Brazil Drops Bond-Debt Plan
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WASHINGTON — Brazilian Finance Minister Luiz Carlos Bresser Pereira said today that at the suggestion of U.S. Treasury Secretary James A. Baker III he has dropped a controversial plan to issue bonds instead of paying interest overdue on about $35 billion worth of his country’s debt to banks.
“We’re going to offer a voluntary system of discounts instead,” he told reporters on the steps of the Treasury. He explained that the discounts on the interest would be worked out with each bank but that the principal of Brazil’s $111 billion in foreign debt would not be affected.
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