Circular Foreign Exchange Operations and Movement of Funds and Securities with the Abroad - CAMEX 1 - 53

BANCO CENTRAL DE LA REPUBLICA ARGENTINA
COMMUNICATION "A" 328 01/06/83
TO THE FINANCIAL ENTITIES AUTHORIZED TO OPERATE IN EXCHANGE AND EXCHANGE BROKERS:
Ref.: Circular FOREIGN EXCHANGE OPERATIONS AND MOVEMENT OF FUNDS AND SECURITIES WITH THE ABROAD - CAMEX - 1 - 53

We address you with reference to swap operations carried out under the provisions made known by Communications "A" 162 of 15.7.82 and "A" 205 of 18.8.82 and to any renewals of said operations by virtue of complementary regulations.

On this matter, we inform you that it has been resolved to apply to the aforementioned swap operations, whose maturities have occurred from 5.3.83 and will operate henceforth, the following provisions for their renewal:

1. Term
   The operations will be renewed for a term of 450 days counted from the maturity date of the last fixed-term renewal contracted, with partial cancellations as provided in point 2.

2. Cancellation
   It will be carried out in partial installments and in the terms detailed below, counted from the date of the renewal that is instrumented according to these provisions:
   33% at 270 days
   33% at 360 days
   34% at 450 days

3. Renewals
   In accordance with the provisions referred to in points 1. and 2. above, the operations will be renewed for partial and successive periods, the first of 180 days and 90 days each for the remaining three, applying for each period the prevailing selling exchange rate in the single exchange market on the date of the renewal. For technical reasons, the indicated terms may be reduced or extended by up to two days. In the case of operations maturing between 5.3.83 and the date of this Circular, the following procedure will be followed for the calculation and application of future rates:

• From the maturity date of the contract to be renewed under this regime and until the date of the present Communication inclusive, the prevailing rates will be applied, in the corresponding periods.

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• From 2.6.83 and until the fulfillment of the initial term of 180 days counted from the original maturity, the future rate fixed in point 4 will be applied.
  The renewal of the contracts will be formalized, in the form of practice, maintaining the same numbering originally assigned to the one being extended; the first term of 180 days will be counted from its maturity and the exchange rate to be applied will be the selling rate prevailing on that date. For the respective compensation, they will be adjusted to the procedure of point 6.

4. Future Rate
   The provisions of Chapter I, Point 4 of Communication "A" 327 of the date will be applied.

5. Interests
   The forward exchange purchases made by the holders of swaps will be for the amount of the owed capital plus the interests they must pay to the lender for periods concordant with the renewals referred to in point 3.
   For the interests, forward purchases corresponding only to the net sum to be paid to the lender (excluding taxes and other expenses payable in pesos) may be contracted.
   The forward contracts for the sum insured as interest may be liquidated for the purposes of payment to the creditors.

6. Amount resulting from the compensation of exchange rates
   The compensations will be carried out directly by the authorized entities, without the need to contract them in each case through the exchange switch, and instrumented by sending, in the form of practice, the respective formula 2600. For the case of contracts maturing between 5.3.83 and the date of this Circular, the exchange rate of the contract and the selling rate prevailing on the original maturity date must be taken into consideration. For contracts to mature, the compensation must be carried out between the exchange rate of the contract and the selling rate prevailing on the day of maturity. In both cases, the compensation will be for the amount of the capital and from the resulting amount, the amount corresponding to the owed future rate, the peso value of the interests insured in foreign currency, and the amount of taxes and fiscal levies on the operation will be deducted. Such deductions will be carried out directly by the authorized entity.

B.C.R.A. COMMUNICATION "A" 328 01/06/83
On the back of the respective formula 2600, they will detail the amount of each deduction according to the items, that is, interest, future rate, taxes, etc.
The balance resulting from the compensations referred to in the preceding paragraphs with the deductions indicated for each case, must be applied to the constitution of an unavailable deposit in this Institution, as indicated in point 6.1.

6.1. Deposit in the Central Bank according to the following characteristics:
6.1.1. Amount to invest: The amounts resulting from the exchange rate compensations that are carried out as a consequence of the renewals referred to in point 3., with the deductions practiced.
6.1.2. Term and amortization: The term will be 450 days and the amortization will be carried out in 3 installments of 33% each for the first two and 34% for the last. The first amortization installment will take place at 270 days counted from the date of the first renewal carried out with adjustment to the norms of this Circular and the next two at 360 and 450 days respectively, counted from the same date.
6.1.3. Capital adjustment: The amortization will be carried out by adjusting the nominal value of the services according to the variation experienced by the index referred to in point 4.
6.1.4. Interest: It will accrue a rate of 6% per year, calculated on the capital adjusted as provided in point 6.1.3. The income will be paid semi-annually for expired periods, the first service taking place at 180 days counted from the date of the constitution of the deposit.
6.1.5. Early return: The Central Bank may dispose of the early return, partial or total, of the deposits, at their adjusted values plus accrued interest if it simultaneously decides to cancel early the foreign currency debt that originated the swap operation. Likewise, at the request of the investor, the Central Bank will proceed to cancel the deposits early for the necessary amount to pay the future rates, the fiscal levies on the external loan operation and the exchange differences originated in the same operation, up to the amount in which the sum of all of them were favorable to the Central Bank. These cancellations will be carried out at the adjusted value of the deposits plus accrued interest.
6.1.6. Negotiability: The investments will be non-transferable, with the exception of those cases in which they form part of the transfer of foreign currency debt referred to in section 7.2. Likewise, these investments may be affected as guarantee for the foreign currency operations that originated them.

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  6.1.7. The constitution of the deposit will imply the consent of the holder for the Central Bank to substitute it with public titles issued by the National Government, of equal financial characteristics.
  6.1.8. For contracts maturing between 5.3.83 and 1.6.83, the deposits will be considered constituted on the date of maturity of the original contract and will be adjusted:
  a) between the date of maturity of the contract and 6.5.83 on the basis of 6% monthly (effective rate); b) between 7.5.83 and 1.6.83 on the basis of 12% monthly (effective rate); c) from 2.6.83 based on the variation of the index mentioned in section 6.1.3.

7. Other provisions
   7.1. To enable the best application of the provisions of this Circular, the holders of the operations may, directly, substitute the lending creditors by complying, insofar as it corresponds, with the informative regime of exchange operations and the permanent survey of obligations with the abroad.
   7.2. With the same purpose, this Bank is willing to consider changes in local debtors, that is, the modification of ownership of the swaps and consequently of the respective forward exchange contracts.
   In both cases, it will not imply modifications to the norms of this Circular.
   7.3. External creditors who wish, instead of the provisions of this Circular, may opt to make loans to the National Government for amounts equivalent to the owed swap operations. These loans must be on equal terms and conditions as the refinancing operations that cover the debt of the public sector. In turn, the Central Bank will allocate the foreign exchange coming from these new loans to the cancellation of the corresponding swap operations.

We salute you very attentively.
BANCO CENTRAL DE LA REPUBLICA ARGENTINA
Antonio E. Conde Evaristo H. Evangelista
Principal Manager General Sub-manager