Word: braziller
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Dates: during 1980-1989
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...Chase Manhattan hiked their benchmark prime rate on loans to commercial customers from 7.5% to 7.75%, its first rise in nearly three years. Several major banks soon followed suit. Two days later, seven leading banks had announced that they would take the serious step of reclassifying their loans to Brazil to a "nonperforming" status. That means that the banks' books will no longer maintain the fiction that Brazil is still paying interest. The decision will sharply slash the lenders' first quarter profits...
...banks' quick action was apparently designed to show Brazil and the financial community that they can weather the current Latin debt crisis. In part to compensate for the Brazilian losses, banks boosted the prime rate, which is widely used in determining the interest not only on commercial credit but on home-equity and other consumer loans. The rate hike means more interest income and profits for the banks...
...reclassification of $6.8 billion worth of Brazilian loans. Seven major banks will see their profits reduced by a combined $112 million for the first quarter. At BankAmerica, 40% of quarterly earnings could be lost, while Manufacturers Hanover could take a hit of as much as 20%. If Brazil does not resume making interest payments on its debt this year, 1987 earnings would be reduced by some $1.9 billion for all U.S. banks. Anticipating such losses, Standard & Poor's has lowered the credit ratings it assigns to several of Brazil's U.S. lenders, including Chase and Chemical Bank...
...many observers, the banks' decision to reclassify Brazilian loans is as much a negotiating ploy as a financial move. Brazil may have hoped that the prospect of forgone interest income and sharply reduced bank profits would force U.S. lenders to give in to its demands for easier terms. But now that several major banks no longer assume they will receive Brazilian interest anytime soon, the debtor's threat to withhold payment indefinitely is less menacing. Says one banker: "We are saying to Brazil, 'We can survive.' " New negotiations begin this week in Manhattan between representatives of U.S. banks and Brazilian...
...them onto conveyor belts headed for domestic flights before the luggage ever got to Customs inspectors. Others simply picked up the bags and carried them out through emergency exits. Accomplices erased from airline computer systems all records of the flights made by the couriers who carried the drugs from Brazil. Since 1981, the ring may have smuggled $1.5 billion worth of cocaine through J.F.K. Last Tuesday narcotics agents arrested 40 people, including 23 present or former Pan Am employees, eight from Eastern and two from Delta. But, says New York City Special Prosecutor Sterling Johnson, "I have no doubt that...