Banks regroup for Korea talks, await Seoul team
Copyright 1998 Nando.net
Copyright 1998 Reuters
President-elect Kim Dae-jung confident of success in labor talks
NEW YORK (January 21, 1998 5:25 p.m. EST http://www.nando.net) -
International bankers gathered at Citibank's New York headquarters
Wednesday to await South Korea's response to several proposals to help
ease the country's debt crisis.
Sometime after noon, a delegation from Seoul was expected to join the
bankers and outline its reaction to options drawn up during debt
refinancing talks in New York two weeks ago.
"We expect the Korean government officials to come and present their
plan," one banking source told reporters outside Citibank headquarters.
With a Korean proposal on the table, the talks could begin in earnest,
the source said.
Two weeks ago, global lenders agreed to roll over Korea's maturing
obligations for 90 days, easing concerns the Asian nation might default
on some $40 billion in debt coming due by March 31.
Global lenders said they would wait for Korea's response to a proposed
plan that would provide funds to boost the country's reserves and
simultaneously lengthen the maturity of its debt.
But a senior Finance Ministry official in Seoul said earlier Wednesday
his country did not favor the plan, originally proposed by J.P. Morgan &
Co. Inc., because it would prove too costly for the government.
The two sides now must hash out how much of that original plan, which
was been modified, will survive.
A Korean representative met early Wednesday with William McDonough,
president of the Federal Reserve Bank of New York.
Yong Hwan Kim, co-chairman of Korea's joint Presidential Economic
Committee, declined to describe the details of the talks at the New York
Fed.
"It's very much informative and constructive," Kim told reporters after
his discussions with McDonough.
The main issues in the talks were the form of any Korean debt
refinancing, what prices would be acceptable to Seoul and international
bankers, and whether Seoul should issue new debt, sources close to the
Korean delegation said.
U.S. analysts saw a bumpy road ahead as the banks and the Koreans try to
resolve their differences over how much Seoul should support its ailing
banking and corporate sectors.
"A more generalized rollover (of debt) would be helpful, but the markets
are looking for a more systematic approach to the commercial bank
liabilities and the corporate liabilities," said Luis R. Luis, head of
emerging market analysis at Scudder, Stevens & Clark, a Boston-based
mutual fund company.
Global lenders involved in Wednesday's talks are to include most of
those who met with Korean officials two weeks ago.
In addition to Citibank, the banks include Chase Manhattan, J.P. Morgan,
Banca Commerciale Italiana, Bank of America, Bank of New York, Canada's
Bank of Nova Scotia, Japan's Bank of Tokyo-Mitsubishi, Bankers Trust,
Germany's Deutsche Bank, First Chicago NBD, HSBC Holdings Plc, ING Bank,
Lehman Brothers, Merrill Lynch & Co. Inc., National Australia Bank, SBC
Warburg Dillon Read and France's Societe Generale.
As of mid-1997, Japanese banks had about $23 billion in loans and other
credits to South Korea, while European banks had $36 billion, according
to the Bank for International Settlements, a bank for central banks.
U.S. banks had extended $10 billion of credit to South Korea, the BIS
said.
By SVEA HERBST-BAYLISS
This archive was generated by hypermail 2b30 : Fri Apr 13 2001 - 13:02:14 PDT