T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Tuesday, April 29, 2008, Vol. 9, No. 84 Headlines A R G E N T I N A ALEMANI ITALO: Proofs of Claim Verification Deadline Is May 30 ALITALIA SPA: Italy Has Until May 4 to Explain Loan, EC Rules ARTECO CONST: Proofs of Claim Verification Is Until June 4 BANCO HIPOTECARIO: S&P Changes Outlook to Negative From Stable BANCO PATAGONIA: S&P Revises Outlook to Negative After Argentina COMESA SA: Proofs of Claim Verification Deadline is June 24 CRATEC SRL: Proofs of Claim Verification Is Until July 10 GUACAMOLE COMPANY: Proofs of Claim Verification Is Until June 6 IMMSA SA: Trustee to Verify Proofs of Claim Until June 17 MASTERING SA: Files for Reorganization in Buenos Aires Court RISK METHODS: Files for Reorganization in Buenos Aires Court SUMMIT GROUP: Trustee to Verify Proofs of Claim Until June 4 TYSON FOODS: R. Bond Supports Petition to Lessen Ethanol Mandate * ARGENTINA: S&P Revises Outlook as Economic Minister Resigns * BUENOS AIRES: S&P Shifts Outlook Along With Argentine Ratings * MENDOZA PROVINCE: S&P Changes B+ Rating Outlook to Negative B E R M U D A IPC HOLDINGS: Net Income Up 13% to US$86.8 Mil. in 1st Qtr. 2008 SEA CONTAINERS: Fails to Submit Plan by Filing Deadline SEA CONTAINERS: SCSL Panel Asks Documents on Pension Dispute SHIPPING INTEREST: Proofs of Claim Filing Deadline Is May 8 SHIPPING INTEREST: Sets Final Shareholders Meeting for May 26 UNOCAL KRUENG: Proofs of Claim Filing Is Until May 7 UNOCAL KRUENG: Sets Final Shareholders Meeting for May 26 B R A Z I L BANCO CRUZEIRO: Moody's Rates New Short Term Note Program at Ba1 BANCO CRUZEIRO: Sells US$110 Million Two-Year Bonds BANCO GMAC: Moody's Affirms B1 Global Currency Deposit Ratings BRASIL TELECOM: Telemar to Buy Invitel SA for US$3.5 Billion BRASKEM SA: Opens Polypropylene Production Plant in Paulinia COSAN SA: ExxonMobil Deal Cues Moody's Rating Review EMBRATEL PARTICIPACOES: Gets Anatel's Okay for Satellite Paid TV GENERAL MOTORS: Moody's Holds B3 Rating, Changes Outlook to Neg. GENERAL MOTORS: GMAC and ResCap Downgrades Cue S&P's Neg. Watch GERDAU SA: Primary Share Offering in Bovespa Brings in BRL2.65B GOL LINHAS: Releases Corporate Responsibility Report for 2007 PARANA BANCO: First Qtr. Profit Up 132% to BRL23.6 Mil. in 2008 PRIDE INT'L: BOD's Actions May Cue Seadrill's Buyout, Fitch Says UAL CORP: Continental Airlines Chooses Not to Merge with United UAL CORP: Begins Merger Discussions with US Airways C A Y M A N I S L A N D S BANK INTERNASIONAL: Reports IDR197.86 Billion 1Q Net Profit BELAY OFFSHORE: Will Hold Final Shareholders Meeting on May 2 FY FUNDING: Sets Final Shareholders Meeting for May 1 JUST FOREX: Final Shareholders Meeting Is on May 1 LVHN ASSURANCE: Sets Final Shareholders Meeting for May 1 ML ELKHORN: Final Shareholders Meeting Is on May 2 SOLARIS CAPITAL: Will Hold Final Shareholders Meeting on May 1 SPENCER HOUSE: Final Shareholders Meeting Is on May 1 SPENCER HOUSE CAPITAL: Sets Final Shareholders Meeting for May 1 THE CL BRAZIL: Sets Final Shareholders Meeting for May 1 WESKAT LIMITED: Proofs of Claim Filing Deadline Is Until May 2 C O S T A R I C A US AIRWAYS: Begins Merger Discussions with United Airlines D O M I N I C A N R E P U B L I C AMERICAN AIRLINES: Won't Charge US$25 on Extra Luggage J A M A I C A CASH PLUS: Has US$15 Million Unclaimed Deposits, Report Says NAT'L COMMERCIAL: Court to Rule on Olint Account Closure NATIONAL COMMERCIAL: Profit Increases 44% in First Six Months M E X I C O ALESTRA: Turnarounds With Net Income of MXN188 Million in 2007 ASARCO: Grupo Mexico to Submit Reorganization Plan for ASARCO CONTINENTAL AIRLINES: Chooses Not to Merge With United Air Lines DESARROLLADORA HOMEX: Equity International Sells 11 Mil. Shares DIOMED HOLDINGS: Can Use Cash Collateral on Interim Basis DIOMED HOLDINGS: Seeks Court OK to Sell Assets to AngioDynamics DIOMED HOLDINGS: Selects Fladgate LLP as U.K. Legal Counsel FIAT SPA: Earns EUR427 Million in First Quarter of 2008 FRONTIER AIRLINES: Taps Faegre & Benson as Special Counsel RESIDENTIAL CAPITAL: Taps T. Marano as Non-Exec Board Chairman RESIDENTIAL CAP: S&P Junks Ratings on Board Members' Stepdown SHARPER IMAGE: Chooses to Pursue Sale of Business and Assets SR TELECOM: Changes Name to SRX Post After Acquisition WENDY'S INTERNATIONAL: Inks US$2BB Buyout Deal with Triarc Cos. WENDY'S INT'L: Triarc Deal Prompts Moody's 'Ba3' Rating Reviews WENDY'S INT'L: Triarc Deal Cues S&P's Negative Watch P U E R T O R I C O GAMESTOP: Moody's Lifts Ba2 Ratings to Ba1 on Strong Performance HORIZON LINES: Net Income Drops to US$2.1MM in 1st Quarter 2008 MICRON TECH: Inks New DRAM Joint Venture With Nanya Technology MICRON TECH: Moody's Holds Ba3 Corporate Family Rating MUSICLAND HOLDING: Ct. Awards Professionals US$10M Final Payment R&G FINANCIAL: Board Suspends Preferred Stock Dividend Payments V E N E Z U E L A PETROLEOS DE VENEZUELA: Corocoro Begins Production X X X X X X * Brazil, Chile & Peru Make S&P's Potential Rising Stars List * Large Companies With Insolvent Balance Sheet - - - - - ================= A R G E N T I N A ================= ALEMANI ITALO: Proofs of Claim Verification Deadline Is May 30 -------------------------------------------------------------- Gustavo H. Scocco, the court-appointed trustee for Alemani Italo, Riba Jorge y Otros S.H.'s bankruptcy proceeding, will be verifying creditors' proofs of claim until May 30, 2008. Mr. Scocco will present the validated claims in court as individual reports on July 24, 2008. The National Commercial Court of First Instance in San Francisco, Cordoba, 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 Alemani Italo 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 Alemani Italo's accounting and banking records will be submitted in court on Sept. 4, 2008. Mr. Scocco is also in charge of administering Alemani Italo's assets under court supervision and will take part in their disposal to the extent established by law. The debtor can be reached at: Alemani Italo, Riba Jorge y Otros S.H." Bv. 25 de Mayo 1566, San Francisco Cordoba, Argentina The trustee can be reached at: Gustavo H. Scocco Pje. Newton 1879, San Francisco Cordoba, Argentina ALITALIA SPA: Italy Has Until May 4 to Explain Loan, EC Rules ------------------------------------------------------------- The European Commission gave the Italian government until May 4, 2008, to reply on concerns whether its planned EUR300 million loan to Alitalia S.p.A. breaks the European Union rule on state aid, Matthew Newman writes for Bloomberg News. As reported in the TCR-Europe on April 24, 2008, the Commission said it would review the financing to Alitalia. Under EU's "one time, last time" principle, a company beneficiary of a state aid cannot receive additional rescue or restructuring funding within 10 years since its accepted financial assistance. Alitalia cannot receive further aid until 2011, since it took fiscal assistance in 2001. According to Bloomberg News, Italy needs to prove that the loan was offered on commercial terms to gain approval from the Commission. Alitalia may face months-long probe over the legality of the loan, which may further cramp Italy's efforts to sell its 49.9% stake in the national carrier. As reported in the TCR-Europe on April 25, 2008, Ryanair Plc said it will file a suit at the European Commission against the EUR300-million bridging loan granted to Alitalia. Italy said it would respond to the Commission's query within the deadline, Bloomberg News relates. About Alitalia Headquartered in Rome, Italy, Alitalia S.p.A. -- http://www.alitalia.it/-- provides air travel services for passengers and air transport of cargo on national, international and inter-continental routes, including United States, Canada, Japan and Argentina. The Italian government owns 49.9% of Alitalia. Despite a EUR1.4 billion state-backed restructuring in 1997, Alitalia posted net losses of EUR256 million and EUR907 million in 2000 and 2001 respectively. Alitalia posted EUR93 million in net profits in 2002 after a EUR1.4 billion capital injection. The carrier booked annual net losses of EUR520 million in 2003, EUR813 million in 2004, EUR168 million in 2005, and EUR625.6 million in 2006. Italian Finance Minister Tommaso Padoa-Schioppa had said that if the sale to Air France fails, Alitalia may seek protection from creditors and the government would appoint a special commissioner to initiate bankruptcy proceedings. ARTECO CONST: Proofs of Claim Verification Is Until June 4 ---------------------------------------------------------- Aldo Emilio Cambiasso, the court-appointed trustee for Arteco Const. S.A.'s bankruptcy proceeding, will be verifying creditors' proofs of claim until June 4, 2008. Mr. Cambiasso will present the validated claims in court as individual reports on July 18, 2008. The National Commercial Court of First Instance in San Francisco, Cordoba, 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 Arteco Const. 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 Arteco Const.'s accounting and banking records will be submitted in court on Sept. 15, 2008. Mr. Cambiasso is also in charge of administering Arteco Const.'s assets under court supervision and will take part in their disposal to the extent established by law. The trustee can be reached at: Aldo Emilio Cambiasso Cerrito 1070 Buenos Aires, Argentina BANCO HIPOTECARIO: S&P Changes Outlook to Negative From Stable -------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Banco Hipotecario S.A. and Banco Patagonia S.A. to negative from stable, following a similar rating action on the global scale ratings on the Republic of Argentina. The long-term counterparty credit ratings on both banks are still 'B+', the same as the sovereign ratings. The Argentine financial system currently enjoys ample liquidity and has shown strong positive business and financial trends in the past few years. "The outlook revisions reflect the growing uncertainty in the domestic environment as a result of a government management style that exacerbates political and social tensions and may eventually deteriorate governability and curtail local investors' confidence," said S&P's credit analyst Carina Lopez. In this context, S&P will continue to monitor Argentine banks' financial condition closely. At this point, a downgrade of the sovereign will result in a lower rating for Argentine financial institutions. A revision to stable of the outlook on the sovereign ratings will trigger a similar rating action on the country's banks. The government's rejection of corrective policies for the country's overheating economy and further challenges in the nation's political dynamic following the resignation of Martin Lousteau prompted the negative outlook on the sovereign ratings. Rising inflation expectations and distortions in the economy through price controls, subsidies, and regulation will hurt growth prospects now that Argentina's output gap has narrowed. Less growth could erode the government's popularity, which is already a challenge for the administration. Any material fiscal deterioration that results could lead to a downgrade of Argentina. Conversely, if Cristina Fernandez's new government adjusts the policy mix to redress the overheated economy, the outlook would revert to stable. 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: S&P Revises Outlook to Negative After Argentina ---------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Banco Hipotecario S.A. and Banco Patagonia S.A. to negative from stable, following a similar rating action on the global scale ratings on the Republic of Argentina. The long-term counterparty credit ratings on both banks are still 'B+', the same as the sovereign ratings. The Argentine financial system currently enjoys ample liquidity and has shown strong positive business and financial trends in the past few years. "The outlook revisions reflect the growing uncertainty in the domestic environment as a result of a government management style that exacerbates political and social tensions and may eventually deteriorate governability and curtail local investors' confidence," said S&P's credit analyst Carina Lopez. In this context, S&P will continue to monitor Argentine banks' financial condition closely. At this point, a downgrade of the sovereign will result in a lower rating for Argentine financial institutions. A revision to stable of the outlook on the sovereign ratings will trigger a similar rating action on the country's banks. The government's rejection of corrective policies for the country's overheating economy and further challenges in the nation's political dynamic following the resignation of Martin Lousteau prompted the negative outlook on the sovereign ratings. Rising inflation expectations and distortions in the economy through price controls, subsidies, and regulation will hurt growth prospects now that Argentina's output gap has narrowed. Less growth could erode the government's popularity, which is already a challenge for the administration. Any material fiscal deterioration that results could lead to a downgrade of Argentina. Conversely, if Cristina Fernandez's new government adjusts the policy mix to redress the overheated economy, the outlook would revert to stable. 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. COMESA SA: Proofs of Claim Verification Deadline is June 24 ----------------------------------------------------------- Bernardino Margolis, the court-appointed trustee for Comesa SA's bankruptcy proceeding, will be verifying creditors' proofs of claim until June 24, 2008. Mr. Margolis 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 Comesa 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 Comesa's accounting and banking records will be submitted in court. Infobae didn't state the reports submission deadlines. Mr. Margolis is also in charge of administering Comesa's assets under court supervision and will take part in their disposal to the extent established by law. The debtor can be reached at: Comesa SA Esmeralda 1075 Buenos Aires, Argentina The trustee can be reached at: Bernardino Margolis Parana 426 Buenos Aires, Argentina CRATEC SRL: Proofs of Claim Verification Is Until July 10 --------------------------------------------------------- Ricardo Adolfo Bertoglio, the court-appointed trustee for Cratec S.R.L.'s bankruptcy proceeding, will be verifying creditors' proofs of claim until July 10, 2008. Mr. Bertoglio will present the validated claims in court as individual reports on Sept. 4, 2008. The National Commercial Court of First Instance in San Francisco, Cordoba, 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 Cratec 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 Cratec's accounting and banking records will be submitted in court on Oct. 16, 2008. Mr. Bertoglio is also in charge of administering Cratec's assets under court supervision and will take part in their disposal to the extent established by law. The trustee can be reached at: Ricardo Adolfo Bertoglio Lavalle 1537 Buenos Aires, Argentina GUACAMOLE COMPANY: Proofs of Claim Verification Is Until June 6 --------------------------------------------------------------- Oscar Alfredo Arias, the court-appointed trustee for Guacamole Company S.A.'s bankruptcy proceeding, will be verifying creditors' proofs of claim until June 6, 2008. Mr. Arias 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 Guacamole Company 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 Guacamole Company's accounting and banking records will be submitted in court. Mr. Arias is also in charge of administering Guacamole Company's assets under court supervision and will take part in their disposal to the extent established by law. The trustee can be reached at: Oscar Alfredo Arias Carlos Pellegrini 1063 Buenos Aires, Argentina IMMSA SA: Trustee to Verify Proofs of Claim Until June 17 --------------------------------------------------------- Julio Salaberry, the court-appointed trustee for Immsa SA's reorganization proceeding, will be verifying creditors' proofs of claim until June 17, 2008. Mr. Salaberry will present the validated claims in court as individual reports. The National Commercial Court of First Instance No. 26 in Buenos Aires, with the assistance of Clerk No. 51, 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 Immsa 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 Immsa's accounting and banking records will be submitted in court. La Nacion didn't state the reports submission deadlines. Creditors will vote to ratify the completed settlement plan during the assembly on Feb. 16, 2009. The debtor can be reached at: Immsa SA Alsina 2143 Buenos Aires, Argentina The trustee can be reached at: Julio Salaberry Uruguay 766 Buenos Aires, Argentina MASTERING SA: Files for Reorganization in Buenos Aires Court ------------------------------------------------------------ Mastering SA has requested for reorganization approval after failing to pay its liabilities since April 23, 2008. The reorganization petition, once approved by the court, will allow Mastering to negotiate a settlement with its creditors in order to avoid a straight liquidation. The case is pending in the National Commercial Court of First Instance No. 4 in Buenos Aires. Clerk No. 7 assists the court in this case. The debtor can be reached at: Mastering SA Alicia Moreau de Justo 850 Buenos Aires, Argentina RISK METHODS: Files for Reorganization in Buenos Aires Court ------------------------------------------------------------ Risk Methods Argentina SA has requested for reorganization approval after failing to pay its liabilities since May 30, 2007. The reorganization petition, once approved by the court, will allow Risk Methods to negotiate a settlement with its creditors in order to avoid a straight liquidation. The case is pending in the National Commercial Court of First Instance No. 17 in Buenos Aires. Clerk No. 33 assists the court in this case. The debtor can be reached at: Risk Methods Argentina SA San Mart�n 50 Buenos Aires, Argentina SUMMIT GROUP: Trustee to Verify Proofs of Claim Until June 4 ------------------------------------------------------------ Amalia Mild, the court-appointed trustee for Summit Group Corporation S.A.'s reorganization proceeding, will be verifying creditors' proofs of claim until June 4, 2008. Ms. Mild will present the validated claims in court as individual reports on July 17, 2008. 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 Summit Group 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 Summit Group's accounting and banking records will be submitted in court on Sept. 11, 2008. Creditors will vote to ratify the completed settlement plan during the assembly on April 24, 2009. The trustee can be reached at: Amalia Mild Lavalle 2024 Buenos Aires, Argentina TYSON FOODS: R. Bond Supports Petition to Lessen Ethanol Mandate ---------------------------------------------------------------- Tyson Foods Inc. President and CEO Richard L. Bond has issued a statement in response to Texas Governor Rick Perry's request for a 50 percent waiver from the federal renewable fuel standard (RFS) mandate for ethanol produced from grain: "We applaud Governor Perry for his decision to petition the EPA for a partial waiver from the ethanol mandate. Something has to be done to address corn-based ethanol's detrimental impact on food prices and this is a good first step." "As a major employer in Texas, with more than 10,000 Team Members, we appreciate Governor Perry's efforts and hope other states will follow his lead. In addition, we hope Congress will also do the right thing by removing the tariff on imported, sugar-based ethanol and by reducing or eliminating the 51 cent per gallon federal tax credit for ethanol produced from corn in the U.S." 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 makes a wide variety of protein-based and prepared food products at its 123 processing plants. Tyson has approximately 114,000 Team Members employed at more than 300 facilities and offices in 26 states and 80 countries. Tyson's U.S. beef plants are located in Amarillo, Texas; Dakota City, Nebraska; Denison, Iowa; Finney County, Kansas; Joslin, Illinois, Lexington, Nebraska and Pasco, Washington. The company also has a beef complex in Canada, and is involved in a vertically integrated beef operation in Argentina. * * * As reported in the Troubled Company Reporter-Latin America on April 8, 2008, Moody's Investors Service confirmed Tyson Foods, Inc.'s corporate family rating and probability of default rating at Ba1. Moody's said the rating outlook remains negative. * ARGENTINA: S&P Revises Outlook as Economic Minister Resigns ------------------------------------------------------------- Standard & Poor's Ratings Services said that it revised its outlook on its sovereign credit ratings on the Republic of Argentina to negative from stable and affirmed its 'B+' long- and 'B' short-term ratings on the republic. The negative outlook reflects the government's rejection of policies to correct the country's overheating economy, signaled by the resignation of Economic Minister Martin Lousteau. S&P expects current policy to increase the likelihood of continued acceleration in inflation, which could both fray social cohesion and lead to additional direct governmental interventions in the economy. Inflation expectations reached 32% for the next 12 months. Although strong economic activity matched with rising inflation and export taxes helped support fiscal accounts, yielding a forecasted primary surplus of 3.3% to 3.8% of GDP in 2008, wage pressures, subsidies, and the continued dispute with the agricultural sector will challenge fiscal policy over the next 18-24 months. Any reversal of the favorable terms of trade that Argentina has enjoyed for five years would hurt the fiscal outturn and lower the projected 2.8% of GDP current account surplus for 2008. Outlook The negative outlook indicates that downside risk to the ratings on Argentina now predominates. Rising inflation expectations and distortions in the economy through price controls, subsidies, and regulation will hurt growth prospects now that Argentina's output gap has narrowed. Lower growth could erode the government's popularity, which already presents a challenge for the administration. Any material fiscal deterioration that ensues as a result could lead to a lowering of the ratings. Conversely, if President Cristina Fernandez's new government adjusts the policy mix to redress the overheated economy, the outlook would revert to stable. Ratings Affirmed: Argentina, Republic of: -- Senior Unsecured US$500 million 7% BONAR ser VII due Sept. 12, 2013: B+, Recovery Rating: 4 -- US$3.088 billion 8.28% capitalized bonds due Dec. 31, 2033: B+, Recovery Rating: 4 -- US$1.249 billion step up bonds due 12/31/2038: B+, Recovery Rating: 4 -- US$5.313 billion step up bonds due 12/31/2038: B+, Recovery Rating: 4 -- US$566 million capitalized bonds due Dec. 31, 2033: B+, Recovery Rating: 4 -- ?5 billion 4.33% capitalized bonds due Dec. 31, 2033: B+, Recovery Rating: 4 -- US$1.5 billion 7% bonds due March 28, 2011: B+, Recovery Rating: 4 -- EUR2.3 billion 7.82% capitalized bonds due Dec. 31, 2033: B+, Recovery Rating: 4 -- US$14.961 billion fltg rate BODENs 2012 bonds due Aug. 3, 2012: B+, Recovery Rating: 4 -- ?21 billion step up bonds due December 2038: B+, Recovery Rating: 4 -- US$14.124 billion fltg rate Boden2012 libor-linked bonds due Aug. 3, 2012: B+, Recovery Rating: 4 -- US$646.783 million fltg rate libor-linked bonds due April 30, 2013: B+, Recovery Rating: 4 -- EUR5.1 billion step up bonds due Dec. 31, 2038: B+, Recovery Rating: 4 -- US$631.65 million 7% bonds due Oct. 3, 2015: B+, Recovery Rating: 4 Transfer & Convertibility Assessment: -- Local Currency: BB Ratings Affirmed; CreditWatch/Outlook Action: Argentina, Republic of To From -------------------------------------------------------------- Sovereign Credit Rating B+/Negative/B B+/Stable/B Argentine Rating Scale raAA/Negative/-- raAA/Stable/-- According to S&P's credit analyst Sebastian Briozzo, the current policy mix increases the likelihood that inflation continues to accelerate, which will fray social cohesion and could lead to additional direct governmental interventions in the economy. Inflation expectations are 32% for the next 12 months. "Although strong economic activity, rising inflation, and export taxes have helped support the fiscal accounts, yielding a forecasted primary surplus of 3.3% to 3.8% of GDP in 2008, wage pressures, subsidies, and the continued dispute with the agricultural sector will challenge fiscal policy over the next 18 to 24 months," said Mr. Briozzo. "Any reversal of the favorable terms of trade that Argentina has enjoyed for five years would hurt the fiscal outturn and lower the projected 2.8% of GDP current account surplus for 2008." Mr. Briozzo explained that the negative outlook indicates that downside risk to Argentina's ratings now predominates. Rising inflation expectations and distortions in the economy through price controls, subsidies, and regulation will hurt growth prospects now that Argentina's output gap has narrowed. "Lower growth could erode the government's popularity, which already presents a challenge for the administration. Any material fiscal deterioration that ensues as a result could lead to a lowering of the ratings on Argentina. Conversely, if President Cristina Fernandez's new government adjusts the policy mix to redress the overheated economy, the outlook would revert to stable," Mr. Briozzo concluded. * BUENOS AIRES: S&P Shifts Outlook Along With Argentine Ratings --------------------------------------------------------------- Standard & Poor's Ratings Services has revised its outlook on its 'B+' global scale rating on the City of Buenos Aires, Republic of Argentina, to stable from positive, in tandem with the outlook revision on its ratings on Argentina to negative from positive. The action reflects the close linkage between the sovereign and different levels of government in Argentina. At the same time, S&P affirmed its 'B+' long-term foreign and local currency ratings on the city. S&P also affirmed its 'raAA' national scale rating on the City of Buenos Aires, and revised its outlook on the rating to stable from positive. "In contrast to other Argentinean local governments, the outlook on the City of Buenos Aires is stable, reflecting the city's privileged position in terms of both its financial flexibility and debt level," said S&P's credit analyst Sebastian Briozzo. * MENDOZA PROVINCE: S&P Changes B+ Rating Outlook to Negative ------------------------------------------------------------- Standard & Poor's Ratings Services has revised its outlook on its 'B+' global scale rating on the Province of Mendoza, Republic of Argentina, to negative from stable in tandem with the outlook revision on its ratings on Argentina to negative from stable. This action reflects the close linkage between the sovereign and the provinces in Argentina. At the same time, S&P affirmed its 'B+' long-term foreign and local currency ratings on the province. S&P also affirmed its 'raAA' national scale rating on the province and revised its outlook on the rating to negative from stable. ============= B E R M U D A ============= IPC HOLDINGS: Net Income Up 13% to US$86.8 Mil. in 1st Qtr. 2008 ---------------------------------------------------------------- IPC Holdings Ltd. posted a net income of US$86.8 million in the first quarter of 2008, up 13% from that booked in the same quarter in 2007, Jonathan Kent of the Royal Gazette reports. According to the report, the company's 2008 first quarter losses included a US$14.5 million pay-out in connection with the Alon Refinery explosion in Texas, which is far lessser when compared to 2006's US$50 million reserve established for windstorm Kyrill. IPC President and Chief Executive Officer Jim Bryce disclosed that the first quarter this year had been active in terms of catastrophe losses including windstorm Emma in Europe, cyclones in Australia, and tornado and freeze losses in the U.S., the report says. "However, despite this increase in frequency, it has still been relatively quiet for IPC, because most of the catastrophe events were contained within our clients' retentions, and our main per-risk exposure is energy related," the report quotes Mr. Bryce as saying. Mr. Bryce told the Royal Gazette that the company's board of directors authorized a US$300 million share repurchase in February this year, and to date has completed one third. "This was in addition to the US$200 million authorization that was mostly utilized in 2007, and completed during the first quarter of 2008," the Gazette cites Mr. Bryce. The report shows the company received no dividends from its investment in a fund of hedge funds in the first three months this year, compared to the US$7.9 million received in 2007. Headquartered in Bermuda, IPC Holdings, Ltd. through its wholly owned subsidiary IPCRe Limited (Bermuda), provides property catastrophe reinsurance and, to a limited extent, aviation, property-per-risk excess and other short-tail reinsurance on a worldwide basis, with a subsidiary in Dublin, Ireland. * * * IPC Holdings, Ltd. carried A.M. Best Co.'s BB+ rating on the company's US$236,250,000 convertible preferred stock assigned on Nov. 1, 2005. The preferred stock will mature on Nov. 15, 2008. SEA CONTAINERS: Fails to Submit Plan by Filing Deadline ------------------------------------------------------- Sea Containers Ltd. and its debtor-affiliates did not deliver their Chapter 11 plan of reorganization to Honorable Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware by the April 15, 2008 deadline. Judge Carey, on Feb. 25, 2008, granted the Debtors' fifth -- and last -- request to further extend their exclusive periods to file a plan through April 15, 2008, and to solicit acceptances of that plan through June 16. The Debtors have previously noted that obtaining approval of their settlement with the Official Committee of Unsecured Creditors for Sea Containers Services Ltd. and the Pension Trustees with respect to their pension scheme liabilities is a prerequisite to filing a Chapter 11 plan. "[R]esolving the Debtors' pension scheme liabilities [is] a task that must be completed before a viable Plan can be presented to the Court," counsel for the Debtors, Edmon L. Morton, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, had said. A hearing on the approval of the Pension Settlement is scheduled on May 28 and 29, 2008. In addition, Mr. Morton had noted that the Debtors and the GE affiliates involved in GE SeaCo are working to resolve certain open issues relating to GE SeaCo, which resolution will factor in and foster a consensual Plan. About Sea Containers Based in Hamilton, Bermuda, Sea Containers Ltd. -- http://www.seacontainers.com/-- provides passenger and freight transport and marine container leasing. Registered in Bermuda, the company has regional operating offices in London, Genoa, New York, Rio de Janeiro, Sydney, and Singapore. The company is owned almost entirely by United States shareholders and its primary listing is on the New York Stock Exchange (SCRA and SCRB) since 1974. On Oct. 3, the company's common shares and senior notes were suspended from trading on the NYSE and NYSE Arca after the company's failure to file its 2005 annual report on Form 10-K and its quarterly reports on Form 10-Q during 2006 with the U.S. Securities and Exchange Commission. Through its GNER subsidiary, Sea Containers Passenger Transport operates Britain's fastest railway, the Great North Eastern Railway, linking England and Scotland. It also conducts ferry operations, serving Finland and Estonia as well as a commuter service between New York and New Jersey in the U.S. Sea Containers Ltd. and two subsidiaries filed for chapter 11 protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156). Edmon L. Morton, Esq., Edwin J. Harron, Esq., Robert S. Brady, Esq., Sean Matthew Beach, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors and the Financial Members Sub-Committee of the Official Committee of Unsecured Creditors of Sea Containers Ltd. is represented by William H. Sudell, Jr., Esq., and Thomas F. Driscoll, Esq., at Morris, Nichols, Arsht & Tunnell LLP. Sea Containers Services, Ltd.'s Official Committee of Unsecured Creditors is represented by attorneys at Willkie Farr & Gallagher LLP. In its schedules filed with the Court, Sea Containers disclosed total assets of $62,400,718 and total liabilities of US$1,545,384,083. (Sea Containers Bankruptcy News, Issue No. 40; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SEA CONTAINERS: SCSL Panel Asks Documents on Pension Dispute ------------------------------------------------------------ The Official Committee of Unsecured Creditors of Sea Containers Services Ltd. asks the Honorable Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware to compel the Official Committee of Unsecured Creditors of Sea Containers Ltd. to produce documents that have been withheld on the basis of the common interest privileges between the SCL Committee and the DIP Lenders or the Bondholders. As previously reported, the Debtors asked the Court to approve the pension scheme agreement between them and the trustees of the two main Sea Containers Pension Schemes to agree on the amount of their claims against the Sea Containers estate. As a result of extensive negotiations that commenced prior to the bankruptcy filing and have continued throughout these Chapter 11 cases, the Debtors, their Official Committee of Unsecured Creditors, and the Trustees agreed to the Settlement under which the Schemes' claims against the Debtors are fully resolved. The SCSL Committee's Document Requests seek to obtain from the SCL Committee various categories of documents directly relevant to the issues raised by its objection to the Settlement, including: -- documents relating to the SCL Committee's evaluation and analysis of the Pension Schemes' claims; -- documents concerning communications between the SCL Committee and the Debtors or their creditors about: * the Pension Schemes' claims; * the SCL Committee's contention that the Pension Schemes and the SCSL Committee violated the automatic stay; and * set-off rights between the Debtors; and -- documents relating to the grounds raised in the objection to the Pension Schemes' proofs of claim filed by the SCL Committee. Mr. Stratton says the SCL Committee has not produced, and does not intend to produce, a privilege log for the documents withheld based on the common interest privileges it asserted. Although the parties did agree that privilege logs need not be produced for documents withheld based on the attorney-client privilege or attorney-work product doctrine, reflecting communications between the committees and their members and advisors, no agreement was reached with respect to documents withheld based on a common interest privilege, he continues. Dispute on Common Interests David B. Stratton, Esq., at Pepper Hamilton LLP, in Wilmington, Delaware, argues that the SCL Committee's assertion that it has a "common interest" privilege with respect to all communications between the SCL Committee and two groups of creditors, the DIP Lenders, and a group of unsecured bondholders represented by Kramer Levin Naftalis & Frankel LLP, is not supported by law. Mr. Stratton tells Judge Carey that there is no common interest between the DIP Lenders and the SCL Committee. He asserts that the interests of the DIP Lenders, by virtue of their position, differ significantly from, and potentially conflict with, the interests of unsecured creditors. He notes that it was this divergence in interest that led the U.S. Trustee to remove certain noteholders, who became DIP Lenders, from the original SCL Committee. Hence, he points out, the SCL Committee cannot withhold communications with the DIP Lenders under the guise of a "common interest" privilege. Although the SCL Committee and the Bondholders may share a common commercial interest, that interest alone is insufficient to give rise to a common interest privilege, Mr. Stratton argues. He contends that the SCL Committee cannot demonstrate that it shares a common legal interest with the Bondholders in opposing the Debtors' request to approve the settlement regarding the pension claims. As a result of the expansive privileges asserted by the SCL Committee, its entire document production consists of seven documents, a number of which are duplicates, totaling eleven pages in the aggregate, Mr. Stratton tells the Court. He notes that the SCSL Committee, the Sea Containers 1983 Pension Scheme and the Sea Containers 1990 Pension Scheme have produced more than 20,000 pages of documents in response to the SCL Committee's discovery requests. Objections A. SCL Committee The SCL Committee tells Judge Carey that the SCSL Committee's document requests seek to compel disclosure of communications among the SCL Committee, creditors and DIP Lenders concerning: -- the claims asserted by the Pension Schemes; -- whether the SCSL Committee acted in violation of the automatic stay in taking steps to procure the Pension Claims; -- the Debtors' request to approve the Settlement; and -- any settlement discussions regarding the Pension Claims. William H. Sudell, Jr., Esq., at Morris, Nichols, Arsht & Tunnell LLP, in Wilmington, Delaware, says the SCL Committee is stranger to the Settlement and the request to approve the Settlement because it played no part in the facts and circumstances that form the basis for the Pension Claims and equalization matters that were resolved in the Settlement. Hence, he asserts, there is no historical fact that the SCL Committee could provide documents that would be in any way relevant in evaluating the issues presented by the Settlement. Mr. Sudell contends that the communications among the SCL Committee, certain creditors, and the DIP Lenders, that the SCSL Committee seeks to compel took place in aid of a common interest arising in connection with litigation -- resisting the dilutive effect on creditors of allowance of the Pension Claims in an inflated amount. He notes that the communications necessarily took place in the conduct of SCL Committee's duties as an official committee. The communications are irrelevant to the facts that would determine the merits of the Settlement Request, and are protected by the common-interest privilege, Mr. Suddell argues. He adds that the disclosure of the communications would chill the: -- SCL Committee from carrying its function, -- creditors from obtaining the benefit of the official committee, and -- inhibit the orderly plan process. Hence, the SCL Committee asks the Court to deny the request to compel. B. Bondholders Bondholders Contrarian Capital Advisors, LLC; J.P. Morgan Securities Inc.; Credit Trading Group; Post Advisory Group, LLC; Trilogy Capital LLC; and Varde Investment Partners, L.P.; say that while they are not aware of the specific documents the SCL Committee has withheld pursuant to the common interest privilege, there can be little debate that the privilege applies to communications between the SCL Committee and the Bondholders, and their counsel and advisors. The Bondholders inform the Court that they have had numerous detailed communications concerning the legal merits of the Pension Claims and the Settlement Request, as well as strategy and tactics related to the SCL Committee's litigation against both. They relate that included in their communications are the objectives and interests of the Bondholders and the SCL Committee. Hence, the Bondholders point out that their privileged communications with the SCL Committee fall squarely within the common interest privilege. The Bondholders also argue that they share a common legal interest with the SCL Committee in assuring that the allowed amount of the Pension Claims conforms to all applicable legal requirements, and in challenging a Settlement, which fails to reasonably reflect those requirements. Accordingly, the Bondholders ask the Court to deny SCSL Committee's request. C. Mariner Investment Group Mariner Investment Group Inc., one of the DIP Lenders, joins and supports the SCL Committee's objection to the request. Mariner objects to the document production request as it relates to communications between Mariner Investment and the SCL Committee concerning the Pension Claims. Janet M. Weiss, Esq., at Gibson, Dunn & Crutcher LLP, in New York, contends that communications with Mariner Investment could not possibly have any bearing on approval of the Pension Settlement because it has not filed any objection or other pleadings in connection with the settlement. She adds that the request is not, by any stretch, "reasonably calculated to lead to the discovery of admissible evidence," pursuant to Rule 26(b)(1) of the Federal Rules of Civil Procedure. "The [SCSL] Committee's request for communications between Mariner and the SCL Committee is merely a litigation tactic designed to chill open discussions between Mariner and the SCL Committee, which is representing Mariner's substantial interests as a bondholder," Ms. Weiss points out. Ms. Weiss further argues that the request, which is specifically aimed at the DIP Lenders is "nothing more than an intimidation tactic," which creates wasteful expense and harms to the bankruptcy estates. Hence, Mariner Investment asks the Court to limit the scope of the SCSL Committee's discovery to exclude documents reflecting any communications with the DIP Lenders relating to the Pension Claims. About Sea Containers Based in Hamilton, Bermuda, Sea Containers Ltd. -- http://www.seacontainers.com/-- provides passenger and freight transport and marine container leasing. Registered in Bermuda, the company has regional operating offices in London, Genoa, New York, Rio de Janeiro, Sydney, and Singapore. The company is owned almost entirely by United States shareholders and its primary listing is on the New York Stock Exchange (SCRA and SCRB) since 1974. On Oct. 3, the company's common shares and senior notes were suspended from trading on the NYSE and NYSE Arca after the company's failure to file its 2005 annual report on Form 10-K and its quarterly reports on Form 10-Q during 2006 with the U.S. Securities and Exchange Commission. Through its GNER subsidiary, Sea Containers Passenger Transport operates Britain's fastest railway, the Great North Eastern Railway, linking England and Scotland. It also conducts ferry operations, serving Finland and Estonia as well as a commuter service between New York and New Jersey in the U.S. Sea Containers Ltd. and two subsidiaries filed for chapter 11 protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156). Edmon L. Morton, Esq., Edwin J. Harron, Esq., Robert S. Brady, Esq., Sean Matthew Beach, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors and the Financial Members Sub-Committee of the Official Committee of Unsecured Creditors of Sea Containers Ltd. is represented by William H. Sudell, Jr., Esq., and Thomas F. Driscoll, Esq., at Morris, Nichols, Arsht & Tunnell LLP. Sea Containers Services, Ltd.'s Official Committee of Unsecured Creditors is represented by attorneys at Willkie Farr & Gallagher LLP. In its schedules filed with the Court, Sea Containers disclosed total assets of US$62,400,718 and total liabilities of US$1,545,384,083. The Debtors were not able to file a Chapter 11 plan of reorganization on April 15, 2008. (Sea Containers Bankruptcy News, Issue No. 40; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SHIPPING INTEREST: Proofs of Claim Filing Deadline Is May 8 ----------------------------------------------------------- Shipping Interest Trustees Limited's creditors are given until May 8, 2008, to prove their claims to Willem van der Vorm, the company's liquidator, 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. Shipping Interest's shareholders agreed on April 18, 2008, to place the company into voluntary liquidation under Bermuda's Companies Act 1981. The liquidator can be reached at: Willem van der Vorm c/o The Liquidation Department Conyers Dill & Pearman, Clarendon House 2 Church Street, Hamilton, HM 11, Bermuda SHIPPING INTEREST: Sets Final Shareholders Meeting for May 26 ------------------------------------------------------------- Shipping Interest Trustees Limited will hold its final general meeting on May 26, 2008, at 9:30 a.m. at Messrs. Conyers Dill & Pearman, Clarendon House, Church Street, Hamilton, Bermuda. These matters will be taken up during the meeting: -- receiving an account showing the manner in which the winding-up of the company has been conducted and its property disposed of and hearing any explanation that may be given by the liquidator; -- determination by resolution the manner in which the books, accounts and documents of the company and of the liquidator shall be disposed; and -- passing of a resolution dissolving the company. Shipping Interest's shareholders agreed on April 18, 2008, to place the company into voluntary liquidation under Bermuda's Companies Act 1981. The liquidator can be reached at: Willem van der Vorm c/o The Liquidation Department Conyers Dill & Pearman, Clarendon House 2 Church Street, Hamilton, HM 11, Bermuda UNOCAL KRUENG: Proofs of Claim Filing Is Until May 7 ---------------------------------------------------- Unocal Krueng Mane, Ltd.'s creditors are given until May 7, 2008, to prove their claims to Gary R. Pitman, the company's liquidator, 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. Unocal Krueng's shareholder decided on April 18, 2008, to place the company into voluntary liquidation under Bermuda's Companies Act 1981. The liquidator can be reached at: Gary R. Pitman Chevron House, 11 Church Street Hamilton, HM DX, Bermuda UNOCAL KRUENG: Sets Final Shareholders Meeting for May 26 --------------------------------------------------------- Unocal Krueng Mane, Ltd., will hold its final general meeting on May 26, 2008, at 9:30 a.m. at Chevron House, Church Street, Hamilton, Bermuda. These matters will be taken up during the meeting: -- receiving an account showing the manner in which the winding-up of the company has been conducted and its property disposed of and hearing any explanation that may be given by the liquidator; -- determination by resolution the manner in which the books, accounts and documents of the company and of the liquidator shall be disposed; and -- passing of a resolution dissolving the company. Unocal Krueng's shareholder decided on April 18, 2008, to place the company into voluntary liquidation under Bermuda's Companies Act 1981. The liquidator can be reached at: Gary R. Pitman Chevron House, 11 Church Street Hamilton, HM DX, Bermuda =========== B R A Z I L =========== BANCO CRUZEIRO: Moody's Rates New Short Term Note Program at Ba1 ---------------------------------------------------------------- Moody's Investors Service assigned long and short-term foreign currency ratings of Ba1 and not prime, respectively, to Banco Cruzeiro do Sul S.A.'s new US$1,000,000,000 Short Term Note Program. At the same time, Moody's assigned a Ba1 rating to the first tranche issued under the program in the amount of US$110,000,000 of two-year senior unsecured notes due in April 2010. The rating outlook is stable. Moody's noted that Banco Cruzeiro's foreign currency debt ratings remain unconstrained by Brazil's country ceiling. These ratings were assigned to Banco Cruzeiro do Sul S.A.: -- US$1,000,000,000 Global Short Term Note Program: Ba1 and not prime long and short-term foreign-currency debt ratings, stable outlook. -- US$110,000,000 Senior Unsecured Notes: Ba1 long-term foreign currency debt rating, stable outlook. Banco Cruzeiro do Sul S.A had unconsolidated assets of BRL4,310 million and equity of BRL1,047.6 million as of Dec. 31, 2007. Headquartered in Sao Paulo, Brazil, Banco Cruzeiro do Sul SA (Bovespa - CZRS4) -- http://www.bcsul.com.br/-- is a private- sector multiple bank with operations in the consumer segment, through paycheck-deductible loans to public employees and social security beneficiaries, and in the corporate segment, offering middle-market companies short-term loans usually backed by receivables. The bank's core business is lending to civil servants, with payments automatically deducted from payrolls. BANCO CRUZEIRO: Sells US$110 Million Two-Year Bonds --------------------------------------------------- Business News Americas reports that Banco Cruzeiro do Sul SA has sold US$110 million of two-year bonds, which are part of a US$1 billion short-term note program. According to BNamericas, Banco do Cruzeiro last issued US$100 million in eurobonds in February 2008. Banco Cruzeiro's net profit rose 472% to BRL236 million in 2007, compared to 2006. It increased lending by 147% to BRL3.29 billion. The bank's assets totaled BRL4.31 billion last year, BNqamericas states. Headquartered in Sao Paulo, Brazil, Banco Cruzeiro do Sul SA (Bovespa - CZRS4) -- http://www.bcsul.com.br/-- is a private- sector multiple bank with operations in the consumer segment, through paycheck-deductible loans to public employees and social security beneficiaries, and in the corporate segment, offering middle-market companies short-term loans usually backed by receivables. The bank's core business is lending to civil servants, with payments automatically deducted from payrolls. * * * As reported in the Troubled Company Reporter-Latin America on March 27, 2008, Moody's Investors Service assigned a Ba1 long- term foreign currency debt rating to Banco Cruzeiro do Sul S.A.'s existing US$30,000,000 senior unsecured notes due in May 2010. Moody's said the outlook on the rating is stable. BANCO GMAC: Moody's Affirms B1 Global Currency Deposit Ratings -------------------------------------------------------------- Moody's Investors Service has affirmed the ratings assigned to Banco GMAC S.A: -- the bank financial strength rating of E+; -- the B1 for both global local-currency and foreign-currency deposits; and -- the Baa1.br/BR-2 for national scale deposits in Brazil. The outlook remains negative for all ratings, except for the BFSR, which outlook is stable. The affirmation of Banco GMAC's ratings follows the rating actions taken on parent GMAC LLC, on April 23, 2008. The latest rating downgrades at the parental level, started in November 2007, have not hurt the local bank's financial condition, which continues to present a satisfactory financial performance on the back of a favorable economic environment and strong auto-finance growth. The E+ BFSR mainly reflects the bank's adequate financials and its niche market operations, as well as Moody's continued concern regarding the financial weakness of its ultimate parent GMAC LLC. As a captive finance company, however, the BFSR is also affected by its operational dependence on the success of GMAC's overall strategy. Moreover, the bank in Brazil is subject to standard Brazilian banking regulations and supervision. Given Banco GMAC's own business strategy and its operational integration with GMAC LLC, Moody's notes that the fragile financial condition of the parent could potentially influence the cost of the bank's predominantly wholesale funding. Higher funding costs, in turn, could potentially hurt profitability and therefore its competitive position within its market niche. Moody's negative outlook on Banco GMAC's ratings primarily relates to the possibility that GMAC LLC's difficulties could worsen, which might lead to deterioration in the Brazilian subsidiary's liquidity profile, and thus its capacity to sustain local deposits level, something that has not been affected so far. These ratings for Banco GMAC S.A. were affirmed: -- Bank financial strength rating: E+, stable outlook; -- Global long- and short-term local-currency deposit ratings: B1/NP, negative outlook; -- Long- and short-term foreign-currency deposit ratings: B1/NP, negative outlook; -- Brazilian long- and short-term national scale deposit ratings: Baa1.br/BR-2, negative outlook. Banco GMAC is headquartered in Sao Paulo, Brazil. As of Dec. 31 2007, Banco GMAC reported total assets of BRL5.82 billion and equity of BRL857.4 million. BRASIL TELECOM: Telemar to Buy Invitel SA for US$3.5 Billion ------------------------------------------------------------ Invitel SA, Brasil Telecom Participacoes SA's parent company, is selling all of its shares to Telemar Participacoes SA for US$3.5 billion or BRL5.86 billion, various reports say. According to Bloomberg News, Telemar would pay BRL72.3 per share of Invitel. The new firm, which would add 8 million land lines in service and 4.6 million mobile users, will be called Oi. Share Purchase Agreement Under the agreement, Brazil's Development Bank and three pension funds of state-controlled companies would own 49.8% of the new company, Bloomberg says, citing Telemar in a news conference in Rio de Janiero. The report says that Telemar would acquire 60.5% of Brasil Telecom's voting shares, which comprise 22.3% of the company's total capital. In addition, Telemar will make a voluntary public offer for up to one third of Brasil Telecom preferred shares and a mandatory tender offer for voting shares at 80% of the offer price to controlling shareholders. Seeking Approval Dow Jones relates that the deal must still be submitted to the Brazilian Telecommunications Agency (Anatel) and government antitrust regulators for approval. In case the deal is rejected, Business News Americas states, Telemar would pay a BRL490 million guarantee to Brasil Telecom. Telemar also offered Brasil Telecom stockholders BRL315 million if they agree not to file any complaints about the acquisition. Tele Norte Leste Participacoes SA's CEO Luis Eduardo Falco, who will oversee the newly-merged company, said in a statement that Telemar has a goal of expanding Brazil's boundaries, aiming to have 30 million customers outside Brazil in five years, Dow Jones Newswires reports. Mr. Falco added that the company will begin with a record of US$23 billion in market value. Headquartered in Brasilia, Brazil, Brasil Telecom Participacoes SA -- http://www.brasiltelecom.com.br-- is a holding company that conducts substantially all of its operations through its wholly owned subsidiary, Brasil Telecom SA. The fixed-line telecommunications services offered to the company's customers include local services, including all calls that originate and terminate within a single local area in the region, as well as installation, monthly subscription, measured services, public telephones and supplemental local services; intra-regional long-distance services, which include intrastate and interstate calls; interregional and international long-distance services; network services, including interconnection and leasing; data transmission services; wireless services, and other services. * * * To date, Brasil Telecom carries Moody's Investors Service's Ba1 senior unsecured and credit default swap ratings. BRASKEM SA: Opens Polypropylene Production Plant in Paulinia ------------------------------------------------------------ Braskem SA disclosed the start up of its polypropylene production plant in the city of Paulinia, Sao Paulo state. With the inauguration of this new industrial unit, which has annual production capacity of 350,000 tons, Braskem further strengthens its leadership position in the Latin American polypropylene market, increasing its annual production capacity in this product to 1.1 million tons. The new plant, in which approximately BRL700 million were invested, combines global scale and the latest technology and is situated in Brazil's most important consumer market, making the project particularly competitive. The project was built through a joint venture between Braskem and Petroquisa, with the companies holding interests of 60% and 40%, respectively. The plant is one of the assets included in the Investment Agreement between Braskem and Petrobras announced to the market on Nov. 30, 2007, which will result in an increase in Braskem's interest in Petroquimica Paulinia from the current 60% to 100%. Through this agreement, Petrobras will become holder of 25% of Braskem total capital. The Paulinia plant represents a milestone in the diversification process of feedstock used by Braskem. This plant will be the first industrial unit of the Company to use propylene from refinery gas as feedstock. The propylene will be supplied by two of Petrobras' refineries, the Paulinia Refinery (REPLAN) and the Henrique Lage Refinery (REVAP), both located in Sao Paulo state. "The project was concluded in record time and with competitive investment costs, portraying the excellent management capacity of our teams in terms of implementing greenfield projects," said Braskem Chief Execitive Officer Jose Carlos Grubisich. "This growth strategy consolidates our leadership in the Latin American polypropylene market and our position as the third- largest resin producer in the Americas, and also represents an important step forward in our objective of becoming one of the ten largest petrochemical companies in the world," added Mr. Grubisich. Braskem SA (BOVESPA: BRKM5; NYSE: BAK; LATIBEX: XBRK) -- http://www.braskem.com.br/-- is a thermoplastic resins producer in Latin America, and is among the three largest Brazilian-owned private industrial companies. The company operates 13 manufacturing plants located throughout Brazil, and has an annual production capacity of 5.8 million tons of resins and other petrochemical products. The company reported consolidated net revenues of about US$9 billion in the trailing twelve months through Sept. 30, 2007. * * * As reported in the Troubled Company Reporter-Latin America on Jan. 17, 2008, Fitch Ratings affirmed the 'BB+' foreign and local currency issuer default ratings of Braskem S.A. Fitch also affirmed the 'BB+' ratings on the company's senior unsecured notes 2008, 2014, and senior unsecured notes 2017. COSAN SA: ExxonMobil Deal Cues Moody's Rating Review ---------------------------------------------------- Moody's Investors Service has placed the Ba2 local currency corporate family rating and foreign currency senior unsecured rating, as well as the A1.br Brazilian national scale corporate family rating of Cosan S.A. Industria e Comercio on review for possible downgrade. "The review of Cosan's ratings was prompted by the announcement that Cosan has signed a share purchase agreement with ExxonMobil International Holdings B.V., to purchase ExxonMobil's fuel distribution and lubes assets in Brazil (Esso) at a price of of US$826 million, in addition to the assumption of US$163 million in net debt and net related-party receivables of US$35 million," said Moody's Vice President Senior Analyst Soummo Mukherjee. "While the acquisition of such assets should benefit Cosan's credit profile by diversifying its operating activities providing it with a more integrated platform and reducing the volatility of its cash flows, this transaction will lower Cosan's overall operating margins and depending on how the transaction is financed, total leverage as measured by debt to EBITDA could increase," added Mr. Mukherjee. The company has announced that it will use the US$310 million proceeds from its recent capital increase by minority shareholders as part of financing for this transaction, while the remainder might be financed by a combination of debt and new equity investors. The review will primarily focus on exploring in greater detail the strategic rationale of this transaction and a longer-term view of Cosan's operations together with the new acquired assets. The review will also explore the exact financing structure for this transaction and the degree that it may economically or financially impact Cosan' business and credit profile. Depending on the additional information obtained during Moody's review process, Cosan's ratings could either be confirmed at the current Ba2 level with a stable outlook, confirmed with a negative outlook, or downgraded to a lower rating category. Ratings placed on review for possible downgrade: -- Global local currency scale corporate family rating: Ba2 -- US$36 million of guaranteed senior unsecured notes due 2009: Ba2 -- US$400 million of guaranteed senior unsecured notes due 2017: Ba2 -- US$450 million of guaranteed senior unsecured perpetual notes: Ba2 -- Brazilian national scale corporate family rating: A1.br Headquartered in Piracicaba, Brazil, Cosan S.A. Industria e Comercio produces sugar and ethanol. The company cultivates harvests and processes sugarcane, the main raw material for sugar and ethanol manufacturing. With 17 manufacturing units and two port terminals in the city of Santos, Cosan says it is currently the largest individual group in the world in terms of sugarcane byproducts manufacturing. With capacity to grind more than 40 million tonnes of sugarcane, the group represents 12% of overall production in the mid-southern region of the country. EMBRATEL PARTICIPACOES: Gets Anatel's Okay for Satellite Paid TV ---------------------------------------------------------------- Embratel Participacoes SA's has secured Brazilian telecoms regulator Anatel's authorization to provide satellite paid television service through the direct-to-home system. Business News Americas relates that the regulator's decision will take affect when it is published in the Brazilian official gazette. According to BNamericas, Embratel Participacoes' direct-to-home system license allows the distribution of image, sound, and audio. BNamericas relates that Embratel Participacoes will deliver in all its packages an educational channel for all public schools throughout Brazil and will provide a satellite dish, a signal decoder, and a television for each of the 2,000 public schools selected by the federal government. Embratel Participacoes' commitments will be in the Embratel TVSat Telecomunicacoes authorization contract, BNamericas states. Embratel Participacoes SA offers a range of complete telecommunications solutions to the market all over Brazil, including local, long distance domestic and international telephone services, data, video and Internet transmission, and is present all over the country with its satellite solutions. Embratel is the market leader in revenues with Long Distance, Domestic and International calls. * * * Embratel Participacoes is rated by Moody's: * local currency issuer rating -- B1; and * senior unsecured debt -- B2. GENERAL MOTORS: Moody's Holds B3 Rating, Changes Outlook to Neg. ---------------------------------------------------------------- Moody's Investors Service changed the rating outlook for General Motors Corporation to negative from stable, but affirmed the company's B3 corporate family rating and its SGL-1 speculative grade liquidity rating. The change in outlook reflects Moody's concerns that GMAC LLC's ability to provide retail and wholesale funding in support of GM's automotive operations may be eroded by the operating weakness at its subsidiary, ResCap LLC. GMAC's long-term rating was lowered to B2 from B1 and remains under review for further possible downgrade because of the risks that ResCap poses for GMAC's capital position and liquidity profile. Moody's believes that in order for ResCap to have continued access to debt capital, GMAC may be required to provide additional indications of support for the unit and that it is likely to do so. This support, however, could weaken GMAC's own credit profile and limit its ability to access the secured and unsecured debt markets. Moody's recognizes that GMAC retains a large cash position and sizable committed credit facilities that can support a significant portion of anticipated new receivable originations. In addition, should GMAC's ability to fund originations be constrained by reduced access to debt capital, third party lenders would likely remain willing to fund higher-quality GM retail receivables. Nevertheless, Moody's views the potential erosion in GMAC's credit profile and its ability to fund retail and wholesale receivables as a material risk factor for GM. Bruce Clark, senior vice president with Moody's, said that "GMAC has always filled a critical role in supporting GM's retail sales, and anything that lessens its ability to provide that support is a negative for GM. We think that one of the tradeoffs for GMAC's potential support of ResCap is an erosion in its ability to support GM's retail sales." Additional factors contributing to the negative outlook are the considerable cash requirements that GM will face during 2008 and 2009. By 2010, GM has the potential to generate positive cash flow due, in part, to the considerable savings that will begin to be realized from the UAW-managed health care plan established as part of the 2007 labor contract. Going into 2008, GM's gross liquidity consisted of approximately US$27.3 billion in cash and US$7.3 billion in committed credit facilities. These liquidity resources support the company's SGL-1 speculative grade liquidity rating by providing substantial coverage of all cash requirements likely to arise during the coming twelve months. These requirements include: ongoing minimum levels of cash required to fund intra-month working capital requirements that can approximate 5%-6% of revenues in the automotive OEM sector; scheduled debt repayments; a large operating cash burn associated with declining industry volumes in North America; and anticipated restructuring expenditures at both GM and Delphi. GM could also be faced with additional cash expenditures related to a resolution of the American Axle -UAW contract negotiations, Delphi's bankruptcy emergence plans, or capital contributions to GMAC. "A critical element of GM's strategy is to maintain enough liquidity to bridge the large cash consumption requirements of 2008 and 2009, until significantly lower health care expenditures start to occur in 2010," Clark noted. "Our key credit concern is that while this liquidity bridge is pretty robust through 2008, it could become more tenuous as the company gets in into the latter half of 2009. We'll continue to focus a lot of our attention on GM's liquidity and its adequacy to get the company to 2010." Although GM's approximately US$34.6 billion in gross liquidity will amply cover all of 2008's cash requirements, the resulting level of liquidity available to cover 2009's requirements will be significantly reduced. Moreover, Moody's remains concerned that absent a material rebound in North American automotive demand, GM's 2009 cash requirements have the potential to strain the liquidity resources the agency expects to be available at that time. As a result Moody's will closely monitor GM's operating performance, the magnitude of cash needs, and the prevailing market conditions through the coming nine months in order to gauge the likely sufficiency of the company's liquidity resources to fund all requirements during 2009. Over the course of this nine-month period, indications that cash requirements are exceeding expectations would likely lead to a lowering of the company's speculative grade liquidity rating. An unabated erosion in the liquidity profile would likely be a precursor to a downgrade of the company's long-term ratings. Conversely, evidence that GM's intermediate term cash requirements are lower than anticipated and that the resulting liquidity position will adequately cover 2009's requirements would contribute to a stabilization of the rating outlook. Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries, including the United Kingdom, Germany, France, Russia, Brazil and India. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GENERAL MOTORS: GMAC and ResCap Downgrades Cue S&P's Neg. Watch --------------------------------------------------------------- Standard & Poor's Ratings Services said that its 'B' long-term and 'B-3' short-term corporate credit ratings on General Motors Corp. remain on CreditWatch with negative implications, where they were placed March 17, 2008. The CreditWatch update follows downgrades of 49%-owned subsidiaries GMAC LLC (B/Negative/C) and Residential Capital LLC (CCC+/Watch Neg/C). The rating actions on Residential Capital LLC and GMAC were triggered by the resignation of the only independent directors at Residential Capital LLC. "We don't expect GM to provide any significant capital to GMAC or indirectly to Residential Capital," said Standard & Poor's credit analyst Robert Schulz, "nor are they required to do so in the future." S&P's ratings does not incorporate any transfer of substantial capital to GMAC. GM's ratings were originally placed on CreditWatch because of the strike at major supplier American Axle & Manufacturing Holdings Inc. The American Axle strike has now lasted two months and forced production shutdowns at several GM plants that produce full-size pickups and SUVs. In addition, GM workers began a strike last week over local work issues at an assembly plant in Delta Township, Michigan, which produces a popular line of crossover utility vehicles. Although S&P expects these labor issues to be resolved, the timing, and therefore the full extent, of their effect on GM's liquidity is unknown. S&P expects the American Axle strike to contribute to a very large use of cash in GM's first-quarter 2008 results, which GM will announce in the next few weeks, and the effect will be magnified by the timing of GM's payables and receivables. The first quarter will be hurt by the negative cash effect of reduced truck shipments and little to no offsetting benefit from reduced payments to suppliers, including American Axle. The second quarter will be affected as well, and in light of weak sales, GM's production levels could remain under pressure even once the American Axle strike is over. Still, GM should be able to maintain ample available liquidity; at year-end 2007, the company had US$27.3 billion, including cash, marketable securities, and US$600 million in short-term VEBA funds. Another uncertainty for GM, although less of a pressing issue in the near term, is former supplier Delphi Corp.'s difficulties in emerging from bankruptcy. S&P still believes the comprehensive costs to GM of Delphi's reorganization will remain within the scope of GM's liquidity. Still, the current capital market turmoil may keep Delphi in Chapter 11 for several more months, if not the rest of this year. S&P's ratings does not leave any room for GM to make substantial cash payments to support a Delphi emergence. S&P's resolution of the GM CreditWatch will likely not occur until the American Axle strike has been resolved. Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries, including the United Kingdom, Germany, France, Russia, Brazil and India. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GERDAU SA: Primary Share Offering in Bovespa Brings in BRL2.65B --------------------------------------------------------------- Gerdau SA has raised BRL2.65 billion through its primary offering of shares in Sao Paulo's Bovespa stock exchange. Gerdau told Business News Americas that subsidiary Metalurgica Gerdau raised BRL1.38 billion in a separate primary share offering, bringing the total amount raised to BRL4.03 billion. 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, India and the United States. * * * As reported in the Troubled Company Reporter-Latin America on Nov. 26, 2007, Moody's Investors Service affirmed Gerdau S.A.'s Ba1 corporate family rating and stable outlook. GOL LINHAS: Releases Corporate Responsibility Report for 2007 ------------------------------------------------------------- GOL Linhas Aereas Inteligentes S.A., the parent company of Brazilian airlines GOL Transportes Aereos S.A. and VRG Linhas Aereas S.A., published its 2007 Corporate Responsibility Report. The report is published annually by the company and includes information on its various activities and projects in assistance of various groups. During 2007, GOL Linhas remained focused on its mission to promote and encourage solidarity and social responsibility through professional actions and activities in the social, cultural, sporting and environmental areas. The company's policy of adopting practices that minimize its impact on the environment has led it to adjust internal procedures and choose suppliers that are also environmentally friendly. It adopted several Environmental Management System (EMS) procedures with its suppliers and uses technical audits to enforce compliance. The company rejects goods and services from firms that do not meet environmental protection standards until compliance confirmation is received. "Founded in the early days of the 21st century, GOL incorporated its commitment to social responsibility into its business model from the very first day of operations. We believe that companies have an important role in tackling social problems and we support all efforts aimed at maintaining a sustainable environment," says GOL's president, Constantino de Oliveira Junior. In order to support areas of society in need, GOL Linhas sponsors a number of projects dedicated to serving issues central to the development of Brazil. Through the donation of airline tickets, the company supports 18 civil society organizations that require long distance travel to meet their objectives of bettering Brazil. Protecting the environment is one of the company' main priorities. Its Maintenance Center, in Confins, Minas Gerais, has been endorsed by the Ministry of the Environment and is equipped with units for processing chemical waste. This waste is processed in accordance with best global practices for environmental protection. About GOL Based in Sao Paulo, Brazil, GOL Intelligent Airlines aka GOL Linhas Areas Inteligentes S.A. (NYSE: GOL and Bovespa: GOLL4) -- http://www.voegol.com.br-- through its subsidiary, GOL Transportes Aereos S.A., provides airline services in Brazil, Argentina, Bolivia, Uruguay, and Paraguay. The company's services include passenger, cargo, and charter services. As of March 20, 2006, Gol Linhas provided 440 daily flights to 49 destinations and operated a fleet of 45 Boeing 737 aircraft. The company was founded in 2001. * * * As reported in the Troubled Company Reporter-Latin America on July 25, 2007, Fitch Ratings affirmed the 'BB+' foreign and local currency issuer default ratings of Gol Linhas Aereas Inteligentes S.A. Fitch also affirmed the outstanding US$200 million perpetual bonds and US$200 million of senior notes due 2017 at 'BB+' as well as the company's 'AA-' (bra) national scale rating. Fitch said the rating outlook is stable. PARANA BANCO: First Qtr. Profit Up 132% to BRL23.6 Mil. in 2008 --------------------------------------------------------------- Parana Banco SA's profit increased 132% to BRL23.6 million in the first quarter of 2008, compared to the same period in 2007, Business News Americas reports. BNamericas relates that Parana Banco had BRL1.97 billion in total assets as of March 2008. Parana Banco Chief Financial Officer Luis Cesar Miara said in a conference call that the bank expects its loan book to increase by at least the same rate in 2008 as in 2007. According to BNamericas, Parana Banco increased lending by 88.1% to BRL1.17 billion by the end of 2007. Parana Banco granted some BRL307 million in new loans in the first quarter 2008. Its loan book increased 81.4% to BRL1.31 billion in March 2008, compared to March 2007, BNamericas notes. Mr. Miara commented to BNamericas, "Lending could either grow a little bit more than last or along the same lines." Parana Banco wouldn't abandon its �conservative credit approval conditions in the payroll and middle-market loan segments,� BNamericas says, citing Mr. Miara. The report says that Parana Banco granted BRL284 million in new payroll loans in the first quarter 2008, about 70.3% greater than in the same quarter in 2007. The bank compiled a middle- market loan portfolio of BRL104 million since entering the segment in the third quarter 2007. Mr. Miara told BNamericas that Parana Banco regained complete control of insurance subsidiary J Malucelli in January 2008 and wants to take advantage of the insurer's 19,300 corporate customers to provide more funding to medium-sized firms. The bank also sees credit card services for pensioners in federal social security system Instituto Nacional de la Seguridad Social �as a promising niche,� Mr. Miara added. Parana Banco is a niche bank in the segment of payroll discount lending, primarily to public-sector employees. The bank's adjusted total assets of US$375 million as of June 2006 represented less than 1% of total assets in the Brazilian banking industry. The bank is a relevant part of a broader conglomerate (J. Malucelli), with operations in different sectors and concentrated in the South of Brazil. Standard & Poor's does not assign ratings to any company in the J. Malucelli group, and the ratings assigned to the bank do not incorporate potential support from shareholders. * * * As reported in the Troubled Company Reporter-Latin America on June 26, 2007, Standard & Poor's Ratings Services raised its long-term counterparty credit rating and senior unsecured debt rating on Parana Banco S.A. to 'B+' from 'B'. The ratings were removed from CreditWatch Positive where they were placed June 11, 2007. At the same time, S&P affirmed the 'B' short- term counterparty credit rating on the bank. S&P said the outlook is stable. PRIDE INT'L: BOD's Actions May Cue Seadrill's Buyout, Fitch Says ---------------------------------------------------------------- Pride International announced that its Board of Directors has revised the company's Stockholder Rights Plan to lower the threshold level of beneficial ownership that would trigger the poison pill from 15% to 10% for acquisitions by Seadrill Limited and its affiliates and associates. Pride's Board of Directors took this step in response to Seadrill's acquisition of an approximately 9.9% ownership stake in Pride. In addition, Seadrill has made a filing under the Hart-Scott- Rodino Antitrust Improvements Act of 1976 to permit it to acquire Pride securities. It is unclear at this time if Pride's Board of Directors has taken this step for the purpose of remaining independent or in order to engage in more formal negotiations with Seadrill. Fitch notes that one potential outcome stemming from the announcement is that Pride could be acquired by Seadrill. If an acquisition should occur, Pride bondholders are protected by a change of control provision in the company's US$500 million of 7.375% senior notes due 2014. Bondholders have the ability to force the company to repurchase the notes at 101% of par plus accrued and unpaid interest, but only if the change in control results in a ratings downgrade. Additionally, Pride's US$500 million senior secured credit facility contains a change of control protection for lenders. The revolver was undrawn at year-end 2007 and had only US$13.3 million of letters of credit on the facility. Lenders of the company's US$300 million of 3.25% convertible senior notes due 2033 contain multiple protections. Noteholders have the right to require the company to repurchase the notes on May 1, 2008 at 100% of the principal amount plus accrued and unpaid interest. More importantly, the notes are convertible into Pride's common stock at a conversion rate of 38.9045 shares per US$1,000 principal amount of notes (equal to a conversion price of US$25.704 per share). The notes are currently convertible and Pride has announced its plans to redeem the notes on May 16, 2008, effectively forcing noteholders to convert before May 15, 2008. Pride currently expects to pay approximately US$300 million in cash in connection with the conversion and the remaining amount satisfied in shares. Fitch has not taken any rating actions on Pride as a result of the current disclosure by the company. Fitch would note that should Seadrill succeed in acquiring Pride, negative rating action at Pride remains a possibility. Seadrill currently operates with significantly higher leverage than its peers in the offshore drilling market. In addition, Seadrill has been significantly more aggressive in acquiring and building newbuilds on a speculative basis than has Pride or others in the industry. Pride's ratings reflect the significant improvement the company has made in reducing debt and capitalizing on the strong offshore drilling environment to sell non-core assets and refocus the company as an offshore drilling contractor with a focus on deepwater assets. Pride's credit metrics reflect these improvements as well as the strong market conditions for offshore drilling rigs. For the last 12 months ending Dec. 31, 2007, Pride generated US$918.3 million of EBITDA, and free cash flow was US$28.6 million. Credit metrics were robust with interest coverage of 11 times and debt-to-EBITDA of 1.3x. Fitch currently maintains these ratings for Pride: -- Issuer Default Rating at 'BB'; -- Senior unsecured at 'BB'; -- Senior secured bank facility at 'BBB-'; -- Senior convertible notes at 'BB'. The Rating Outlook is Stable. Headquartered in Houston, Texas, Pride International Inc. (NYSE: PDE) -- http://www.prideinternational.com/-- provides onshore and offshore contract drilling and related services in more than 25 countries, operating a diverse fleet of 277 rigs, including two ultra-deepwater drillships, 12 semisubmersible rigs, 28 jackups, 16 tender-assisted, barge and platform rigs, and 214 land rigs. The company maintains worldwide operations in France, Mexico, Kazakhstan, India, and Brazil, among others. UAL CORP: Continental Airlines Chooses Not to Merge with United --------------------------------------------------------------- Continental Airlines Inc.'s Chairman and Chief Executive Officer Larry Kellner and President Jeff Smisek disclosed to more than 45,000 employees that the company's Board of Directors unanimously supported the management's recommendation that, in the current industry environment, the best course for Continental is not to merge with another airline at this time. As reported in the Troubled Company Reporter on March 20, 2008, UAL Corp., United Air Lines Inc.'s parent, planned to pursue a consolidation with Continental Airlines if given the go-ahead, to create the airline industry's biggest carrier, United Press International reports. Stephen Canale, a union representative on United Airlines' board of directors, said that Continental is "without question" the first choice for a United merger. According to the two executives, the Board very carefully considered all the risks and benefits of a merger with another airline, and determined that the risks of a merger at this time outweigh the potential rewards, as compared to Continental's prospects on a standalone basis. The management will, however, continue to review potential alliances and its membership in SkyTeam. Continental is considering alternatives to SkyTeam as its carefully evaluates which major global alliance will be best for Continental over the long term. While some would prefer to see Continental pursue a merger, the company strongly believes it has made the right decision -- one that is in the best interests of its stockholders, co-workers, customers and the communities it serves. Messrs. Kellner and Smisek relate that every U.S. carrier, including Continental, is under enormous pressure from record high fuel prices, a slowing U.S. economy and a weak dollar. In today's harsh environment, the company must continue to adjust its business model to ensure it to successfully navigate through these difficult times, so that in the future it can once again grow and prosper. In the meantime, Continental must all continue to concentrate on what it does so well: delivering clean, safe and reliable air transportation every day. Even in these tough times, Messrs. Kellner and Smisek said, Continental has great strengths. It has an enviable position in the New York market, a powerful hub in Houston, and hubs in Cleveland and Guam. Continental has a solid trans-Atlantic route network, which has recently been enhanced by our access to London Heathrow. It also has a great Latin American network and a growing portfolio of routes to India and Asia. Continental flies the youngest, most fuel-efficient fleet and have the best new aircraft order book among the major network carriers. About Continental Airlines Continental Airlines Inc. (NYSE: CAL) -- http://continental.com/ -- is the world's fifth largest airline. Continental, together with Continental Express and Continental Connection, has more than 2,900 daily departures throughout the Americas, Europe and Asia, serving 144 domestic and 139 international destinations. More than 500 additional points are served via SkyTeam alliance airlines. With more than 45,000 employees, Continental has hubs serving New York, Houston, Cleveland and Guam, and together with Continental Express, carries approximately 69 million passengers per year. About UAL Corp. Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The company filed for chapter 11 protection on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors before the Committee was dissolved when the Debtors emerged from bankruptcy. Judge Wedoff confirmed the Debtors' Second Amended Plan on Jan. 20, 2006. The company emerged from bankruptcy protection on Feb. 1, 2006. (United Airlines Bankruptcy News, Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/ or 215/945-7000). * * * Moody's Investor Service placed UAL Corp.'s long term corporate family and probability ratings at 'B2' in January 2007. The ratings still hold to date with a stable outlook. UAL CORP: Begins Merger Discussions with US Airways --------------------------------------------------- US Airways Group Inc. recently got together with United Airlines, Inc. to discuss a potential merger, which would revive a consolidation that was turned down by regulators in 2001, Ted Reed of the TheStreet.com reported. US Airways and United were already having discussions even before Delta Airlines, Inc. and Northwest Airlines Corp. announced plans to merge, a person familiar with the situation had disclosed. However, the Delta-Northwest deal has spurred talks of a Continental-United consolidation, which could push US Airways out of the picture, the source said. US Airways Chief Executive Officer Doug Parker made no move to counter speculations that US Airways may be involved in another merger. But he did say that if US Airways does take part in a merger, "we will do so because we believe it is the best interests of our employees and our airline." Mr. Parker added that despite the problems associated with the 2005 merger between America West and US Airways, the carrier is stronger as a result, said Mr. Reed. Meanwhile, an airline analyst wrote in a research note this week, that a US Airways-United deal has "considerable merit" and would be less complicated than a UAL-Continental merger, The Charlotte Observer reported. According to the Observer, a US Airways-United merger could be easier when it comes to aligning the wages of pilots, combining fleets and reducing flights and seats. DOT Reduces Fine The U.S. Department of Transportation reduced the fine it imposed against US Airways Group Inc. for problems related to the company's reporting of flight delays, the Pittsburgh Business Times reports. The Business Times says the fine has been reduced from US$50,000 to US$30,000. US Airways had explained that the "problem stemmed from melding reservation systems after the 2005 merger with America West Airlines," according to the paper. "This stemmed from having two separate reservations system prior to our March 2007 reservations system integration," US Airways spokesman Morgan Durrant said, reports Business Times. "What likely happened is that someone called a pre-merger America West reservations center and asked for on-time performance information for a pre-merger US Airways flight. At any rate, the issue is fixed and on-time performance information is available to callers who ask." The DOT requires U.S. carriers to disclose flight delays to federal government and consumers. USAIR Builds New Maintenance Plant US Airways started building a new equipment maintenance plant at the Philadelphia International Airport on April 17, 2008, Linda Loyd of The Philadelphia Inquirer reports. US Airways expects the 58,000-square-foot plant to be completed late next year, at an estimated total cost of US$18,000,000, Ms. Loyd notes. The plant will consolidate three existing US Airways repair facilities at the airport, The Philadelphia Inquirer says. About US Airways Based in Tempe, Arizona, US Airways Group Inc.'s (NYSE: LCC) - http://www.usairways.com/-- primary business activity is the ownership of the common stock of US Airways, Inc., Allegheny Airlines, Inc., Piedmont Airlines, Inc., PSA Airlines, Inc., MidAtlantic Airways, Inc., US Airways Leasing and Sales, Inc., Material Services Company, Inc., and Airways Assurance Limited, LLC. US Airways has operations in Japan, Australia, China, Costa Rica, Philippines, and Spain, among others. Under a Chapter 11 plan declared effective on March 31, 2003, USAir emerged from bankruptcy with the Retirement Systems of Alabama taking a 40% equity stake in the deleveraged carrier in exchange for US$240 million infusion of new capital. US Airways and its subsidiaries filed another chapter 11 petition on Sept. 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning, Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, represent the Debtors in their restructuring efforts. In the Company's second bankruptcy filing, it lists US$8,805,972,000 in total assets and US$8,702,437,000 in total debts. The Debtors' Chapter 11 plan for its second bankruptcy filing became effective on Sept. 27, 2005. The Debtors completed their merger with America West on the same date. (US Airways Bankruptcy News, Issue No. 158; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) About UAL Corp. Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The company filed for chapter 11 protection on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors before the Committee was dissolved when the Debtors emerged from bankruptcy. Judge Eugene R. Wedoff confirmed the Debtors' Second Amended Plan on Jan. 20, 2006. The company emerged from bankruptcy protection on Feb. 1, 2006. (United Airlines Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported in the Troubled Company Reporter-Latin America on April 23, 2008, Standard & Poor's Ratings Services revised its rating outlook on UAL Corp. and its United Air Lines Inc. subsidiary (both rated B/Negative/--) to negative from stable. On April 25, 2008, the TCR-LA related that Standard & Poor's Ratings Services said that its ratings and outlook on UAL Corp., parent of United Air Lines Inc. (both rated B/Negative/--) are not affected by UAL's report of a heavy first-quarter loss. UAL reported a first-quarter US$542 million pretax loss, as much higher fuel prices more than offset increased revenues. S&P had revised its rating outlook on both entities to negative from stable on April 16, 2008. In that outlook revision, S&P cited very high fuel prices and the expected effect on UAL revenues of a weak U.S. economy. ========================== C A Y M A N I S L A N D S ========================== BANK INTERNASIONAL: Reports IDR197.86 Billion 1Q Net Profit ----------------------------------------------------------- Nury Sybli and Harry Suhartono of Reuters report that PT Bank Internasional Indonesia Tbk reported net profit of IDR197.86 billion in the January-March quarter, up from IDR115.43 billion in the same period last year. Reuters relates that BII's net interest income climbed 15 percent to IDR715 billion, lifting its net interest margin to 5.27 percent from 4.87 percent a year earlier. "Our performance is encouraging and in line with our expectations. Good progress has been made in building up our core loan and deposit business and improving our loan loss provisions," BII's President Director Henry Ho said in a statement, Reuters reports. According to Nury Sybli and Harry Suhartono, Mr. Ho also warned that "uncertainties in the global financial markets, the tightening of credit spreads, and domestic inflationary pressures from possible fuel and food price rises could affect the Indonesian economy and banking industry." About Bank Internasional PT Bank Internasional Indonesia Tbk -- http://www.bii.co.id/-- engages in general banking services and in other banking activities based on Syariah principles. The bank's services are divided into three categories: Personal Services, consisting of Funding, Credit Card Services, Loan, Reksadana and Bancassurance; Corporate Services, consisting of Funding, Credit Card Services, Loan and Investment Banking, and Platinum Services, consisting of Platinum Access, Syariah Platinum Access and Platinum MasterCard. The bank is headquartered in Jakarta, Indonesia. With a total customer deposit base of more than IDR34 trillion and over IDR47 trillion in assets, Bank Internasional is one of the largest banks in Indonesia with an international network that comprises over 230 branches and 700 ATMs across Indonesia, as well as a banking presence in Mauritius, Mumbai and the Cayman Islands. As reported on March 3, 2008, Fitch Ratings affirmed PT Bank Internasional Indonesia Tbk's (BII) long-term foreign currency Issuer Default Rating at 'BB', following Fullerton Financial Holdings' announcement of its intentions to pursue the sale of its interest in BII. FFH is a wholly owned subsidiary of Temasek Holdings. On Oct. 19, 2007, Moody's Investors Service raised the foreign currency long-term debt and foreign currency long-term deposit ratings of PT Bank Internasional Indonesia Tbk. -- The issuer/foreign currency subordinated debt ratings were raised to Ba2/Ba2 from Ba3/Ba3 and foreign currency long- term deposit rating to B1 from B2 -- The Not Prime foreign currency short-term deposit rating, Baa3 global local currency deposit rating and D BFSR were unaffected. BELAY OFFSHORE: Will Hold Final Shareholders Meeting on May 2 ------------------------------------------------------------- Belay Offshore, Ltd., will hold its final shareholders' meeting on May 2, 2008 at 9:00 a.m. at the office of the company. These matters will be taken up during the meeting: 1) accounting of the wind-up process, and 2) authorizing the liquidators to retain the records of the company for a period of five years from the dissolution of the company, after which they may be destroyed. Belay Offshore's shareholders agreed on March 7, 2008, to place the company into voluntary liquidation under The Companies Law (2004 Revision) of the Cayman Islands. The liquidators can be reached at: John Cullinane and Derrie Boggess c/o Walkers SPV Limited Walker House, 87 Mary Street George Town, Grand Cayman KY1-9002