UNITED NATIONS CENTRE AGAINST APARTHEID NOtES ANiD nocuit1ENTS* 13/84 August 1984 UNITED STI\.TES AND CANADIAN INVOLVEl>IENI' IN WANS '10 SOOTH AFRICA FID11979 '10 t:Wi 1984 by Beate Klein /Note: Beate Klein has written extensively on foreign investment in and financial relations with South Africa. Her paper entitled ''Bricks in the wall"was ptblished in the Notes and DocUments series in 1981, while her paper "Bank loans to South Africa 1979-mid-1982" was publlshed as a Special Issue of Notes and DocUments in 1982. '!his paper was presented at the North Anerican Fegional Conference for Action against Apartheid, held at the United Nations Headquarters fran 18 to 21 June mr..- '!he views expressed in this paper are those of the author. / 'ltAIl material in these Notes and Oocuments may be freely reprinted. Acknowledgement, together with a copy of the publication containing the reprint, would be appreciated. United Nations, New York 10017 84-19265 -2- Qui de to OhaFt I; United States and Canadian loans to South Africa Chart I presents an annual chronology of identifiable loans to South Africa which involved United States and/or Canadian banks. As' noted previously, each loan may have involved additional financial institutions from other countrie~but these banks have been excluded from this study. Loan listings include the following information: Month in which the transaction was completed Name of the South African borrower (and guarantor) Amount of the loan in the currency in which the agreement was originally transacted U.S.$ equivalent of the loan Rate of interest charged the borrower, expressed as a straight percentage (fixed rate~ or the amount above the fluctuating London Interbank Offered Rate (floating rate) Type of loan, either bond or credit Term of the loan and the date it comes due, or matures. The financial institutions listed below the loan details are the United States or Canadian controlled or affiliated organizations which were involveo as lenders or underwriters in the agreement. Those which acted as managers of the loans are indicated by (M). All loan figures are denoted in millions and a key to abbreviations can be found on page 3. Guide to C,hart II: Un! ted States and Canadian financial i,nsti tutions Chart II reverses the data contained in chart I and presents the loan information by lending institution. United States banks are listed first ,follove by the Canadian ones. Institutions are arranged alphabetically under the name of the company which exercises ultimate control over the lending insti- tution. Loan data follows immediately after the lending institution, which can be either the parent or a subsidiary company. Where it was not possible to attribute a transaction to a specific subsidiary due to data insufficiency, the loan is assigned to the parent corporation. In some cases the "parent" company does not actually control the lending bank. but is affiliated to it through a minority shareholding. These institutions are noted with an asterisk (*) and an explanation of their relationship to the cited parent can be found under "Notes on Financial Institutions." Lenders which were affected by mergers, sale, or acquisi- tions during the period under study are also listed under "Notes" on page 4. -4- Notes on financial institutions Banque de la Soci:te Financiere Europtenne (France) is owned equally by nine banks, one of which is Bank of America, N.T.,S.A. Joh. Berenberg, Gossler & Co. (FRG) is 15 ~er cent awned by Philadelphia National Bank, the holding company of which is Corestates Financial Corp. Cr~dit Suisse First Boston Ltd. (London) is 37 per cent awned by First Boston Inc. Crocker National Corporation, the holding company of Crocker National Bank, is 57: per cent'owned.by Midland Bank PLC of the United Kingdom. Dominion Securities Ames Ltd. is the result of a 1981 merger of A. E. Ames Ltd. and Dominion Securities Corp. Ltd. International Commercial Bank PLC (London) was an affiliate of First National Bank of Boston and Irving Trust at the time of the 1980 loan to South Africa. Bank of Boston claims that it no longer owns any of the International Commercial Bank sh~res. Irving Trust has retained its affiliation. Samuel Montagu & Co. Ltd. (London) is owned by Aetna Life and Casualty Co. (40 per cent) and Midland Bank PLC (60 per cent) of the United Kingdom. Orion Bank Ltd. (London) was owned by six transnational banks at the time of the 1980 loan, among them being Chase Manhattan Corp. and the Royal Bank of Canada. In 198~ the Royal Bank of Canada acquired all of the shares of Orion and the name changed to Orion Royal Bank Ltd. Phibro-Salomon, Inc. was formed in 1981 with the acquisition of Salomon Brothers by Phillip Brothers,Inc. Phibro-Salomon is 27 per cent owned by the Anglo American Corporation of South Africa through the Mineral and Resources Corporation (MINORCO), its Bermuda-based investment subsidiary. SOUTH AFRICA BORROWER LOAN AMT. US$(mil) BONDI MONTH (& GUARANTOR) (mil) EQUIV. RATE CREDIT TERM/LIFE 1979 • NA Medical University of $30 $30.0 NA CR 5/1984 Southern Africa (RSA) Financial Institutions: Citibank NA (M) Crocker National Bank (M) 1980 • Oct ESCOM (RSA) DM100 $54.3 9.25% B 7/1987 Financial Institutions: Cr~dit Suisse First Boston Ltd. (M) I VI A. E. Ames & Co. Ltd. I Bache Halsey Stuart Shields, Inc. Joh. Berenberg, GassIer & Co. Dillon Read Overseas Corp. Goldman Sachs International Corp. Kidder Peabody International Corp. Morgan Stanley International Salomon Brothers International Dean Witter Reynolds International CHART I: U.S. AND CANADIAN LOANS TO SOUTH AFRICA. 1979 - 5/1984 SOUTH AFRICA BORROWER LOAN AMT. US$ (mil) BOND/ MONTH (& GUARANTOR) (mil) EQUlV. RATE CREDIT TERM/LIFE 1980 • June Republic of South Africa DM120 $67.9 9.00% B 7/1987 Financial Institutions: A. E. Ames & Co. Ltd. Arnhold and S. Bleichroeder. Inc. Bache Halsey Stuart Shields. Inc. Joh. Berenberg. Gossler & Co. Credit Suisse First Boston Ltd. Dillon Read Overseas Corp. Goldman Sachs International Corp. Kidder Peabody International Ltd. Merrill Lynch International & Co. Morgan Stanley International Salomon Brothers International I Dean Witter Reynolds International '"I • Oct Republic of South Africa $250 $250.0 + .88%(2) CR 7/1987 +1. 00% (5) Financial Institutions: Citicorp International Group (M) SOUTH AFRICA BORROWER LOAN AMT. US$(mil) BOND/ MONTH (& GUARANTOR) (mil) EQUIV. RATE CREDIT TERM/LIFE • Aug Standard Bank Import & $50 $50.0 +.38% B 5/1985 Export Finance Co. Ltd (Standard Bank of SA Ltd.) Financial Institutions: Citicorp International Bank Ltd. (M) International Commercial Bank (M) Orion Bank Ltd. (M) • Sept Standard Bank Import & SF 9.5 $ 5.8 6.63% B 4/1984 Export Finance Co. Ltd. (Standard Bank of SA Ltd.) Financial Institutions: Citicorl' Ltd. (M) ..I 1981 • Dec African Explosives & $100 $100 + .88% CR 7/1988 Che mical. Industry Financial Institutions: Citicorp International Group (M) Chase Manhattan Capital Markets (M) Manufacturers Hanover Ltd. (M) • NA Standard Bank Import & $50 $50.0 + .75%. CR 7/1988 Export Finance Co. Ltd (Standard Bk of SA Ltd.) Financial Institutions: Banque de la Societe Financiere Europeenne (M) CHART 1: U.S. AND CANADIAN LOANS TO SOUTH AFRICA, 1979 - 5/1984 SOUTH AFRICA BORROWER LOAN AMT. US$(mil) BOND/ MONTH (& GUARANTOR) (mil) EQUIV. RATE CREDIT TERM/LIFE 1981 • NA Volkskas $50 $50.0 + .75% CR 5/1986 Financial Institutions: Citicorp International Group (M) First National Bank of Boston (M) Manufacturers Hanover Ltd. (M) Chase Manhattan Capital Markets (M) Dow Banking Corp. (M) • Sept City of Johannesburg (RSA) DM50 $20.0 10.00% B 4/1986 I Financial Institutions: Joh. Berenberg, Gossler & Co. «' Blyth Eastman Paine Webber International Ltd. Credit Suisse First Boston Ltd. Dominion Securities Ames Ltd. Drexel Burnham Lambert Inc. Goldman Sachs International Corp. Kidder Peabody International Ltd. Samuel Montagu & Co. Ltd. Morgan Stanley International Smith Barney, Harris Upham & Co. Inc. Dean Witter Reynolds Overseas Ltd. SOUTH AFRICA BORROWER LOAN AMT. US$(mil) BONDI MONTH (& GUARANTOR) (mil) EQUIV. RATE CREDIT TERM/LIFE 1982 • May ESCOM (RSA) DMlOO $43.1 9.50% B 8/1990 Financial Institutions: Bache Halsey Stuart Shields Inc. Bear Stearns & Co. Joh. Berenb~rg) Gossler & Co. Blyth Eastman Paine Webber International Ltd. Credit Suisse First Boston Ltd. Dominion Securities Ames Ltd. Drexel Burnham Lambert Inc. Goldman Sachs International Corp. Kidder Peabody International Ltd. McLeod Young Weir International Ltd. Morgan Stanley International -h Smith Barney Harris Upham & Co. Inc. I Dean Witter Reynolds Overseas Ltd. MINORCO - Mineral and $60 $60.0 9.25 % B 15/1997 Resources Corp. Ltd. Financial Institutions: Citicorp International Group (M) Salomon Brothers International (M) Chemical Bank International Group (M) Credit Suisse First Boston Ltd. (M) Merrill Lynch International & Co. (M) Wood Gundy Ltd. (M) Arnhold and S. Bleichroeder, Inc. CIBC Ltd. Bache Halsey Stuart Shields Inc. Chase Manhattan Ltd. Dominion Securities Ames Ltd. Manufacturers Hanover Ltd. McLeod Young Weir International Ltd. Pitfield McKay Ross Ltd. CHART I: U.S. AND CANADIAN LOANS TO SOUTH AFRICA, 1979 - 5/1984 SOUTH AFRICA BORROWER LOAN AMI. US$(mil) BONDI MONTH (& GUARANTOR) (mil) EQUlV. RATE CREDIT TERMILIFE 1982 • July South African Breweries $100 $100.0 + .75% (3) CR 7/1989 + 88 (4) Financial Institutions: Manufacturers Hanover Ltd. (M) Chase Manhattan Capital Markets (M) North Carolina National Bank (M) Morgan Guaranty Trust Co. (M) • Nov South African Transport DMIOO $40.0 9.25% B 5/1987 Services (RSA) Financial Institutions: Arnhold and S. Bleichroeder, Inc. Bache Halsey Stuart Shields Inc. Goldman Sachs International Corp. Joh. Berenberg, Gossler & Co. Credit Suisse First Boston Ltd. Dominion Securities Ames. Ltd. Smith Barney, Harris Upham & Co. Inc. Kidder Peabody International Ltd. Morgan Stanley International • Nov Barclays National Bank $140 $140.0 NA CR NA Financial Institutions: Citicorp Capital Markets Group (M) Morgan Guaranty Trust Co.