U.S. bankers who met with Indonesian officials in New York this week expressed optimism that a voluntary debt restructuring for the nation's companies will gain lenders' approval.
"The overall tone of the meeting was quite positive," said Robert S. Strong, executive vice president of Chase Manhattan Corp., at a press conference after Wednesday's talks. "We expect we will get the support we need."
The restructuring, covering about $64 billion of Indonesian private- sector debt owed to foreign banks and $7 billion of interbank credits, was drafted in June in response to the growing economic crisis in Indonesia.
Wednesday's meeting was the first of six scheduled between Indonesian government officials and banks around the world.
The five remaining meetings are to be in Paris, Frankfurt, Tokyo, Singapore, and Seoul, South Korea. Banks must present their responses to the restructuring offer by July 23.
Chase Manhattan, Bank of Tokyo-Mitsubishi Ltd., and Deutsche Bank are co-leaders of the 13-member bank steering committee.
Ginandjar Kartasasmita, Indonesia's coordinating minister of economy, finance, and industry, said not all of the $64 billion must be restructured. However, he did not exclude the possibility that an additional $54 billion to $55 billion of Indonesian government borrowings might also need to be rescheduled.
In a positive sign, he added, however, that foreign banks have so far agreed to renew about $1.4 billion of trade finance credits, despite an estimated $1.1 billion that is in arrears on trade finance loans. The agreement calls on banks to maintain $4 billion to $5 billion of trade finance credits.
The plan calls for banks to grant Indonesian borrowers a three-year grace period during which no payments need be made on principal, as well as an option to extend the grace period another five years.
The Asian country, in turn, has agreed to set up a special agency to make foreign exchange available to Indonesian companies so that they may repay their debts in hard currency.
Indonesian borrowers owed U.S. banks nearly $8 billion at yearend, according to the Federal Financial Institutions Examination Council. The data include both on- and off-balance-sheet transactions, such as derivative contracts and foreign exchange exposure.
