's revenues for the first quarter 2007 are short of expectations on account of lower-than-expected company units and franchise rental revenues. The earnings per share estimate for this year was decreased to US$0.16 from US$0.17, Newratings.com states. Headquartered in Spartanburg, South Carolina, Denny's Corporation (Nasdaq: DENN) -- http://www.dennys.com/-- is America's largest full-service family restaurant chain, consisting of 521 company-owned units and 1,024 franchised and licensed units, with operations in the United States, Canada, Costa Rica, Guam, Mexico, New Zealand and Puerto Rico. * * * Denny's Corp. carries Standard & Poor's 'B+' Long Term Foreign Issuer and 'B+' Long Term Local Issuer ratings. =================================== D O M I N I C A N R E P U B L I C =================================== BANCO INTERCONTINENTAL: Central Bank Cancels Torre Auction ---------------------------------------------------------- The Dominican Republic's central bank has called off the auction of Banco Intercontinental's Torre Intercentro, Dominican Today reports. Dominican Today relates that Torre Intercentro was constructed by Banco Intercontinental. It became part of the assets that the government has to liquidate to recover the money for Banco Intercontinental's former depositors. It was initially offered for US$30 million. However, the central bank's committee, which manages real properties, decided during its April 26 meeting to cancel Torre Intercentro's auction due to lack of completed documents from the six interested bidders. About 13 entities were originally interested in the auction, Dominican Today states. Banco Intercontinental aka Baninter collapsed in 2003 as a result of a massive fraud that drained it of about US$657 million in funds. As a consequence, all of its branches were closed. The bank's current and savings accounts holders were transferred to the bank's new owner -- Scotiabank. The bankruptcy of Baninter was considered the largest in world history, in relation to the Dominican Republic's Gross Domestic Product. It cost Dominican taxpayers DOP55 billion and resulted to the country's worst economic crisis. BANCO LEON: Earns DOP36.3 Million in First Quarter 2007 ------------------------------------------------------- Banco Leon Bank's net profits increased 42.3% to DOP36.3 million in the first quarter 2007, compared to the same quarter in 2006, Dominican Today reports. Banco Leon president Manuel Pena-Morros told Dominican Today that the bank's first quarter results indicate a growth in its main financial and business indicators, which are in line with the period's goals and consolidate its position as a national bank. He commented, "The results to March 2007 ratify the continuity of the advances of the bank in obtaining our financial and operational goals." Banco Leon's deposits increased 4.4% to DOP20.76 billion in the first quarter 2007, compared to the same quarter last year. The bank's total assets rose 10.2% to DOP24.89 billion. According to Dominican Today, Banco Leon's loan portfolio grew 20.6% to DOP14.8 billion in the first quarter 2007, from the first quarter 2006. Its portfolio of defaulted loans declined to 5.1% from 5.3%. The financial margin rose 9.2% to DOP494.6 million. Banco Leon achieved important objective by providing products and services of the highest quality. Its global quality indicator reaching 91% in the first quarter 2007, a 30% increase compared to the first quarter 2006, Dominican Today states, citing Mr. Pena-Morros. * * * Fitch Ratings assigned these ratings to Banco Multiple Leon SA: -- CCC+ long-term issuer default rating; -- C short-term rating; -- BBB(DOM) national long-term rating; -- F3(DOM) national short-term rating; and -- Outlook Positive CERVECERIA NACIONAL: Moody's Ups US$255MM Notes Rating to Ba3 ------------------------------------------------------------- Moody's Investors Service upgraded to Ba3 from B1 Cerveceria Nacional Dominicana's, C. por A. 8% US$255 million senior notes due 2014 and the company's foreign currency corporate family rating. The rating action solely reflects Moody's upgrade of the Dominican Republic's foreign currency country ceiling to Ba3 from B1 and concludes the reviews for upgrade initiated in March 2007. Cerveceria Nacional's 16% US$175 million Dominican peso linked senior notes due 2012 and the company's local currency corporate family rating were affirmed at Ba3. The rating outlook is stable for all ratings. Rating upgraded: -- 8.0% US$255 million senior unsecured notes due 2014, to Ba3 from B1 (foreign currency) -- Foreign currency corporate family rating, to Ba3 from B1 Ratings affirmed: -- 16% US$175 million Dominican peso linked senior unsecured notes due 2012, at Ba3 (local currency) -- Local currency corporate family rating, at Ba3 Headquartered in Santo Domino, Dominican Republic, Cerveceria Nacional Dominicana, C. por A. is the leading beer company in the Dominican Republic. Cerveceria Nacional's main beer brands are Presidente, Presidente Light and Bohemia, which account for about 95% of revenues. The company also is the leader in the Dominican non-alcoholic malts market and has a growing export business, which serves the U.S. East Coast, the Caribbean and various other regions including Europe. Cerveceria Nacional is the main operating subsidiary of E. Leon Jimenes, a family- controlled holding company. Fiscal 2006 revenues reached about US$497 million. HILTON HOTELS: Earns US$95 Million in 2007 First Quarter -------------------------------------------------------- Hilton Hotels Corporation reported financial results for the first quarter ended March 31, 2007. First quarter highlights compared to the first quarter of 2006 are as follows: * Total company Adjusted EBITDA of US$371 million, up 13%. * Fees up 16% to US$176 million on strong RevPAR and unit growth and the Hilton International acquisition. * Pro forma comparable system-wide RevPAR increased 8.9%, driven by strong rate increases and high demand in most major markets. Hilton reported first quarter 2007 net income of US$95 million compared with US$104 million in the 2006 quarter. Diluted net income per share was US$.23 in the 2007 first quarter, versus US$.26 in the 2006 period. Excluding non-recurring items in both periods and assuming the Hilton International acquisition occurred Jan. 1, 2006, diluted EPS totaled US$.20 per share in the 2007 quarter, a 33 % increase from US$.15 per share in the 2006 period. Non-recurring items combined to benefit the 2007-quarter by US$.03 per share as follows: * US$30 million pre-tax gain on asset dispositions and other; * US$8 million pre-tax loss on foreign currency transactions. The 2006 first quarter benefited from non-recurring items totaling US$.06 per share. Additionally, had the HI acquisition been completed on Jan. 1, 2006, first quarter 2006 results would have been reduced by approximately US$.05 per share due to the seasonally weak business environment in the first two months of the year. Net income from the Scandic hotel system, the sale of which was announced on March 2, 2007 and completed on April 26, 2007, is reflected as discontinued operations. The company reported first quarter 2007 total operating income of US$228 million, on total revenue of US$1.864 billion. Total company earnings before interest, taxes, depreciation and amortization were US$371 million, an increase of 13 % from US$328 million in the 2006 quarter. System-Wide RevPAR; Management/Franchise Fees All of the company's brands reported significant system-wide revenue-per-available-room increases, with particularly strong gains in average daily rate. On a system-wide basis and pro forma as if the acquisition of HI had occurred January 1, 2006, first quarter RevPAR increased 8.9 % compared to the 2006 period. The company's brands showed first quarter RevPAR gains as follows: Conrad, 13.2 %; Hilton, 10.3 %; Doubletree, 8.8 %; Homewood Suites by Hilton, 8.0 %; Hilton Garden Inn, 7.9 %; Hampton Inn, 7.8 %; and Embassy Suites, 6.3 %. Management and franchise fees increased 16 % in the first quarter to US$176 million, benefiting from RevPAR gains, the addition of new units and the acquisition of HI. 2006 fees include HI from February 23, 2006 and a one-time US$15 million management contract termination fee related to a sold joint venture property. Adjusting for a full quarter of HI and this one-time termination fee, fee income increased 17 % in the first quarter. Owned Hotel Results Continued strong demand trends, primarily among leisure and business travelers, resulted in high single digit or double digit ADR increases at many of the company's gateway hotels around the world. Business transient, group and leisure all showed significant ADR gains. Across all brands, revenue from the company's owned hotels was US$571 million in the first quarter 2007, a 13 % increase from US$507 million in the 2006 quarter. Total owned hotel expenses were up 13 % in the quarter to US$429 million. Owned results exclude hotels that have been classified as discontinued operations in connection with the Scandic sale. Comparable North America owned revenue and expenses increased 6.1 % and 6.3 %, respectively. Expenses were impacted by higher insurance costs. RevPAR from comparable N.A. owned hotels increased 6.0 %. Comparable owned N.A. hotel occupancy decreased 0.5 points to 74.4 %, while ADR increased 6.8 % to US$198.19. Particularly strong RevPAR growth was reported at the company's owned hotels in New York, Chicago and Washington. Comparable N.A. owned hotel margins in the first quarter decreased 10 basis points to 24.4 %. The aforementioned higher insurance costs impacted margin growth by approximately 70 basis points. Renovation activity at the Hilton New York negatively impacted comparable results in the quarter. Renovations are expected to continue at the Hilton New York, the Waldorf=Astoria and the Hilton Hawaiian Village in 2007. Additionally, the Hilton San Francisco and Hilton Waikoloa Village were challenged by soft group markets. On a pro forma basis, as if the acquisition of HI had occurred January 1, 2006, comparable international owned revenue and expenses increased 10.7 % and 9.4 %, respectively. Pro forma RevPAR from international comparable owned hotels increased 11.8 %. Occupancy increased 0.3 points to 67.8 %, while ADR increased 11.3 % to US$157.45. Strong results were reported in Luxembourg, Amsterdam, Sydney and across the U.K. Adjusting for the impact of foreign exchange, RevPAR from international comparable owned hotels increased 4.8 %. Pro forma comparable international owned margins improved 90 basis points to 22.2 %. On a worldwide basis, pro forma comparable owned RevPAR increased 7.3 %, with margins flat at 23.8 %. Excluding the impact of foreign exchange, worldwide pro forma comparable owned RevPAR increased 5.7 %. Leased Hotels Revenue from leased hotels was US$455 million in the first quarter 2007 compared to US$189 million in the 2006 quarter, while leased expenses were US$413 million in the current quarter versus US$169 million last year. The EBITDAR-to-rent coverage ratio was 1.4 times in the quarter. Leased results exclude hotels that have been classified as discontinued operations in connection with the Scandic sale. Pro forma comparable leased revenue increased 13.4 %, leased expenses increased 10.2 %, and margins increased 260 basis points to 9.3 %. RevPAR from leased properties increased 16.4 %. Adjusting for the impact of foreign exchange, RevPAR from comparable leased hotels increased 9.2 %, reflective of business strength in the U.K. and Germany. Hilton Grand Vacations Hilton Grand Vacations Company, the company's vacation ownership business, reported a 35 % decline in profitability in the first quarter, due to %age-of-completion accounting associated with new projects. Revenue and expenses associated with projects in development are deferred to correspond with the pace of construction. Unit sales declined 8 %, however average unit sales prices increased 42 % over last year, with the increase driven by new projects in Hawaii. HGVC had first quarter revenue of US$146 million, a 20 % decrease from US$183 million in the 2006-quarter. Expenses were US$114 million in the first quarter, compared with US$134 million in the 2006 period. Brand Development/Unit Growth In the first quarter, the company added 44 properties and 6,865 rooms to its system as follows: Hampton Inn, 22 hotels and 1,940 rooms; Hilton, 9 hotels and 2,798 rooms; Hilton Garden Inn, 6 hotels and 774 rooms; Doubletree, 2 hotels and 548 rooms; Homewood Suites by Hilton, 4 hotels and 427 rooms; Embassy Suites, 1 hotel and 308 rooms, and Hilton Grand Vacations, 70 units. Fourteen hotels and 2,872 rooms were removed from the system during the quarter. During the first quarter, the company added new domestic Hilton hotels in Providence, Ft. Lauderdale, Branson, and Oklahoma City. The company added new international Hilton hotels in Sicily, Italy; Hefei, China; Warsaw, Poland; and the U.A.E. The company added new Doubletree hotels in Chicago, Illinois and Augusta, Georgia. The company opened its 1,400th Hampton Inn, representing its 140,000th room, in Chicago. Also during the quarter, the company entered into management agreements for a Conrad in Abu Dhabi, Hiltons in Costa Rica and Jordan, and a Doubletree in Costa Rica. Early in the second quarter 2007, the company announced the ground breaking of the 498-room Waldorf=Astoria at Bonnet Creek and the 1,000-room Hilton Bonnet Creek, part of a resort development adjacent to the Walt Disney World(R) Resort in Florida. The company expects to break ground on the 1,400-room Hilton Orlando at the Orange County Convention Center in the second quarter of 2007. All three hotels will be managed by the company upon completion, which is scheduled for late 2009. During the first quarter, Hilton Garden Inn was named the "Best Mid-Price Hotel Value" by Entrepreneur (TM) magazine for the second consecutive year. At March 31, 2007, the Hilton worldwide system consisted of 2,838 hotels and 483,090 rooms. The system count excludes 129 properties that left the system in April 2007 in connection with the sale of the Scandic brand. The company's current development pipeline is its biggest yet, and the largest for any U.S.-based hotel company, with more than 800 hotels and 111,000 rooms at March 31, 2007. Approximately 90 % of the hotels in the current development pipeline are in the Americas, though international development is expected to comprise an increasingly larger %age of the company's unit growth within the next two years. Asset Dispositions The company completed the sale of the Scandic chain for EUR833 million or approximately US$1.1 billion. The company also entered into an agreement to sell up to 10 hotels in Continental Europe to Morgan Stanley Real Estate for EUR566 million or approximately US$770 million. Additionally, the company is in advanced stages of documentation with preferred buyers of the Hilton Caledonian in Scotland, the Hilton Washington in the District of Columbia and a number of the other domestic assets that were being put on the market for sale late last year. The company expects to close on the majority of these asset sales by mid-summer. Net proceeds from sales will be used to pay down debt. Corporate Finance At March 31, 2007, Hilton had total debt of US$7.06 billion (net of approximately US$500 million of debt and capital lease obligations resulting from the consolidation of certain joint venture entities and a managed hotel, which are non-recourse to Hilton). Of the US$7.06 billion, approximately 54 % is floating rate debt. Total cash and equivalents (including restricted cash of approximately US$325 million) were approximately US$476 million at March 31, 2007. The increase in debt from Dec. 31, 2006, was due to borrowings under the company's revolving credit facilities, primarily due to the seasonality of the first quarter and the timing of capital expenditures, including timeshare development. Hilton's debt currently has an average life of approximately 5.9 years, at an average cost of approximately 6.6 %. The company's average basic and diluted share counts for the first quarter were 389 million and 424 million, respectively. Hilton's effective tax rate for continuing operations in the first quarter 2007 was approximately 35 %. Total capital expenditures in the first quarter were approximately US$167 million, including approximately US$77 million expended for timeshare development. 2007 Outlook The company provided the following updated estimates for full- year 2007. The sale of Scandic (including the use of net proceeds to reduce debt) is expected to reduce the company's 2007 recurring EPS by US$.10 per share. This impact has been reflected in the estimates provided below. The outlook, however, excludes any non-recurring gains or losses related to the disposition of Scandic, the impact of future asset sales, share repurchases or other potential significant transactions. Total capital spending in 2007 is expected to be approximately US$1.0 billion as follows: approximately US$290 million for routine improvements and technology, approximately US$380 million for timeshare projects, and approximately US$330 million for hotel renovation, special projects and hotel investments. To the extent the company completes additional asset sales, capital expenditures would be expected to decrease. The company expects to add approximately 255 hotels and 35,000 rooms to its system in 2007. Stephen F. Bollenbach, Hilton co-chairman and chief executive officer, said: "Last year's acquisition of Hilton International is proving -- as we expected -- to be a tremendous benefit to our company, our customers and our shareholders as international results have been excellent since we completed the acquisition. "We continue to have great success in opening full-service Hilton hotels in markets around the world and are making significant progress in signing up new deals globally across our Family of Brands, as evidenced by our recently announced ventures in China and India, and developments in Russia and other parts of the world. To further accelerate our shift to a fee-based company, we are bolstering our international development resources to facilitate our ability to secure new contracts. "An important component of our strategy is the asset disposition program, which we began in 2005. We are seeing continued terrific results on that front as well, the latest example being the recently sale of our 10 assets in Continental Europe. We executed this transaction at a great price and expect to retain management agreements on a majority of the hotels." Mr. Bollenbach concluded: "We are excited about the strength of our business, the enthusiasm of our team members and the opportunities to continue our worldwide growth. Our future could not be brighter as we strengthen our position as the premier global lodging industry company." About Hilton Hotels Headquartered in Beverly Hills, California, Hilton Hotels Corp. -- http://www.hilton.com/-- together with its subsidiaries, engages in the ownership, management, and development of hotels, resorts, and timeshare properties, as well as in the franchising of lodging properties in the United States and internationally, including Australia, Austria, Barbados, Finland, India, Indonesia, Trinidad and Tobago, Philippines and Vietnam. * * * As reported on May 1, Standard & Poor's Ratings Services said its rating and outlook on Hilton Hotels Corp. (BB+/Stable/--) would not be affected by the company's announcement that it has entered into an agreement with Morgan Stanley Real Estate to sell up to 10 hotels for approximately US$612 million in proceeds (net of property level debt repayment, taxes, and transaction costs). Upon the close of the transactions, Hilton Hotels plans to use the net proceeds to repay debt. Standard & Poor's rating upgrade for Hilton Hotels in March 2007 incorporated the expectation that the company would sell a meaningful level of additional assets over the near term, which would likely lead to additional debt reduction. Still, Standard & Poor's is encouraged by the expected transaction multiple related to today's announcement. If the lodging transaction market remains strong, enabling Hilton Hotels to generate substantial proceeds from remaining asset sales, if these proceeds are used for debt reduction, and if the lodging environment remains strong, an outlook revision to positive could be considered as 2007 progresses. Any movement signaling the potential for a higher rating will depend on Hilton Hotels's commitment to maintaining credit measures aligned with higher ratings over the lodging cycle. In February 2007, Moody's Investors Service upgraded Hilton Hotels Corporation's corporate family rating to Ba1 from Ba2 reflecting a reduction in leverage from a faster than expected pace of asset sales and strong earnings during 2006. Adjusted debt to EBITDAR has improved to around 5.0x from 6.0x in January 2006. * DOMINICAN REPUBLIC: Moody's Lifts Ratings to B2 from B3 --------------------------------------------------------- Moody's Investors Service has upgraded the Dominican Republic's ratings to reflect a general improvement in credit conditions associated with a stronger-than-expected recovery from the 2003 banking and exchange-rate crisis. The government's foreign- and local-currency bond ratings were upgraded to B2 from B3. The Dominican Republic's foreign- currency country ceiling was upgraded to Ba3 from B1. The country ceiling is based on the government bond ratings and Moody's assessment of a low risk of a payments moratorium in the case of a default by the Dominican government. The country's ceiling for foreign-currency bank deposits was also upgraded to B3 from Caa1. All ratings have a stable outlook. "Macroeconomic stability has been restored, and the country is experiencing above-trend growth with GDP increasing at an average annual rate of 10% during 2005-2006," said Moody's Vice President Mauro Leos. "Single-digit inflation, declining interest rates and the appreciation of the exchange rate reflect conservative monetary management on the part of the central bank." Mr. Leos said a major contributing factor to the ratings upgrade was a significant reduction in the Dominican Republic's external credit vulnerabilities, reflecting the steady increase registered in the level of international reserves and the presence of a more flexible exchange rate regime. "These conditions, which mark a departure from those present when a period of financial stress forced the government to restructure its external debt obligations, have strengthened the Dominican Republic's credit profile. Their continuation will be crucial for maintaining the country's current favorable credit trends," said Mr. Leos. On the fiscal side, he said, corrective measures implemented by the Fernandez administration have been effective in reducing the fiscal deficit. However, fiscal adjustment has relied heavily on tax measures. Mr. Leos noted that, "a more balanced approach appears to be required in the future, as expenditure adjustment has lagged. " "In particular, financial problems in the electricity sector must be addressed to contain high budget transfers," said Mr. Leos. Government debt ratios have declined after a transitory spike in 2003-2004. Those ratios now stand at levels roughly similar to those observed in the pre-crisis period, while external debt ratios are slightly higher than the corresponding ones during the same period. "Still, in both instances, debt ratios are below the means for the B peer group, which is a typical feature of the Dominican Republic's credit profile," said Mr. Leos. "Even though the presence of moderate fiscal and current account deficits should support declining debt ratios in the coming years, the government continues to face important credit challenges," said Mr. Leos Particularly significant in this respect, he said, is the fact that more than 80% of the government's debt is denominated in foreign currency. Since the government has been unable to reduce its high foreign-currency exposure, its credit standing remains as vulnerable to exchange rate shocks as it was during the 2003-2004 episode. "Reinforcing the institutional framework in order to avoid future lapses in economic policy would be required to assure a sustained improvement in the Dominican Republic's credit standing," said Mr. Leos. In this regard, congressional approval of IMF-supported structural reforms is expected to improve budget control and fiscal transparency and, if implemented and enforced, to strengthen the Dominican Republic's rating prospects. "Moody's would also view favorably further progress in ongoing efforts to strengthen the central bank, including a final resolution of reforms designed to bolster the institution's autonomy, and continued progress in recapitalizing its balance sheet," said Mr. Leos. The analyst reported that the banking system has benefited from the post-crisis economic recovery and a more stable macroeconomic environment. Capital adequacy has improved, profitability has increased, and non-performing loans have declined. In addition, as the authorities have reinforced the regulatory environment and financial supervision, systemic risks have been reduced significantly," said Leos. The A1 local currency deposit ceiling and the A1 local currency bond ceiling -- the highest possible rating that could be assigned to obligors and obligations denominated in local currency within the country -- were not affected by this review. ============= E C U A D O R ============= PETROBRAS ENERGIA: Unveils Issuance of US$300-Mil. Series Notes --------------------------------------------------------------- Petrobras Energia S.A. has informed that, based on the offerings received, it has determined the terms and conditions relating to the US$300 million Series "S" Notes due 2017, with an interest coupon of 5.875% p.a., at a price of 99.617%, and with a annual yield to investors of 5.926%. Interest will be payable semiannually and principal will be repaid in a single installment at maturity. The Notes are expected to be issued on May 7, 2007, and the proceeds of the offering may be used for: working capital in Argentina or investments in tangible assets located in Argentina or debt refinancing. The Notes will be supported by a Standby Purchase Agreement provided by PESA's ultimate controlling shareholder, Petroleo Brasileiro S.A. Pursuant to this Agreement, in the event the Issuer fails to make payment of principal, interest or any other amount owed by the Issuer in connection with the Notes, PETROBRAS is obligated to purchase the rights of noteholders to receive such payments on the Notes. The Notes were rated Baa2 and BBB- -- Investment Grade -- by Moody's Investors Service and Standard & Poor's Ratings Services, respectively. The Notes were offered both in the domestic and international capital markets to individual and institutional investors. Petrobras Energia Participaciones SA (Buenos Aires: PBE, NYSE:PZE) through its subsidiary, explores, produces, and refines oil and gas, as well as generates, transmits, and distributes electricity. It also offers petrochemicals, as well as markets and transports hydrocarbons. The company conducts oil and gas exploration and production operations in Argentina, Venezuela, Peru, Ecuador, and Bolivia. * * * As reported on the Troubled Company Reporter-Latin America on May 2, 2007, Fitch Ratings assigned a 'BB+' rating to Petrobras Energia S.A.'s US$300-million unsecured notes due 2017. The senior unsecured notes are supported by a standby purchase agreement provided by Petrobras International Finance Company (PIFCO) a subsidiary of Petrobras Brasileiro S.A. both of which are rated 'BB+' by Fitch. Under the terms of the standby purchase agreement and in the event that PESA fails to make payment on the notes, Petrobras is obligated to buy the rights of noteholders and make payment on the notes to the trust. The Rating Outlook is Stable. As reported on Jan. 4, 2007, Fitch Argentina Calificadora de Riesgo affirmed these ratings assigned to Petrobras Energia: -- international currency: B+ -- local currency: BB- -- unsecured senior debt: B+ * ECUADOR: Gets US$87.8-Mil. Financing from IDB for Dam Project --------------------------------------------------------------- The Republic of Ecuador has received US$87.8 million loan from the Inter-American Development Bank for the construction of a dam, the "Baba dam," at the confluence of the Baba and Toachi rivers, equidistant between the cities of Quito and Guayaquil. The project consists of the construction, operation and maintenance of the Baba dam and the construction of an 8-km. diverter from the reservoir formed by the Baba dam to the Daule Peripa reservoir and the Marcel Laniado de Wind -- MLW -- generation plant. The MLW plant currently uses only 80MW of its total installed capacity of 213MW. The objective of the project is therefore to allow for the use of the idle installed capacity of the MLW plant in order to generate an additional average of 388GWh of energy per year. "Ecuador suffers from a deficit in hydro-generation investments, and its capacity to cover current demand is decreasing," said project team leader, Jean-Marc Aboussouan. "This shortfall, combined with rapidly increasing demand for energy due to a growing economy, electrification and urbanization means Ecuador must import increasing amounts of electricity." According to Mr. Aboussouan, the additional energy the MLW plant will be able to generate after construction of the Baba dam represents approximately 22% of the country's current electricity imports. The total cost of this public-private partnership project is approximately US$195.2 million. The private sector will contribute both capital and debt financing. Its key participant is the Brazilian company Odebrecht Investimentos em Infra- Estrutura Ltda. The public sector will contribute through revenues generated from the existing energy produced at the MLW. The IDB's participation has contributed significantly to the project's environmental and social management, particularly as it relates to the design of an adequate compensation and resettlement plan, developing a more integrated and effective environmental management system and helping develop innovative solutions to water issues downstream of the dam, explained Mr. Aboussouan. The Bank and other project shareholders have held various public participation events, including consultation on original project design and meetings about the adopted alternative design. The alternative project design proposed by Odebrecht has allowed for substantial reduction in land acquisition and resettlement. Instead of 240 families that would have had to be relocated in the original design, only 43 families will have to be relocated; and land acquisition is limited to 1,099 hectares compared to the original 3, 760 hectares. Under the adopted design, no protected areas or ecological sensitive habitats will be affected. Construction of the Baba dam is expected to last two years. * * * As reported in the Troubled Company Reporter on Jan. 25, 2007, Fitch Ratings downgraded the long-term foreign currency Issuer Default Rating of Ecuador to 'CCC' from 'B-', indicating that default is a real possibility in the near term. In addition, these ratings were downgraded: -- Uncollateralized foreign currency bonds to 'CCC/RR4' from 'B-/RR4'; -- Collateralized foreign currency Par and Discount Brady bonds to 'CCC+/RR3' from 'B/RR3'; and -- Short-term foreign currency IDR to 'C' from 'B'. Fitch also affirmed the Country ceiling rating at 'B-'. ===================== E L S A L V A D O R ===================== MILLICOM INT'L: Moody's Assigns Loss-Given-Default Rating --------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the corporate families in the Telecommunications, Media and Technology sectors, the rating agency confirmed its Ba3 Corporate Family Rating for Millicom International Cellular S.A. Moody's also assigned a Ba3 probability of default rating to the company. Debt ratings remain unchanged in conjunction with the implementation of Moody's Loss Given Default and Probability of Default rating methodology for existing non-financial speculative-grade corporate issuers in Europe, Middle East and Africa. Projected POD LGD Loss-Given Debt Issue Rating Rating Default ---------- ------- ------- -------- 10% Sr. Unsec. Regular Bond/Debenture Due 2013 B2 LGD5 85% Moody's explains that current long-term credit ratings are opinions about expected credit loss, which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alphanumeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Headquartered in Bertrange, Luxembourg, and controlled by Sweden's AB Kinnevik, Millicom International Cellular S.A. -- http://www.millicom.com/-- is a global telecommunications investor with cellular operations in Asia, Latin America and Africa. It currently has cellular operations and licenses in 16 countries. The Group's cellular operations have a combined population under license of around 391 million people. The Central America Cluster comprises Millicom's operations in El Salvador, Guatemala and Honduras. The population under license in Central America at December 2005 is 26.4 million. The South America Cluster comprises Millicom's operations in Bolivia and Paraguay. The population under license in South America at December 2005 is 15.2 million. =========== M E X I C O =========== ADVANCED MICRO: Completes US$2.2 Bil. of 6% Sr. Notes Offering -------------------------------------------------------------- Advanced Micro Devices Inc. completed its offering of US$2.2 billion aggregate principal amount of 6% Convertible Senior Notes due 2015, including US$200 million of notes that were issued in connection with the exercise in full of the initial purchasers' over-allotment option. The notes were privately offered to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. In connection with the offering, AMD entered into capped call transactions with an affiliate of one of the initial purchasers. The capped call transactions are intended to reduce the potential dilution to AMD's stockholders upon any future conversion of the notes. The capped call transaction effectively will increase the conversion price of the convertible notes to US$42.12 per share of AMD's common stock, representing a 300% premium relative to the last reported sale price of US$14.04 per share of the common stock on April 23, 2007. AMD estimates that the net proceeds from the offering, will be approximately US$2,169 million, after deducting discounts, commissions and estimated offering expenses. AMD used approximately US$182 million of the net proceeds of the offering to fund the cost of the capped call transactions. AMD used US$500 million of the remaining net proceeds to repay a portion of the term loan AMD entered into with Morgan Stanley Senior Funding, Inc. to finance a portion of the purchase price of, and expenses related to, the acquisition of ATI Technologies Inc. AMD will use the remaining amount for general corporate purposes, including working capital and capital expenditures. About Advance Micro Advanced Micro Devices Inc. (NYSE: AMD) -- http://www.amd.com/ -- provides innovative processing solutions in the computing, graphics and consumer electronics markets. AMD is dedicated to driving open innovation, choice and industry growth by delivering superior customer-centric solutions that empower consumers and businesses worldwide to differ materially from current expectations. The company has corporate locations in Sunnyvale, California, Austin, Texas, and Markham, Ontario, and global operations and manufacturing facilities in the United States, Europe, Japan, and Asia. It maintains operations in Belgium, France, Germany, the United Kingdom, Mexico and Brazil. * * * As reported in the Troubled Company Reporter-Latin America on May 2, 2007, Moody's Investors Service affirmed Advanced Micro Devices, Inc.'s B1 corporate family rating, while revising to Ba2 from Ba3 the ratings on both the currently secured US$390 million notes due 2012 (2012 Note) and the US$1.7 billion remainder of the original US$2.5 billion term loan due 2013. Moody's said the rating outlook remains negative. AMSCAN HOLDINGS: Gets Refinancing Commitments from Three Lenders ---------------------------------------------------------------- Amscan Holdings Inc. has received commitments from Credit Suisse, Bank of America Securities and Lehman Brothers to refinance its senior debt facilities that will enable the company to lower its overall cost of debt and improve its financial flexibility. The refinancing is expected to consist of a five-year US$150 million asset-based revolving credit facility and a six-year US$425 million term loan. The company's leverage at closing will remain largely unchanged as the net proceeds are planned to be used to repay existing senior debt and related prepayment fees. The commitments provide that: i. ABL facility will be secured by a first priority lien on accounts receivable and inventories, with a second priority lien on all other assets of the Company; ii. term loan will be secured by a first priority lien on all of the company's assets, except for accounts receivable and inventories, and a second priority lien on accounts receivable and inventories; iii. term loan will amortize at 1% per year with a balloon payment at maturity; both facilities will be guaranteed by the company's domestic subsidiaries; and iv. both will be subject to customary prepayment provisions and negative covenants and will include only incurrence- based financial covenants. The company expects the refinancing to close during May 2007. About Amscan Holdings Headquartered in Elmsford, New York, Amscan Holdings Inc. -- http://www.amscan.com/-- makes more than 400 specially designed ensembles of party accessories and novelties, including balloons, invitations, pinatas, stationery, and tableware. Amscan sells to more than 40,000 retail outlets worldwide, mainly party goods superstores, mass merchandisers, and other distributors. Party City accounted for about 13% of sales before the firm bought it in 2005. Amscan itself makes party items (which bring in about 60% of sales) and buys the rest from other manufacturers, primarily in Asia. It has production and distribution facilities in Asia, Australia, Europe, and North America. Berkshire Partners and Weston Presidio are Amscan's principal owners. The company has a wholly owned metallic balloon distribution operations located in Mexico. * * * As reported in the Troubled Company Reporter-Latin America on May 3, 2007, Moody's Investors Service rated Amscan Holdings, Inc.'s proposed secured revolving credit facility at Ba3 (LGD-2, 28%) and secured term loan at B1 (LGD-3, 36%). Moody's also affirmed the 8.75% senior subordinated notes (2014) at Caa1 (LGD-5, 88%) and the corporate family rating at B2. Proceeds from the new debt are to be used to refinance the existing 1st- lien bank loan and 2nd-lien term loan. Ratings assigned: -- US$150 million 5-year secured revolving credit facility at Ba3 (LGD-2, 28%); and -- US$425 million 6-year secured term loan at B1 (LGD-3, 36%). These ratings are affirmed: -- US$175 million 8.75% senior subordinated notes (2014) at Caa1 (LGD-5, 88%); -- Corporate Family Rating at B2; and -- Probability of default rating at B2. As reported in the Troubled Company Reporter-Latin America on May 3, 2007, Standard & Poor's Ratings Services affirmed all of its ratings on Amscan Holdings Inc., including the 'B' corporate credit rating. At the same time, Standard & Poor's assigned its 'BB-' bank loan rating and '1' recovery rating to Amscan's proposed US$150 million asset-based revolving credit facility, indicating the expectation of full (100%) recovery of principal in the event of a payment default. In addition, Standard & Poor's assigned its 'B' bank loan rating and '3' recovery rating to the company's proposed US$425 million senior secured term loan B facility, indicating the expectation of meaningful (50%- 80%) recovery of principal in the event of a payment default. The bank loan ratings are based on preliminary terms and are subject to review upon final documentation. S&P said the outlook is negative. AXTEL SAB: Revenues Increase 114% to MXN2.9B in First Quarter ------------------------------------------------------------- Axtel, S.A.B. de C.V. said in a filing with the Mexican Stock Exchange that its revenues grew 114% to MXN2.9 billion in the first quarter 2007, compared to the same period in 2006. Axtel also made emphasis on the fact that its operating cash flow (EBITDA) increased 83%to MXN910 million in the first quarter 2007 from MXN496 million in the first quarter 2006. In addition, Axtel's operating profit grew 51% to MXN210 million in the first quarter 2007, compared to MXN139 million in the first quarter 2006. Axtel reported having 815 thousand lines in service in the first quarter 2007, which is 26% more than those reported for the first quarter of 2006. Axtel Corporate Director Patricio Jimenez Barrera said, "The significant increases in revenues, cash flow, and operating profit achieved during this quarter confirm our growth strategy after the acquisition of Avantel and our commitment to create value for our shareholders and to the development of Mexico." "Concurrently with our leading the process of integration of Avantel along the right track, during this quarter we also had a geographic expansion, as we started operations in Tampico, Tamaulipas and Cuernavaca, Morelos, thus expanding our local service coverage to 19 cities in the country that are inhabited by more than 43 million persons. Our continuing emphasis on the quality of our service and our constant effort to improve our customers' satisfaction will be our key strategies to consolidate our position in the market throughout this year," Mr. Barrera stated. Headquartered in Monterrey, Mexico, AXTEL is a Mexican telecommunications company that provides local and long distance telephony, broadband Internet, data and built-to-suit communications solutions in 17 cities and long distance telephone services to business and residential customers in over 200 cities. The seventeen cities in which AXTEL currently provides local services are Mexico City, Monterrey, Guadalajara, Puebla, Leon, Toluca, Queretaro, San Luis Potosi, Aguascalientes, Saltillo, Ciudad Juarez, Tijuana, Torreon (Laguna region), Veracruz, Chihuahua, Celaya and Irapuato. * * * As reported in the Troubled Company Reporter-Latin America on Jan. 25, 2007, Standard & Poor's Ratings Services assigned its 'BB-' rating to Axtel SAB de CV's US$250 million Senior Unsecured Notes due January 2017. It also affirmed its 'BB-' long-term corporate credit rating on Axtel. S&P said the outlook is negative. As reported in the Troubled Company Reporter-Latin America on Jan. 23, 2007, Moody's Investors Service has confirmed Axtel, S.A.B. de C.V.'s Ba3 corporate family rating and changed the rating outlook to stable. AXTEL SAB: Will Use Sycamore's Cross-Connect Platforms ------------------------------------------------------ Axtel S.A.B. de C.V. has selected Sycamore Networks, Inc.'s DNX- 11 and DNX-88 multi-service cross-connect platforms to optimize its Signaling System Number 7 or SS7 network and enhance the delivery of converged voice, video, and data services. The Sycamore DNX solution enables Axtel to reduce operational expenses while improving the performance and reliability of its integrated communication services. Axtel Transmission Specialist Erik Uresti said, "Deploying leading edge technologies is a key part of Axtel's strategy as we transform our nationwide network to support competitive business and residential services. Sycamore's technology enhances our high-value service offerings by significantly improving bandwidth efficiencies in our transmission infrastructure and providing scalability and reliability in a flexible, highly compact network element." Deployment of Sycamore DNX multi-service cross-connect systems will help Axtel cost-effectively scale its SS7 network, maximize service concentration in remote gateway applications, and improve bandwidth efficiencies as wireless backhaul traffic increases. Sycamore Networks President and Chief Executive Officer Daniel E. Smith stated, "Intelligent traffic optimization is critical to network operators as they evolve their infrastructure networks to cost-effectively backhaul multiple service types. We are pleased to deliver Axtel a competitive solution that meets their requirements to lower the cost of network operations, improve service flexibility, and enhance the scalability of their SS7 network." The DNX multi-service cross-connect platform offers exceptional density with proven reliability, enabling fixed line and mobile network operators to meet a broad range of multi-service grooming and aggregation applications while reducing network cost and complexity. About Sycamore Networks Sycamore Networks, Inc. -- http://www.sycamorenet.com-- is a leading provider of intelligent networking software for fixed line and mobile network operators worldwide. From multi-service access networks to the optical core, Sycamore Networks products enable network operators to lower overall network costs, increase operational efficiencies, and rapidly deploy new revenue-generating services. Sycamore Networks' global customer base includes Tier 1 service providers, government agencies, and utility companies. About Axtel Headquartered in Monterrey, Mexico, AXTEL is a Mexican telecommunications company that provides local and long distance telephony, broadband Internet, data and built-to-suit communications solutions in 17 cities and long distance telephone services to business and residential customers in over 200 cities. The seventeen cities in which AXTEL currently provides local services are Mexico City, Monterrey, Guadalajara, Puebla, Leon, Toluca, Queretaro, San Luis Potosi, Aguascalientes, Saltillo, Ciudad Juarez, Tijuana, Torreon (Laguna region), Veracruz, Chihuahua, Celaya and Irapuato. * * * As reported in the Troubled Company Reporter-Latin America on Jan. 25, 2007, Standard & Poor's Ratings Services assigned its 'BB-' rating to Axtel SAB de CV's US$250 million Senior Unsecured Notes due January 2017. It also affirmed its 'BB-' long-term corporate credit rating on Axtel. S&P said the outlook is negative. As reported in the Troubled Company Reporter-Latin America on Jan. 23, 2007, Moody's Investors Service has confirmed Axtel, S.A.B. de C.V.'s Ba3 corporate family rating and changed the rating outlook to stable. CELESTICA INC: Moody's Cuts Corporate Rating to B1 After Review --------------------------------------------------------------- Moody's Investors Service downgraded Celestica Inc.'s corporate family rating to B1 from Ba3 and the senior subordinated note ratings to B3 from B2. Simultaneously, Moody's lowered the company's speculative grade liquidity rating to SGL-2 from SGL-1. This rating action concludes Moody's Feb. 1, 2007 review for possible downgrade, which was triggered by the company's weak fourth quarter financial performance, operational setbacks at its Mexican facility and softness in European top-line revenue growth. The ratings outlook is negative. The downgrade to B1 reflects: (i) the continued excess capacity in the EMS sector; (ii) Celestica's sub-par asset utilization and ongoing business restructurings, which have totaled roughly US$345 million since January 2005; (iii) expectations of continued pressure in the telecom space as OEM consolidation combined with heightened competition from Asian outsourcers have negatively impacted volumes; (iv) the potential for prolonged restructurings, which inevitably would serve as a major distraction for management in an industry where management focus and execution are key competitive differentiations; (v) an increase in leverage from 3.1x EBITDA in 2005 to 5.0x as a result of weak EBIT levels over the last two quarters; and (vi) negative free cash flow generation in recent quarters due in part to increasing working capital, which has reduced Celestica's cash balance to a level which does not provide as much financial flexibility. Although good, liquidity has been deteriorating given that cash declined each year since 2003 when it was over US$1 billion to US$704 million as of the recent first quarter, while funded debt rose from US$211 million to US$750 million during the same period. Additionally, Celestica's recent refinancing of its credit facility has resulted in full access to a new US$300 million revolver that is half the size of the old credit facility and now secured to most of the company's assets. Finally, free cash flow remains negative for the twelve months ended March 31, 2007, as Celestica has generated negative free cash flow in five of the last nine quarters. The B1 rating also considers Celestica's response to the weak operating environment through operational streamlining, warehouse consolidation, the gradual transfer of programs from Mexico to Asia and headcount reductions over the next several quarters. The restructuring involves the implementation of best practices at the Mexico facility and modest revenue growth at the European operations via new program wins, but this will take a full year to launch. The rating also reflects Celestica's position as a Tier 1 EMS provider, efforts to diversify its concentrated client base, improving inventory and accounts receivable turnover and the sequential improvement in gross margin. Although Celestica is moderately levered and has good liquidity, the negative outlook reflects Moody's concerns about the continued softness in the EMS space with significant supply overhang and excess capacity, margin pressures, and execution and customer attrition issues. While the company continues to implement its restructuring plans to reduce capacity and inventory levels, as well as refocusing to a more customer- centric strategy, Moody's believe the EMS operating environment will remain challenged over the near-to-intermediate term. Given this difficult industry backdrop, the negative outlook also reflects our concerns regarding the company's ability to remedy its operational issues and losses in its overseas (non- Asian) operations in a timely manner and to minimize customer attrition in order to alleviate the negative impact on Celestica's revenue, profitability and cash flow generation. Moody's will most likely stabilize the ratings outlook if Celestica is able to demonstrate: improved customer retention and meaningful program wins as evidenced by revenue growth, enhanced product/services mix, and diversification partly due to growth in non-traditional end-markets, or tightening in supply/demand imbalances; improved operating performance in the second half of 2007 such that operating margins recover above 2.0% (Moody's adjusted) and operating income return on assets (net cash) is sustainable between 4.0% -- 4.5% (Moody's adjusted); an ability for management to improve core execution; financial leverage below 4.5x (Moody's adjusted) as EBITDA levels advance; fewer material restructuring charges plus realization of planned cost savings; and an ability to generate and sustain meaningful positive free cash flow levels. These ratings were downgraded: -- Corporate Family Rating to B1 from Ba3 -- Probability of Default Rating to B1 from Ba3 -- US$500 million 7.875% Senior Subordinated Notes due 2011 to B3 (LGD-5, 85%) from B2 (LGD-5, 87%) -- US$250 million 7.500% Senior Subordinated Notes due 2013 to B3 (LGD-5, 85%) from B2 (LGD-5, 87%) -- Speculative Grade Liquidity Rating to SGL-2 from SGL-1 Based in Toronto, Canada, Celestica, Inc. (NYSE: CLS, TSX: CLS/SV) -- http://www.celestica.com/-- provides electronic manufacturing services to original equipment manufacturers in the computing, telecommunications, aerospace and defense, automotive, consumer electronics, and industrial sectors in Asia, Mexico, Puerto Rico, Brazil, and Europe. Its solutions comprise design and engineering, manufacturing and systems integration, and fulfillment, as well as after-market services. The company has a facility in Monterrey, Mexico. The company has a strategic alliance with Bartolini Progetti S.p.a. Celestica was incorporated as Celestica International Holdings, Inc. in 1996 and changed its name to Celestica, Inc. The company is based in Toronto, Canada. Celestica, Inc. is a subsidiary of the Onex Corp. GRUPO MEXICO: Local Unit's Miners to Resume Talks with Gov't ------------------------------------------------------------ The Peruvian government has resumed talks on Wednesday with the country's mining federation, in a bid to halt a strike that begun on April 30. Representatives of the National Federation of Metallurgic and Steel Miners, which is made up of 74 unions and representing about 28,000 of Peru's 100,000 mine workers, met with Labor Minister Susana Pinilla to negotiate demands for better working conditions for subcontracted workers. Of the 74 unions, 33 are on strike, including employees of Southern Copper Corp. -- a subsidiary of Grupo Mexico de CV, and Doe Run Resources Corp. The miners have demanded higher wages and better pensions as rising metal prices generate record earnings for mining companies. Peru is among the world's top two silver producers, and is No. 3 in copper and zinc and No. 5 in gold. About Southern Copper Corporation Headquartered in Phoenix, Ariz., Southern Copper Corporation produces copper, molybdenum, zinc, and silver. It engages in mining, milling, and flotation of copper ore to produce copper concentrates and molybdenum concentrates; the smelting of copper concentrates to produce anode and blister copper; and the refining of blister/anode copper to produce copper cathodes. The company also engages in the mining and processing of gold and lead, as well as produces refined copper using SX/EW technology. It operates the Toquepala and Cuajone mines in the Andes Mountains, which is located approximately 984 kilometers southeast of the city of Lima, Peru; and a smelter and refinery west of the Toquepala and Cuajone mines in the coastal city of Ilo, Peru. Southern Copper Corporation has its mining, smelting, and refining operations in Peru and Mexico, as well as exploration operations in Chile. About Grupo Mexico Grupo Mexico SA de C.V. -- http://www.grupomexico.com/-- through its ownership of Asarco and the Southern Peru Copper Company, Grupo Mexico is the world's third largest copper producer, fourth largest silver producer and fifth largest producer of zinc and molybdenum. * * * As reported in the Troubled Company Reporter-Latin America on Dec. 29, 2006, Fitch upgraded the local and foreign currency Issuer Default Rating assigned to Grupo Mexico, S.A. de C. V. to 'BB+' from 'BB'. Fitch said the rating outlook is stable. GRUPO TMM: Incurs US$5.1 Million Net Loss in 2007 First Quarter --------------------------------------------------------------- Grupo TMM, S.A.B., reported its financial results for the first quarter of 2007. Javier Segovia, president of Grupo TMM, said, "You can clearly see from our press release that Grupo TMM is growing and is improving its operating performance. Improved results are reflected in not only Maritime and Ports, where both divisions are on target with this year's guidance, but also in Logistics where investments are now occurring. During the third and fourth quarters of 2007 all divisions of TMM will excel. As you know we increased our flexibility as we paid all of our bondholders in full, and we are now ready to seize accretive opportunities as they present themselves in Maritime, Logistics and Ports. Also, during the first quarter we continued to explore alternatives to improve our debt maturity profile and to lower our debt service. We will soon be able to provide our shareholders with more information on these accretive moves and alternatives." "Our results are reflecting real improvement. EBITDA after corporate expenses in the fourth quarter of 2006 was US$7.0 million, and in the first quarter of 2007 was US$12.8 million. In 2006 we produced US$31.7 million of EBITDA, and in 2007 we anticipate producing an EBITDA of US$58 million after corporate expense of approximately US$17 million. By the third and fourth quarters of 2007, as Logistics continues to bring on its equipment, and as we position that equipment and eliminate and sell older and unusable assets, the Logistics run rate target of US$17 million of EBITDA per year will become a reality." Mr. Segovia continued, "As you all know, the Mexican government has indicated that expanded exploration in the Gulf of Mexico is of paramount importance in order to replace oil reserves that are declining and has determined a need to increase the entire Mexican offshore fleet capability by 11 percent. In 2006, we invested in modern offshore vessels that will enable Grupo TMM to be well positioned to assist the Mexican government in this expansion process." "In addition, the Mexican government recently announced its decision to replace its product tanker fleet for distribution of oil products in the Pacific and the Gulf of Mexico coastlines. We anticipate that PEMEX will ultimately own 10 vessels and will charter another 10. PEMEX has to replace six owned vessels in order to comply with Marpol regulations. We believe PEMEX will turn to companies like ours, which can acquire and operate these vessels, and that have a solid 13-year performance record, with experience and knowledgeable personnel that have managed crews, and that operates under the Mexican flag. Our current and future state of financial options and our knowledge of the Mexican oil industry, joined with the accelerating governmental demand for exploration and for the additional desire to replace product tanker vessels positions Grupo TMM with great competitive advantages. We believe that our Maritime division will meet its target EBITDA of US$55 million in 2007." "Ports are extremely stable as noted in the detail of our release, as we are moving ahead on this division both on the auto handling as well as on the cruise ship segments at Acapulco." "On the Logistics side we continue to make the investments that we said we were going to make. We have received 130 of the 271 tractor orders placed and have received 305 of the 370 trailers we intended to bring on this year. Additionally, our new truck terminal and maintenance facility should be completed within the next six weeks. We are seeing major advancements in profitability, and you can see that Logistics produced a US$0.5 million of operating profit as compared to the US$2.3 million loss in the fourth quarter of 2006. As we advance the next several months we will continue to improve our financial flexibility and capabilities within the division. All of our businesses within Logistics are expanding, and you will see the impact of a very profitable Logistics organization in the third and fourth quarters of this year." "The entire ADEMSA warehouse transaction is ahead of our expectations, and we believe we will meet all of our goals on the warehousing side. We will continue to look for additional warehouses as the summer progresses. At the maintenance and repair and terminals segments, our business is above both revenue and profitability plans. We have told you in the past with the modifications and improvements we are making, Logistics will produce its guidance, and as other transactions are completed we will update you further." "I want to point out that the demand for our Logistics services is very strong and growing. Despite the loss of a significant amount of revenue and profit from the cancellation of service agreements by Kansas City Southern de Mexico in 2006, bringing our revenue base for Logistics down to US$60 million annually, we are in April 2007 at a run rate of US$101 million of annual revenue, and we believe we will make US$120 million, which is our goal for Logistics in 2007. This number is being accomplished by all of the investments we are making in trucking and through other improvements in infrastructure and technology to enhance utilization and efficiency." "In order to be in position for the opportunities that we believe are coming, on April 30 the Company's shareholders authorized the Company to proceed to negotiate several transactions, and even though we have not yet consummated agreements, authorization is now in place to improve our current amortization profile, taking advantage of a preliminary rating of AA (mex) by Fitch Ratings for this specific structured debt program. If all goes as planned, we may have the flexibility to issue 20-year Mexican trust certificates ('Certificados Bursatiles') for up to US$3 billion Mexican pesos that could increase up to US$9 billion Mexican pesos as demand for offshore and product tanker vessels, transportation assets and port terminals accelerates. This kind of long-term financing tied to the useful life of vessels is a first in Mexico. As more details are available we will announce them. Needless to say, any moves we make will be highly accretive. We believe there's a huge opportunity waiting for us as oil exploration vessels and product tankers are replaced in the near future." Mr. Segovia concluded, "As we said last quarter, 2006 proved to be a difficult transition year, and our first quarter results reflect that transition and shed a positive light on future results." Financial Results Comparing the first quarter of 2007 with the first quarter of 2006, TMM reported the following results: -- Revenue of US$68.6 million, up 9.9 percent from US$62.4 million -- Operating income of US$6.4 million, up 2.7 times from US$1.7 million -- Operating margin of 9.3 percent, up 6.5 percentage points -- EBITDA of US$12.8 million, up from US$7.3 million -- Net loss of US$5.1 million compared to net income of US$78.9 million Revenues in the first quarter of 2007 were impacted by the cancellation of service agreements by Kansas City Southern de Mexico, which reduced first quarter 2007 revenues by US$10.0 million. The increase in operating profit in first quarter of 2007 compared to first quarter 2006 was mainly attributable to an improvement of US$4.5 million in the Maritime division's operating profit. SG&A of US$8.8 million in the first quarter of 2007 increased 4.7 percent or US$0.4 million over the same period of 2006 due mainly to annual increases to employees and to the addition of our new warehouse company, partially offset by the devaluation of the peso versus the dollar. Net financial cost in the first quarter of 2007 was US$10.6 million compared to US$24.5 million in the same quarter last year. This decrease resulted from the reduction of US$17.0 million attributable to the amortization of expenses associated with the Company's 2007 Notes, and a US$4.3 million reduction attributable to interest related to such Notes and other debt. This reduction was partially offset by a US$6.4 million interest increase associated with the Company's securitization program. As of March 31, 2007, TMM's total debt was US$357.5 million, of which US$191.5 million is related to the company's securitization facility, US$159.6 million is project finance debt and is related to the acquisition of maritime assets (which is supported by approximately US$154.1 million of long-term contracted revenues, by the Mexican Navigation Law and by the total market value of these assets, which is estimated to exceed their book value by US$42 million), and US$6.4 million is related to other debt. Segment Results Maritime Comparing the first quarter of 2007 with the same period of last year: -- Revenue increased 26.7 percent to US$15.7 million in the offshore segment mainly attributable to average daily rate increases and to two additional vessels in operation -- Cost reduction of 23.1 percent in the offshore segment due to the conversion of vessels from a leased to an owned status resulting in a gross profit increase of 197.4 percent -- Revenue increase of 72.5 percent to US$16.0 million in the tanker segment due mainly to more vessels in operation -- Revenue increase of 14.6 percent to US$7.7 million in the parcel tanker segment due to higher rates and volumes Logistics Comparing the first quarter of 2007 with the same period of last year: -- Trucking revenues increased 13.2 percent to US$9.6 million due to increased freight volumes as a result of the acquisition of 130 new tractors and 305 new trailers -- Recently acquired warehousing company contributed US$3.5 million of revenues and US$1.1 million of gross profit in the first quarter of 2007 -- Maintenance and repair revenues increased 50.0 percent to US$1.6 million due to ongoing rehabilitation and expansion of maintenance facilities -- Inbound logistics revenues decreased 11.6 percent to US$4.7 million due mainly to a decrease in production in the automobile industry export output Ports and Terminals Comparing the first quarter of 2007 with the same period of last year: -- Revenues and operating profit increased 29.9 percent and 98.7 percent, respectively -- Revenues at Acapulco increased 43.6 percent to US$2.0 million due mainly to a 54.8 percent revenue increase in the cruise ship business segment -- Auto handling revenues at Acapulco improved 44.8 percent to US$0.4 million as export volumes to Japan and South America increased from 6,812 automobiles to 8,472 About Grupo TMM Headquartered in Mexico City, Grupo TMM SA (NYSE: TMM)(MEX VALORIS: TMMA) -- http://www.grupotmm.com/-- is a Latin American multimodal transportation and logistics company. Through its branch offices and network of subsidiary companies, TMM provides a dynamic combination of ocean and land transportation services. * * * Standard & Poor's Ratings Services raised its corporate credit rating on Grupo TMM SA to 'B-' from 'CCC.' The rating was removed from Creditwatch, where it was placed on Dec. 15, 2004. S&P said the outlook is positive. FEDERAL-MOGUL: Creditors Vote to Accept Fourth Amended Plan ----------------------------------------------------------- Federal-Mogul Corporation and its debtor-affiliates' balloting agent, The Garden City Group, Inc., delivered to the United States Bankruptcy Court for the District of Delaware on May 1, 2007, a summary of the ballots cast on the Debtors' Fourth Amended Joint Plan of Reorganization. Jeffrey S. Stein, vice president of The Garden City Group, discloses that majority of the Voting Classes voted to accept the Fourth Amended Plan. Among the Classes that fully support the Plan are: Voting Class No. of Votes Vote Value ------------ ------------ ---------- 1B, FMC - Bank Claims 68 US$1,073,788,242 1L, FMC - Affiliate Claims 26 1,093,536,678 25L, F-M Global - Affiliate Claims 2 1,802,613,599 11J, F-M Sealing Systems (Slough) - Asbestos PI Claims 13,083 146,663,204 12J, F-M Friction Products - Asbestos PI Claims 18,064 222,489,896 13J, F-M Mogul Sealing Systems (Rochdale) - Asbestos PI Claims 12,700 141,906,215 83J, Washington Chemical - Asbestos PI Claims 17,944 210,069,522 Among the Voting Classes where more than 5% of its members voted against the Plan are: Share of Disapproving Voting Class Votes Vote Value ------------ ------------ ---------- 15H, F-M Bradford - Unsecured Claims 6.81% US$3 16H, F-M Camshafts - Unsecured Claims 5.26% 3,412 19H, TBA Industrial - Unsecured Claims 14.28% 1,265 32H, T&N Industries - Unsecured Claims 20.00% 12,826 40H, F-M Bridgewater - Unsecured Claims 6.25% 635 69H, J.W. Roberts - Unsecured Claims 96.61% 407,454 A two-page Ballot Summary for Class 5J-1, broken down by disease, is available for free at http://ResearchArchives.com/t/s?1e64 A 63-page list of the Ballot Summary for the other Voting Classes is available for free at http://ResearchArchives.com/t/s?1e65 As previously approved by the Court, votes cast to accept or reject the Third Amended Joint Plan of Reorganization by Classes A, B, D, F, H, L, M, N and O were counted for purposes of computing the acceptance or rejection of the Fourth Amended Plan. Votes cast to accept or reject the Third Amended Plan by Classes C, H-UK, I, and J were also counted for purposes of computing acceptance or rejection of the Fourth Amended Plan except to the extent that those votes were changed by the claimholders in connection with the solicitation of the Fourth Amended Plan. Garden City identified around 415 Ballots that were invalid and not counted for the approval or rejection of the Plan. Plan Proponents Seek Protection from Plan-Related Depositions The Debtors, the Official Committee of Asbestos Claimants, the Legal Representative for Future Asbestos Claimants, and Cooper Industries, LLC, seek a protective order precluding certain deposition notices served by, among others, Mt. McKinley Insurance Company and PepsiAmericas, Inc. The Deposition Notices seek to discover, among others, the fairness of the Fourth Amended Plan, the Plan's compliance with the requirements under Section 1129 of the Bankruptcy Code, the Debtors' assets and liabilities, and facts underlying the Plan. The Deposition Notices are harassing, unduly burdensome, and a transparent attempt to delay confirmation of the Plan, the Debtors complain. The Plan is insurance neutral and preserves the rights of the Propounding Parties, the Plan Proponents maintain. In response, the Propounding Parties assert that they are parties-in-interest and have standing to conduct the Depositions pursuant to Sections 1128(b) and 1109(b) of the Bankruptcy Code. The Propounding Parties ask the Court to compel the Plan Proponents to provide supplemental responses that fully address their discovery requests. Subsequently, at the Court's direction, Mt. McKinley and PepsiAmericas conferred with the Plan Proponents and the Pneumo Protected Parties, and agreed to narrow the issues they raised in their request for complete responses to their Discovery Requests. Nevertheless, Mt. McKinley urges the Court to compel the Plan Proponents to produce all documents and communications addressing "insurance neutrality." About Federal-Mogul Headquartered in Southfield, Michigan, Federal-Mogul Corporation -- http://www.federal-mogul.com/-- is an automotive parts company with worldwide revenue of some US$6 billion. Federal- Mogul also has operations in Mexico and the Asia Pacific Region, which includes, Malaysia, Australia, China, India, Japan, Korea, and Thailand. The Company filed for chapter 11 protection on Oct. 1, 2001 (Bankr. Del. Case No. 01-10582). Lawrence J. Nyhan Esq., James F. Conlan Esq., and Kevin T. Lantry Esq., at Sidley Austin Brown & Wood, and Laura Davis Jones Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C., represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed UA$10.15 billion in assets and US$8.86 billion in liabilities. Federal-Mogul Corp.'s U.K. affiliate, Turner & Newall, is based at Dudley Hill, Bradford. Peter D. Wolfson, Esq., at Sonnenschein Nath & Rosenthal; and Charlene D. Davis, Esq., Ashley B. Stitzer, Esq., and Eric M. Sutty, Esq., at The Bayard Firm represent the Official Committee of Unsecured Creditors. On March 7, 2003, the Debtors filed their Joint Chapter 11 Plan. They submitted a Disclosure Statement explaining that plan on April 21, 2003. They submitted several amendments and on June 6, 2004, the Bankruptcy Court approved the Third Amended Disclosure Statement for their Third Amended Plan. On July 28, 2004, the District Court approved the Disclosure Statement. The estimation hearing began on June 14, 2005. They then submitted a Fourth Amended Plan and Disclosure Statement on Nov. 21, 2006, and the Bankruptcy Court approved that Disclosure Statement on Feb. 6, 2007. The confirmation hearing is set for June 8, 2007. (Federal-Mogul Bankruptcy News, Issue No. 135; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). KANSAS CITY SOUTHERN: Earns US$22.2 Mil. in First Quarter 2007 -------------------------------------------------------------- Kansas City Southern said in a statement that its net profits increased 72% to US$22.2 million in the first quarter 2007, from US$12.9 million in the same quarter in 2006. According to Kansas City Southern's statement, the company's revenues grew 5.9% to US$411 million in the first quarter 2007, compared to the same period in 2006, mainly due to an 8.2% boost in prices, which more than compensated for a 1.3% drop in volume over that period. Business News Americas relates that the increase was led by: -- 13.3% growth in coal revenues, -- 12.5% revenue growth for petroleum and chemical products, -- 11.6% increase in intermodal products, and -- 8.6% increase in agricultural and mineral products. Meanwhile, the revenue in the automotive segment dropped 8.5% in the first quarter 2007, compared to the year-ago period, BNamericas says. BNamericas notes that Kansas City Southern's Ebitda after capital expenditures grew 9.6% to US$108 million in this year's first quarter, compared to last year's first quarter. Kansas City Southern said in a statement that it predicts for the rest of the year a revenue growth in line with the rates registered for 2005-2006. The company also expects to gain from: -- completion of the first phase of terminal expansions at the Lazaro Cardenas port in Michoacan, Mexico; -- the leasing of 150 new locomotives, and -- strong growth from its Panama Canal Railway Company (PCRC) subsidiary. Kansas City Southern Chief Executive Officer Mike Haverty said in a conference call that the company expects Hong Kong-based port company HPH to conclude the first phase of expansions to Lazaro Cardenas by September. Mr. Haverty told BNamericas that construction at the port terminal will add 600,000 twenty-foot equivalent units of capacity, in addition to the 200,000 twenty-foot equivalent units of existing capacity. According to a previous BNamericas report, the Mexican subsidiary KCSM is also working on the construction of a 110- hectare multi-modal terminal. The US$80-million first phase of construction will start in January 2008 and end within a year. Published reports say that upon its completion, the multi-modal terminal will have a capacity to handle one million twenty-foot equivalent units yearly. Kansas City Southern's statement says that in the second quarter, the firm will proceed with the refinancing of 12.5% notes issued by KCSM. It will bring the company pre-tax interest savings of some US$7.5 million. Kansas City Southern Chief Financial Officer Pat Ottensmeyer commented in a conference call, "Those become positive on June 15, and the economics are very positive for us to go ahead and call those bonds and replace them, and we believe that market conditions are favorable as indicated by the transaction we placed in December of last year." Reports say that Kansas City Southern had successfully refinanced US$175-million of notes held at 10.25% interest by KCSM, with notes at 7.625% interest. Kansas City Southern said in a statement that it is considering refinancing its holding in PCRC. Mr. Ottensmeyer said that this transaction would give the firm about US$35 million in cash. Net income at PCRC increased 31% for the first quarter 2007, from the second quarter 2007. Container volumes increased 25%, and freight revenues grew 16%, allowing Kansas City Southern to implement its plans to refinance the subsidiary, BNamericas states, citing Mr. Haverty. Headquartered in Kansas City, Mo., KCS is a transportation holding company that has railroad investments in the US, Mexico and Panama. Its primary U.S. holding includes KCSR, serving the central and south central US. Its international holdings include Kansas City Southern de Mexico, serving northeastern and central Mexico and the port cities of L zaro C rdenas, Tampico and Veracruz, and a 50% interest in Panama Canal Railway Company, providing ocean-to-ocean freight and passenger service along the Panama Canal. KCS' North American rail holdings and strategic alliances are primary components of a NAFTA Railway system, linking the commercial and industrial centers of the U.S., Canada and Mexico. * * * As reported in the Troubled Company Reporter-Latin America on Feb. 12, 2007, Standard & Poor's Ratings Services affirmed its ratings on Kansas City Southern, including the 'B' corporate credit rating, and removed the ratings from CreditWatch, where they were placed Jan. 29, 2007. The 'D' rating on the preferred stock was not on CreditWatch. KRISPY KREME: Prudential Downs Firm's Rating to Neutral Weight -------------------------------------------------------------- Prudential Financial analyst Howard W. Penney has downgraded Krispy Kreme Doughnuts' shares to "neutral weight" from "overweight," Newratings.com reports. Newratings.com relates that the target price for Krispy Kreme was reduced to US$14 from US$17. Mr. Penney said in a research note published on May 2 that Krispy Kreme has recently reorganized its management team. According to Newratings.com, Mr. Penney expects the recent changes to put off the turnaround at Krispy Kreme from a company-owned model to a business model concentrated on franchisee. The earnings per share estimate for fiscal year 2007 was reduced to US$0.30 from US$0.34, while estimate for fiscal year 2008 was decreased to US$0.77 from US$0.81. Founded in 1937 in Winston-Salem, North Carolina, Krispy Kreme (NYSE: KKD) -- http://www.krispykreme.com/-- is a branded specialty retailer of premium quality doughnuts, including the Company's signature Hot Original Glazed. There are currently approximately 320 Krispy Kreme stores and 80 satellites operating system wide in 43 U.S. states, Australia, Canada, Mexico, the Republic of South Korea and the United Kingdom. The U.S. District Court for the Middle District of North Carolina has set Feb. 7, 2007, as the hearing date for the final approval of the terms of the settlement of the shareholder derivative action entitled Wright v. Krispy Kreme Doughnuts Inc., et al. PORTRAIT CORP: To Sell Assets to CPI Corp. for US$100 Million ------------------------------------------------------------- Portrait Corporation of America Inc. has entered into a definitive agreement with CPI Corp. to sell substantially all of the company's operating assets and its foreign and domestic affiliates for US$100 million in cash, subject to certain closing adjustments, and the assumption of certain liabilities. On Aug. 31, 2006, PCA and certain of its direct and indirect subsidiaries filed voluntary petitions for relief under the Bankruptcy Code, commencing jointly administered chapter 11 cases before the United States Bankruptcy Court for the Southern District of New York. The parties intend to consummate the transaction under Sections 363 and 365 of the Bankruptcy Code. The transaction is subject to certain conditions, including the approval of the Bankruptcy Court and other governmental regulatory approvals. PCA will file a motion seeking approval of the asset purchase agreement. The parties expect the Bankruptcy Court to conduct a hearing on the motion in May 2007. The transaction is expected to close by the end of June 2007. "CPI is excited about the opportunity to leverage the company's strong digital capabilities and infrastructure and proven project management skills to upgrade PCA's studios with digital technology, improve convenience and flexibility and enhance the overall customer experience," Renato Cataldo, CPI's president and chief executive officer, stated. "Cpi is also pleased to be embarking on a relationship with Wal-Mart which the company looks forward to strengthening and expanding both domestically and internationally including in a new branded format. Finally, the company is pleased about the opportunities this deal brings to employees of both organizations. CPI has consciously become a more field-focused organization in recent years to better address the needs of the company's Sears Portrait Studio associates. CPI aims to bring the same focus on the PCA field organization and will eagerly solicit their views and concerns. CPI believes the combination will benefit customers, employees and shareholders alike." About CPI Corp. CPI Corp (NYSE: CPY) is a portrait photography company offering photography services in the United States, Puerto Rico and Canada through Sears Portrait Studios. The company also operates searsphotos.com, the vehicle for the company's customers to archive, share portraits via email and order additional portraits and products. About Portrait Corporation of America Portrait Corporation of America Inc. -- http://pcaintl.com/-- provides professional portrait photography products and services in North America. The company operates portrait studios within Wal-Mart stores and Supercenters in the United States, Canada, Mexico, Germany and the United Kingdom. The company also operates a modular traveling business providing portrait photography services in additional retail locations and to church congregations and other institutions. PCA is the sole operator of portrait studios in Wal-Mart stores and supercenters in the U.S., Canada and Mexico. As of April 30, 2007, PCA operates 2,048 studios worldwide, including 1,695 in the U.S. and Puerto Rico, 243 in Canada, 105 in Mexico and 5 in the United Kingdom. During its completed fiscal year ended Jan. 28, 2007, PCA photographed over 5.6 million customers and generated sales of US$290 million. Portrait Corporation and its debtor-affiliates filed for Chapter 11 protection on Aug. 31, 2006 (Bankr S.D. N.Y. Case No. 06-22541). John H. Bae, Esq., at Cadwalader Wickersham & Taft LLP, represents the Debtors in their restructuring efforts. Berenson & Company LLC serves as the Debtors' financial advisor and investment banker. Kristopher M. Hansen, Esq., at Stroock & Stroock & Lavan LLP represents the Official Committee of Unsecured Creditors. Peter J. Solomon Company serves as financial advisor for the Committee. At June 30, 2006, the Debtor had total assets of US$153,205,000 and liabilities of US$372,124,000. =========== P A N A M A =========== CHIQUITA BRANDS: Weak Quarter Results Cue S&P's Negative Watch -------------------------------------------------------------- Standard & Poor's Ratings Services placed its 'B' corporate credit and other ratings on Chiquita Brands International Inc. on CreditWatch with negative implications, meaning that the ratings could be lowered or affirmed following the completion of their review. Total debt outstanding at the company was about US$1.3 billion as of March 31, 2007. "The CreditWatch placement follows the company's announcement of weak first-quarter operating results due to high purchased fruit and other industry costs and lower local banana prices in Europe," said Standard & Poor's credit analyst Alison Sullivan. Adjusted EBITDA fell about 35% in the quarter, which resulted in over 9x leverage for the 12 months ending March 31, 2007. Costs are likely to remain under pressure due to raw products, fuel, ship charter, paper, and resin prices. "We are concerned that operating trends and credit measures continue to deteriorate," said Ms. Sullivan. "Weak industry trends, including continuing adjustment to European markets following the tariff regime change, and uncertain timing surrounding restoration of consumer confidence to return to packaged salads, are likely to persist." Standard & Poor's will review Chiquita Brands' operating and financial plans with management before resolving the CreditWatch listing. Standard & Poor's will also review the impact of debt repayment on existing recovery ratings as part of this review. Cincinnati, Ohio- based Chiquita Brands International, Inc. (NYSE: CQB) -- http://www.chiquita.com/-- operates as an international marketer and distributor of bananas and other fresh produce sold under the Chiquita and other brand names in over 70 countries including Panama, Philippines, Australia, Belgium, Germany, among others. It also distributes and markets fresh-cut fruit and other branded, value-added fruit products. ======= P E R U ======= DOE RUN PERU: Government Restarts Talks with Striking Miners ------------------------------------------------------------ The Peruvian government has resumed talks on Wednesday with the country's mining federation, in a bid to halt a strike that begun on April 30. Representatives of the National Federation of Metallurgic and Steel Miners, which is made up of 74 unions and representing about 28,000 of Peru's 100,000 mine workers, met with Labor Minister Susana Pinilla to negotiate demands for better working conditions for subcontracted workers. Of the 74 unions, 33 are on strike, including employees of Southern Copper Corp. -- a subsidiary of Grupo Mexico de CV, and Doe Run Resources Corp. The miners have demanded higher wages and better pensions as rising metal prices generate record earnings for mining companies. Peru is among the world's top two silver producers, and is No. 3 in copper and zinc and No. 5 in gold. About Doe Run Resources Based in St. Louis, Mo., The Doe Run Company -- http://www.doerun.com/-- is a privately held natural resources company dedicated to environmentally responsible mineral production, metals fabrication, recycling and reclamation. The company and its subsidiaries deliver products and services needed to provide power, protection and convenience through premium products and associated metals including lead, zinc, copper, gold and silver. As the operator of one of the world's only multi-metal facilities and the Americas' largest integrated lead producer, Doe Run employs more than 5,000 people, with U.S. operations in Missouri, Washington and Arizona, and Peruvian operations in Cobriza and La Oroya. Doe Run Peru S.R.L., an indirect Peruvian subsidiary, operates a smelter in La Oroya, Peru, one of the largest polymetallic processing facilities in the world, producing an extensive product mix of non-ferrous and precious metals, including silver, copper, zinc, lead and gold. Doe Run Peru also has a copper mining and milling operation in Cobriza, Peru in the region of Huancavelica, which is approximately 200 miles southeast of La Oroya in Peru. Going Concern Doubt Crowe Chizek and Company LLC raised substantial doubt about Doe Run Peru's ability to continue as a going concern after auditing the consolidated balance sheets of The Doe Run Resources Corporation and subsidiaries as of Oct. 31, 2005, and 2004. Doe Run Peru has not filed financial reports for fiscal year ended Oct. 31, 2006. Crowe Chizek pointed to Doe Run Peru's significant capital requirements under environmental commitments, which, if not met, could result in defaults of the company's credit agreements; has substantial contingencies related to tax; and has significant debt service obligations. At Dec. 31, 2005, The Doe Run Resources' balance sheet showed US$167,905,000 of stockholders' deficit. NUTRO PRODUCTS: S&P Revises Watch to Positive on Mars Takeover -------------------------------------------------------------- Standard & Poor's Ratings Services revised its CreditWatch listing for Nutro Products Inc. to CreditWatch with positive implications, from CreditWatch with negative implications. Ratings were initially placed on CreditWatch on March 30, 2007, reflecting concerns about the potential negative impact on sales related to the Menu Foods pet food recall. This included the 'B-' corporate credit rating and other ratings on the company. CreditWatch with positive implications means that the ratings could be affirmed or raised following the completion of Standard & Poor's review. Total debt outstanding at Dec. 31, 2006, was about US$781 million. "The revision of the CreditWatch listing to positive follows the company's announcement that it has entered into an agreement to be acquired by privately held Mars Inc.," said Standard & Poor's credit analyst Bea Chiem. Terms were not disclosed. "We anticipate that Nutro's outstanding debt will be repaid," said Ms. Chiem. Standard & Poor's will withdraw the ratings on Nutro Products upon repayment of all debt following completion of the transaction, which is expected within 30 to 60 days and is subject to regulatory approval. Based in City of Industry, California, Nutro Products, Inc. -- http://www.nutroproducts.com/-- formulates and manufactures dry and canned food, biscuits, and treats for dogs and cats. The company's brand names include Natural Choice, MAX, and Gourmet Classics. Its products are available in feed stores and pet supply shops, such as Petco and PetSmart, across the US and Canada. Nutro Products' products are also distributed worldwide, including Indonesia, Peru and Austria, among others. * PERU: Government Restarts Talks with Striking Miners ------------------------------------------------------ The Peruvian government has resumed talks on Wednesday with the country's mining federation, in a bid to halt a strike that begun on April 30. Representatives of the National Federation of Metallurgic and Steel Miners, which is made up of 74 unions and representing about 28,000 of Peru's 100,000 mine workers, met with Labor Minister Susana Pinilla to negotiate demands for better working conditions for subcontracted workers. Of the 74 unions, 33 are on strike, including employees of Southern Copper Corp. -- a subsidiary of Grupo Mexico de CV, and Doe Run Resources Corp. The miners have demanded higher wages and better pensions as rising metal prices generate record earnings for mining companies. Peru is among the world's top two silver producers, and is No. 3 in copper and zinc and No. 5 in gold. * * * As reported in the Troubled Company Reporter-Latin America on March 2, 2007, Standard & Poor's Ratings Services assigned its 'BB+' foreign currency credit rating to the Republic of Peru's (BB+/Stable/B foreign, BBB-/Stable/A-3 local currency sovereign credit ratings) US$1.24 billion global bond due in 2037 issued as part of a new liability management operation. ===================== P U E R T O R I C O ===================== ALLIED WASTE: Earns US$39.9 Million in Quarter Ended March 31 ------------------------------------------------------------- Allied Waste Industries, Inc. reported US$39.9 million of net income for the three months ended March 31, 2007, compared to US$41.2 million of net income for the same period in 2006. The company highlighted the following information from its reported quarterly financial results: -- First quarter 2007 diluted earnings from continuing operations of US$0.07 per share, inclusive of US$26.7 million (after tax), of costs associated with debt refinancings. Excluding these refinancing costs, first quarter diluted earnings were US$0.14 per share. Prior year first quarter earnings were US$0.08 per share; -- Internal revenue growth for the quarter of 3.1%, reflects an average price increase of 5.9%, partially offset by a 2.8% decrease in volume primarily related to roll-off, construction and special waste business; -- Operating income for the first quarter increased 13.9% to US$235 million, compared with US$206 million in the prior year; quarterly operating margins expanded by 160 basis points to 16.1%; -- During the quarter, Allied successfully refinanced US$750 million of Senior Notes and the revolving portion of its senior secured credit facility resulting in expected interest savings of approximately US$15 million per year. Results for the first quarter 2007 and all prior periods reflect the sale of Allied Waste's South Florida operations to Waste Services, Inc. As a result of this transaction, which closed on March 30, 2007, financial results for the South Florida operations are classified as discontinued operations. Allied's South Florida operations consisted of a collection company, a transfer station and a materials recovery facility that provided services in Miami-Dade County. "Allied Waste is off to a strong start in 2007, as our results continued to benefit from company initiatives focused on improving profitability and driving better financial returns," said John Zillmer, Chairman and Chief Executive Officer. "Adjusting for costs associated with our debt refinancings, Allied's first quarter earnings increased 75% to US$0.14 per share. The strength of Allied's first quarter results put the Company solidly on track with our expected full year outlook." Revenue for the first quarter ended March 31, 2007, was US$1.46 billion, an increase of US$34 million, or 2.4%, from US$1.42 billion in the first quarter 2006. The increase in revenue resulted from internal growth of 3.1%, comprised of a 5.9% increase in same store average unit price, including a 0.7% increase associated with a fuel recovery fee, partially offset by a 2.8% decrease in same-store volumes. "Our first quarter results reflect the strength of the business environment and Allied's focus on improving pricing, while driving greater efficiencies throughout our operations," said Donald Slager, President and Chief Operating Officer. Operating income for the quarter increased 13.9% to US$234.9 million, compared with US$206.2 million last year. Operating income as a percent of revenue increased 160 basis points to 16.1%, compared with 14.5% for the same period last year, as higher SG&A expenses were partially offset by lower depreciation and amortization costs. Gross profit for the first quarter 2007 was US$525.7 million, up US$34.2 million, or 7.0%, over the comparable period last year. Gross profit as a percentage of revenue increased 160 basis points to 36.1%, reflecting the positive impact of higher prices in the period and lower costs resulting from reduced volumes and productivity initiatives that kept year-over-year operating costs comparable at US$931 million. First quarter income from continuing operations, inclusive of refinancing costs, was US$34.4 million, compared with US$39.9 million in the prior year. The company incurred refinancing costs of US$45.4 million, US$26.7 million after tax, for fees and expenses associated with debt refinancings that were completed during the period. These costs were included in interest expense for the period. Excluding the impact of these costs, Allied would have reported income from continuing operations of US$61.1 million. Cash flow from operations in the first quarter 2007 was US$113.5 million, compared with US$167.6 million in the comparable quarter last year. First quarter 2007 cash flow from operations includes debt refinancing costs and a greater outflow from working capital in comparison with prior year. Free cash flow for the quarter was a net use of US$87.3 million, a slight decrease in the use of cash from the prior year amount of US$94.3 million. About Allied Waste Allied Waste North America, Inc., a wholly owned operating subsidiary of Allied Waste Industries, Inc., is based in Phoenix, Arizona. Allied Waste is a vertically integrated, non- hazardous solid waste management company providing collection, transfer, and recycling and disposal services for residential, commercial and industrial customers. As of Dec. 31, 2006, the company operated a network of 304 collection companies, 161 transfer stations, 168 active landfills and 57 recycling facilities in 37 states and Puerto Rico. The company had revenues of approximately US$6.0 billion in fiscal 2006. * * * As reported in the Troubled Company Reporter-Latin America on April 4, 2007, Moody's Investors Service assigned B2 (LGD 4, 69%) to the proposed US$50 million Mission Economic Development Corp. Solid Waste Disposal Revenue Bonds Series 2007A due 2018, an Allied Waste North America, Inc. Project. The borrower will be Allied Waste North America, Inc. or Allied Waste NA and the bonds will be unsecured obligations guaranteed by the parent, Allied Waste Industries, Inc. Concurrently, Moody's affirmed other ratings of Allied Waste, Allied Waste NA and its wholly owned subsidiary, Browning-Ferris Industries, LLC. The outlook for the ratings remains positive. Moody's took these rating actions: -- assigned a B2 (LGD4, 69%) rating to the proposed US$50 million solid waste disposal revenue bonds series 2007A of Allied Waste NA due 2018; -- affirmed all other ratings of Allied Waste, Allied Waste NA, and Browning-Ferris Industries, LLC as set out in the recent press release dated March 27, 2007. Moody's said the ratings outlook is positive. CENTRAL PARKING: Moody's Puts (P)Ba2 Rating on US$355MM Facility ---------------------------------------------------------------- Moody's Investors Service assigned provisional ratings to KCPC Acquisition, Inc. in connection with the pending leveraged buyout of Central Parking Corporation. Moody's assigned a provisional (P)B2 Corporate Family Rating, a (P)Ba2 rating to the proposed US$355 million first lien credit facility and a P(B2) rating to the proposed US$50 million second lien term loan facility. The US$355 million first lien credit facility consists of: (i) a US$225 million term loan facility; (ii) a US$75 million revolving credit facility and; (iii) a US$55 million synthetic letter of credit facility. The provisional ratings will be converted to definitive ratings upon the closing of the transaction. The rating outlook for KCPC is stable. On February 22, Moody's placed the Ba3 Corporate Family Rating, Ba3 Probability of Default Rating and B2 rating on the convertible trust issued preferred securities of CPC on review for possible downgrade following the company's announcement that it entered into a definitive agreement to be acquired by a consortium of private investment funds. Pursuant to the merger agreement, KCPC, a newly formed holding company owned by affiliates of Kohlberg & Co. LLC, Lubert-Adler Partners, LP and Chrysalis Capital Partners, Inc., will merge with and into CPC. Under the terms of the merger agreement, CPC's common equity shareholders will receive US$22.53 per share in cash or about US$745 million. The merger is subject to the approval of CPC's shareholders and customary closing conditions. The chairman of the company, his family and related entities, who collectively own 47% of the common stock of CPC, have entered into voting agreements to vote in favor of the merger agreement unless the merger agreement is terminated or materially amended. CPC may terminate the merger agreement under certain circumstances, including if its board of directors determines in good faith that it has received a superior proposal, and otherwise complies with certain terms of the merger agreement. In connection with such termination, the company must pay a fee of US$22.4 million to the equity sponsors. If the merger agreement is terminated because the equity sponsors fail to obtain sufficient financing, then a US$30 million payment will be due to the company. The merger agreement provides that at the effective time of the merger, each outstanding share of the Trust Issued Preferred Securities issued by Central Parking Finance Trust, a statutory business trust and wholly-owned subsidiary of CPC, shall remain outstanding and shall thereafter be convertible at the election of the holder of the TIPS into an amount equal to the product of the common stock merger consideration times the number of shares of company common stock into which the TIPS could have been converted at the effective time. If substantially all of the TIPS elect to convert and receive cash consideration in connection with the buyout, then Moody's will withdraw the ratings on the TIPS. If a material amount of TIPS remain outstanding after the buyout, then Moody's expects to lower the TIPS rating to Caa1. Upon closing of the transaction, Moody's expects to lower the Corporate Family Rating and Probability of Default Rating of CPC to B2 and then withdraw such ratings. Moody's affirmed the Baa3 rating on the existing US$299 million senior secured credit facility of CPC since the merger agreement provides that the credit facility will be repaid in connection with the closing of the buyout. Moody's expects to withdraw the rating on the secured credit facility of CPC upon closing of the transaction. In connection with the merger, CPC expects to form one or more special purpose entities and contribute to Propco the majority of its owned parking facilities and the improvements thereon. Propco will issue approximately US$417.8 million in aggregate principal amount of first mortgage and mezzanine financing (not rated by Moody's). Propco will not be a guarantor under the new secured credit facilities. After the buyout, CPC and its guarantor subsidiaries will derive revenues from its portfolio of leased and managed parking facilities, a limited number of owned properties, and a management agreement with Propco. The proceeds from the real estate financing, US$275 million of first and second lien term loans, a US$210 million cash equity contribution, and existing cash and revolver borrowings will be used to fund the equity component of the buyout, retire existing debt and pay related fees and expenses. The (P)B2 Corporate Family Rating reflects a more than four-fold increase in consolidated debt levels (excluding Moody's standard adjustments) as a result of the buyout. On an Opco only basis, debt levels will increase from about US$170 million (including the full amount of the TIPS) to about US$284 million, with the majority of the company's owned parking facilities transferred to Propco. Although constrained by modestly weak credit metrics for the B2 rating category and an uneven track record of financial performance, the ratings are supported by a leading market position, improving profitability over the last year and the expectation for growing demand for outsourced parking services. Moody's assigned these ratings to KCPC: * US$75 million 6 year first lien revolving credit facility, (P)Ba2 (LGD 2, 19%) * US$225 million 7 year first lien term loan facility, (P)Ba2 (LGD 2, 19%) * US$55 million 7 year first lien synthetic letter of credit facility, (P)Ba2 (LGD 2, 19%) * US$50 million 7.5 year second lien term loan facility, (P)B2 (LGD 4, 51%) * Corporate family rating, (P)B2 * Probability of default rating, B2 These ratings of Central Parking Corporation remain on review for downgrade: * US$78 million 5.25% convertible trust issued preferred securities (issued by the Central Parking Finance Trust), rated B2 (LGD 6, 93%) * Corporate family rating, Ba3 * Probability of default rating, Ba3 These ratings of Central Parking were affirmed: * US$225 million senior secured revolving credit facility due 2008, rated Baa3 (LGD 2, 15%) * US$74 million senior secured term loan facility due 2010, rated Baa3 (LGD 2, 15%) Central Parking Corporation, headquartered in Nashville, Tennessee, is a leading provider of parking and transportation- related services. As of December 31, 2006, the Company operated more than 3,000 parking facilities containing approximately 1.5 million spaces at locations in 37 states, the District of Columbia, Canada, Puerto Rico, Chile, Colombia, Peru, the United Kingdom, the Republic of Ireland, Spain, Greece, Italy and Switzerland. Revenues (including reimbursed expenses related to management contracts) for the twelve month period ending Dec. 31, 2006 were about US$1.1 billion. DELTA AIR: S&P Lowers Rating on Corporate Certs. to D from B ------------------------------------------------------------ Standard & Poor's Ratings Services stated that it inadvertently raised its ratings on the class A-1 and A-2 certificates from the US$27 million Corporate Backed Trust Certificates Series 2001-19 Trust to 'B' from 'D' on May 1, 2007. The ratings on this pass-through transaction were based solely on the rating assigned to the underlying collateral, Delta Air Lines Inc.'s US$27,109,000 8.3% senior unsecured notes due Dec. 15, 2029. However, the rating on this debt issued by Delta Air was lowered to 'D' and was later withdrawn after the company filed for bankruptcy in September 2005. The ratings on the synthetic issue are now being lowered to 'D' and will be withdrawn to reflect the fact that the referenced Delta Air debt is no longer outstanding. Headquartered in Atlanta, Ga., Delta Air Lines (OTC:DALRQ) -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 502 destinations in 88 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. The airline also serves Puerto Rico and the U.S. Virgin Islands. Plan Update The Debtors filed a chapter 11 plan of reorganization and disclosure statement explaining that plan on Dec. 19, 2007. On Jan 19, 2007, they filed revisions to the plan and disclosure statement, and submitted further revisions to the plan on Feb. 2, 2007. On Feb. 7, 2007, the Court approved the Debtors' disclosure statement. The hearing to consider confirmation the Debtors' plan was scheduled. On April 30, 2007, Delta Air Lines emerge from Chapter 11 bankruptcy proceedings. DORAL FINANCIAL: Liquidity Needs Cue PwC's Going Concern Doubt -------------------------------------------------------------- PricewaterhouseCoopers LLP, in San Juan, Puerto Rico, raised substantial doubt about Doral Financial Corporation's ability to continue as a going concern after auditing the company's financial statements as of Dec. 31, 2006, and 2005. The auditing firm reported that the company will need significant outside financing to meet liquidity needs during 2007. These needs, PwC added, aroused primarily due the maturity of the company's US$625 million senior notes in July 2007. Net loss for the year ended Dec. 31, 2006, was US$223.9 million, as compared with a net income of US$13.2 million for the year ended Dec. 31, 2005. Total interest income for the year 2006 was US$821.9 million, a decrease by US$125.9 million, from total interest income of US$947.8 million in 2005. Net interest income for the year ended Dec. 31, 2006, decreased by US$79.2 million, as compared with 2005. The decrease in net interest income was principally due to continued compression of the company's net interest spread and a reduction in the average balance of the company's interest earnings assets. At Dec. 31, 2006, Doral Financial's total assets were US$11.9 billion, as compared with US$17.3 billion at Dec. 31, 2005. Total liabilities were US$11 billion at Dec. 31, 2006, as compared with US$16.1 billion at Dec. 31, 2005. The company recorded total stockholders' equity of US$903.4 million as of Dec. 31, 2006. Cash due from banks and total money market investments as of Dec. 31, 2006, were US$227.1 million and US$918.7 million, respectively. A full-text copy of the company's annual report is available for free at http://ResearchArchives.com/t/s?1e4c Recapitalization of the Company Doral Financial will need significant outside financing during 2007, principally for the payment of its US$625 million floating rate senior notes that mature on July 20, 2007, and of amounts required under the settlement agreement dated April 27, 2007, in respect of the consolidated securities class action and shareholder derivative litigation brought against the Company following the announcement of the restatement of its financial statements in 2005. The company currently estimates that these external funding needs for 2007 will range between approximately US$700 million and US$800 million, without considering the distribution of any proceeds from the sale of Doral Bank NY's branches. Doral Financial is in active negotiations with a private equity firm regarding a substantial investment in the company by a new bank holding company. Sale of New York Branches On March 15, 2007, Doral Bank NY, Doral Financial's wholly owned New York City-based thrift subsidiary, entered into a definitive purchase and assumption agreement with New York Commercial Bank, the commercial bank subsidiary of New York Community Bancorp. New York Commercial Bank agreed to acquire Doral Bank NY's 11 existing branches in the New York City metropolitan area. The sale of the New York branches will allow Doral Financial to focus its efforts on its well-capitalized, core Puerto Rico banking operations and is expected to improve the holding company's liquidity. Doral Financial will retain Doral Bank NY's federal thrift charter and initially intends to maintain an internet-based deposit gathering operation as it evaluates other possible strategic business opportunities on the U.S. mainland. Pursuant to the terms of the agreement, New York Commercial Bank will assume certain of Doral Bank NY's assets and liabilities, including deposits of about US$370 million. Class Action and Derivative Lawsuits On April 27, 2007, Doral Financial entered into an agreement to settle all claims in the consolidated securities class action and shareholder derivative litigation filed against the company following the announcement in April 2005, of the need to restate its financial statements for the period of 2000 to 2004. As a result of this agreement, Doral Financial established a litigation reserve and recorded a charge to its full-year financial results for 2006 of US$95 million. This amount is included in the non-interest expenses for the year ended Dec. 31, 2006. The settlement is subject to class notice and approval from the U.S. District Court for the Southern District of New York. About Doral Financial Corp. Based in New York City, Doral Financial Corp. (NYSE: DRL) -- http://www.doralfinancial.com/-- is a diversified financial services company engaged in mortgage banking, banking, investment banking activities, institutional securities and insurance agency operations. Its activities are principally conducted in Puerto Rico and in the New York City metropolitan area. Doral is the parent company of Doral Bank, a Puerto Rico based commercial bank, Doral Securities, a Puerto Rico based investment banking and institutional brokerage firm, Doral Insurance Agency Inc. and Doral Bank FSB, a federal savings bank based in New York City. * * * As reported in the Troubled Company Reporter on May 2, 2007, Moody's Investors Service said that it is continuing its review of Doral Financial Corporation for possible downgrade. Moody's had most recently downgraded Doral (senior debt to B2 from B1) on Jan. 5, 2007, and kept the ratings on review for possible downgrade. According to Moody's, the primary credit issue is Doral Financial's ability to refinance US$625 million of debt maturing in July, which has been hampered by a number of legal and regulatory issues. As reported in the Troubled Company Reporter-Latin America on Jan. 8, 2007, Moody's Investors Service downgraded to B2 from B1 the senior debt ratings of Doral Financial Corp. Moody's said the ratings are on review for possible downgrade. As reported in the Troubled Company Reporter-Latin America on Jan. 8, 2007, Standard & Poor's Ratings Services lowered its long-term ratings on Doral Financial Corp., including the counterparty credit rating, to 'B' from 'B+'. S&P said the outlook remains negative. DORAL FINANCIAL: May Go Bankrupt If Cash Infusion Talks Fail ------------------------------------------------------------ Doral Financial Corp. told the Orlando Sentinel reports that it may be forced out of business if negotiations on a US$700- million cash infusion with an undisclosed private-equity firm fail. Doral Financial said in a statement that it is in talks with a private equity firm regarding a substantial investment in Doral by a new bank holding company. The negotiations with the private-equity firm involved selling an equity stake at a discount to market value, Elizabeth Hester at Bloomberg News reports, citing Doral Financial. Reuters' Christian Plumb states that the deal would include the creation of a new bank holding company where various private equity and other financial investors would have stakes. Doral Financial admitted to The Sentinel that it lacked money to pay debt due in 2007. Business News Americas relates that Doral Financial needs outside funding for the payment of its US$625-million floating rate senior notes that mature on July 20. Doral Financial told BNamericas that the proposed transaction would satisfy the company's capital and liquidity needs. Doral Financial said in a statement that the private-equity firm would make a substantial investment that would result in very significant dilution to existing shareholders. Bloomberg News' Ms. Hester notes that a deal between Doral Financial and the private-equity firm would have to be approved by the shareholders and the regulator. According to Doral Financial's statement, failure to refinance the senior notes and recapitalize the firm would have a material adverse effect and impair its financial condition and ability to operate as going concern. The Sentinel says that Doral Financial "tightened its underwriting standards" and reduced its lending as Puerto Rico's economic growth has slowed. Ms. Hester at Bloomberg News relates that Doral Financial made 64% fewer loans this year, compared to last year. "In order for them to remain a viable entity they need all this capital," Soleil Securities Corp. analyst Keri McGreevy explained to The Sentinel. ThinkEquity Partners analyst Audrey Snell commented to BNamericas, "They need a lot of money and a public deal -- such as equity stock -- is impractical at this level." Meanwhile, Doral Financial said in a statement that its management is trying to change the company to a community bank from being a mortgage lender to offer a wider range of products. Based in New York City, Doral Financial Corp. (NYSE: DRL) -- http://www.doralfinancial.com/-- is a diversified financial services company engaged in mortgage banking, banking, investment banking activities, institutional securities and insurance agency operations. Its activities are principally conducted in Puerto Rico and in the New York City metropolitan area. Doral is the parent company of Doral Bank, a Puerto Rico based commercial bank, Doral Securities, a Puerto Rico based investment banking and institutional brokerage firm, Doral Insurance Agency Inc. and Doral Bank FSB, a federal savings bank based in New York City. * * * As reported in the Troubled Company Reporter on Jan. 8, 2007, Standard & Poor's Ratings Services lowered its long-term ratings on Doral Financial Corp., including the counterparty credit rating, to 'B' from 'B+'. S&P said the outlook remains negative. DORAL FINANCIAL: Pays Dividend on Three Preferred Stock Series -------------------------------------------------------------- Doral Financial Corporation has paid the regular monthly cash dividend on the company's 7% Noncumulative Monthly Income Preferred Stock, Series A, 8.35% Noncumulative Monthly Income Preferred Stock, Series B and 7.25% Noncumulative Monthly Income Preferred Stock, Series C, in the amount of US$0.2917, US$0.173958, US$0.151042 per share, respectively. The dividend on each of the series was paid to the record holders as of the close of business on April 26, 2007, in the case of the Series A Preferred Stock, and to the record holders as of the close of business on April 15, 2007, in the case of Series B and Series C Preferred Stock. Doral also announced that the quarterly dividend on the company's 4.75% perpetual cumulative convertible preferred stock, in the amount of $2.96875 per share, which was approved by the Board of Directors on April 30, 2007, will be paid on June 15, 2007, to holders of record as of the close of business on June 1, 2007. Based in New York City, Doral Financial Corp. (NYSE: DRL) -- http://www.doralfinancial.com/-- is a diversified financial services company engaged in mortgage banking, banking, investment banking activities, institutional securities and insurance agency operations. Its activities are principally conducted in Puerto Rico and in the New York City metropolitan area. Doral is the parent company of Doral Bank, a Puerto Rico based commercial bank, Doral Securities, a Puerto Rico based investment banking and institutional brokerage firm, Doral Insurance Agency Inc. and Doral Bank FSB, a federal savings bank based in New York City. * * * As reported in the Troubled Company Reporter on Jan. 8, 2007, Standard & Poor's Ratings Services lowered its long-term ratings on Doral Financial Corp., including the counterparty credit rating, to 'B' from 'B+'. S&P said the outlook remains negative. ROYAL CARIBBEAN: Guzman & Co. Reaffirms Outperform Rating --------------------------------------------------------- Newratings.com reports that Guzman & Company analyst Jake Balzer has reaffirmed his "outperform" rating on Royal Caribbean Cruises. According to Newratings.com, the 12-month target price for Royal Caribbean's shares is set at US$54. Mr. Balzer said in a research note published on May 1 that Royal Caribbean has reported its first quarter 2007 earnings per share short of the estimates and the consensus. Mr. Balzer told Newratings.com that the deficit was due to the extreme seasonality of Pullmantur and the weaker-than- anticipated demand in the Caribbean region. Expectations for Royal Caribbean's third quarter results might be over optimistic. The long-term prospects for the firm seem bright, Newratings.com states, citing Guzman & Company. Headquartered in Miami, Royal Caribbean Cruises Ltd. (NYSE: RCL) -- http://www.royalcaribbean.com/ -- is a global cruise vacation company that operates Royal Caribbean International, Celebrity Cruises and Pullmantur. The company has a combined total of 34 ships in service and seven under construction. It also offers unique land-tour vacations in Alaska, Australia, Canada, Europe and Latin America. The company has operations in Puerto Rico. * * * As reported in the Troubled Company Reporter on Jan. 15, 2007, Moody's Investors Service assigned Royal Caribbean Ltd.'s new benchmark size Euro senior unsecured notes Ba1, raised RCL's Speculative Grade Liquidity rating to SGL-2 from SGL-3 and affirmed all other existing ratings. ============= U R U G U A Y ============= FUCEREP: Fitch Upgrades Issuer Default Ratings to B- from CCC ------------------------------------------------------------- Fitch Ratings upgrades Fucerep-Cooperativa de Ahorro y Credito: -- Foreign and local currency Issuer Default Ratings to 'B-' from 'CCC'; and -- National long-term rating to 'BB(uy)' from 'B(uy)'. In addition, Fitch affirms Fucerep's support rating at '5'. The Rating Outlook is Stable. The ratings assigned to Fucerep reflect its small size, low capitalization and the losses incurred in the period 2002-2005, although in 2006 its performance improved significantly. The ratings also reflect its gradual move towards operating under a license with limitations (mainly related to foreign currency activities), which has lower capital requirements. It should be noted here that an international rating has been assigned to Fucerep due to local requirements, but the institution does not issue debt or obtain credit internationally, nor does it expect to in the future. The Outlook on Fucerep's foreign and local currency long-term IDR and National Ratings is Stable. The Outlook for its ratings will mainly depend on the cooperative's success on meeting the targets set in its capitalization plan, which was submitted to the Central Bank of Uruguay together with the application to operate under its new license. Fucerep is a credit cooperative that has operated in Uruguay since 1974 and offers services in retail banking, with a focus on individuals. Fucerep was founded by employees from Banco de la Republica Oriental del Uruguay or BROU, which explains its close ties to the bank and concentration of loans among BROU's employees. At end of 2006, Fucerep reported assets and equity of US$9.9 million and US$1.9 million, respectively. ================= V E N E Z U E L A ================= CERRO NEGRO: Bondholders Impose 45-Day Moratorium ------------------------------------------------- Venezuelan paper El Universal reports that the holders of bonds that the Cerro Negro joint venture issued have imposed a suspension of 45 days to correct a drop in production before declaring default. El Universal says that Cerro Negro owes a total of US$500 million. According to El Universal, a decrease in output that started in January has resulted to violation of supply contracts for the Chalmette plant, which is owned by Venezuelan state-run oil firm Petroleos de Venezuela SA and Exxon. Business News Americas relates that the Venezuelan government confiscated operations at Cerro Negro and three other Orinoco extra-heavy crude oil projects on May 1 as part of a nationalization drive. The Orinoco oil projects are producing 450,000 barrels daily, which is below their total installed capacity of 600,000 barrels per day. The drop was due to OPEC-imposed production reduction, Petroleos de Venezuela Vice President for Exploration and Production Luis Vierma told BNamericas. Cerro Negro is a joint venture between Venezuelan state-owned oil company Petroleos de Venezuela, US oil firm ExxonMobil and UK's BP. It extracts extra-heavy crude and upgrades it into 100,000-barrel-per-day-plus of synthetic crude before shipping it to the Chalmette plant in Louisiana for refining. It is Exxon's sole active project in Venezuela. As reported in the Troubled Company Reporter-Latin America on Jan. 25, 2007, Fitch downgraded the ratings that apply to the respective senior secured debt obligations of the four extra heavy crude oil strategic associations in Venezuela -- Petrozuata, Cerro Negro, Sincor and Hamaca. The ratings remained on Rating Watch Negative. The ratings of these debt obligations of Cerro Negro Finance, Ltd. were downgraded to CCC from B+: -- US$200 million 7.33% bonds due 2009; -- US$350 million 7.90% bonds due 2020; and -- US$50 million 8.03% bonds due 2028. DAIMLERCHRYSLER AG: Earns US$3.7 Billion in Full Year 2006 ---------------------------------------------------------- DaimlerChrysler AG has released its 2006 consolidated financial statements, prepared according to International Financial Reporting Standards. In IFRS, DaimlerChrysler reported US$3.78 billion in net profit on US$152.81 billion in net revenues for the full year 2006. In U.S. GAAP, the company posted US$3.23 billion in net profit on US$151.59 in net revenues for the full year 2005. "We have used the transition to IFRS to make our financial reporting even more transparent," said Bodo Uebber, Board of Management member at DaimlerChrysler AG responsible for Finance & Controlling and Financial Services. "At the same time, we have improved our internal information system," he added. The transition to IFRS does not change the divisions' return targets or the Group's performance measurement. EBIT of EUR5.5 billion for the year 2006 is almost unchanged compared to the previous figure for operating profit. In terms of after-tax earnings, compared to U.S. GAAP the change to IFRS leads to an increase of EUR600 million to EUR3.8 billion, while earnings per share increase by EUR0.50. DaimlerChrysler presented its consolidated financial statements according to U.S. GAAP in February. Key figures Earnings by Segments 2006 (in billions of euros) U.S. GAAP IFRS Change Mercedes Car Group 2.4 1.8 -0.6 Chrysler Group -1.1 -0.5 0.6 Truck Group 2.0 1.9 -0.1 Financial Services 1.7 1.6 -0.1 Van, Bus, Other 0.9 1.3 0.4 Elimination/ Reconciliation -0.4 -0.6 -0.2 DC Group 5.5 5.5 - (in millions of euros) U.S. GAAP IFRS Change Group: Equity 34,155 37,449 3,294 Financial Liabilities(2) -78,584 -98,553 -19,969 Total Assets 190,022 217,634 27,612 Industrial Business: Equity 25,248 28,628 3,380 Equity Ratio(1) 25.1% 27.2% 2.1% Net Liquidity 6,400 9,861 3,461 Total Assets 94,541 99,427 4,886 (1) Excluding dividend payment (2) US-GAAP: nominal value; IFRS: hedged nominal value (in millions of euro) 2006 U.S. GAAP IFRS Change Revenues 151,589 152,809 1,220 Operating Profit / EBIT 5,517 5,489 -28 Net Income / Net Profit 3,227 3,783 556 EPS (euro) 3.16 3.66 0.50 Revenues by Segments 2006 (in billions of euro) U.S. GAAP IFRS Change Mercedes Car Group 54.6 51.4 -3.2 Chrysler Group 47.1 47.0 -0.1 Truck Group 32.0 31.8 -0.2 Financial Services 17.2 16.0 -1.2 Van, Bus, Other 13.4 13.2 -0.2 Elimination/ Reconciliation -12.7 -6.6 +6.1 DC Group 151.6 152.8 +1.2 Development Costs According to U.S. GAAP, development costs are generally expensed in the same period that they are incurred. According to IFRS, however, some development costs are capitalized as intangible assets and amortized on a straight-line basis. In the 2006 consolidated financial statements, this change led to an increase in shareholders' equity of EUR5.1 billion compared to the U.S. GAAP accounts. The impact on EBIT was immaterial. EADS The impairment of nearly EUR2 billion recognized on the book value of the Group's equity interest in EADS in 2003 according to U.S. GAAP was not required under IFRS. Therefore, our EADS shareholding has a considerably higher valuation in the IFRS balance sheet at year-end 2006. Under both IFRS and U.S. GAAP, EADS is shown in DaimlerChrysler's consolidated financial statements using the equity method after a three-month time lag. According to IFRS, important events such as the decisions by the EADS management in the fourth quarter of 2006 concerning the Airbus A380 and the Airbus A350 have to be reflected by DaimlerChrysler, with a resulting charge on earnings of EUR4 million. Under U.S. GAAP, there was no such effect in the fourth quarter of 2006 because the time lag was to be observed. On balance, these two factors led to an increase in shareholders' equity of EUR8 million in the IFRS consolidated financial statements for 2006 compared with the U.S. GAAP accounts. EBIT is reduced by EUR8 million primarily due to the aforementioned additional charge to earnings of EUR4 million compared with U.S. GAAP and because unlike operating profit, EBIT includes the after-tax equity-method result of EADS. Net profit is reduced by EUR5 million. Pensions and Similar obligations With regard to pension and healthcare plans, DaimlerChrysler decided in favor of the "fresh-start" option as of the date of transition to IFRS, Jan. 1, 2005. This means that at that date, all of the actuarial gains and losses previously accumulated have been charged to equity. But this led to an only slight reduction in shareholders' equity of EUR8 million in 2006, as due to a change in U.S. GAAP, actuarial gains and losses are fully included in equity as of Dec. 31, 2006, also according to U.S. GAAP. However, in the 2006 IFRS income statement, this results in a positive impact on EBIT of EUR3 million, because retroactive plan adjustments are always immediately entered in the income statement under IFRS, whereas under U.S. GAAP they are distributed over the remaining service period. Earnings before taxes according to IFRS increased by EUR1.6 billion compared to U.S. GAAP. ABS Transactions Asset backed securities, which result mainly from the sale to institutional investors of receivables in the financial services business, are classified as "sold" under U.S. GAAP and are not consolidated. But according to IFRS, they remain in the balance sheet. In the 2006 consolidated financial statements, this means that the balance sheet total is EUR21.7 billion higher than under U.S. GAAP. In addition, the ABS items results in an increase in revenues of EUR9 million. Provisions According to IFRS, long-term provisions are generally to be discounted and recognized at their present value if the effects of discounting are material. According to U.S. GAAP, discounting is only allowed for certain types of provisions if the dates of the amounts and cash flows can be reliably determined. This changed treatment results in a reduction of EUR8 million in provisions in the IFRS consolidated financial statements for 2006. The change to IFRS also led to valuation differences concerning the early retirement model commonly used in Germany, the so- called "Altersteilzeit". Under U.S. GAAP, the total payments due during the non-working phase are "saved" by gradually setting up provisions during the employment phase. Under IFRS however, provisions for the payments due during the non-working phase are set up in the full amount when the "Altersteilzeit" agreements are signed. In the IFRS consolidated financial statements, this resulted in a reduction of EUR5 million in both shareholders' equity while EBIT decreased by EUR5 million. These differences resulted in the following effects on key figures in 2006 under IFRS: The substantial increase in the balance-sheet total to EUR218 billion was primarily due to consolidating the ABS transactions. The equity of the industrial business increases to EUR28.6 billion, with a corresponding increase in the equity ratio to 27.2%. This was mainly caused by capitalizing development costs. The net liquidity of the industrial business increases from EUR6.4 billion to EUR9.9 billion. One of the main reasons for this is that the residual-value guarantees for leased vehicles are no longer shown as financing liabilities, but under other financial liabilities due to their operating nature. The consolidated cash flow from operating activities is slightly higher under IFRS than under U.S. GAAP. There is a positive effect from the capitalization of development costs. On the other hand, there is a reduction in cash provided by operating activities because under IFRS the Group enters proceeds from the sale of vehicles with significant residual-value guarantees under cash provided by operating activities. The increase in net profit to EUR3.8 billion compared with net income of EUR3.2 billion under U.S. GAAP is primarily a result of the lower cost of pensions and similar obligations. On the other hand, there are higher expenses mainly due to the treatment of EADS, taxes and provisions for early retirement. At the divisional level, the change to IFRS primarily affects the Mercedes Car Group and the Truck Group, whose revenues fall in 2006 compared to U.S. GAAP. This is due to the altered allocation of effects from manufacturer leasing, that is, leasing vehicles to customers through the Financial Services division in Germany. With the use of IFRS, these vehicles are no longer regarded as being sold by the respective division. Instead, revenues are recognized on a pro-rata basis in line with the leasing payments over the period of the lease. This means that revenues and earnings are recognized within the divisions over the period of the leasing contracts. So this is only a timing difference and does not reflect any reduction in revenues from the operating business. There is no change in revenues at the Group level. DaimlerChrysler's consolidated financial statements for 2006 according to IFRS are available on the Internet at: http://www.daimlerchrysler.com/ifrs About DaimlerChrysler Based in Stuttgart, Germany, DaimlerChrysler AG (NYSE:DCX) (FRA: DCX) -- http://www.daimlerchrysler.com/-- develops, manufactures, distributes, and sells various automotive products, primarily passenger cars, light trucks, and commercial vehicles worldwide. It primarily operates in four segments: Mercedes Car Group, Chrysler Group, Commercial Vehicles, and Financial Services. The company's worldwide operations are located in: Canada, Mexico, United States, Argentina, Brazil, Venezuela, China, India, Indonesia, Japan, Thailand, Vietnam, and Australia. The Chrysler Group segment offers cars and minivans, pick-up trucks, sport utility vehicles, and vans under the Chrysler, Jeep, and Dodge brand names. It also sells parts and accessories under the MOPAR brand. The Chrysler Group is facing a difficult market environment in the United States with excess inventory, non-competitive legacy costs for employees and retirees, continuing high fuel prices and a stronger shift in demand toward smaller vehicles. At the same time, key competitors have further increased margin and volume pressures -- particularly on light trucks -- by making significant price concessions. In addition, increased interest rates caused higher sales & marketing expenses. In order to improve the earnings situation of the Chrysler Group as quickly and comprehensively, measures to increase sales and cut costs in the short term are being examined at all stages of the value chain, in addition to structural changes being reviewed as well. DAIMLERCHRYSLER AG: Magna Tops List of Chrysler Contenders ---------------------------------------------------------- Magna International Inc. leads the race for DaimlerChrysler AG's Chrysler Group and could grab a much larger stake in the ailing unit, potentially taking a direct minority ownership stake of between 25% and 50%, Tony Van Alphen of the Toronto Star reports, quoting Brett Hoselton, an analyst from U.S. investment firm KeyBanc Capital Markets. "Many industry sources indicate Magna is the leading contender for Chrysler," Mr. Hoselton said in a note to clients. He added that the firm believes Magna and partner Onex Corp. will assess the Chrysler Group in the "mid to high US$5 billion range," higher than previous estimates of US$4.6 billion to US$4.7 billion. Toronto-based Onex would also hold 40% to 65% and German-parent DaimlerChrysler would retain 10% in addition to a higher Magna share, Mr. Hoselton said in the note. However, the deal would fall apart if DaimlerChrysler, the United Auto Workers, Magna and Onex Corp. fail to iron out the details, the Star cites Mr. Hoselton as saying. Magna Chair Frank Stronach told the Star his company would consider other equity groups as its partner although Onex is the number one choice. He explained that it would take another few weeks before the auto parts maker completes a partnership group. Mr. Stronach has also insisted the company would only take a minority stake to avoid competing directly with other major customers General Motors, Ford and Toyota. Daimler also has to resolve a key issue, which remains uncertain, regarding responsibility for billions of dollars in Chrysler's pension and health-care obligations, Mr. Hoselton said in the note. "Scenarios include retainment by Chrysler or placement into a separate entity (independent from Chrysler or DaimlerChrysler)," he said. "We believe both scenarios include DaimlerChrysler retaining some responsibility for the liabilities." Labor Weighs in Mr. Stronach has met with leaders of the United Auto Workers and the Canadian Auto Workers who want DaimlerChrysler to keep the money-losing North American operations, the Star reveals. The TCR Europe reported on April 30 that UAW President Ron Gettelfinger denied speculations that the union had endorsed Magna International Inc. as its preferred buyer for Chrysler. Representatives from the UAW, the CAW and IG Metall unions had reiterated their opposition to DaimlerChrysler AG's plan to sell Chrysler Group, especially if private equity groups take over. About DaimlerChrysler Based in Stuttgart, Germany, DaimlerChrysler AG (NYSE:DCX) (FRA: DCX) -- http://www.daimlerchrysler.com/-- develops, manufactures, distributes, and sells various automotive products, primarily passenger cars, light trucks, and commercial vehicles worldwide. It primarily operates in four segments: Mercedes Car Group, Chrysler Group, Commercial Vehicles, and Financial Services. The company's worldwide operations are located in: Canada, Mexico, United States, Argentina, Brazil, Venezuela, China, India, Indonesia, Japan, Thailand, Vietnam, and Australia. The Chrysler Group segment offers cars and minivans, pick-up trucks, sport utility vehicles, and vans under the Chrysler, Jeep, and Dodge brand names. It also sells parts and accessories under the MOPAR brand. The Chrysler Group is facing a difficult market environment in the United States with excess inventory, non-competitive legacy costs for employees and retirees, continuing high fuel prices and a stronger shift in demand toward smaller vehicles. At the same time, key competitors have further increased margin and volume pressures -- particularly on light trucks -- by making significant price concessions. In addition, increased interest rates caused higher sales & marketing expenses. In order to improve the earnings situation of the Chrysler Group as quickly and comprehensively, measures to increase sales and cut costs in the short term are being examined at all stages of the value chain, in addition to structural changes being reviewed as well. PEABODY ENERGY: Re-Elects Five Member to Board of Directors ----------------------------------------------------------- Peabody Energy Corporation re-elected five members of its board of directors at the company's annual meeting of shareholders held in St. Louis on May 1. Re-elected directors include: -- William A. Coley, Chief Executive Officer of British Energy plc; -- Irl F. Engelhardt, Chairman of Peabody Energy; -- William C. Rusnak, former President and Chief Executive Officer of Premcor Inc.; -- John F. Turner, former Assistant Secretary of State for the Bureau of Oceans and International Environmental and Scientific Affairs; and -- Alan H. Washkowitz, former managing director of Lehman Brothers. Each of these members will serve three-year terms through 2010. Peabody Energy Board Of Directors are: A) Gregory H. Boyce Mr. Boyce is President and Chief Executive Officer of Peabody Energy, a position he has held since Jan. 1, 2006. In March 2005, Peabody's Board elected Mr. Boyce to the position of President and Chief Executive Officer. He was elected to the Board of Directors in March 2005 and chairs the Executive Committee. Mr. Boyce joined Peabody in October 2003 as President and Chief Operating Officer. Prior to joining Peabody, Mr. Boyce served as Chief Executive Officer - Energy for international mining company Rio Tinto in London, with responsibility for coal and uranium operations located in five countries. Prior to that, he was President and Chief Executive Officer of Kennecott Energy Company. Other prior positions include President of Kennecott Minerals Company and Executive Assistant to the Vice Chairman of Standard Oil of Ohio. Mr. Boyce holds a Bachelor of Science Degree in Mining Engineering from the University of Arizona, and the Advanced Management Program Degree from the Harvard University's Graduate School of Business. Mr. Boyce's leadership positions include serving as a member of the National Coal Council and as Study Chair of the National Coal Council's 2006 report, "Coal: America's Energy Future." He is also Co-Chairman of the Coal-Based Generation Stakeholders' Group and a member of the Coal Industry Advisory Board of the International Energy Agency. He is a Board member of the Center for Energy and Economic Development and the National Mining Association. Mr. Boyce is a member of the Board of Directors of the St. Louis Regional Chamber and Growth Association and a member of Civic Progress in St. Louis. He is a member of the Advisory Council of the University of Arizona's Department of Mining and Geological Engineering, and the School of Engineering and Applied Science National Council at Washington University. B) B. R. (Bobby) Brown Mr. Brown served as Chairman, President and Chief Executive Officer of CONSOL Energy Inc., a domestic coal and gas producer and energy services provider, from 1978 to 1998. He also was Senior Vice President of E. I. du Pont de Nemours & Co., CONSOL's controlling shareholder, from 1981 to 1991. Mr. Brown's experience includes Senior Vice President at Conoco and President and Chief Executive Officer of Remington Arms Company, Inc. Mr. Brown has previously served as Director and Chairman of the Bituminous Coal Operators' Association Negotiating Committee, Chairman of the National Mining Association, and Chairman of the Coal Industry Advisory Board of the International Energy Agency. He is an inductee in the West Virginia Mining Hall of Fame and a recipient of the Distinguished Service Award from the National Mining Association. He is currently a director of Delta Trust & Bank and Remington Arms Company, Inc. C) William A. Coley Mr. Coley is Chief Executive Officer and Director of British Energy Group plc, the United Kingdom's largest electricity producer. He has held this position since March 2005. He was formerly a non-executive director of British Energy. He served as President of Duke Power and retired in February 2003. During his 37-year career with Duke Power, Mr. Coley held various officer-level positions in the engineering, operations and senior management areas. Mr. Coley was named Senior Vice President of Customer Operations and elected to the Duke Power Board of Directors in 1990, named President of the Associated Enterprises Group in 1994 and elected President in 1997. Mr. Coley earned his Bachelor of Science degree in Electrical Engineering from Georgia Institute of Technology and is a registered professional engineer. He is also a director of CT Communications, Inc. D) Irl F. Engelhardt Mr. Engelhardt is Chairman of Peabody Energy. He served as Chief Executive Officer of the company from 1990 through 2005. Mr. Engelhardt joined the company in 1979 after a decade of management consulting experience and held various officer-level positions prior to being named Chief Executive Officer. His business experience includes: * Group Vice President and Executive Director of Hanson Industries; * Co-Chief Executive Officer of The Energy Group; * Chairman of Cornerstone Construction and Materials; * Chairman of Suburban Propane; Chairman of Citizens Power; and * Chairman of Peabody Resources Limited (Australia). He received a Bachelor of Science degree in Accounting from the University of Illinois in 1968 and a master's degree in business administration from Southern Illinois University in 1971. Mr. Engelhardt's industry leadership positions include former chairman posts with the National Mining Association, the Coal Industry Advisory Board of the International Energy Agency, the Center for Energy and Economic Development and Co-Chairman of the Coal Utilization Research Council and the Coal-Based Generation Stakeholders Group. In addition to serving as Chairman of Peabody's Board of Directors, Mr. Engelhardt is Chairman of The Federal Reserve Bank of St. Louis, and a member of the Board of Directors of Valero Energy Corporation and The Williams Companies, Inc. E) Dr. Henry Givens, Jr. Mr. Givens is President of Harris-Stowe State University in St. Louis, Mo., a position he has held since 1979. He began his career in education as a teacher in the Webster Groves School District, was named principal of the nation's first prototype magnet school and assistant to the superintendent of schools. He was the first African American to serve as Assistant Commissioner of Education in Missouri, holding the post for five years. Dr. Givens earned his baccalaureate degree at Lincoln University in Missouri, his master's degree at the University of Illinois and his doctorate at Saint Louis University. He has participated in post-doctoral studies in higher education administration at Harvard University and has been recognized with over 100 national, state and local awards, including two honorary doctorates of Humane Letters from Lincoln University and St. Louis University. He is a director of The Laclede Group Inc. and serves on the Advisory Board of U.S. Bank, N.A. (St. Louis). He is affiliated with numerous educational organizations and honor societies. F) William E. (Wilber) James Mr. James is a Founding Partner of RockPort Capital Partners LLC, a venture fund specializing in energy and environmental technology and advanced materials. He is also Chairman of RockPort Group, a holding company engaged in international oil trading, banking and communications. Prior to joining RockPort, Mr. James co-founded and served as Chairman and Chief Executive Officer of Citizens Power LLC, a leading power marketer. Previously, Mr. James was a co-founder of the nonprofit Citizens Energy Corporation and served as Chairman and Chief Executive Officer of Citizens Corporation, its for-profit subsidiary, from 1987 to 1996. Mr. James holds a Bachelor of Arts degree from Colorado College. G) Robert B. Karn III Mr. Karn is a financial consultant and former managing partner in financial and economic consulting with Arthur Andersen LLP in St. Louis. Before retiring from Andersen in 1998, Mr. Karn served in a variety of accounting, audit and financial roles over a 33-year career, including Managing Partner in charge of the global coal mining practice from 1981 through 1998. He is a Certified Public Accountant and has served as a Panel Arbitrator with the American Arbitration Association. Mr. Karn serves on the Board of Directors of Natural Resource Partners, L.P., a coal-oriented master limited partnership that is listed on the New York Stock Exchange. He is also a member of the Board of Trustees of Fiduciary/Claymore MLP Opportunity Fund and Fiduciary/Claymore Dynamic Equity Fund. H) Henry (Jack) E. Lentz Mr. Lentz is an Advisory Director for Lehman Brothers Inc. He has held this position since January 2004. Mr. Lentz joined Lehman Brothers in 1971 and became a Managing Director in 1976. In 1988, Mr. Lentz left Lehman Brothers to serve as Vice Chairman of Wasserstein Perella Group, Inc., an investment banking firm. In 1993, he returned to Lehman as a Managing Director and served as head of the firm's worldwide energy practice. In 1996, he joined the Merchant Banking Group as a Principal and in 2003 became a consultant to the Merchant Banking Group. Mr. Lentz is currently a director of Rowan Companies, Inc. and CARBO Ceramics, Inc. Mr. Lentz holds an MBA from the Wharton School of Business at the University of Pennsylvania. I) William C. Rusnack Mr. Rusnack is former President and Chief Executive Officer of Premcor Inc., one of the largest independent oil refiners in the United States prior to its acquisition by Valero Energy Corporation in 2005. He served as President, Chief Executive Officer and Director of Premcor from 1998 to February 2002. Prior to joining Premcor, Mr. Rusnack was President of ARCO Products Company, the refining and marketing division of Atlantic Richfield Company. During a 31-year career at ARCO, he was also President of ARCO Transportation Company and Vice President of Corporate Planning. He holds a Bachelor of Science degree in General Chemistry from Indiana University of Pennsylvania and an MBA from the University of Chicago. He is also a director of Sempra Energy and Flowserve Corporation. J) Dr. James R. Schlesinger Mr. Schlesinger is currently Chairman of the Board of Trustees of the MITRE Corporation, a not-for-profit corporation that provides systems engineering, research and development and information technology support to the government, a position he has held since 1985. He also serves as senior advisor to Lehman Brothers and as a Trustee to the Center for Strategic and International Studies. Dr. Schlesinger was U.S. Secretary of Energy from 1977 to 1979. He held senior executive positions for three U.S. Presidents, serving as Chairman of the U.S. Atomic Energy Commission from 1971 to 1973, Director of the Central Intelligence Agency in 1973 and Secretary of Defense from 1973 to 1975. Prior positions include Assistant Director of the Office of Management and Budget, Director of Strategic Studies at the Rand Corporation, Associate Professor of Economics at the University of Virginia and consultant to the Board of Governors of the Federal Reserve System. He also serves as a consultant to the Department of Defense, the Department of State and the Department of Homeland Security. Dr. Schlesinger holds Bachelor of Arts, master's and doctoral degrees from Harvard University. He is also a director of Evergreen Energy Inc. and Sandia Corporation. K) Dr. Blanche M. Touhill Ms. Touhill is Chancellor Emeritus and Professor Emeritus at the University of Missouri - St. Louis. She previously served as Chancellor and Professor of History and Education at the University of Missouri - St. Louis from 1991 through 2002. Prior to her appointment as Chancellor, Dr. Touhill held the positions of Vice Chancellor for Academic Affairs and Interim Chancellor at the University of Missouri - St. Louis. Dr. Touhill holds bachelor's and doctoral degrees in history and a master's degree in geography from St. Louis University. Dr. Touhill has served on the Board of Directors of Trans World Airlines and Delta Dental as well as a number of civic organizations. In 1997, she was named the St. Louis Citizen of the Year. L) John F. Turner Mr. Turner is former U.S. Assistant Secretary of State for Oceans and International Environmental and Scientific Affairs within the State Department. Mr. Turner had served as Assistant Secretary from November 2001 to July 2005. Prior to his appointment, he was President and Chief Executive Officer of the Conservation Fund, a national non-profit organization dedicated to public-private partnerships to protect land and water resources. He has also served as the Director of the U.S. Fish and Wildlife Service from 1989 to 1993. Mr. Turner began his career in state politics, serving 19 years in the Wyoming State Legislature and is a past president of the Wyoming State Senate. He earned a bachelor's degree in biology from the University of Notre Dame, and a master's degree in wildlife ecology from the University of Michigan. He also serves on the Board of the University of Wyoming, Ruckelshaus Institute of Environment and Natural Resources and as a Visiting Professor of Environment and Natural Resources at the University. He is also a director of International Paper Company and Ashland, Inc. M) Sandra A. Van Trease Ms. Van Trease is Group President, BJC Healthcare, a position she has held since September 2004. BJC Healthcare is one of the largest non-profit healthcare organizations, delivering services to residents in the greater St. Louis, Southern Illinois and mid-Missouri regions. Prior to joining BJC Healthcare, Ms. Van Trease served as President and Chief Executive Officer of UNICARE, an operating affiliate of WellPoint Health Networks Inc., from 2002 to September 2004. Ms. Van Tease also served as President, Chief Financial Officer and Chief Operating Officer of RightCHOICE Managed Care, Inc. from 2000 to 2002, and as Executive Vice President, Chief Financial Officer and Chief Operating Officer from 1997 to 2000. Prior to joining RightCHOICE in 1994, she was a Senior Audit Manager with Price Waterhouse LLP. She is a Certified Public Accountant and Certified Management Accountant. Ms. Van Trease is also a Director of Enterprise Financial Services Corporation and serves on the Board of Directors of a number of civic organizations. She earned her master's degree in business administration from Washington University in St. Louis and her bachelor's degree in business administration from the University of Missouri - St. Louis. N) Alan H. Washkowitz Mr. Washkowitz is the former Managing Director of Lehman Brothers Inc. He was part of the firm's Merchant Banking Group until July 2005, with responsibility for the oversight of Lehman Brothers Merchant Banking Partners II L.P. Mr. Washkowitz joined Kuhn Loeb & Co. in 1968 and became a general partner of Lehman Brothers in 1978 when Kuhn Loeb & Co. was acquired by Lehman. Prior to joining the Merchant Banking Group, Mr. Washkowitz headed Lehman Brothers' Financial Restructuring Group. Mr. Washkowitz holds an MBA from Harvard University and a Juris Doctorate from Columbia University. Mr. Washkowitz serves on the Board of Visitors of the Faculty of Law for Columbia University, and on the Advisory Board for the Columbia University Center on Corporate Governance. He is also a director of L-3 Communications Corporation. Headquartered in St. Louis, Missouri, Peabody Energy Corporation (NYSE: BTU) -- http://www.peabodyenergy.com/-- is the world's largest private-sector coal company, with 2005 sales of 240 million tons of coal and US$4.6 billion in revenues. Its coal products fuel 10% of all U.S. and 3% of worldwide electricity. The company has coal operations in Venezuela. * * * As reported in the Troubled Company Reporter on Mar 9, 2007, Moody's Investors Service reported that, after the adoption of final guidelines for preferred stock and hybrid securities notching, it downgraded Peabody Energy Corporation's hybrid instrument to Ba3. This instrument had been placed on review for downgrade. This completes the review for possible downgrade. * VENEZUELA: To Formally Leave IMF & World Bank ----------------------------------------------- The Venezuelan government will formally withdraw its account from the International Monetary Fund and the World Bank, El Universal reports. "We will no longer have to go to Washington nor to the IMF nor to the World Bank, not to anyone," President Hugo Chavez was quoted by Efe news agency as saying. The Venezuelan leader has initiated the establishment of a regional bank that would provide country's in the hemisphere with banking and financing services similar to those of the IMF and the World Bank. Bolivia, Brazil, Ecuador and Paraguay have already pledged membership to the proposed bank. * * * As reported in the Troubled Company Reporter on Nov. 20, 2006, Fitch Ratings affirmed Venezuela's long-term foreign and local currency Issuer Default Ratings at 'BB-'. At the same time, the agency also affirmed the short-term foreign currency IDR at 'B' and the Country Ceiling at 'BB-'. Fitch said the outlook on the ratings remains stable. * VENEZUELA: Bonds, Currency Fall Over IMF Exit Talk ---------------------------------------------------- Lester Pimentel and Guillermo Parra-Bernal at Bloomberg News reports that Venezuela's dollar bonds and currency fell after President Hugo Chavez announced the government's plan to withdraw its account from the International Monetary Fund. Concerns are high that the decision will trigger a default on Venezuela's debts. The nation's decision is in line with its plan to establish a regional bank that would provide similar services provided by the international lender at cheaper rates. When President Chavez announced that his country is cutting ties with the IMF, he said that the bank has curtailed the nation's economic sovereignty for decades, Bloomberg relates. According to the same report, the country's prospectus of a 9.375 percent bond maturing in 2034, it states that Venezuela ceasing to be a member of the IMF is an event of default. To reassure investors, Finance Minister Rodrigo Cabezas said that a withdrawal plan is in the works to ensure that bondholders won't get hurt, Bloomber relates. Gunter Heiland at JPMorgan Asset Management was quoted by Bloomberg as saying that the President's remarks could trigger a technical default, a condition that would be detrimental to a country that needs money while in the process of nationalizing many industries. The yield on Venezuela's 9-1/4 percent dollar bonds due September 2027 rose 6 basis points, or 0.06 percentage point, to 7.18 percent at 5:05 p.m. on May 2 in New York, according to JPMorgan Chase & Co. The bond's price, which moves inversely to the yield, fell 0.80 cents on the dollar to 122.00. * * * As reported in the Troubled Company Reporter on Nov. 20, 2006, Fitch Ratings affirmed Venezuela's long-term foreign and local currency Issuer Default Ratings at 'BB-'. At the same time, the agency also affirmed the short-term foreign currency IDR at 'B' and the Country Ceiling at 'BB-'. Fitch said the outlook on the ratings remains stable. * VENEZUELA: Says It Will Continue to Pay Foreign Debt ------------------------------------------------------ Venezuelan government told the Associated Press that it would repair its foreign debt although it has decided to withdraw from the International Monetary Fund and the World Bank. The AP says that Finance Minister Rodrigo Cabezas said the decision wouldn't affect, in any way, the payment of foreign obligations. According to some analysts and investors, the Venezuelan government bonds, like many international debt deals, carry clauses that consider pulling out from the IMF to technically be a default. The AP relates that Bear Stearns & Co. lowered Venezuelan government bonds, which paved the way for possibie technical default. Tehrantimes.com reports that both financial institutions has suffered crisis of credibility following Venezuela's decision. President Hugo Chavez commented that those institutions are in crisis, citing IMF's lack of money to meet its payroll, Tehrantimes.com adds. As published in TurkishPress.com, IMF chief Rodrigo Rato refused to react to Venezuela's withdrawal because he had yet to receive an official request from Caracas. "I think I'm not entitled to react on a such serious matter until I receive an official request," says Mr. Rato. * * * As reported in the Troubled Company Reporter on Nov. 20, 2006, Fitch Ratings affirmed Venezuela's long-term foreign and local currency Issuer Default Ratings at 'BB-'. At the same time, the agency also affirmed the short-term foreign currency IDR at 'B' and the Country Ceiling at 'BB-'. Fitch said the outlook on the ratings remains stable. *********** 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, Rizande delos Santos, Christian Toledo, and Junald Ango, Editors. Copyright 2007. All rights reserved. ISSN 1529-2746. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Latin America subscription rate is US$625 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Christopher Beard at 240/629-3300. * * * End of Transmission * * *