Magazine article American Banker

90-Day Delay in Payment of Soviet Bank Debt Asked

Magazine article American Banker

90-Day Delay in Payment of Soviet Bank Debt Asked

Article excerpt

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. …

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