Embratel Participacoes SA-PN (ADR) Rights Issue In The S&P Latin America 40 Indices

• Embratel Participacoes SA-PN (ADR) (Brazil, NYSE: EMT, Sedol: 2779621) announced a rights issue with an ex-date of February 17, 2005. The rights issue was suspended on its expected ex-date by action of the Brazilian Securities and Exchange Commission (CVM). According to S&P Latin America 40 Index methodology, corporate actions are applied to the index after the close of business on the day before their ex-date. As a result, a capital increase in the form of an index-neutral rights issue was applied to the S&P Latin America 40 Indices before the action by the CVM.

  The CVM has since stated that it will allow the rights issue to proceed as planned. The revised ex-date has not yet been announced. For purposes of the S&P Latin America 40 Index, the capital increase applied to the index last week will not be adjusted. On the revised ex-date of the rights issue, a price adjustment will be applied to the S&P Latin America 40 Index. The price adjustment will reflect the per-share value of the rights.

Company additions to and deletions from an S&P equity index do not in any way reflect an opinion on the investment merits of the company.

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