90-Day Delay in Payment Of Soviet Bank Debt Asked
FRANKFURT -- Soviet debt negotiators want to delay for 90 days payments of principal owed commercial banks in the first quarter of 1992, said Martin Kohlhaussen, chairman of Commerzbank.
Mr. Kohlhaussen did not say how much money is involved, but the rapidly devolving Soviet state owes western banks $3.37 billion in December alone.
Banks have not agreed to the proposal, the German banker said. The 12-member Soviet debt steering committee formed last week is expected to meet next week to discuss the proposal. Commerzbank is a committee member.
It was unclear what effect Sunday's declaration of a commonwealth would have. Russia, Ukraine, and Byelorussia said their commonwealth replaces the Soviet Union, which "is ceasing its existence."
|Useful' First Discussion
The bank representatives and officials of the Soviet foreign trade bank, Vneshekonombank, concluded what was termed a "useful" first session early Saturday and announced that talks would be resumed no later than Dec. 16.
The Soviet Union last week become the latest in a series of former East bloc countries to seek payment deferrals from commercial creditors.
Poland has been in default since 1989, and Bulgaria has repeatedly announced unilateral three-month moratoriums since 1990. Yugoslav officials recently said they want to restructure the country's commercial and official debts but stressed they do not intend to suspend interest payments.
Commerzbank Loss Reserve
The Soviet Union made clear that it wants to maintain its creditworthiness and access to international markets, said Mr. Kohlhaussen, who last week said Commerzbank would take a loss provision for more than half its $560 million in loans to the Soviet Union.
Mr. Kohlhaussen said Monday that the $135 billion-asset bank, Germany's third-largest, would defer a dividend increase despite a strong profit in the first 10 months of 1991, since much of the increase will go into reserves.
Soviet officials do not want to follow the example set by Poland, which has gotten a debt writeoff from the Paris Club of government creditors and is seeking a similar agreement from its bank lenders, Mr. Kohlhaussen said.
Less Readiness to Lend
Banks already have essentially halted lending to Poland and require government guarantees for repayment of loans to the Soviet Union.
The 12-bank steering committee met in Frankfurt to seek clarification of the terms and conditions of Vnesheconombank's request to defer debt payments. The move followed an accord in November with the Group of Seven industrial nations on a deferral of principal payments on government debt. The country's foreign debt totals about $68 billion.
Vnesheconombank asked Deutsche Bank to form the bank panel. The Soviet Union is estimated to owe money to 300 to 500 banks.