National debt to Brazil from 1970s may come back to haunt the government

According to PAP citing "Gazeta Mercantil", Brazil intends to issue 10-year bonds estimated at $2.4 billion, using Poland's old debt to Brazil as security. Since Poland has better quotations on the international finance market, Brazil should attract lower interest loans from international investors. The following are the organizers of the bonds' issue: JP Morgan Chase, Bank of America, UBS Warburg and Citigroup. It is not clear whether the Polish government was informed about the issue, though two years ago it approved a similar issue. Brazil credited Poland in 1970's with import credits. In April 1991, it signed a loans reduction deal with 17 creditors. As a result, the $33 billion Polish loan was reduced by around 50%, and an installments repayment schedule was worked out in line with Poland's requirements. (Rzeczpospolita, p.B1) K.K.