Fitch Upgrades Select Argentine Corporate Ratings.

CHICAGO -- Fitch Ratings has upgraded select long-term foreign currency (LTFC), long-term local currency (LTLC) and national scale ratings of several Argentine corporates following Argentina's debt exchange in June 2005 and concurrent upgrade by Fitch of the Argentine country ceiling to 'B' from 'B-'. The related rated actions are as follows:

Cerveceria y Malteria Quilmes S.A. (CMQ)

--LTFC rating upgraded to 'B' from 'B-', Stable Outlook;

--Fitch has assigned an LTLC rating of 'BB-', Stable Outlook;

--National long-term rating of Fideicomiso Financiero Bebidas Argentinas upgrade to 'AA-(arg)' from 'A(arg)'.

CMQ's ratings reflect its dominant position in the Argentine beer industry, strong financial profile, and diversification into soft drinks, juices, and water. The ratings also take into account the strong shareholders: the Bemberg family, via Beverage Associates Corp. (BAC) and Companhia de Bebidas das Americas (AmBev). Fitch rates AmBev's foreign currency debt obligations 'BB+'. CMQ has low leverage, but most of its debt is denominated in U.S. dollars while its revenues are generated in Argentine pesos exposing the company to exchange rate fluctuations as well as potential transfer and convertibility (T&C) restrictions by the Argentine government. As a result, CMQ's foreign currency rating is capped at the 'B' country ceiling.

Molinos Rio de la Plata S.A.

--LTFC rating upgraded to 'B' from 'B-', Stable Outlook;

--LTLC rating upgraded to 'B' from 'B-', Stable Outlook.

The ratings of Molinos Rio de la Plata S.A. (Molinos) reflect the company's leading business position in domestic branded food products and its ability to generate dollar-based revenues through exports. Molinos is exposed to volatility of crushing margins in its agricultural commodity business and has high leverage and some foreign currency mismatch resulting from the company's mostly dollar-denominated debt.

Pan American Energy LLC (PAE)

--Fitch has assigned an LTLC rating of 'BB-', Stable Outlook.

The ratings reflect PAE's strong and expanding asset base of hydrocarbon reserves, its position as the second largest hydrocarbon producer in Argentina, strong U.S. dollar revenues from exports of oil and gas, ability to retain a material amount of export revenues offshore, benefits related to its ownership by BP plc (Fitch LTFC rating of 'AA+'), strong credit protection measures, conservative financial position, and manageable debt maturity profile. The rating also reflects concentration of assets in Argentina, potential for increased interference in Argentine export taxes or remittance requirements, political concerns in Bolivia, inherent risks of commodity price volatility, and its small size relative to BP's consolidated operations.

Petrobras Energia S.A. (PE)

--LTLC upgraded to 'BB-' from 'B', Stable Outlook;

--National long-term rating upgraded to 'AA-(arg)' from 'A+(arg)', Stable Outlook.

PE's ratings are supported by its strong level of oil and gas reserves, improved financial profile, significant cash generation outside of Argentina, and its ability to retain a material amount of export revenues offshore. A degree of implicit parent support from Petrobras (rated 'BB-' on an international foreign currency basis by Fitch), is incorporated in the ratings. PE's growth remains subject to sizable capital expenditure requirements, which should be manageable. The company continues to be exposed to risks associated with the shift in government policies away from market-oriented frameworks and uncertainty regarding the integrity of the local energy market (specifically the natural gas sector).

Telefonica de Argentina S.A. (TASA)

--LTFC rating upgraded to 'B' from 'B-', Stable Outlook;

--LTLC rating upgraded to 'B' from 'B-',Stable Outlook;

--National long-term rating upgraded to 'A-(arg) from 'BBB+(arg)', Stable Outlook.

TASA's ratings reflect its strong market position, improved financial profile, and historical support provided by its parent, Telefonica S.A. TASA currently has a manageable debt profile and has been applying most of its free cash flow to reduce debt. The ratings also incorporates exposure to foreign currency as most of TASA's revenues are peso-denominated while its debt is largely foreign currency denominated. The company's revenues are mainly originated by its regulated fixed-line business exposing it to regulatory risks.

Telefonica Holding de Argentina S.A. (THA)

--LTFC rating upgraded to 'B-' from 'CCC', Stable Outlook;

--LTLC rating upgraded to 'B-' from 'CCC', Stable Outlook;

--National long-term rating upgraded to 'BBB+(arg) from 'BBB-(arg)', Stable Outlook.

THA's ratings reflect the rating improvement of its underlying asset, TASA. THA cash flow generation and its ability to service its debt obligations depend on inflows from TASA. In addition, the ratings consider the strong parent support as reflected by Telefonica Internacional S.A. (THA's parent company) decision to capitalize credits with THA for aproximately US$620 million.

Fitch's rating definitions are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies and relevant policies and procedures are also available from this site, at all times. This document will remain on the public site for seven days.