Circular A 1300: Modifications to the Special Regime for Cancellation of Loans and Rediscounting

BANCO CENTRAL DE LA REPUBLICA ARGENTINA
COMMUNICATION "A" 1300 07/12/88
TO FINANCIAL ENTITIES:
Ref.: Circular NATIONAL PUBLIC BONDS
TINAC - 1 - 116. Circular FOREIGN EXCHANGE OPERATIONS AND MOVEMENTS OF FUNDS AND SECURITIES WITH THE EXTERIOR - CAMEX - 1

• 174. Circular MONETARY REGULATIONS
• REMON - 1 - 449. Special Regime for Cancellation of Loans and Rediscounting. Modifications.
  We address you to inform you that this Bank has adopted the following resolution:

1 - Replace point 6.2 of the Annex to Communication "A" 1194 with the following:
"6.2. Loan and/or rediscounting lines granted in foreign currency and/or those related to foreign trade shall not be eligible for the purposes of this regime.
When the chosen lines were linked to unavailable financial assets, the releases resulting from the application of this regime shall only take effect on the originally scheduled maturity date for the installments whose early amortization is carried out."

2 - Replace the second paragraph of point 6.8 of the Annex to Communication "A" 1194 - text according to Annex I to Communication "A" 1225 - with the following:
"Debt related to foreign trade, contracted in foreign currency - except for External Bonds of the Argentine Republic - and that corresponding to overdue and unpaid assistance for services due from July 1, 1988, shall not have the character of computable and cancellable debt. Furthermore, debtors who, as of June 30, 1988, had a "Normal" or "With Arrangements" status, but presented a different status by the date of the bidding, shall not be able to participate in this regime."

3 - Replace point 3.1 of Annex II to Communication "A" 1225 with the following:
"3.1. It shall be received for all concepts, except that related to foreign trade, contracted in foreign currency - except for External Bonds of the Argentine Republic - and that corresponding to overdue and unpaid assistance for services due from July 1, 1988, and up to the concurrence with the maximum limit determined in accordance with what is stipulated in point 6.8 of the regime."

4 - Replace point 3.2 of the Annex to Communication "A" 1194 with the following:
"3.2. The receipt of presentations shall take place at the time indicated in each call issued by the Central Bank. Within the period of the following 10 days, the result of the evaluation of the offers will be made known to the intervening entities, notifying their rejection or conditional acceptance. The evaluation will be carried out through the public bidding procedure based on the estimated present value determined by the Central Bank for the loans and/or rediscountings whose cancellation is offered, and on the nominal value of external public obligations subject to conversion.
3.3. At the time of each bidding call, the maximum global amount applicable to this operation will be established. The amount offered by each participating client - equivalent to the amount of rediscountings and/or loans to be amortized - may not exceed the percentage determined on that maximum.
Complementary offers will be admitted for up to another percentage equal to the maximum, provided that the accepted original offer has reached said maximum and imply implicit discounts greater than or equal to those contained in the respective main offers. In these cases, the acceptance of the main offers will result in the automatic acceptance of the complementary ones and in the extension of the originally established global amount by an equal amount.
3.4. In no case will the granting of discounts or write-offs on the values of the loans and/or rediscountings be permitted. Consequently, the value in australes considered for the nominal amount of the external obligations presented may never be lower than the amount of the rediscountings and/or loans being cancelled, including their adjustments and accrued interest.
3.5. Allocation System:
3.5.1. The global quota foreseen for each bidding will be integrated, in turn, by two sub-quotas: one general and one special, which will be established for small and medium-sized enterprises.
All offers - ordered in descending order starting from the highest discount offered - will compete in the general sub-quota. When a minimum discount has been determined in the bidding call, offers that have offered discounts greater than or equal to the minimum will be accepted, up to the limit of that sub-quota. Partial acceptances will not be made, which means that residual quota may remain. In this case, if the next offer could be attended to by more than 50%, it will be allocated in full, increasing this sub-quota accordingly.

B.C.R.A. COMMUNICATION “A” 1300 7.12.88
The general cutoff of the bidding will be determined by the discount level offered by the last accepted offer.
3.5.2. Offers corresponding to small and medium-sized enterprises that have offered discounts not less than 10% of the general cutoff of the bidding will participate in a second allocation within their own sub-quota, following a similar criterion to that established in the previous point.
3.5.3. If, by application of the preceding provisions, residual quota remains in the general and small and medium-sized enterprise sub-quotas, the sum of both will determine the possibility of continuing to allocate unaccepted offers starting from the general cutoff of the bidding, only to the extent that the subsequent offer(s) can be fully allocated with the total remaining residual. This procedure will not determine modifications in the cutoff value that would have resulted for SMEs.
3.6. In case the definitive rejection of offers is permitted, the release of the guarantee will correspond within 5 days of its occurrence. The provisions of this paragraph are excepted for the cases provided for in point 5.
3.7. Conditional acceptances will be perfected once this Bank approves the verification of the debt to be converted.
Holders of offers accepted conditionally and those who present obligations to convert with instructions to credit the resulting funds in favor of bidders of a bidding, must present the instruments representing external public debt within 15 days of notification at the Treasury Department of this Central Bank, accompanying the corresponding formula. Within the 6 days following this presentation, the Central Bank will communicate the definitive acceptance of the offers. In the case where it is verified that the titles are not in conditions to be applied to the cancellation of the lines, the Central Bank will inform the intervening entity of this situation, granting 10 additional days from that communication to remedy the observed irregularities or, in case, to provide new instruments. Once this period has expired, the Central Bank will have a new 6-day period to accept or definitively reject the offer. Failure by the offeror to comply with any of the terms provided for in this point will authorize the Central Bank to effect the definitive rejection of the offer, without prejudice to the application of measures for non-compliance provided for in point 5. No presentation of certificates corresponding to debts in the process of instrumentation will be admitted - in no case."

5 - Establish that the modifications established in points 1 to 4 of this Resolution will govern from the public bidding whose call was disseminated through Communication "A" 1293.
We salute you very attentively.
BANCO CENTRAL DE LA REPUBLICA ARGENTINA
Juan Carlos Báez Eduardo G. Castro
Manager of Sub-Manager General
Financing and Studies of the Financial System