BRASILIA - William Rhodes, the Citicorp vice chairman who heads the steering committee of Brazil's creditor banks, has reaffirmed that an accord with the International Monetary Fund is essential to a conclusion of Brazil's debt restructuring with commercial banks.
Mr. Rhodes denied a Brazilian newspaper report that said the commercial debt agreement could take effect without an IMF accord.
Accord |Always Contemplated'
The newspaper, O Estado de Sao Paulo, said Mr. Rhodes told Economy Minister Fernando Henrique Cardoso that Brazil did not need an IMF accord to finish the agreement on repayment of the $40 billion foreign bank debt.
"We have always contemplated that an IMF program would form part of the restructuring plan," Mr. Rhodes said in a telephone interview.
"That is what I discussed with the minister. Central Bank President Paulo Cesar Ximenes, and chief debt negotiator Pedro Malan during the visit to the ministry" on Tuesday, the banker said.
Agreement on Par Bonds
Brazil wants to conclude an IMF accord and obtain a total of $1.6 billion from the IMF, the World Bank. and the Inter-American Development Bank as a guarantee to help clinch the commercial debt repayment deal.
It was announced Tuesday that the banks had largely agreed to Brazil's request for a maximum of 40% repayment in par bonds and a minimum of 35% in discount bonds. The limit on par bonds means substantial savings for Brazil.
"We wanted to rebalance" the mix of repayment options, "and that is what this whole exercise was," Mr. Rhodes said.
Brazil and the banks begin talks on repayment contracts and documentation next week in New York. The negotiations are expected to run at least severalweeks.
Asked when the debt agreement could be signed, Mr. Rhodes said, "We have to have our discussions on the documentation, and Brazil has to work out its arrangement with the fund so we can have a signing by the end of September."
Brazil then could begin repayments in November, he said, adding, "It's a tight schedule."