MEXICO SIGNS 7.7 BILLION DLR LOAN AGREEMENT
Mexican officials and representatives
of about 360 creditor banks worldwide started to sign
agreements for 7.7 billion dlrs in new loans, Citibank said as
co-chairman of Mexico's bank advisory committee.
    The package, which was agreed in principle with the
committee last October 16, is built on a core loan of six
billion dlrs, of which five billion dlrs will be lent for 12
years with five years' grace.
    The remaining one billion dlrs is in the form of a
co-financing with the World Bank, which will guarantee 500 mln
dlrs. This loan is for 15 years with nine years' grace.
    The package also includes two contingency facilities
totalling 1.7 billion dlrs.
    One is a growth-contingency co-financing with the World
Bank for 500 mln dlrs, of which half will be guaranteed by the
World Bank.
    The loan may be drawn to fund high-priority investment
projects if Mexican economic growth fails to reach certain
growth targets for the first quarter of 1987.
    Disbursements would be for 12 years with seven years'
grace. Bankers said they expect the loan, which is available
until March 1988, will be drawn down.    
    The second contingency facility, for 1.2 billion dlrs, is
designed to support investment in the public and private
sectors.
    The loan may be drawn down until April 1988 but only if
Mexico experiences a shortfall in public-sector external
receipts and provided that Mexico first qualifies for drawings
under a 600 mln sdr oil-contigency facility from the
International Monetary Fund.
    This IMF loan would be triggered if the price of oil falls
below nine dlrs a barrel for three months.
    Because of the level of public sector external receipts in
the fourth quarter of 1986 and the first quarter of 1987,
Mexico will not draw the first two tranches of the continency
facility, totalling 451 mln dlrs, Citibank said.
    As previously reported, bank commitments to the new money
package will also be reduced by 250 mln dlrs, representing the
interest payments that Mexico will save this year, thanks to
the reduced spread on the rescheduling.
    Under the rescheduling, Mexico is restructuring 43.7
billion dlrs of previously rescheduled debt over 20 years with
seven years' grace.
    Maturities on another 8.6 billion dlrs of loans granted in
1983 and 1984 will remain the same. The interest rate will be
at 13/16 pct over Eurodollar deposit rates - the margin that
applies to the entire package.
    Rounding out the deal, the banks have agreed to prolong six
billion dlrs of trade lines and to refinance some 10 billion
dlrs of private-sector debt that comes under the Mexican
government's exchange-guarantee scheme, Ficorca.
    The size of the package thus comes to about 76 billion
dlrs, the largest ever assembled in the international credit
markets, Citibank said.
    The loan is still only 99 pct subscribed and the loan books
will be kept open for several more weeks to round up the final
100 mln dlrs and the approximately 60 banks that have so far
refused to join the deal.
 
 Reuter
