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Technology Stocks : Semi-Equips - Buy when BLOOD is running in the streets!
LRCX 139.60-6.2%Nov 20 3:59 PM EST
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To: FJB who wrote (5789)6/10/1998 7:45:00 PM
From: Tiger  Read Replies (1) of 10921
 
The reason that most loans are in $s relates to two issues:

1) The SEA countries' currencies were linked to the US$. Lenders wouldn't want to take the direct SEA currency risk, but were comforted in the belief that a stable exchange rate would allow the borrowers to repay. (In the end, if the borrowers default because of an adverse shift, the banks will effectively have taken the currency hit anyway.)

2) Yen-denominated loans were not typical as the primary end markets (US or other SEA countries) for the borrowers' products was also US$-linked. The closed Japanese markets - think about those Japanese trade surpluses - don't allow for accumulation of much yen for repayment of debt by borrowers.
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