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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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