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The term sheet outlined the major terms of the proposed
restructuring that the BAC had negotiated with the Brazilians.
From about November 1983 through January 27, 1984, virtually
all of the foreign lenders submitted their individual written
commitments to the term sheet that the BAC had negotiated on their
behalf with the Brazilians. Prior to and during this period, some
foreign lenders, including Commercial Credit Corporation, a
subsidiary of Control Data Corporation, initially indicated that
their approval of the term sheet would be conditional upon the
Brazilians' resolving the withholding issue favorably to them,
which issue is discussed more fully infra.
Phase III
The phase III negotiations began in about the fall of 1984 and
continued through July 1986. Originally, the BAC and the
Brazilians contemplated restructuring the scheduled Brazilian
foreign debt payments due in the 7-year period from January 1,
1985, through December 31, 1991. However, no such 7-year
restructuring agreement was ultimately concluded.
On July 25, 1986, Brazil and its foreign lenders signed the
phase III DFA. The phase III DFA covered the scheduled Brazilian
foreign debt payments due in 1985 and 1986. Under the phase III
DFA, any 1985 debt payments would be available for relending to
other Brazilian persons and companies during a specified relending
period; 1986 debt payments, on the other hand, would not be
available for relending.
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