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Strategies & Market Trends : Telebras (TBH) & Brazil -- Ignore unavailable to you. Want to Upgrade?

To: Steve Fancy who wrote (9077)	10/21/1998 1:40:00 AM
From: Steve Fancy	Read Replies (1) \| Respond to of 22640

U.S. working on credit facility for Latam--bankers Reuters, Wednesday, October 21, 1998 at 01:17 By Apu Sikri NEW YORK, Oct 20 (Reuters) - The United States is working with other Group of Seven countries to provide Latin American countries with between $100 billion and $200 billion in a backup line of credit that will have some commercial bank participation, according to senior bank officials in New York. Bankers said Treasury officials have approached them to participate in the credit facility which would be led primarily by the United States and its G-7 partners. Bank officials, who requested anonymity, said participation in the credit line by commercial banks would probably be limited to between $10 billion and $15 billion. A U.S. Treasury spokeswoman categorically denied that Treasury was approaching banks to participate in a contingency fund for Latin America. But bankers in New York said discussions among senior government officials have continued, and some banks have been approached for their input. The credit facility would be a back-up line of credit that Brazil and other Latin American countries could draw upon in the event they run out of multilateral funds, bankers said. Bank officials in New York said details of a credit facility by the U.S. and others would likely be announced as part of a broader agreement with multilateral lending agencies, including the IMF. Talk of a mammoth credit facility from the Western powers emerged more than a month ago in the days and weeks after Russia defaulted on its domestic debt, triggering a financial crisis. The rumors were discounted by government officials in most capitals, including Washington, London and Frankfurt. The U.S. participation would be in the form of a Treasury swap line, which does not require approval from the U.S. Congress, bankers said. A similar credit facility was extended to Mexico after the peso plunged against the dollar beginning in December, 1994. On Tuesday, Brazil announced a few details of a fiscal package under the guidelines of the International Monetary Fund. The IMF and the Brazil Ministry of Finance said in a joint statement that Brazil would follow a three-year fiscal program generating primary surpluses of 2.6 percent of GDP in 1999, 2.8 percent in 2000 and 3.0 percent in 2001. Brazil experienced a financial crisis after Russia defaulted on its domestic borrowings in August, killing investor appetite for the debt of emerging market countries. As investors backed away from Brazil, they withdrew their dollar holdings, and taking $20 billion out of Brazil's foreign exchange reserves. The government of President Henrique Fernando Cardoso, in the runup to elections, refrained from making any clear statements about borrowings from the IMF. Copyright 1998, Reuters News Service