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To: DJBEINO who wrote (2724)	3/8/1998 11:47:00 PM
From: DJBEINO	Respond to of 9582

03-09-98 Financial Aid from G-7 May Be Delayed; Despite Successful Debt Talk with Individual Creditor Banks Yoo Cheong-mo Staff reporter Despite Korea's successful conclusion of debt-rescheduling talks with individual creditor banks, the disbursement of an $8-billion aid promised by 13 industrialized countries will probably be delayed for some time, officials said. A ranking official at the Ministry of Finance and Economy said yesterday that the $8 billion will eventually be delivered, but only after Seoul manages to raise additional overseas capital on its own. ''The 13 lenders, including the Group of Seven countries, seem prepared to link their extension of the $8 billion to the injection of new foreign currency into Korea through Seoul's global bond offering or international syndicated loan,'' said the official, who preferred to remain anonymous. A massive inflow of new foreign money would help improve international attitudes concerning Korea's economy, leading the parliaments of the 13 nations to respond favorably to the Korea aid package, he added. The Korean government is now preparing to sell about $9 billion worth of dollar-denominated ''foreign-exchange stabilization bonds'' in New York. It is also trying to arrange syndicated loans of up to $4 billion by four or five U.S. commercial banks. Admitting that the prospects of success for the global bond offering and syndicated loan schemes are less than certain due to the nation's low credit rating, the official said, ''It is very difficult to predict when the $8-billion governmental loans will arrive here.'' As part of the $57-billion rescue package for Korea arranged by the International Monetary Fund last December, the 13 countries promised to offer a second-line of credit, reaching up to $23.35 billion. The $23.35 billion in governmental aid included $10 billion pledged by Japan and $5 billion by the United States. Out of the total, $8 billion was to be disbursed early this year. Presidential economic adviser You Jong-keun, who returned to Seoul Friday from the international debt road show, told reporters that he had asked Tokyo and Washington to assist in speeding up the execution of the $8-billion loan, but refused to reveal details on the matter. While expressing optimism concerning the possible rollover of the $24-billion short-term debts, You expressed concern that the domestic political impasse would adversely effect the decision-making process of foreign creditor banks. He also warned that political unrest could result in raising interest rates on the nation's foreign debts. Meanwhile, the brisk sale of Japanese yen-denominated bonds, issued by Seoul to stabilize the local currency market is sending a hopeful signal, ministry officials said. The MOFE said that about 77.64 million yen ($604,000) worth of the yen bonds had been sold within four days of the sale's launch Monday. The government aims to raise a total of 30 billion yen by selling the yen bonds to Korean residents in Japan.