Security Pacific Merchant Bank in Los Angeles...

Security Pacific Merchant Bank in Los Angeles has created a debt-for-equity swap program that amounts to a mutual fund for banks that want to trade part of their Chilean debt for equity investments in the South American country. Under the plan, which was put together with the approval of Chile’s central bank, banks can exchange debt for shares in a fund that will be invested in long-term growth opportunities in Chile. The fund is limited to $75 million, and Security Pacific National Bank, the merchant bank’s parent, has agreed to contribute at least $7 million of Chilean debt. Chile is paying interest only on its $19-billion foreign debt.