Central Bank of Bolivia

Board of Directors

BOARD RESOLUTION NO. 018/2015

SUBJECT: MONETARY OPERATIONS MANAGEMENT – APPROVES MODIFICATIONS TO SANO CREDIT CONTRACT NO. 156/2014.

VISTOS:

• The Political Constitution of the State promulgated on February 7, 2009.
• Law No. 1670 of the Central Bank of Bolivia (BCB) of October 31, 1995.
• Law No. 261 of July 15, 2012.
• Law No. 291 Modifying the General State Budget – Management 2012 of September 22, 2012.
• Law No. 614 of December 13, 2014, approving the General State Budget for the 2015 management (PGE – 2015).
• The Specific Regulation for the Granting of Credit established in Law No. 261, approved by Board Resolution of the Central Bank of Bolivia (BCB) No. 159/2012 of August 28, 2012, modified by Board Resolutions No. 194/2012, No. 050/2014, No. 006/2015, and No. 015/2015 of November 20, 2012, May 20, 2014, January 6, 2015, and January 27, 2015, respectively.
• The Board Resolution of the BCB No. 018/2013 of February 26, 2013, modified by Board Resolution No. 071/2014 of July 1, 2014.
• The SANO Contract No. 156/2014 of July 3, 2014.
• The notes from the Ministry of Economy and Public Finance (MEFP) CITE: MEFP/VTCP/DGCP/UEPS-1829/2014 and 54/2015 of December 23, 2014, and January 15, 2015, respectively.
• Reports from the Monetary Operations Management CITE: BCB-GOM-SOSP-DCE-INF-2015-2 and 4 of January 16 and 27, 2015, respectively.
• Reports from the Legal Affairs Management CITE: BCB-GAL-SANO-INF-2015-31 and 48 of January 16 and 27, 2015.
• Act No. 006/2015 of the BCB Board session of January 27, 2015.

CONSIDERING:

That the Political Constitution of the State (CPE), approved by Referendum on January 25, 2009, and promulgated on February 7, 2009, in item 6 of its Article 9, establishes that it is the aim and function of the State to promote and guarantee the responsible and planned use of natural resources, and to boost their industrialization, through development and strengthening of the productive base in its different dimensions and levels. Likewise, in item 10 of paragraph I of Article 158 and Article 322, it establishes that the Plurinational Legislative Assembly has the attribute to approve the contracting of public debt.

That Article 322 of the Political Constitution of the State provides that the Plurinational Legislative Assembly will authorize the contracting of public debt when the capacity to generate income to cover capital and interest is demonstrated, and the most advantageous conditions in rates, terms, amounts, and other circumstances are technically justified. Public debt will not include obligations that have not been expressly authorized and guaranteed by the Plurinational Legislative Assembly.

That Law No. 261, in its Article 2, authorizes the MEFP to contract a credit under concessional conditions with the BCB in national currency for an amount up to Bs1,633,372,800.00 (ONE THOUSAND SIX HUNDRED THIRTY-THREE MILLION THREE HUNDRED SEVENTY-TWO THOUSAND EIGHT HUNDRED 00/100 BOLIVIANOS) destined for the construction of the Cable Transport System (Teleférico) in the cities of La Paz and El Alto, for which the BCB is exempted from the application of Articles 22 and 23 of Law No. 1670 of October 31, 1995.

That Law No. 291, in its Article 10, authorizes the General Treasury of the Nation – TGN, to transfer resources to the MEFP, for the payment of the debt arising from the credit to be contracted with the BCB, for the construction of the Cable Transport System (Teleférico) in the cities of La Paz and El Alto; as well as for the constitution of the necessary backing guarantees required by the respective loan contract.

That Law No. 614, in its Third Additional Provision, expands the financing of the credit provided for by Law No. 261 of July 15, 2012, by an additional amount of up to Bs3,087,000,000.- (THREE THOUSAND EIGHTY-SEVEN MILLION 00/100 BOLIVIANOS) destined for the construction and implementation of the Cable Transport System (Teleférico) in the cities of La Paz and El Alto, in its second phase. For this effect, the Ministry of Economy and Public Finance is authorized, through the General Treasury of the Nation – TGN, to contract the additional credit under concessional conditions, and the Central Bank of Bolivia – BCB, to expand the aforementioned credit, exempting it from the application of Articles 22 and 23 of Law 1670 of October 31, 1995, of the Central Bank of Bolivia – BCB. Likewise, it authorizes the MEFP, through the TGN, to issue and grant Non-Negotiable Treasury Bonds in favor of the BCB, to guarantee the entire credit.

That Board Resolution of the BCB No. 159/2012 and its subsequent modifications, regulates the granting of the credit provided for in Laws No. 261 and No. 614 “Construction, implementation, and administration of the Cable Transport System (Teleférico) in the cities of La Paz and El Alto”, by the Central Bank of Bolivia (BCB) in favor of the Ministry of Economy and Public Finance (MEFP), approves the Specific Regulation for the Granting of Credit provided for in Laws No. 261 and No. 614.

That Board Resolution of the BCB No. 018/2013 approves the request for an extraordinary concessional credit of Bs1,633,372,800.00 in favor of the MEFP for the construction of the Cable Transport System (Teleférico) in the cities of La Paz and El Alto, establishing its financial conditions.

That Board Resolution of the BCB No. 071/2014 modifies the financial conditions of the extraordinary concessional credit of Bs1,633,372,800.00 in favor of the MEFP for the construction of the Cable Transport System (Teleférico) in the cities of La Paz and El Alto.

That Contract SANO No. 156/2014 stipulates, among other aspects, the following:

• That the object of the contract is the granting of an extraordinary credit under concessional conditions, for an amount of up to Bs1,633,372,800.00 that the BCB makes in favor of the MEFP for the construction of the Cable Transport System (Teleférico) in the cities of La Paz and El Alto.

• The conditions of the credit established in clause five are:

Field	Value
Total credit amount:	Bs1,633,372,800.- (One Thousand Six Hundred Thirty-Three Million Three Hundred Seventy-Two Thousand Eight Hundred 00/100 Bolivianos).
Currency:	Bolivianos.
Term:	30 (thirty) years.
Grace period:	0 (zero) years.
Interest rate:	0.29% (zero point twenty-nine percent) (Base 30/360*).
Interest Payment:	Annual.
Principal Payment:	Fixed annual installments.
Disbursement deadline:	December 31, 2015.
Guarantees:	Automatic debit from a specific account of the TGN.

• Base 30/360: represents the total number of days elapsed between one date and another for the calculation of interest, assuming 12 months of 30 days each totaling 360 days.

That through note CITE: MEFP/VTCP/DGCP/UEPS-1829/2014, the MEFP, in compliance with the specific provision contained in Paragraph I, of the Third Additional Provision, of Law No. 614, requests the BCB for an Addendum to Contract SANO No. 156/2014, for the expansion of the credit contract amount, for an amount of up to Bs4,720,372,800.- (Four Thousand Seven Hundred Twenty Million Three Hundred Seventy-Two Thousand Eight Hundred 00/100 Bolivianos). Likewise, it requests the preparation and submission of the contract modification as soon as possible since the expansion of the credit and the signing of the corresponding Addendum is a priority for the MEFP.

That through note CITE: MEFP/VTCP/DGCP/UEPS-54/2015, the MEFP submits the new disbursement schedule and the payment plan that considers the financial conditions agreed upon in Contract SANO No. 156/2014 and the additional amount authorized by Law No. 614.

That the Monetary Operations Management in its reports CITE: BCB-GOM-SOSP-DCE-INF-2015-2 and 4 concludes that there is no technical impediment to expand the amount and modify the guarantees of Contract SANO No. 156/2014, specifying legal opinion and criteria.

That the Legal Affairs Management in its reports CITE: BCB-GAL-SANO-INF-2015-31 and 48 concludes that the request to modify Contract SANO No. 156/2014 in its Clauses Fourth, Fifth, and Eleventh is legally appropriate.

That in Act No. 006/2015 the BCB Board modified clauses fourth, fifth, and eleventh of Contract SANO No. 156/2014 referring to the object, credit conditions, and guarantee, and authorized the Acting President to sign an addendum to the aforementioned Contract with the MEFP.

THEREFORE,

THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA

RESOLVES:

Article 1.- Approve the modification of the financial conditions of Contract SANO No. 156/2014 for Extraordinary Credit for Construction, Implementation, and Administration of the Cable Transport System (Teleférico) in the Cities of La Paz and El Alto, in the following manner:

Field	Value
Total credit amount:	Bs4,720,372,800.- (Four Thousand Seven Hundred Twenty Million Three Hundred Seventy-Two Thousand Eight Hundred 00/100 Bolivianos).
Currency:	Bolivianos.
Term:	30 (thirty) years.
Grace period:	0 (zero) years.
Interest rate:	0.29% (zero point twenty-nine percent) (Base 30/360*).
Interest Payment:	Annual.
Principal Payment:	Fixed annual installments.
Disbursement deadline:	December 31, 2015.
Guarantees:	Non-Negotiable Treasury Bonds.

• Base 30/360: represents the total number of days elapsed between one date and another for the calculation of interest, assuming 12 months of 30 days each totaling 360 days.

Article 2.- Authorize the President of the BCB to sign the respective addendum, according to the approved conditions and terms.

Article 3.- The Presidency and the General Management are in charge of the execution and compliance of this Resolution.

La Paz, January 27, 2015

Signatures:

• Marcelo Zabalaga Estrada
• Abraham Pérez Alandia
• Reynaldo Yujra Segales
• Ronald Polo Rivero
• Sergio Velarde Vera