BANCO CENTRAL DE LA REPUBLICA ARGENTINA

COMMUNICATION "A" 3940 30/04/2003

TO FINANCIAL ENTITIES:

Ref.: Circular
Camex 1 - 444
Single and Free Foreign Exchange Market.

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We address ourselves to you in order to inform you that the following has been arranged regarding the treatment of financial debt principal subject to cancellation according to the requirement to have prior approval from this Central Bank in accordance with the current exchange regulation at the date, which is owed by financial entities that opt for the mechanism established in Chapter II of Decree 739/03.

1. For the purpose of considering perfected the adherence to the mechanisms for refinancing liabilities with the Central Bank established in Decree 739/03, the financial entities that exercise this option must have regularized the status of their external liabilities in accordance with the terms of this Communication, prior to 12/05/2003. It will be understood that compliance with the foregoing has been given when, due to the conditions of the refinancing of the external liabilities included in this regulation, the corresponding authorization from the Central Bank is obtained, issued in accordance with the procedures exposed in this Communication.

2. For the purposes of the option established in Article 8 of Decree 739/03, the entities must accompany a note committing to initiate negotiations and make the corresponding presentation in the terms exposed herein.

3. Financial entities must make the corresponding request for conformity of the terms proposed by note addressed to the External Affairs and Foreign Exchange Management, which must be presented before 07/31/03, including the following detail:
   i. The debtor's declaration of having complied with the external debt declarations in accordance with what is established in the norms of Communication A 3602 and complementary ones, counting with the corresponding validation.
   ii. Data of the debt to be refinanced: types of debt, amounts, maturities, interest rates, periodicity of payments of capital services and interests, overdue installments, guarantees granted to creditors, and other conditions affecting the debts to be refinanced.
   iii. Treatment in the refinancing of overdue and unpaid interest installments. Treatment of interim periods of interest.
   iv. Detail of the proposal to creditors with the conditions of amortization of the principal, interest rates, periodicity of payments, guarantees, repurchase conditions, capitalization, forgiveness, and other options that form part of the offer. In the case that a menu of options is presented, method of assignment and limits in the options.
   v. Impact on the entity's liquidity in the next 12 months, resulting from the implementation of the proposed refinancing scheme to external creditors.
   vi. Detail of the participation of the parent company and subsidiaries in the debt to be refinanced or repurchased. For the capital payments that the parent company and subsidiaries receive directly or indirectly as a consequence of the capital payments of the debt subject to repurchase or refinancing, a note must be presented with the firm commitment to compensate the funds received by the parent company and subsidiaries in 100% with the income from the single and free foreign exchange market of new bullet loans with a minimum term of five years. These loans may include the option of prepayment, subject to the condition that during six consecutive calendar months, the entity has not registered borrowings with the Central Bank under letters b, c, and f of Article 17 of the Organic Charter.
   vii. Commitment letter from the parent company and subsidiaries to maintain the commercial credit lines registered as of 03/31/2003, with the detail thereof, for a term no less than the maturity of the last installment of the external refinancing. The maintenance of commercial lines will be considered fulfilled when effective utilization is registered by the entity and/or a firm offer for its utilization is available.

4. Within three business days following the closing of the months of September and October 2003, the entities covered by this regulation must inform the Central Bank by note regarding the degree of progress in the negotiation of agreements with external creditors.

We salute you attentively.

BANCO CENTRAL DE LA REPUBLICA ARGENTINA
Jorge L. Rodríguez Raúl O. Planes
External Affairs Manager and Deputy General Manager Foreign Exchange Operations