Brazil, the developing world's biggest debtor, will pay about $300 million to bank lenders today, clearing up enough of its arrearage on interest payments so that the banks will not have to put the loans on their lists of "nonperforming assets," Brazilian officials said late Wednesday.
Federal rules usually require banks to put loans on the problem list if the interest is past due by more than 90 days, although New York-chartered banks face a 60-day past-due clause.
For most banks, the reporting quarter ends today. Finance Minister Ernane Galveas said repayments will be disbursed to insure that none of the loans are past-due more than 90 days, or 60 days for New York banks.
Brazil is behind by about $2.5 billion in interest payments due banks. Although the nation makes interest payments every day, they are not sufficient to cover the interest that comes due. The back interest will not be fully repaid, Finance Minister Ernane Galveas said, until banks and governments put together a new $11 billion financing package.
About 800 banks must agree to the new financing package.
In another development, Mexico and its lenders refinanced the final $8.3 billion of the $21 billion in loans that mature between Aug. 23, 1982, and the end of 1984. The maturing loans have been converted to eight-year loans, with a four-year grace period on repayment of principal. Lenders can choose an interest rate of either 1.875 percentage points over the London Interbank Offered Rate or 1.75 percentage points over the U.S. prime rate.