Circular LISOL 1-303: Treatment of facilities granted to facilitate the sale of immobilized assets

BANCO CENTRAL DE LA REPUBLICA ARGENTINA ______ COMUNICACION " A " 3131 I 10/07/00 ______ TO FINANCIAL ENTITIES:
Ref.: Circular LISOL - 1 - 303
Relationship for immobilized assets and other concepts. Treatment of facilities granted to facilitate their sale.

We address you to inform you that this Institution has adopted, on the subject of reference, the following resolution:

"- Substitute, from 1.8.00, point 1.1.2.1. of Section 1. of the norms on 'Relationship for immobilized assets and other concepts' with the following:

"1.1.2.1. Facilities granted to facilitate the installment sale of entity assets, regardless of the nature of the asset, when any of the following conditions are verified:

i) the pertinent analyses and evaluations regarding the financial situation of the acquirer have not been carried out, nor have the norms on credit matters been observed.

ii) the borrower is linked - in the terms of Annex I to Communication "A" 2140 or point 4.2. of Chapter I of Circular OPRAC - 1, taking into account what is provided in the third paragraph of point 2. of the resolution disseminated by said communication - to the holder of the debt that originated the foreclosure or to the creditor financial entity.

iii) that the assistance is granted under conditions that are more favorable than those currently in the market for financings of the same nature (term, interest rate, amortization system, grace periods, guarantees, etc.)."

In attachment, we send you the pages of the ordered text of the norms currently in force regarding 'Relationship for immobilized assets and other concepts' which replace those previously provided.

We salute you very attentively.

BANCO CENTRAL DE LA REPUBLICA ARGENTINA Juan Carlos Isi Alfredo A. Besio Submanager of Manager of Norms for Regulatory Regime Financial Entities

ANNEX: 3 pages.

RELATIONSHIP FOR IMMobilized ASSETS AND OTHER B.C.R.A. CONCEPTS
Section 1. Immobilized assets.
1.1. Concepts included.
1.1.1. Shares of domestic companies.
1.1.1.1. Non-marketable.
1.1.1.2. Marketable when the holding exceeds 2.5% of the capital and/or votes of the company or when, without exceeding said margin, the eventual liquidation of the holding may significantly affect the quotation taking into account the daily amount of transactions carried out.
1.1.2. Diverse credits.
1.1.2.1. Facilities granted to facilitate the installment sale of
entity assets, regardless of the nature of the asset, when any of the following conditions are verified:

i) the pertinent analyses and evaluations regarding the financial situation of the acquirer have not been carried out, nor have the norms on credit matters been observed.

ii) the borrower is linked - in the terms of Annex I to Communication “A” 2140 or point 4.2. of Chapter I of Circular OPRAC-1, taking into account what is provided in the third paragraph of point 2. of the resolution disseminated by said communication - to the holder of the debt that originated the foreclosure or to the creditor financial entity.

iii) that the assistance is granted under conditions that are more favorable than those currently in the market for financings of the same nature (term, interest rate, amortization system, grace periods, guarantees, etc.).

1.1.2.2. Balance in favor of value-added tax and advances of
other taxes.
1.1.2.3. Assets affected as collateral, including, among others, those
linked to the fulfillment of obligations related to the acting as a stock market or over-the-counter market agent and the electronic clearing houses. Version: 2nd Communication “A” 3131 Validity:
1.08.00

RELATIONSHIP FOR IMMobilized ASSETS AND OTHER B.C.R.A. CONCEPTS
Section 1. Immobilized assets.
1.1.2.4. Other diverse credits.
1.1.3. Assets for own use.
1.1.4. Diverse assets.
1.1.5. Organization and development expenses not deductible for the determination of the computable financial responsibility.
1.1.6. Goodwill (registrations incorporated prior to
30.5.97).
1.2. Exclusions.
1.2.1. Assets affected as collateral.
1.2.1.1. Linked to the fulfillment of obligations related
to the electronic clearing houses when they are computable for the integration of the minimum liquidity requirements.
1.2.1.2. For the following operations, as long as the pertinent
provisions are observed:

i) Passive securities repos and foreign currency. ii) Passive credit repos. iii) Futures, options, and other derivative products. iv) Credit lines from abroad for the settlement of operations carried out through Euroclear and Cedel. v) “Stand-by” letters of credit used for the integration of the minimum liquidity requirements. Version: 3rd Communication “A” 3131 Validity:
1.08.00

B.C.R.A.
ORIGIN OF THE PROVISIONS INCLUDED IN THE ORDERED TEXT OF THE NORMS ON THE RELATIONSHIP FOR THE IMMobilized ASSETS AND OTHER CONCEPTS ORDERED TEXT SOURCE NORM Observations
Section Point Paragraph Com. Chapter/ Point Paragraph
Annex
1. 1.1.1. “A” 2736 unique 1.6.
1. 1.1.2. “A” 2736 unique 1.5. According to Com. “A”
3131
1. 1.1.3.
a
1.1.6.
“A” 2736 unique 1.1. a
1.4.
According to Com. “A”
2753
1. 1.2.1.1. “A” 2736 unique 1.5.3. According to Com. “A”
2753
1. 1.2.1.2. “A” 2753 1. Includes clarification
interpretative and modification by
Com. “A” 2832
2. 2.1. “A” 2736 1. 1st
3. 3.1.1. “A” 2736 unique 1. last According to Com. “A”
2966
3. 3.1.2.1. “A” 2736 unique 3.
and
3.1.2.2.
“A” 414
LISOL-1
VII 5.2.2.
3. 3.1.2.3. “A” 2736 unique 3.
3. 3.2. “A” 2736 1. 3rd According to Com. “A”
2966. Includes
interpretative clarification
3. 3.3. “A” 2736 1. 2nd
4. 4.1. “A” 2736 1. 1st
5. 5.1.1. “A” 2736 1. last
5. 5.1.2. a
5.1.4.
“A” 414
LISOL-1
V 3.2.2. a
3.2.4.
According to Com. “A”
2019
5. 5.1.5. “B” 5159
5. 5.2.1. “A” 2241
CREFI-2
I 3.2.3.
5. 5.2.2. “A” 2241
CREFI-2
II 1.2.
5. 5.2.3. “A” 2241
CREFI-2
III 1.1.
5. 5.2.4. “A” 2241
CREFI-2
IV 1.3.
5. 5.3. “A” 414
LISOL-1
V 4. Modified by the
Com. “A” 817
6. 6.1. “A” 2227 unique 5.2.1. last According to Com. “A”
2649
6. 6.2. “A” 2227 unique 5.1.8. According to Com. “A”
2736
“A” 2227 unique 5.2.2.