For U.S. syndicated lenders, the good news about the Russian economic crisis is that they saw it coming. The bad news is that it is expected to spread to Latin America next.

As the Russian crisis deepens, bankers are looking south to see if the last emerging market domino will fall. That is because most major American lenders have set their sights on Latin America as the greatest opportunity for marketing financial services, analysts say.

Russia's woes will definitely slow things down in the Latin American market, said Bill Craighead, an analyst with Loan Pricing Corp. In the end, he said, that market "may totally shut down."

On the surface the links between Russia and Latin America seem thin. But the devaluation of Russian currency has led directly to widening spreads in the Latin American bond market.

"The psychology of global investors has turned sharply against all emerging markets," Mr. Craighead said.

That means more Latin American institutions will turn to banks for financing, and banks will probably raise the price of loans there. "Throughout the crisis the question of 'who's next?' has loomed-and Latin countries continue to be mentioned as possible victims," Mr. Craighead wrote in a report.

William Hartmann, the interim head of Citicorp's global loan group, said the chief difference between Latin America and Russia is the level of development. Russia still lacks the legal framework of capitalism, he said.

Despite their differences, the regions are linked, he noted-by, among other things, the world oil market. "If Russia decides to step up exports of oil and gas, it could drive down commodity prices," he said. "That could hurt some of the more commodity-dependent countries in Latin America."

For now, Mr. Hartmann said Citicorp is far from abandoning its ambitious expansion plans in Latin America, but remains "cautious." In Russia, Citicorp participated in three loans, worth $138 million, in the first half. Tuesday the bank announced it would take a $200 million charge on Russia-related trading losses.

Yet for the most part U.S. banks beat a hasty retreat from Russia-so fast it seems as if they had hardly entered the market. Through the first half only three U.S. banks had participated in syndicated loans to Russian entities, according to Securities Data Co.

First among the three was Chase Manhattan Corp., which participated in a $350 million loan to an unspecified entity. In all the U.S. banks participated in only five deals, together worth less than $1 billion, through June 30.

Leaving the Russian loan market altogether were BankAmerica Corp. and Bankers Trust Corp., which together participated in nine loans, worth $481 million, in 1997.

Most of the banks left dealing, under darkening clouds, were European- among them Bayerische Vereinsbank, Westdeutsche Landesbank Giro, and Bank Austria-which combined to participate in $1.3 billion of this year's $1.9 billion of Russian syndicated loans.

Over all, world banks lent $9 billion to Russia through syndications in 1997, a tiny fraction of the $1.6 trillion syndicated worldwide, according to Securities Data Co.

In Latin America the stakes are higher. Lenders coughed up $39.5 billion in 1997 and $20.2 billion through the first half of 1998. And those loans were led primarily by U.S. banks.

Chase alone participated in 33 loans worth $13.8 billion in 1997. Other U.S. banks with large exposure include BankAmerica, with 29 loans worth $10.5 billion; Citicorp, with 30 loans worth $10.1 billion; and J.P. Morgan & Co., with 18 loans worth $8.8 billion.

Bankers have been more cautious in their lending. Loan agreements include flexible pricing based on market conditions, and lenders are far more likely to share underwriting duties with as many as four others to get deals done, Mr. Craighead said.

But those tactics have not shown signs of slowing business so far. Through the first half only one bank, BankAmerica, significantly reduced its lending to Latin America. The bank's participation in nine loans worth $2.3 billion put it on pace to do about half the business it did in 1997.

Citicorp's Mr. Hartmann attributes the loyalty from lenders to the long- standing relationships there. Unlike Russia, Latin America is a place where U.S. banks built offices even when political instability was the norm.

"People have spent a lot more time focusing on relationships there," said Citicorp's Mr. Hartmann. "Individual countries might be in the press because of economic woes, but from the bank side we're not seeing a wholesale retreat."

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