Fitch Assigns 'CC' Rating to Uruguay's COFAC.

BUENOS AIRES, Argentina -- Fitch Ratings has assigned international and national long-term ratings to Cooperativa Nacional de Ahorro y Credito COFAC of 'CC' and 'B-(uy)', respectively, removing them from the default category of 'D' both internationally and nationally. At the same time, Fitch has affirmed COFAC's support rating at '5'.

COFAC's ratings were placed in default following the bank's suspension by the Central Bank of Uruguay in March due to its severely deficient capital levels and the entity's failure to meet capital targets set out in successive capitalization plans. The assigned ratings are based on the capitalization received by COFAC following its suspension and the improvement in its liquidity position as a result of the reprogramming of a portion of its deposits. At the same time, the ratings also factor the impact the suspension is likely to have on the institution's market position, both in terms of loans and deposits.

Following the brief suspension of COFAC, its depositors agreed to a plan whereby a portion of deposits over USD 15,000, excluding checking account balances, were converted to equity as follows:

-- 12% of deposits between US$15,000 and US$25,000;

-- 26% of deposits over US$25,000.

In addition, the uncapitalized portion of these deposits were restructured with gradually increasing quarterly amortizations.

Established in Uruguay in 1987, COFAC is the largest of Uruguay's credit cooperatives and reported assets of US$252 million and equity of US$18.6 million at year-end 2004. COFAC has over 320,000 members and its network consists of its head office, as well as 40 branches located throughout the country. COFAC is primarily focused on retail banking, serving primarily Uruguayan individuals and Pymes. COFAC forms part of Grupo COFAC, which is a financial group dedicated to providing financial services in Uruguay and has subsidiaries in insurance, pensions and credit cards.