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...private lenders alone have some $25 billion at risk in Mexico, a sum that puts that nation, along with Brazil, at the top of the list of foreign borrowers from American banks. Brazil, however, does not rely on oil for its income. Mexico's major creditors include Citicorp, which has loaned $2.8 billion to government agencies and companies there...

Author: /time Magazine | Title: Banking on Mexico | 2/7/1983 | See Source »

Perhaps with that in mind, most lenders try hard to play down the problems and insist that talk of default, let alone bankruptcies, is ill founded. "Foreigners have been borrowing our money since 1902, when we opened our first [overseas] branch in Shanghai." Citicorp Chairman Walter Wriston told TIME. "Our loan losses overseas are not a third of what they are from those good people who borrow our money and speak our language. There are few recorded instances in history of governments, any government, actually getting out of debt. Countries do not fail to exist." The rescheduling of Mexico...

Author: /time Magazine | Title: The Debt-Bomb Threat | 1/10/1983 | See Source »

...Chemical Bank, for example, has $1.4 billion on loan in Mexico and $370 million to Argentina, a sum amounting to 92% of its shareholders' equity. Chase Manhattan has loans totaling $2.5 billion to the two countries, 77% of stockholders' equity, and New York's Citicorp, which refuses to confirm the exact figures, has a reported $4 billion, or 85%. On top of that, Citicorp is a very big lender to Brazil, with an estimated $5 billion in total loans. Altogether, the nine largest U.S. banks have loaned out about 130% of their equity to Mexico, Brazil...

Author: /time Magazine | Title: The Debt-Bomb Threat | 1/10/1983 | See Source »

...Smith Barney investment firm, estimates that delinquent loans to foreign firms may have lowered fourth-quarter profits of major banks by some 5%. Concern about an earnings drain from bad loans has already helped depress bank stocks. While the stock market has been reaching new highs, shares of Citicorp have fallen 14% since November. Chase Manhattan has dropped 11%, and Valley National is down...

Author: /time Magazine | Title: The Debt-Bomb Threat | 1/10/1983 | See Source »

...days on end, the financial world waited in suspense as bankers tried to patch together the two rescue packages. In the case of Mexico, 13 leading U.S., Japanese, British and West German bankers worked around the clock for nearly two weeks in the 29th-floor dining room of Citicorp headquarters in New York City to keep the country from defaulting. "It was handled like a money-raising telethon," one observer recounted later. Just the process of sending out the 27-page rescheduling proposal to some 1,400 banks involved in Mexico's loans gobbled up 600 hours of telex...

Author: /time Magazine | Title: The Debt-Bomb Threat | 1/10/1983 | See Source »

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