wate - To: Dan Zelikow October 26, 1998 Wes McGrew Doug Smith Thr: Karin cist! From: Scott Melese-d’Hospital “2-t-— Subject: [ischeipReadout ou Meetings Last Week with Brazilian and Argentine Beonomic Teams QSGROEIEGEE briefed the Board at 10:00 am. this moming on his travels to Atgentina’ and Brazil lst Thursday and Friday, Details follow:| Qon o> . ‘The two sides agreed that as soon as an LOT is signed (early next week, on current indications), the authorities would undertake a “soadshow” of inteinational financial centers including New York, Tokyo, Frankfurt, and possibly London to talk up the plan. Io this context the authorities would set up meetings with foreign creditor ‘banks to press them to rebuild credit lines, with a view to ultimately bringing them back up to pre-crisis levels, The Brazilians are hoping for G~7 ceatral bank backing in this endeavor. . ‘On domestic debt rollover, the “large spike” (roughly four weeks in witich RS13-RSIGB needed to be rolled over each week) has passed. Weekly rollover requirements are now back down to R$8-9B, Jn this context the authorities are trying very gradually to Jengthen saatuities by issuing longer maturities that are partly ixed, partly floating, eg., 3-month paper with the interest rate Gxed for the first week and indexed to the overnight rate thereafter, They hope gradually to lengthen both the fixed and the overall maturity of government debt. Requirements to roll over instruments indexed to foreign exchange are low, 2s thesé have the longest maturities of Brazilian domestic obligations, now averaging 23 months.(kEHeFiexpects the program to be announced “in a couple of days,” after which will Commence “detailed discussions” on the LOL He expects the LOLto be out early next week, Comménts of other EDs: