Brazil, Citibank OK $82-Billion Debt Restructuring Plan

Brazil and Citibank today announced completion of a historic $82-billion debt restructuring package, which will allow the nation to start drawing funds by the middle of the month.

The package should enable Brazil to bring back-interest payments to commercial banks up to date and in turn boost U.S. commercial banks’ fourth-quarter earnings.

The loan agreement will give Brazil $5.2 billion in new loans. It also reschedules old loans and covers various short-term trade loans.

The agreement will allow Brazil to make the first drawdown, totaling $4 billion, in the next two weeks and bring back-interest payments up to date for the first time since February, 1987.

Brazil is the developing world’s largest debtor, with $120.3 billion of external debt.