FIRST INTERSTATE <I> ESTIMATES BRAZIL RISKS
First Interstate Bancorp said its
1987 pre-tax income could be reduced by about 33.5 mln dlrs if
it decides to reclassify its 339 mln dlrs in medium- to
long-term loans to Brazil as nonperforming.
    But the company stressed in a filing with the Securities
and Exchange Commission that it believes it is too soon to
reclassify the debt, despite Brazil's Feb 20 suspension of
direct interest payments on medium- and long-term loans.
    "The corporation believes that it is premature to make a
decsion to classify such medium- and long-term debt as
nonperforming at this time," First Interstate said.
    But First Interstate said that if Brazil's suspension of
interest payments continues, it may have to reclassify its
loans as nonperforming and place them on non-accrual, meaning
that interest previously accrued but not paid would be deducted
from net income and interest would no longer be accrued.
    Besides its medium- and long-term debt, First Interstate
said it also has 165 mln dlrs in short-term loans or trade
lines in Brazil.
    As of Dec 31, 1986, nonperforming Brazilian outstandings
were about 4.1 mln dlrs, it said.
 Reuter
