S. Korean Pact Called Insufficient

The debt rollover agreement between South Korean banks and their foreign creditors is “still not sufficient” for the U.S. and other members of the Group of Seven leading industrial nations to release $8 billion in accelerated financial assistance, U.S. Treasury Secretary Robert Rubin said Thursday.

While the rollover agreement reached late Wednesday is “very, very constructive and very, very important,” Rubin said, “in and of itself, and without the addition of private money, which they intend to raise very shortly, it still isn’t sufficient in its amount to constitute a refinancing of the preponderance of the short-term debt.” Rubin spoke to reporters after a speech to the Community Development Finance Institution’s conference in Washington.

While the South Koreans and their creditors agreed to extend the maturity on $24 billion worth of debt, Rubin said it isn’t yet clear whether negotiations will be successfully completed on all of that.

Rubin also said that by the time the refinancing agreements are complete, South Korea may no longer need the accelerated aid.