NEW YORK -- Argentina Friday signed agreement for a $1.1 billion bridge loan with a group of 250 banks amid public praise and private grumbling by bankers attending the ceremony.
The agreement is part of $2.6 billion in financing Argentina will receive from international commercial banks.
Citibank, lead bank in a committee that has been working on the loan, said commitments have been received for the $1.5 billion balance of the total loan. The commercial bank agreement paves the way for Argentina to receive a $1.8 billion loan from the International Monetary Fund and additional credits from the Bank for International Settlements.
Argentina's total external debt amounts to roughly $37 billion.
The signing of the loan agreement was posponed from Thursday when the committee had not received confirmation of the total amount of the credit from individual banks.
But by Friday noon, Citibank realized the loan was actually oversubscribed by $100 million, and thus had to recalculate and prorate individual contributions.
'The success of this syndication is an expression of confidence by the international banking community in Argentina's future,' said William R. Rhodes, senior vice president at Citibank and chairman of the bank working committee for Argentina.
But a UPI reporter who managed to gain entrance to the private meeting found a different atmosphere.
Citicorp's conference room filled with bankers impatient at having to sign the loan agreement on New Year's Eve.
A British banker grumbled a commet about the Falkland Islands and the loan's recipient. 'And we have to lend them money,' he said.
'That is because countries which owe money now can force bankers to lend them more against their will,' another banker said.
'They're going to serve champagne when we should be lighting mourning candles,' another said, before someone decided to recheck the reporter's identity and he was ushered to the door.
The agreement was signed by Rhodes at a ceremony at Citicorp center in New York attended by Alberto Sola, financial representative for the Republic of Argentina in the United States; Alberto Ayerza, vice president of the Central Bank of Argentina; Ubaldo Aguirre and Raul C. Sanguinetti, directors of the central bank. Rhodes represented the international banks.
The $1.1 billion bridge loan is for 15 months. The $1.5 billion agreement, which will be signed at a later date, is a five-year syndicated credit.
Citibank, N.A., is agent for the 250 bank syndicated loan. Other banks represented on the working committee are: Bank of America, N.T. & S.A.; the Bank of Tokyo Ltd.; The Chase Manhattan Bank, N.A.; Credit Lyonnais; Credit Suisse; Deutsch-Sudanerikanische Bank A.G.; Lloyds Bank International Ltd., Manufacturers Hanover Trust Co.; the Morgan Guaranty Trust Co. of New York, and the Royal Bank of Canada.