June 4 (<a href=quote.bloomberg.com>Bloomberg) -- Mexico's peso was headed for its biggest decline in five years after a deputy governor of the central bank suggested the bank may be ready to reduce interest rates as growth slows and inflation remains under control.

The peso fell 2.7 percent to 10.5710 per dollar in Mexico City and U.S. trading at 4:15 p.m. New York time. The peso last had a bigger one-day decline on Jan. 13, 1999, when it fell 3.9 percent. Brazil's real rose on the central bank's offer to sell interest rate swaps.

Jesus Marcos Yacaman, one of Mexico's four deputy central bank governors, last night told Bloomberg in an interview in Buenos Aires the national economy may grow less than the bank's forecast. Similar suggestions by bank officials have many investors expecting the bank to reduce interest rates by raising lending to banks, said Guillermo Estebanez, a currency strategist at Banc of America Securities Inc. in San Francisco.

They're basically saying that they'll tolerate lower rates,'' said Estebanez. All the factors that were supporting the peso, like the sales of reserve dollars, have worn out.''

Mexico's Central Bank Governor, Guillermo Ortiz, in April cut the forecast for economic growth this year to 2.4 percent from 3 percent, after raising interest rates five times since September. Economists expect the central bank to meet its target for inflation of 2 percent to 4 percent. Slow growth in the U.S., which buys 85 percent of Mexico's exports and accounts for 70 percent of the investment flowing into Mexico, has spurred investor concern South America's largest economy may sputter.

Yields

Lower inflation expectations have driven down yields on the country's benchmark 28-day Treasury note to an all-time low of 4.72 percent at yesterday's central bank auction, below the trailing 12-month inflation rate, making Mexican assets less attractive to overseas investors.

``Foreign banks have been the most active today buying dollars,'' said Omar Martin del Campo, a currency trader at Arka Casa de Bolsa SA in Mexico City. Martin del Campo said Citigroup Inc. and J.P. Morgan Chase & Co. have both been selling pesos.

Estebanez said he expected the peso market to focus on U.S. economic indicators such as Friday's payroll numbers and next Thursday's retail sales figures. He said indications of slower growth in the world's largest economy could accelerate the peso's decline.

Adding to the peso's decline, Mexico last month reported its trade deficit widened in April from a year ago on declining exports, which account for a quarter of its $600 billion economy.

Exports fell 5.7 percent from the same year-ago period, increasing concerns expressed by some investors that rising production costs and a stronger currency may hold Mexico's share of the U.S. export market at about 10 percent.

The peso future contract for June delivery, the most-traded on the Chicago Mercantile Exchange, fell for a second day, losing 2.9 percent to 9.4300 cents per peso from 9.7125 yesterday.

Brazil

Brazil's real gained for a second day after the government said it would sell investors more insurance against exchange-rate losses, reducing the chance companies will buy dollars to guard against a weaker real.

The real climbed 1 percent to 2.9160 per dollar, a three-week high, in Sao Paulo, boosting its gains in 2003 to 21 percent, the best performer of the world's 16 most widely traded currencies. Earlier, it rose to a three-week high of 2.8920.

The central bank sold $260.25 million nominal value of interest-rate swaps, known locally as cupom cambial, of $330 million it offered at an auction today. The government Monday refinanced 77.8 percent of the $1.4 billion of swaps due June 12.

Clearly the move is going to help the real, some may even interpret it as creating an anchor for the currency,'' said Flavio Farah head of the Treasury desk at the Sao Paulo unit of Dusseldorf, German-based Westdeutsche Landesbank Girozentrale. Still, I don't know why they're doing it, with all the money coming in there was no need.''

2002

Brazilian banks and companies have sold almost $6 billion of bonds abroad on increased investor expectations that South America's largest economy can pay its roughly $400 billion debt, helping the real strengthen. At the same time, a stronger real makes it more expensive for companies and investors to buy swaps, reducing the demand for the contracts, said Daniel Vairo, a trader at Opportunity Asset Management Ltda., which manages about 7 billion reais of stocks and bonds in Rio de Janeiro.

The swaps, along with dollar-indexed bonds, were sold in the past several years to protect the real from declines as investors pulled money from the country on concern Argentina would default or Luiz Inacio Lula da Silva, elected Brazil's president last year, would adopt policies that might bankrupt the country.

Bank Tally

All told, the central bank promised investors it would pay any currency exchange losses on $58 billion of investments. While the real's rally this year has turned central bank losses on the contracts into profits, the government says it wants to reduce the amount of the swaps held by investors.

``It seems to me it would be better to have the $300 million it could sell today available for later,'' Farah said.

Any such event might cause the dollar to surge against Brazil's real and require swap sales to limit declines, he added.

Brazil's benchmark 8 percent bond maturing in 2014 gained for the fourth day in six, adding 0.81 cent to 90.44 cents on the dollar, paring the yield to 10.35 percent, according to J.P. Morgan Chase & Co.

Regional Currencies

Argentina's peso rose for a fourth day, gaining 0.5 percent to 2.8225 per dollar, raising the currency's gains in 2003 against the dollar to 19 percent, the second-best performance among 59 currencies tracked by Bloomberg.

Colombia's peso rose for the third day in four, adding 0.2 percent to 2,844.00 per dollar, while Chile's peso fell for a second day, declining 0.3 percent to 715.05 per dollar.

Peru's new sol rose for a second day in three, adding 0.3 percent to 3.4820 per dollar. Venezuela's bolivar was fixed at 1,598 per dollar this year.

Posted on Wed, Jun. 04, 2003 CHRISTOPHER SCINTA Associated Press

WASHINGTON - DirecTV Latin America LLC said Wednesday it has received bankruptcy court approval of a $300 million credit line from majority owner Hughes Electronics Corp.

The debtor-in-possession loan, approved by the U.S. Bankruptcy Court in Wilmington, Del., is meant to finance the company until it emerges from Chapter 11 bankruptcy.

Some minor changes were made to the agreement that clarify and modify Hughes' rights, should DirecTV Latin America default on the loan, said Jannice Reyes, spokeswoman for the satellite broadcaster. Hughes of El Segundo, Calif., made the changes to address concerns from its unsecured creditors committee.

DirecTV Latin America, based in Fort Lauderdale, Fla., filed for Chapter 11 in March, and soon after, the court gave interim approval for the company to borrow $30 million on the Hughes credit line, pending the final approval. DirecTV Latin America said in its request for the interim loan that without the financing, it would be forced to cease operations.

The satellite-television company already owes Hughes about $1.35 billion. In return for the DIP loan, Hughes received first-priority liens and security interests in all of DirecTV Latin America's property.

DirecTV Latin America said in previous court filings that it expects to draw $258.8 million on the $300 million loan agreement until February 2004. The company said it expects negative net cash flow of $259.4 million for the same period.

General Motors Corp. agreed to sell its stake in Hughes to News Corp., with News Corp. gaining a controlling stake in Hughes and consequently in DirecTV Latin America.

When it filed for bankruptcy, DirecTV Latin America listed assets of $600 million and liabilities of $1.6 billion as of December. The company attributed its Chapter 11 filing to economic and political crises in Argentina, Venezuela and Brazil.

June 3 (<a href=quote.bloomberg.com>Bloomberg) -- Brazil's currency rose for the first day in three after Banco Bradesco SA, the country's third-largest bank, sold $150 million of debt, raising investors' expectations capital flows to the country will rise.

The real rose as much as 1.5 percent to 2.9345 per dollar in Sao Paulo trading after Bradesco sold the bonds, raising three times the originally announced amount of 18-month bonds. The real was at 2.9440 per dollar, or 1.1 percent stronger than yesterday's close, at 3:59 p.m. New York time.

The real, which has gained 20 percent this year against the dollar, the best performance of the world's 16 most traded currencies, was also bolstered after Fitch Ratings raised its outlook on Brazil's debt to positive from stable.

The flows remain strong,'' said Daniel Vairo, a trader with Opportunity Asset Management Ltda., a Rio de Janeiro-based company that manages about 7 billion reais of bonds and stocks. As much as $200 million to $500 million could come in the next two weeks.''

Brazilian banks and companies have sold more than $5 billion of foreign-currency debt in 2003, taking advantage of U.S. interest rates at four-decade lows to borrow abroad and invest at home where rates are at 26.5 percent a year or more. Banco Bradesco SA, Brazil's third-largest bank, completed its sale today.

The yield on 2-year U.S. Treasury bonds, a benchmark for U.S. borrowing fell to 1.198 percent, the lowest in more than 53 years. Rates in Brazil are at four-year highs. The Bradesco bonds will pay interest of 4.8 percent.

Hedging Bet

Such flows may be enough, Vairo added, to limit the effect of yesterday's central bank auction of interest-rate swaps, a contract used by investors to insure against declines in the real against the dollar.

Last week the government ended its promise to refinance all of its $100 billion of interest-rate swaps, known in Brazil as ``cupom cambial.'' At yesterday's auction, it sold 77.8 percent of the total of swaps and dollar-indexed debt maturing June 12, a move that some believe will force companies to buy dollars in the spot market to hedge against currency risk.

So far demand for hedge is not materializing,'' said Carlos Gandolfo, a partner at Pioneer Corretora de Cambio Ltda., a Sao Paulo currency brokerage that handles about a third of all currency trades in Brazil's spot market. Exports and other capital flows to the country are strong, and that's helping the real today.''

Tipping Point

The debt-rating upgrade by came after the government of Luiz Inacio Lula da Silva implemented policies to control spending and pass changes to the pension and tax systems aimed at reducing the country's $400 billion debt, Fitch said in a statement.

An alliance between Lula's Workers' Party and the Democratic Movement Party, or PMDB, was also a factor in the change, Fitch said.

The alliance with the PMDB puts them over the tipping point to win a constitutional amendment that would allow passage of pension and tax reforms,'' Morgan Harting, sovereign risk analyst for Fitch in New York. We think default risk has been reduced, there is less uncertainty about Lula today than there was a few months ago.''

A higher credit rating would make the country more attractive to some investors and could lower the cost Brazil must pay to borrow from investors abroad.

Brazil's B long-term sovereign credit rating means investment in the country's debt is highly speculative'' and that financial commitments are currently being met; however, capacity for continued payment is contingent upon a sustained, favorable business climate,'' according to Fitch ratings definitions.

Debt, Outlook

Today, Brazil sold 5.82 billion reais of fixed- and floating- rate debt at its regular Tuesday bond auction. It sold 3.32 billion reais of floating-rate notes, known as LFT's, and 2.5 billion reais of fixed-rate Treasury notes, known as LTN's.

The real rose in the futures market. The U.S. dollar contract for July 1 settlement, the most traded on Sao Paulo's BM&F commodities and futures exchange, fell 1.4 percent to 2.990 reais to the dollar.

Brazil's 8 percent bond maturing in 2014 rose 0.56 cent to 89.56 cents on the dollar, paring the yield to 10.59 percent, according to J.P. Morgan Chase & Co.

Regional Currencies

Mexico's currency weakened for the second day in three after yields on the benchmark 28-day Treasury note fell to a record low at the central bank's debt auction today.

The peso fell 0.4 percent to 10.2745 per dollar from 10.2470 yesterday, paring its gains in 2003 to 0.8 percent, the 12th-best performance of the 16 most widely traded currencies.

Mexico's benchmark one-month Treasury bill yield fell to 4.72 percent from 4.91 percent a week ago at a government debt auction. The 91-day bill's yield fell to 5.11 percent from 5.43 percent a week ago, the central bank said on its Web site.

Chile's peso fell for the first day in four, pacing the price declines of the country's biggest export, copper.

The peso fell 0.3 percent to 713.05 per dollar from 711.10 yesterday as copper declined for the first day in four in New York trading.

Argentina's peso gained for a third day, rising 0.4 percent to 2.8375 per dollar to boost its gain in 2003 to 18 percent, the second-best performance among 59 currencies tracked by Bloomberg.

Colombia's peso weakened for the first day in three, declining 0.1 percent to 2,848.73 per dollar. Peru's new sol was little changed at 3.4922 per dollar from 3.4932 yesterday. Venezuela fixed its bolivar at 1,598 per dollar this year.

<a href=www.hispanicbusiness.com>HISPANIC BUSINESS

WATERBURY, Conn., June 3 /PRNewswire/ -- Known throughout Latin America for its customized water resources solutions, Haestad Methods today announced the details of its latest tour to the region. Beginning on June 3, the tour promises to attract more than 500 clients from the continent's leading water utilities and consulting firms, who are eager to participate in the presentations, localized training, and on-site visits.

Haestad Methods will launch the tour by showcasing its complete suite of water, storm, and sanitary sewer modeling software at the Aquatech Fitma Brazil exposition in Iberapuera, Sao Paulo on June 3-5. The main attraction will include demonstrations on Haestad Methods' groundbreaking WaterGEMS(R) for ArcGIS(TM), the most powerful GIS (geographic information systems) software designed for efficiently modeling, managing, and protecting water distribution infrastructure.

Responding to the continuous demand for hydrologic and hydraulic training, Haestad Methods will lead several new training programs throughout the region. Training will take place in Sao Paulo, Brazil on June 9-13; Mexico City, Mexico on July 21-25; and Bogota, Colombia on September 1-5. Participants will earn an A+ Modeler Certificate for each two-day course completed on water distribution and sanitary sewer design and modeling. Following each set of training sessions, Haestad Methods will sponsor an Open House, where attendees have the opportunity to view demonstrations and presentations on cutting-edge technologies for water resources modeling.

For over a decade, Haestad Methods has provided its Latin American clients with customized products and services including Spanish and Portuguese versions of WaterCAD(R) water distribution modeling software and on-line discussion forums. Just a year ago, Haestad Methods had the privilege of training more than 300 water resources professionals from the most influential companies based in Chile, Colombia, Peru, Brazil, Ecuador, Venezuela, Panama, Uruguay, and Mexico.

"Much excitement has been generated on behalf of the civil engineers, professors, and consultants who are planning to participate in this customized tour," said Norelis Florentino, Latin American Markets Director for Haestad Methods. "Our team looks forward to providing its Latin American clients with the resources they require to continue building cost-effective and efficient water and wastewater systems."

Professionals interested in attending an upcoming training event can view complete course and registration information by visiting www.haestad.com/ced/workshops, calling +1-203-755-1666, or e-mailing international@haestad.com. Haestad Methods' water resources discussion groups can be accessed by visiting www.haestad.com/lists.

About Aquatech Fitma Brazil 2003:

Aquatech Fitma Brazil is the most complete and important event for the water and environmental sector in Brazil and Latin America. Its 3rd annual event will take place on June 3-5, at the Pavilhao da Bienal in Ibirapuera, Sao Paulo. Aquatech Fitma reaches new and higher levels of prestige, evidenced by the growing number of participants, among exhibitors, visitors, and those attending simultaneous events. Aquatech Fitma Brazil provides one of the best forums in the world for exhibiting the latest technologies for the water and wastewater industry. For more information on Aquatech Fitma Brazil 2003, visit www.aquatechtrade.com.

About Haestad Methods:

Haestad Methods has been in the business of providing engineers with technology for 25 years and is internationally recognized as the world's leading water resources software company. Haestad Methods provides more than 125,000 civil engineers in over 170 countries with hydrologic and hydraulic modeling software, services, continuing education workshops, and publications. Haestad Methods' complete suite of engineering software products for water, stormwater, and wastewater modeling and management includes WaterGEMS(R), WaterCAD(R), PumpMaster(TM), Darwin(TM), WaterSafe(TM), SewerCAD(R), StormCAD(R), PondPack(R), FlowMaster(R), CulvertMaster(R), and HEC-Pack(TM). Haestad Methods trains thousands of engineers each year. It is duly authorized to award CEUs and PDHs and is licensed by Sandia National Laboratories to conduct RAM-W(SM) (Risk Assessment Methodology for Water Utilities) Training.For more information, call Haestad Methods at 1-800-727-6555 (USA or Canada) or +1-203-755-1666 (worldwide), e-mail info@haestad.com, or visit www.haestad.com, www.watersecurity.org, or www.civilquiz.com. Haestad Methods

CONTACT: Christine Byrne, Public Relations of Haestad Methods,+1-203-805-0432, cbyr@haestad.com

Web sites: www.haestad.com http: www.watersecurity.org

Source: PR Newswire

Tue June 3, 2003 11:37 AM ET NEW YORK, June 3 (<a href=reuters.com>Reuters) - Emerging sovereign bonds drifted higher on Tuesday, bolstered by the bonds of Brazil, Ecuador and Venezuela as investors' sanguine view of Latin America and the hunt for high yield persisted.

The benchmark J.P. Morgan Emerging Market Bond Index Plus 11EMJ rose 0.37 percent in terms of daily returns as Brazil's share of the index, a hefty one-fifth of the total, climbed 0.3 percent on the day. Brazil's bellwether C bond BRAZILC=RR was unchanged at 89 bid.

The gains came as investors, uninspired by the rock-bottom yields offered by U.S. Treasuries, continued to funnel cash to Latin American debt. This year's flows to emerging markets, also buoyed by optimism over Brazilian President Luiz Inacio Lula da Silva's economic policies and reform agenda, have lifted the EMBI-Plus a heady 19.3 percent since Jan. 1.

While the emerging debt rally has lost some of its momentum in recent weeks, analysts said the view remains rosy.

"Overall, it's mainly positive sentiment" driving the market, said Ricardo Amorim, head of Latin American research at research firm IDEAGlobal. "The big oil producers -- Venezuela and Ecuador -- are performing well, mainly on oil prices."

With crude prices hovering above $30 a barrel amid concerns about inventory levels ahead of the U.S. summer driving season, Ecuador's share of the index added 0.76 percent and Venezuela gained 0.14 percent.

"There seems to be pretty good buy side with Venezuela," said an emerging debt trader. "Although prices haven't moved a ton, there's been pretty good volume in the past day and a half."

Credit agency Fitch revised its outlook for Brazil's ratings to positive from stable. Fitch said the shift reflected indications Lula could be on the way to building the political consensus needed to enact reforms.

Mexico's debt, meanwhile, felt the weight of new supply as the country offered a new 10-year bond denominated in euros, said the trader.

Its spread over U.S. Treasuries -- the premium investors demand to compensate for perceived risk -- widened 1 basis point to 234, while Mexico's share of the EMBI-Plus added 0.34 percent.

Mexico offered the 750 million bond on Tuesday in a deal that was expected to price later in the day. The spread was expected to be 173 basis points over the benchmark swaps curve.

Peru's debt was the session's primary dark spot as political concerns helped sink its share of the index 1.13 percent.

Peru's bonds have had a turbulent ride since President Alejandro Toledo imposed a state of emergency last week in an effort to quell violent protests and strikes by teachers, farmers, health care workers and court workers.