BW5696 JUN 24,2003 11:17 PACIFIC 14:17 EASTERN     Business Editors     CHICAGO--(<a href=www.businesswire.com>BUSINESS WIRE)--June 24, 2003--Following Fitch Ratings' recent rating actions that upgraded the Bolivarian Republic of Venezuela's foreign currency rating and the senior unsecured debt rating of Petroleos de Venezuela S.A. (PDVSA) to 'B-' from 'CCC+', Fitch Ratings has revised the Rating Watch to Positive from Negative on the following PDVSA-related transactions:     Petrozuata Finance Inc. (Petrozuata), senior secured debt rating 'B' -- US$300 million series A bonds due 2009;
-- US$625 million series B bonds due 2017;
-- US$75 million series C bonds due 2022.

    Cerro Negro Finance, Ltd. (Cerro Negro), senior secured debt rating 'B'     -- US$200 million bonds due 2009;     -- US$350 million bonds due 2020;     -- US$50 million bonds due 2028.

    Sincrudos de Oriente Sincor, C.A. (Sincor project), senior secured debt rating 'B'     -- US$1.2 billion senior bank loans borrowed by the sponsors of     Sincor Finance Inc.     Petrolera Hamaca, S.A. (Hamaca), senior Secured Debt Rating 'B'     Total senior project loans of US$1.1 billion, consisting of:     -- US$627.8 million senior agency loan due 2018;     -- US$470 million senior bank loan due 2015, borrowed on a several  (not joint) basis 30% by Corpoguanipa, S.A., a subsidiary of PDVSA, and 70% by Hamaca Holdings L.L.C.     Fitch is currently reviewing each of the projects, and shall follow up with corresponding rating actions if necessary in the coming weeks.     Petrozuata is owned 50.1% by a ConocoPhillips subsidiary and 49.9% by a PDVSA subsidiary. Cerro Negro is owned 41.67% by an ExxonMobil subsidiary, 41.67% by a PDVSA subsidiary and 16.67% by a Veba Oel subsidiary. Sincor is owned 47% by a TOTALFinaElf subsidiary, 38% by a PDVSA subsidiary and 15% by a Statoil subsidiary. Hamaca is owned 40% by ConocoPhillips subsidiary, 30% by ChevronTexaco subsidiary, and 30% PDVSA subsidiary. All four projects are involved in the development of Venezuela's extra heavy crude oil reserves.

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CONTACT: Fitch Ratings
         Caren Y. Chang, 312/368-3151, Chicago
         Alejandro Bertuol, 212/908-0393, New York
         Carlos Fiorillo, +58-212-286-3356, Caracas
         or 
         Media Relations: Matt Burkhard, 212/908-0540, New York

KEYWORD: NEW YORK
INDUSTRY KEYWORD: BANKING BOND/STOCK RATINGS
SOURCE: Fitch Ratings

June 23 (<a href=quote.bloomberg.com>Bloomberg) -- Venezuela's long-term debt rating was raised by Fitch Ratings as increased oil production reduced the risk of default on the country's $29 billion of debt.

The rating upgrade raised Venezuelan debt one level to B-, six levels below investment grade, from CCC+.

The Venezuelan government's near-term financing outlook has improved given the resumption of oil production,'' Fitch said. Furthermore, voluntary domestic debt swaps and recent external bond payments have mitigated concerns about debt service willingness over the near term.''

The rating change underscores lessening concern that Venezuela may have difficulty in making debt payments this year.

Mon June 23, 2003 02:43 PM ET NEW YORK, June 23 (<a href=reuters.com>Reuters) - Fitch said its raised the long-term sovereign ratings of Venezuela on Monday, citing the government's success in restoring oil production levels after a general strike earlier this year choked off output in the lucrative sector.

Fitch said in a statement it lifted Venezuela's long-term foreign currency rating to B-minus, or six rungs into speculative territory, from CCC-plus. It also raised the nation's long-term local currency rating to B-minus from CCC. The outlook on the ratings is stable.

"The Venezuelan government's near-term financing outlook has improved given the resumption of oil production and the measures implemented to avoid a liquidity crisis," said Fitch.

BW5724 JUN 23,2003 11:32 PACIFIC 14:32 EASTERN     Business Editors     NEW YORK & LONDON--(<a href=www.businesswire.com>BUSINESS WIRE)--June 23, 2003--Fitch Ratings today upgraded the Bolivarian Republic of Venezuela's long-term foreign currency rating to 'B-' from 'CCC+'and its long-term local currency (Venezuelan bolivar) rating to 'B-' from 'CCC'. These rating actions reflect the government's success in getting oil production back up to levels achieved prior to the national strike earlier this year, thereby relieving public financing pressures. Furthermore, voluntary domestic debt swaps and recent external bond payments have mitigated concerns about debt service willingness over the near term. The Rating Outlook is Stable.     The Venezuelan government's near-term financing outlook has improved given the resumption of oil production and the measures implemented to avoid a liquidity crisis. Fitch believes that the risks of further oil production disruptions have been reduced due to the failure of the strike to achieve its objectives and increased government control over PdVSA. Yet the highly polarized social situation and severe economic contraction could provide future political challenges, including sporadic outbursts of social unrest.     In the midst of an unprecedented political confrontation, which has translated into one of Venezuela's worst economic declines in recent history, the government has met all of its debt obligations. In this environment, the government made a US$275 million payment on its Brady bond obligations last week. At the onset of the national strike, Fitch was concerned that pressures on the government's capacity to service its debt as a result of oil revenue losses could ultimately affect its willingness to pay. To its credit, the government reduced its 2003 budget by 10% and has been under-executing this revised budget by 40%. Similar to the authorities' projections, Fitch expects the central government deficit to reach 1.8% of GDP this year, compared with 3.4% of GDP in 2002, representing a significant fiscal adjustment. However, a collapse of more than 50% in non-oil revenues combined with increased spending pressures, due either to the deteriorating social situation or a ramp-up in expenditures prior to a referendum and/or early elections, cannot be ruled out. The authorities continued to conduct market-based domestic debt swaps, extending close to US$754 million in DPN maturities over the medium-term. In addition, the authorities have been successful in securing new financing through private placements, which could reach US$950 million in 2003.     Venezuela's debt service capacity remains strong relative to similarly rated sovereigns and has been strengthened with the end of the oil strike. Since the implementation of capital controls and the resumption of oil exports, the country's international reserves have increased from a low of US$13.5 billion in January to US$16.5 billion in mid-June. At 153% (not including assets in the macroeconomic stabilization fund, the FIEM), Venezuela's external liquidity ratio currently exceeds the 123% median of 'B/C/D' rated countries. Assuming capital controls are not liberalized this year, this ratio could increase to an estimated 224% by year-end. Including an estimate for the loss of revenue due to the halt in oil exports, Venezuela's expected current account surplus position in 2003 will still be more than enough to cover its external amortizations and stock of short-term external debt this year, which Fitch estimates at about US$6.6 billion. The government should not have any difficulty meeting its financial requirements for the remainder of 2003. External amortizations amount to US$915 million, while domestic amortizations are about US$1 billion in the second half of this year.     Although recent changes to macroeconomic policy, including a fixed exchange rate and capital controls, have strengthened the government's ability to service its debt, the non-oil private sector is paying the cost of these measures. Future upgrades would be dependent on a viable resolution of the political crisis and improvements in the government's macroeconomic policy framework.     A comment detailing Fitch's analysis for this rating upgrade will be available shortly.

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CONTACT: Fitch Ratings, New York
         Theresa Paiz Fredel, 212/908-0534  
         Roger M. Scher, 212/908-0240
         Media Relations: 
         Matt Burkhard, 212/908-0540

KEYWORD: NEW YORK VENEZUELA INTERNATIONAL LATIN AMERICA
INDUSTRY KEYWORD: BANKING BOND/STOCK RATINGS
SOURCE: Fitch Ratings

June 23 (<a href=quote.bloomberg.com>Bloomberg) -- Siderurgica del Orinoco CA, Venezuela's biggest steelmaker, said it reached an agreement with creditor banks and the government to reduce $1.88 billion of debt by half in a bid to return to profitability after five years of losses.

Thirty international and domestic banks, including Citigroup Inc. and Deutsche Bank AG, agreed on the accord, which cuts the company's debt to about $791 million. The Venezuelan government, which sold a majority stake in the company to private investors in 1997, will increase its holding to 40 percent from 30 percent, the steelmaker, based in Puerto Ordaz, Venezuela, said in a statement.

Sidor, a producer of steel slabs used to build cars and appliances, is restructuring debt for the second time in three years after a two-month national strike curbed revenue and state restrictions on the sale of dollars complicated Sidor's ability to get foreign currency. President Hugo Chavez made the survival of the former state company, which employs 5,000, a priority.

``The government made a concerted effort to resolve this problem,'' said Robert Bottome, an analyst with research company Veneconomy in Caracas.

Citigroup spokeswoman Danielle Romero-Apsilos declined to comment.

As part of the debt agreement, some of the company's shareholders, excluding the government, agreed to invest $133.5 million in Sidor. The company had been in negotiations with creditors for 18 months, following the company's missed interest payment of $31.3 million in December 2001.

Sidor produces steel slabs that can be rolled into plate or sheet. The company's output is about 3.5 million tons a year.

Before the agreement, Sidor was 70 percent-owned by Argentina's Siderar SAIC, Mexico's Hylsamex SA de CV, Tubos de Acero de Mexico SA, Brazil's Usinas Siderurgica de Minas Gerais and Venezuela's Siderurgica Venezolana Sivensa SA. The Venezuelan government owned the remainder.