<a href=www.vheadline.com>Venezuela's Electronic News Posted: Wednesday, June 11, 2003 By: Patrick J. O'Donoghue

Executive Vice President Jose Vicente Rangel has met Movimiento Quinta Republica (MVR)  National Assembly (AN) deputies, Nicolas Maduro and Cilia Flores, along with former Movimiento al Socialismo (MAS)  and Podemos (now Vamos) deputy, Rafael Simon Jimenez to exchange views on the situation in Parliament. 

Jimenez says it's important that the House returns to normal and deal with priorities such as the appointment of the new National Electoral College (CNE) authorities.

"People who feel strongly about what happened last Thursday and Friday should be allowed to lodge a complaint at the Supreme Tribunal of Justice (TSJ).

Jimenez discards the opposition threat to take the protest to international bodies since he says international organizations are already monitoring events in Venezuela." 

The House re-convened on Tuesday to take a vote on the minutes of last Tuesday. June 3. when the reform of the Internal debate regulation was introduced. 

At the first count the government bench won 81-79 with 2 abstentions and one saved vote. Since the government bench needed 83 to pass the motion, a second count was undertaken with government bench 82, opposition 79, and 3 abstentions.

• AN president Francisco Ameliach started another rumpus declaring a draw based on Article 129. 

However, the exercise has shown that the government majority is somewhat tenuous and dangerously vulnerable.

<a href=www.vheadline.com>Venezuela's Electronic News Posted: Wednesday, June 11, 2003 By: Patrick J. O'Donoghue

The Christian Socialists (COPEI) has gone to the Attorney General's Office asking for protection during the opposition "Assault on Petare" scheduled for Friday, June 13. 

Miranda State Legislative Assembly deputy, Oscar Perez says he does not care that Sucre Mayor Jose Vicente Avalos has not given permission for the rally clearly aimed at provoking government supporters in the area. 

"The rally will go on because it is the voice of more than 900 barrios and urbanizations in Petare that have nothing to thanks President Chavez Frias' Revolution for." 

Citing Petare's ills, Perez cites 54% poverty and 126 homicides in Q1, Perez de Leon and Domingo Luciani hospitals in a bad way and absolutely no social programs. 

Perez has confirmed that 3,000 Metropolitan (PM) and Miranda State Police will be on duty to prevent violence. 

Executive Vice President Jose Vicente Rangel suggests that the rally should be held elsewhere to avoid public order unrest. "The right to protest is a democratic rights but it can never be above the right to life."

<a href=www.vheadline.com>Venezuela's Electronic News Posted: Wednesday, June 11, 2003 By: Patrick J. O'Donoghue

The Venezuelan Supreme Tribunal of Justice (TSJ)  Constitutional Chamber has upheld an Appeal Court decision to life an arrest warrant against 7 former Petroleos de Venezuela (PDVSA) executives & managers but it also rules that the Attorney General's Office could continue on the case, provided it stuck to the law. 

The Appeal Court threw out the arrest warrants because it reached the conclusion that the Attorney General's Office did not charge the men ... there was an evident subversion of the legal order originating from the Attorney General's Office." 

TSJ president, Ivan Rincon says the Attorney General violated due process and has to start all over again, adding that the Appeal Court does not have the faculty to apply the wordy control of the Constitution.  

• However, the case can begin again only if the Attorney General considers there are sufficient elements to charge the seven. 

Former PDVSA leader Juan Fernandez says he's pleased with the result and will abide by the law.

<a href=reuters.com>Reuters Wed June 11, 2003 01:32 PM ET (The following statement was released by the rating agency)

$350 Million of Debt Affected

NEW YORK, June 11 - Moody's Investors Service downgraded the rating for the 8.85% senior bonds of Merey Sweeny L.P. (MSLP) and Sweeny Funding Corp. to Baa3 from Baa2. The rating outlook is stable. The rating downgrade reflects the rising financial leverage exhibited by the partnership and the increased political risk associated with its 50% indirect owner, Petroleos de Venezuela (PDVSA).

MSLP is a joint venture owned 50% by PDVSA, which is rated Caa1 for its foreign currency obligations, and 50% by ConocoPhillips (COP), rated A3 senior unsecured. A high level of pre-completion distributions to the shareholders and reduced processing fees have reduced MSLP's book equity in 2001 and 2002. Distributions are allowed prior to completion because of sponsor joint-and several guarantee of debt service. The project paid substantial distributions in 2001 and 2002 and is expected to resume at a high earnings payout level post-completion, subject to a minimum debt service coverage test. A severe squeeze on MSLP's processing fees and earnings throughout most of 2002 has also affected the project's equity cushion. The processing fee is tied to a formula that reflects price differentials between West Texas Intermediate and Mayan crude. The light/heavy differentials are highly volatile and shrank in 2002 when OPEC production cuts were implemented.

Despite a benefit from widening light/heavy crude differentials in 2003, MSLP has also been affected by the national strike in Venezuela, which disrupted crude exports to the U.S., including the heavy crude supplied by PDVSA under a long-term contract with COP. The refinery was able to run alternate crudes at a slight disadvantage during and following the strike, and MSLP's utilization and Venezuelan crude deliveries to COP have resumed and are expected to be normal in June 2003. However, the supply disruption highlights MSLP's dependence on Venezuelan crude and potential future supply risk to the project. In addition, PDVSA has certain financial obligations to the partnership, including potential cash calls to meet operating cash flow shortfalls, which have a higher level of risk as reflected in PDVSA's current Caa1 cross border long-term currency rating.

Despite the impact of PDVSA's political risk on the project rating, MSLP's long term debt continues to be rated Baa3 with a stable outlook, incorporating the strategic importance and integration of the project to COP and numerous mechanisms in place that tie the investment strongly to COP. Merey Sweeny is economically and physically integrated with the Sweeny refinery, and other linkages include COP's call right to buy out PDVSA's stake at a discount if PDVSA defaults, and its several pro-rata cash call as needed. The Baa3 rating and stable outlook reflect MSLP's expected financial completion in 2003, which is still subject to certain environmental permits, at which time the sponsors' joint and several guarantees of MSLP's debt service will be extinguished.

MSLP is a 50/50 joint-venture owned indirectly by ConocoPhillips, a major integrated oil company headquartered in Houston, Texas, and by Petroleos de Venezuela, the state oil company of Venezuela.

June 11 (<a href=quote.bloomberg.com>Bloomberg) -- Brazil's stock index fell for a second day in three, led by Tele Norte Leste Participacoes SA, the country's largest phone company, on investor concern the government will grant fixed-line operators a lower-than-expected rate increase.

The benchmark Bovespa index of the most-traded stocks on the Sao Paulo stock exchange fell 0.8 percent to 13,786.85 at 1:12 p.m. New York time. The Bolsa index of shares traded on the Mexican stock exchange in Mexico City rose 25.95, or 0.4 percent, to 6950.94.

Finance Minister Antonio Palocci, who met with phone company officials last night, said a planned increase on tariffs for fixed- line service will be lower than the IGP-DI inflation rate -- currently at 30.05 percent for the 12 months ending in May -- that was stipulated under their contract.

We need to know what the rate increase will be to assess a fair price for the shares,'' said Debora Morsch, who helps manage the equivalent of about $52 million in stocks for Solidus Administradora de Recursos SA in Porto Alegre, Brazil. It seems negotiations aren't going very smoothly.''

The communications ministry was supposed to release the rate increase for the phone calls last night but said that after meeting with the companies it would make public a decision by the end of the week.

In other markets, the main stock indexes in Argentina ad Peru rose, while in Chile and Venezuela they fell.

The following stocks are having significant gains or losses in Latin American markets today. Symbols are in parentheses after the company name. In Brazil the preferred share is usually the company's most-traded class of stock.

Brazil

Telemar (TNLP4 BS) fell for a third day, losing 60 centavos, or 1.7 percent, to 35 reais.

Cia. Energetica de Sao Paulo (CESP4 BS), the power generator for Brazil's biggest city, fell 39 centavos, or 4.5 percent, to 8.25 reais. ``Cesp is not a company we recommend due to its high indebtedness,'' said Pedro Batista, an analyst with Banco Pactual SA in Rio de Janeiro.

Empresa Brasileira de Aeronautica (EMBR4 BS), the world's fourth-largest aircraft maker, rose 11 centavos, or 0.8 percent, to 13.98 reais, adding to a 17 percent jump yesterday after JetBlue Airways Corp. placed an order for 100 new Embraer-190 jet aircraft. Embraer values the contract at $3 billion, with a potential value of $6 billion if all 100 options are exercised. ``We are have a small position in Embraer and after this announcement we are reconsidering to see if it would be a interesting to increase it,'' Solidus' Morsch said.

Petroleo Brasileiro SA (PETR4 BS), the state-controlled oil company, rose 29 centavos, or 0.6 percent, to 52.99 reais. Petrobras remains one of our top picks,'' Marcelo Mesquita, an equity strategist with UBS Warburg SA, wrote in a report. We believe there is a buying opportunity ahead of what we expect to be strong second-quarter results.''

Mexico

Cemex SA (CEMEXCP MM), the world's third-largest cement maker, slid 1.11 peso, or 2.3 percent, to 47.10 pesos after Daniel Altman, an analyst at Bear Stearns & Co. in New York, downgraded his recommendation on the stock to peer perform'' from outperform.'' ``We continue to view Cemex as a show-me story and are reluctant to adjust higher our estimates and target until we see further signs of progress,'' he wrote in a research note.

Fomento Economico Mexicano SA (FEMSAUBD MM), Mexico's largest beverage company, gained 66 centavos, or 1.5 percent, to 44.15 pesos. The shares have gained 16 percent this year.

Grupo Financiero Banorte SA (GFNORTEO MM), Mexico's fourth- largest bank, slipped for the third day in four, losing 24 centavos, or 0.8 percent, to 28.51 pesos. Roberto Attuch, an analyst at Credit Suisse First Boston, cut his rating on the bank to underperform'' from neutral'' this week on concern low interest rates will hurt the bank's profit.

Wal-Mart de Mexico SA (WALMEXV MM), Mexico's largest retailer rose 34 centavos, or 1.1 percent, to 30.40 pesos, after reaching a 52-week high of 30.5 pesos in earlier trading. Expectations for stronger U.S. growth in the second half of the year may help boost consumption in Mexico. The U.S. buys almost 90 percent of Mexican exports, accounting for a quarter of the country's $600 billion gross domestic product.

Argentina

Grupo Galicia (GGAL AR), the country's second-largest bank, rose 4 centavos, or 3.6 percent, to 1.15 peso, heading to its highest price since July 2001 after the bank reported its first- quarter loss narrowed to 59 million pesos ($21 million) from 2 billion pesos in the same period last year.

Molinos Rio de la Plata SA (MOLI AR), which produces pasta and oils, rose 8 centavos, or 1.6 percent, to 5.18 pesos. The company paid $4.5 million to buy the remainder 39 percent of winemaker Bodegas Nieto Senetiner SA.

Peru

Edegel (EDE PE), Peru's biggest non-government power generator, rose 3 centimos, or 2.4 percent, to 1.26 soles. Last week, the company sold 100 million soles in local bonds to replace dollar-denominated maturing debt. Most of the company's revenue is denominated in sol currency.

Grana y Montero SAA (GRAM/C PE), Peru's leading construction company rose 1 centimo, or 3.1 percent, to 33 centimos. The company plans to sell $50 million in bonds in the Peruvian market to finance development projects.

Volcan Cia. Minera SA (VCM/B PE), Peru's main zinc producer, rose 1 centimo, or 3.1 percent, to 33 centimos. The company has said it allowed due diligence review of its assets and books to a Swiss, a Brazilian and a Peruvian company as it looks for a partner. Volcan had reported annual for the past two years because of weak zinc prices.