The Boston Globe from Boston, Massachusetts • 10

10 THE BOSTON GLOBE MONDAY, DECEMBER 26. 1988 year debt with US USSR seeking to settle its 70 position in the world economy." Another sign of the opening of US-Soviet financial relations is' First Chicago a major money center bank with longstanding Soviet connections, entering into an agreement with the Moscow 1 which has enjoyed a long successful record of trading precious metals with the Soviet Union. This transaction will result in Goldman Sachs also being involved in a foreign currency transaction. Two of the Soviet's top bankers, Yuri Moskovsky and Eugene Ulyanov, the chairman and the general manager of the Soviet Union's Foreign Economic Affairs Bank, were being entertained by US bankers. Bankers and international economists who have met Ulyanov, a 37-year-old Russian who worked six years in London and speaks perfect English, describe him as a "very polished guy with a Western style who could get a job at any of the major investment banking firms today." Others report he is the "perfect representative of the new generation of Soviet officials who are leading the effort to enhance their tives from Goldman Sachs London office were in Moscow at the Foreign Economic Affairs Bank discussing broadening of the financial lines of business between the two institutions.

Considerate reception Dennis Suskind, the Goldman Sachs partner in charge of the client relationship with the Soviet Union, refuses to discuss the plan for expanding Goldman's share of Soviet financing plans. All he will say is, "It's a new world. I've been going to Russia for 15 years now: the reception is very considerate now." While the Goldman group was in Moscow, two related developments occurred in New York: An announcement was made at the Soviet Trade Fair that a $14 million platinum trade had been consummated with Goldman, Sachs' commodity trading unit. SOVIET UNION Continued from Page 1 can offer loans to the Soviet institutions. Investment banks such as Morgan Stanley and Shearson Lehman Hutton have participated in bond offeringsfor Soviet bloc institutions such as the National Bank of Hungary through their subsidiaries in West Germany.

A week ago, three representa Narodny bank in London and the Postipankki bank in Helsinki to finance major capital projects in Eastern Europe and the Soviet Union. 1 First Cnicago intends to intro- duce the Moscow and banks to its corporate clients who might be interested in expanding operations in the Soviet bloc, ao- cording to Alan F. Delp, senior vice president, banking, for the bank. Feeling their way The First Chicago executive be lieves the Soviets want to "partici J) I In pate in the mainstream of world' financial markets. They want to' issue commercial paper.

They want to issue bonds. They want to 3 be able to borrow in New York, To- kyo or Europe just like the US and -Sweden. They're feeling their JH way." A special Reagan administra-1 1 tion task force on Western lending to the Soviet Bloc recently pre- pared the ground for a more re- laxed position toward credit for the Soviets. The task force said in its report that Soviet I debt after repayments has de-' dined slightly in the past few years, and concludes that many Western banks "feel comfortable in assessing the creditworthiness 1,1 of the Soviet Union," due to an es-1 timated $30 billion value for its gold reserves. The source of most Soviet hard currency for debt comes from the sale of gold and revenues from the gas which stretches from the Soviet Union into western Europe.

Salomon commodity trading subsidiary, Phillips 1 1 also has been involved in substan- tial gold and platinum trading with the Foreign Economic Affairs 1 bank, according to Henry Scha- char, Phillips president. He scribes the Soviets as both a buyer 1 and a seller of precious metals. Earlier this year the Soviets 1 tested their ability to borrow through the public Eurobond mar-1' ket by arranging an issue of al-most $400 million. $11 billion credit line The Soviet demand for Western, 1 credit was dramatized during Oc- A tober, when more than $11 billion, j.3 in lines of credit from banks in the United Kingdom, Japan, -West Germany, Italy and other, nations was established, accord-: -ing to Martin Colman, EastWest trade and finance specialist for the American Foundation for Re- sistance International. These lines of credit appear tied to Soviet purchases- of West-v ern equipment and consumer goods, according to a State Department source.

Colman, who says he has read 1 the language of their loan agree- mert, maintains, "The Soviets'' cannot repay the debt except by' borrowing more money from us." US loans by banks directly to the Soviet Union total only $1.3 billion, while loans from banks in' Europe, Japan and Canada to the 1 USSR are $32 billion. However, this $1.3 billion does not include' loans made from European bank branches to the Soviet Union, ac; cording to Colman. "They don't have the hard cur; rency to pay these loans back. They are totally Still, they're going to get everything they want," says Colman. i snl "'f -----Lsw -Vixe Suits.

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