- 26 -
two major international banks holding the largest amounts of
outstanding Brazilian loans, took the lead in negotiating the phase
I restructuring of Brazil's foreign debt. The phase I
restructuring agreements were entered into by Brazil and its
foreign lenders on February 25, 1983.
The phase I restructuring included: (1) A phase I DFA that
covered the scheduled debt payments due in 1983 on prior
outstanding Brazilian loans, (2) a phase I CGA under which the
Central Bank would be lent up to an additional $4.4 billion in new
money, (3) a phase I trade receivable commitment agreement, and (4)
a phase I interbank commitment agreement.10
As indicated previously, only the 170 foreign lenders holding
the largest amounts of outstanding Brazilian loans participated in
the phase I CGA. Their shares of this $4.4 billion of new money to
be provided to Brazil were based on their relative holdings of
outstanding Brazilian loans.
In negotiating the phase I restructuring, Citibank, Morgan
Bank, and the Brazilians were under extreme time pressure to
conclude an agreement quickly because of the Brazilian Government's
debt repayment moratorium. If a restructuring agreement were not
concluded, then many of the foreign lenders' Brazilian loans would
10 Under the phase I and later phase II trade receivable
commitment agreements and interbank commitment agreements the
major international banks pledged to provide short-term credit to
Brazil in connection with certain trade receivables and interbank
lines of credit at the same levels which existed prior to the
Brazilian foreign debt crisis.
Page: Previous 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 NextLast modified: May 25, 2011