Riggs National Corporation & Subsidiaries - Page 4




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               We incorporate herein the findings of fact set forth in Riggs          
          I by this reference.  We also incorporate herein the stipulations           
          and exhibits in Riggs I by this reference.  For ease of                     
          understanding, we repeat those facts set forth in Riggs I we deem           
          necessary to clarify the supplemental findings set forth herein and         
          the ensuing discussion resolving the issues for decision.                   
          A.  Background                                                              
               Petitioner was one of hundreds of banks that were involved in          
          the restructuring of Brazil’s foreign debt in the early to mid-             
          1980’s.  As relevant hereto, the restructuring of Brazil’s foreign          
          debt was divided into three phases.  The Central Bank served as the         
          borrower under certain agreements entered into in connection with           
          phase I, phase II, and phase III of Brazil’s foreign debt                   
          restructuring; the Brazilian Government guaranteed the Central              
          Bank’s obligations under these agreements.                                  
               As of the time of the phase I restructuring negotiations,              
          there were as many as 600 foreign lenders holding outstanding               
          Brazilian loans.  Collectively, these lenders had issued thousands          
          of outstanding loans to numerous Brazilian borrowers.  Because it           
          was not feasible to have the foreign lenders and their Brazilian            
          borrowers renegotiate all these loans, the deposit facility                 
          agreement (DFA) mechanism was devised.  Prior outstanding loans             
          were left in place.  When a prior loan borrower made a loan                 
          payment, the payment would be deposited with, and held by, the              






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