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scheduled debt payments due in 1984 on prior outstanding Brazilian
loans, (2) a phase II CGA under which the Central Bank would be
lent up to an additional $6.5 billion in new money, (3) a phase II
trade receivable commitment agreement, and (4) a phase II interbank
commitment agreement.
During the phase II restructuring negotiations, Brazil did not
declare another moratorium with respect to the repayment of its
foreign debt. As a result, although there was pressure for Brazil
and its foreign lenders to conclude a phase II restructuring deal,
the time pressure they were under was not as severe as that which
they had experienced during the phase I restructuring negotiations.
Many of the foreign lenders were unhappy with Citibank's and
Morgan Bank's negotiation of the phase I restructuring. They felt
that they had no input into the phase I negotiations and that the
phase I restructuring agreements had been forced upon them by
Citibank and Morgan Bank.
As a result, the major international banks and Brazil decided
that a Bank Advisory Committee for Brazil (BAC) should be formed to
negotiate the phase II restructuring on behalf of the foreign
lenders. The BAC was formed on June 16, 1983. It had 14 members,
Citibank, Morgan Bank, Lloyd's Bank, Arab Banking Corporation, Bank
of America, Bank of Montreal, the Bank of Tokyo, Bankers Trust,
Chase Manhattan Bank, Chemical Bank, Credit Lyonnais, Deutsche
Bank, Manufacturers Hanover Trust, and Union Bank of Switzerland.
Citibank served as the BAC's chairman; Morgan Bank and Lloyd's Bank
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