BANCO CENTRAL DE LA REPUBLICA ARGENTINA
__________________________________________________________________ COMUNICACION " A " 3104 I 19/04/00 __________________________________________________________________ TO FINANCIAL ENTITIES:
Ref.: LISOL-1-296
OPRAC-1-484
Document Discounting Operations. New Preferred Guarantee Modality "A". Substitution

We address you to bring to your attention that this Institution has adopted the following resolution:

"1. Replace, with effect from 5/1/00, point 1.1.11. of the regulations on "Guarantees", with the following:

"1.1.11. Credit titles (deferred payment checks, promissory notes, bills of exchange, and credit invoices) discounted with recourse to the transferor, provided that the following conditions are observed:

1.1.11.1. In the set of operations carried out with each transferor, it must be verified regarding any of the subjects
legally obligated to pay, other than the transferor:
a) That at least 85%, measured in relation to the nominal value of the documents, are classified in "normal situation" (category 1) according to the latest information available in the "Central Registry of Debtors of the Financial System". b) That, as a maximum, 15%, measured in relation to the nominal value of the documents, are classified in category 2 or concern persons not registered in said central registry. c) That, as a maximum, 20% of the nominal value of the documents corresponds to a single subject obligated to pay. This limitation shall not apply when it concerns documents of up to $ 5,000. These requirements must be observed considering the nominal value of the documents still pending maturity and the new documents to be discounted, when carrying out each discounting operation.

1.1.11.2. Regarding the transferred documents, it must be verified:

a) That, in addition to the pertinent endorsement, there is a record of the transfer formulated by the transferor. b) That they are discounted according to the category assigned in the "Central Registry of Debtors of the Financial System", considering the following percentages regarding their nominal value:
Category of the
Subjects obligated to pay Transferor
(A) (B)
Category 1 90% 80%
Category 2 and unclassi- fied 80% 70%

(A): 1 or 2.
(B): 3, 4, 5 or unclassified. c) That they originate from sales operations or service provision corresponding to the transferor's activity. This condition may be verified through a sworn statement made by the client or by any other means that the entity deems appropriate. d) That they are not replaced upon maturity, and must be presented for collection. Nevertheless, their replacement -before maturity- will be admitted when regarding the subjects obligated to pay, any of the following circumstances are verified:
i) That they have requested bankruptcy proceedings (concurso preventivo) or their bankruptcy has been requested. ii) That they are disqualified from operating in a current account or rejections have occurred due to lack of funds or registration, or due to reports of loss or theft filed in judicial proceedings, in relation to other deferred payment checks from this portfolio. iii) That they record the non-payment of other credit titles -distinct from the deferred payment check-, confirmed by protest, that are part of this portfolio.

1.1.11.3. The set of operations carried out with different clients must constitute a
portfolio that adheres to the following guidelines:

a) Maximum limit of the total nominal value of documents corresponding to a single subject obligated to pay: 2.5% regarding the computable equity of the entity for the month prior to the one in question. b) Maximum limit of the total nominal value of documents corresponding to subjects obligated to pay that, individually considered, are equivalent to 1.5% or more of the computable equity of the entity for the month prior to the one in question: 25% of this portfolio measured by the monthly average of daily balances for the month prior to the one in question. c) Maximum limit of the nominal value of documents corresponding to a single subject obligated to pay: 5% of this portfolio measured by the monthly average of daily balances for the month prior to the one in question. d) Global limit of the portfolio: 100% of the computable equity of the entity for the month prior to the one in question. When the subjects obligated to pay are clients of the financial entity, the amount of assistance granted in accordance with this modality shall be imputed to their credit margins, not being counted for the purposes of the limits established above. Within each period, the limits must be observed on a daily basis.

1.1.11.4. In the portfolio discounted by a specific client, the amount not cancelled by the
client of the unpaid documents and of the checks whose registration has been rejected, may not exceed the equivalent to 100% of the remaining discounting margin. In case of exceeding this value, the transferor may not access new discounting operations for credit titles within this modality, except to the extent necessary to replenish the amount of those unpaid documents. Once the client's entire portfolio is cancelled, the entity may grant them financing adjusted to this regime.

In all cases where this point mentions "subject/s obligated/s to pay", it refers to any of the signatories of the documents holding that status as drawer, endorser, acceptor, or guarantor."

2. Replace, with effect from 5/1/00, the first paragraph of point 1.2. of the regulations on "Guarantees", with the following:

"1.2. Preferred "B".
They are constituted by real rights over assets or third-party commitments, effectively instrumented, ensuring that the entity can dispose of funds for the cancellation of the obligation contracted by the client, having previously complied with the procedures established for the execution of guarantees, and by the guarantees defined in point 1.1. with the exception of those included in point 1.1.11., as long as the residual term of the operations exceeds 6 months."

3. Replace, with effect from 5/1/00, point 3.1.11.
   of Section 3. of the regulations on "Guarantees" with the following:

"3.1.11. Credit titles (point 1.1.11.).
3.1.11.1. Documents corresponding to subjects obligated to pay classified in category 1 and
in cases where the transferors are classified in categories 1 or 2, in the "Central Registry of Debtors of the Financial System": 90%.
3.1.11.2. Documents corresponding to subjects obligated to pay classified in category 2 or
that have not been classified and in cases where the transferors are classified in categories 1 or 2, in the "Central Registry of Debtors of the Financial System": 80%.
3.1.11.3. Documents corresponding to subjects obligated to pay classified in category 1 and
in cases where the transferors are classified in categories 3, 4, 5 or that have not been classified, in the "Central Registry of Debtors of the Financial System": 80%.
3.1.11.4. Documents corresponding to subjects obligated to pay classified in category 2 or
that have not been classified and in cases where the transferors are classified in categories 3, 4, 5 or that have not been classified, in the "Central Registry of Debtors of the Financial System": 70%."

4. Establish that entities that discount credit titles adjusted to the regime referred to in point 1.1.11. of the regulations on "Guarantees" (text according to point 1. of this communication) will have a period of 3 months to form the portfolio included according to the guidelines set forth in point 1.1.11.3. of that provision."

In the attachment, we send you the pages of the ordered text of the regulations in force regarding "Guarantees" that replace those previously provided. We salute you very attentively. BANCO CENTRAL DE LA REPUBLICA ARGENTINA Juan Carlos Isi Alfredo A. Besio Deputy Manager Manager of Standards for Regulatory Framework Financial Entities

ANNEX: 9 pages

1.1.7. Allocation of funds from the federal tax revenue sharing, in operations that have the pertinent intervention of the Ministry of Economy of the Nation.
1.1.8. "Warrants" on fungible goods that have normal and habitual quotation
and usual in local or international markets, widely disseminated and easy access to public knowledge.
1.1.9. Guarantees constituted by the assignment of collection rights of invoices to
consumers for services already provided, issued by service provider companies (companies supplying electricity, gas, telephone, water, etc.), always that it concerns a set of invoices that represents a quantity of no less than 1,000 clients.
1.1.10. Guarantees constituted by the assignment of collection rights regarding
coupon credit cards.
1.1.11. Credit titles (deferred payment checks, promissory notes, bills of exchange and
credit invoices) discounted with recourse to the transferor, in the event that the following conditions are observed:
1.1.11.1. In the set of operations carried out with each transferor, it must be verified regarding any of the subjects legally obligated to pay, other than the transferor:
a) That at least 85%, measured in relation to the nominal value of the documents, are classified in "normal situation" (category 1) according to the latest information available in the "Central Registry of Debtors of the Financial System". b) That, as a maximum, 15%, measured in relation to the nominal value of the documents, are classified in category 2 or concern persons not registered in said central registry. c) That, as a maximum, 20% of the nominal value of the documents corresponds to a single subject obligated to pay. This limitation shall not apply when it concerns documents of up to $ 5,000. These requirements must be observed considering the nominal value of the documents still pending maturity and the new documents to be discounted, when carrying out each discounting operation. Version: 3rd Communication “A” 3104 Validity:
01.05.00

1.1.11.2. Regarding the transferred documents, it must be verified:
a) That, in addition to the pertinent endorsement, there is a record of the transfer formulated by the transferor. b) That they are discounted according to the category assigned in the "Central Registry of Debtors of the Financial System", considering the following percentages regarding their nominal value:
Category of the transferor
Subjects obligated to pay
(A) (B)
Category 1 90% 80%
Category 2 and unclassified 80% 70%

(A): 1 or 2
(B): 3, 4, 5 or unclassified c) That they originate from sales operations or service provision corresponding to the transferor's activity. This condition may be verified through a sworn statement made by the client or by any other means that the entity deems appropriate. d) That they are not replaced upon maturity, and must be presented for collection. Nevertheless, their replacement -before maturity- will be admitted when regarding the subjects obligated to pay, any of the following circumstances are verified:
i) That they have requested bankruptcy proceedings (concurso preventivo) or their bankruptcy has been requested. ii) That they are disqualified from operating in a current account or rejections have occurred due to lack of funds or registration, or due to reports of loss or theft filed in judicial proceedings, in relation to other deferred payment checks from this portfolio. iii) That they record the non-payment of other credit titles -distinct from the deferred payment check-, confirmed by protest, that are part of this portfolio. Version: 2nd Communication “A” 3104 Validity:
01.05.00

1.1.11.3. The set of operations carried out with different clients
must constitute a portfolio that adheres to the following guidelines:
a) Maximum limit of the total nominal value of documents corresponding to a single subject obligated to pay: 2.5% regarding the computable equity of the entity for the month prior to the one in question. b) Maximum limit of the total nominal value of documents corresponding to subjects obligated to pay that, individually considered, are equivalent to 1.5% or more of the computable equity of the entity for the month prior to the one in question: 25% of this portfolio measured by the monthly average of daily balances for the month prior to the one in question. c) Maximum limit of the nominal value of documents corresponding to a single subject obligated to pay: 5% of this portfolio measured by the monthly average of daily balances for the month prior to the one in question. d) Global limit of the portfolio in nominal value: 100% of the computable equity of the entity for the month prior to the one in question. When the subjects obligated to pay are clients of the financial entity, the amount of assistance granted in accordance with this modality shall be imputed to their credit margins, not being counted for the purposes of the limits established above. Within each period, the limits must be observed on a daily basis.
1.1.11.4. In the portfolio discounted by a specific client, the amount
not cancelled by the client of the unpaid documents and of checks whose registration has been rejected, may not exceed the equivalent to 100% of the remaining discounting margin. In case of exceeding this value, the transferor may not access new discounting operations for credit titles within this modality, except to the extent necessary to replenish the amount of those unpaid documents. Once the client's entire portfolio is cancelled, the entity may grant them financing adjusted to this regime. Version: 3rd Communication “A” 3104 Validity:
01.05.00

In all cases where this point mentions "subject/s obligated/s to pay", it refers to any of the signatories of the documents holding that status as drawer, endorser, acceptor, or guarantor.
1.1.12. Direct guarantees issued by central governments, agencies or departments of central governments of countries members of the Organization for Economic Co-operation and Development (O.E.C.D.) that have international risk rating “A” or higher granted by any of the rating agencies admitted by the regulations on “Evaluation of Financial Entities”.
1.1.13. Guarantees constituted by the assignment of rights over the collection of
tariffs and fees in public works concessions, always that it does not exceed the 50% of projected income.
1.1.14. Guarantees or sureties of securities (shares or bonds) private
issued by national or foreign companies, taking into account in permanent form their market value, which must respond to a normal and habitual quotation in local or international markets, widely disseminated and easy access to public knowledge. The local issuing companies must maintain valid debt papers that have local risk rating “A” or higher or international risk rating equal to or higher than that of the debt issued by the Argentine Republic in the international market, granted by any of the rating agencies admitted by the regulations on “Evaluation of Financial Entities”. Foreign titles must correspond to companies whose debt papers have international risk rating “A” or higher granted by any of those rating agencies.
1.1.15. Credit titles (public works certificates, deferred payment checks
and promissory notes), with recourse to the transferor, issued by the provinces, municipalities or Government of the City of Buenos Aires that have the guarantee of federal tax revenue sharing or concern drawers or issuers whose debt -without specific guarantees- has local risk rating “A” or higher or international risk rating equal to that of the Argentine Republic. The entities must inform monthly the Central Bank of the Argentine Republic and the Secretariat of Economic and Regional Programming the amount of operations carried out under this modality, broken down by drawer or issuer. Version: 3rd Communication “A” 3104 Validity:
01.05.00

1.1.16. Fixed pledge with displacement to the entity.
1.2. Preferred “B”.
They are constituted by real rights over assets or third-party commitments, effectively instrumented, ensuring that the entity can dispose of funds for the cancellation of the obligation contracted by the client, having previously complied with the procedures established for the execution of guarantees, and by the guarantees defined in point 1.1. with the exception of those included in the point 1.1.11., as long as the residual term of the operations exceeds 6 months. They are included in this category, with the character of a taxative enumeration, the following:
1.2.1. Mortgage in first degree of privilege over real estate.
1.2.2. Fixed pledge with registration in first degree.
1.2.3. Guarantees or sureties granted by reciprocal guarantee societies, registered in the Registry enabled at the Central Bank of the Argentine Republic.
1.2.4. Preferred “A”, in operations with residual term superior to 6 months, with
exception of those included in point 1.1.11.
1.3. Remaining guarantees.
The guarantees not explicitly included in the preceding points, such as the mortgage in degree other than first and pledge or surety of shares or commercial documents and encumbrances constituted abroad adjusted to legislations different from the local -except the cases expressly provided for-, are considered non-preferred. Version: 1st Communication “A” 3104 Validity:
01.05.00

GUARANTEES B.C.R.A. Section 3. Computation.
3.1.11. Credit titles (point 1.1.11.).
3.1.11.1. Documents corresponding to subjects obligated to pay classified in category 1 and
in cases where the transferors are classified in categories 1 or 2, in the "Central Registry of Debtors of the Financial System": 90%.
3.1.11.2. Documents corresponding to subjects obligated to pay classified in category 2 or
that have not been classified and in cases where the transferors are classified in categories 1 or 2, in the "Central Registry of Debtors of the Financial System": 80%.
3.1.11.3. Documents corresponding to subjects obligated to pay classified in category 1 and
in cases where the transferors are classified in categories 3, 4, 5 or that have not been classified, in the "Central Registry of Debtors of the Financial System": 80%.
3.1.11.4. Documents corresponding to subjects obligated to pay classified in category 2 or
that have not been classified and in cases where the transferors are classified in categories 3, 4, 5 or that have not been classified, in the "Central Registry of Debtors of the Financial System": 70%.
3.1.12. Direct guarantees of foreign governments (point 1.1.12.): 90%.
3.1.13. Assignment of rights over the collection of tariffs and fees in concessions of
public works (point 1.1.13.): 80%.
3.1.14. Private securities (point 1.1.14.): 70% of their quotation value.
3.1.15. Provincial and municipal credit titles (point 1.1.15.): 90% of their nominal value.
3.1.16. Fixed pledge with displacement (point 1.1.16.): 75% of the appraised value of
the asset.
3.1.17. Mortgage in first degree over real estate properties when it concerns
financing granted from 1.1.98, and depending on the result of the comparison between the values of the index of “Evolution of the price of the square meter in sales operations (average country)”, which is elaborated monthly by Banco Hipotecario S.A. and whose series is published by the Central Bank of the Argentine Republic, corresponding to the third month prior to that in which the financing is granted and to the base month –October 1997= 100-, according to the following scale (point 1.2.1.):
Version: 3rd Communication “A” 3104 Validity:
01.05.00

GUARANTEES B.C.R.A. Section 3. Computation.
3.1.17.1. Up to 1.50: 75% of the appraised value of the asset.
3.1.17.2. More than 1.50 and up to 2: 55% of the appraised value of the asset.
3.1.17.3. More than 2: 40% of the appraised value of the asset.
3.1.18. Fixed pledge with registration in first degree (point 1.2.2.): 75% of the appraised value of the asset.
3.1.19. From reciprocal guarantee societies (point 1.2.3.): 90%.
3.2. Partial coverage with preferred guarantees.
When existing preferred guarantees do not cover the total assistance to the client, the part not reached with that coverage will have the treatment established for developments without preferred guarantees. Version: 1st Communication “A” 3104 Validity:
01.05.00

B.C.R.A. ORIGIN OF THE PROVISIONS INCLUDED IN THE ORDERED TEXT OF THE REGULATIONS ON GUARANTEES ORDERED TEXT ORIGIN REGULATION
Section Point Paragraph Com. Annex Point Paragraph Observations

1. 1.1. “A” 2932 unique 1.1.
2. 1.1.1. “A” 2216 I 1. 3rd, a) According to Com. “A” 2443 and
   “A” 2932
3. 1.1.2. “A” 2216 I 1. 3rd, a) According to Com. “A” 2443 and
   “A” 2932
4. 1.1.3. “A” 2216 I 1. 3rd, b) According to Com. “A” 2932
5. 1.1.4. “A” 2216 I 1. 3rd, c) According to Com. “A” 2932
6. 1.1.5. “A” 2216 I 1. 3rd, d) According to Com. “A” 2932
7. 1.1.6. “A” 2216 I 1. 3rd, e) According to Com. “A” 2932
8. 1.1.7. “A” 2216 I 1. 3rd, f) According to Com. “A” 2932
9. 1.1.8. “A” 2216 I 1. 3rd, g) According to Com. “A” 2932
10. 1.1.9. “A” 2216 I 1. 3rd, h) According to Com. “A” 2932
11. 1.1.10. “A” 2216 I 1. 3rd, i) According to Com. “A” 2932
12. 1.1.11. “A” 2932 unique 1.1.11. According to Com. “A” 3104
13. 1.1.12. “A” 2932 unique 1.1.12.
14. 1.1.13. “A” 2932 unique 1.1.13.
15. 1.1.14. “A” 2932 unique 1.1.14.
16. 1.1.15. “A” 2932 unique 1.1.15.
17. 1.1.16. “A” 2932 unique 1.1.16.
18. 1.2. “A” 2932 unique 1.2. According to Com. “A” 3104
19. 1.2.1. “A” 2419 1. 1st Modified by Com. “A”
    2563 (points 1. and 2.) and “A”
    2932
20. 1.2.2. “A” 2448 Debtor status (point
    6.1.2.2.2.) and “A” 2932
21. 1.2.3. “A” 2448 Debtor status (point
    6.1.2.2.2.) and “A” 2932
    “A” 2410 7.
22. 1.2.4. “A” 2932 unique 1.2.4.
23. 1.3. “A” 7 Specifications of the
    items of “other guarantees received”, modified by Com. “A” 2932
24. 2.1. 1st “A” 2448 Debtor status (point
    6.1.2.2.2.)
25. 2.1. 2nd “A” 2932 unique 2.1. 2nd
26. 2.2. “A” 2216 I 1. 4th
27. 3.1. “A” 2932 unique 3.1.
28. 3.1.1. “A” 2932 unique 3.1.1.
29. 3.1.2. “A” 2932 unique 3.1.2.
30. 3.1.3. “A” 2932 unique 3.1.3.
31. 3.1.4. “A” 2932 unique 3.1.4.
32. 3.1.5. “A” 2932 unique 3.1.5.

NEW CONSOLIDATED TEXT RULES OF ORIGIN

Section	Point	Paragraph	Com.	Annex	Point	Paragraph	Observations
3.	3.1.6.	“A”	2932	único	3.1.6.
3.	3.1.7.	“A”	2932	único	3.1.7.
3.	3.1.8.	“A”	2216	I	1. 3º, g)	Según Com. “A” 2932
3.	3.1.9.	“A”	2216	I	1. 3º, h)	Según Com. “A” 2932
3.	3.1.10.	“A”	2216	I	1. 3º, i)	Según Com. “A” 2932
3.	3.1.11.	“A”	2932	único	3.1.11.	Según Com. “A” 3104
3.	3.1.12.	“A”	2932	único	3.1.12.
3.	3.1.13.	“A”	2932	único	3.1.13.
3.	3.1.14.	“A”	2932	único	3.1.14.
3.	3.1.15.	“A”	2932	único	3.1.15.
3.	3.1.16.	“A”	2932	único	3.1.16.
3.	3.1.17.	“A”	2419	1. 1º, ii)	Modificado por Com. “A” 2932
3.	3.1.18.	“A”	2932	único	3.1.18.
3.	3.1.19.	“A”	2932	único	3.1.19.
3.	3.2.	“A”	2216	II	5º