Circular Monetary Regulations REMON 1-1

BANCO CENTRAL DE LA REPÚBLICA ARGENTINA
COMMUNICATION "A" 22 24/04/81
TO FINANCIAL ENTITIES:
Ref.: Circular MONETARY REGULATIONS
REMON 1-1.
We address you to bring to your knowledge that this Institution has resolved to implement a fund authorization regime with the purpose of contributing to the extension of credit operation terms for companies in the private sector.

This regime will adhere to the following order:

1. Basic Conditions.
   1.1. Resources will be awarded through bidding based on the interest rates offered, expressed as annual percentages.
   1.2. The amount to be bid and the date of the calls will be communicated at the time of each bidding.
   1.3. The Central Bank may, at its discretion, limit the access of entities to this loan regime.
   1.4. It shall be the faculty of the Central Bank to accept or reject, totally or partially, the proposals received.
   1.5. In exceptional cases, duly justified at the judgment of the Central Bank, and at the request of the entities, early cancellations, partial or total, may be authorized.
   1.6. These loans will not be computed for the purposes of the relationship between deposits and other obligations and the patrimonial responsibility of the financial entities.

2. Maximum Amount of Offers per Entity.
   2.1. In the first bidding in which participation occurs, that maximum amount will be determined by the proportion that the Central Bank fixes for the respective bidding with respect to the average of the items subject to the single minimum cash rate (point 1.2 of Form. 3000) corresponding to the penultimate month prior to the date of each call.
   2.2. In subsequent biddings, the awarding of funds may be requested for an amount that does not exceed the difference between the result of the proportion referred to in the previous point, determined for the new call, and the debt registered under this regime at the time of the bidding.
   2.3. Such debts will be readjusted to the last day of the previous month according to the procedure indicated in point 3.1. The funds credited during the month of the bidding will be taken at their nominal value.

3. Conditions of the Loans.
   3.1. The debts will be readjusted by applying the financial adjustment index prepared by the Central Bank (Circular R.F. 1050).
   3.2. The interest rates will be those accepted in the bidding.
   3.3. The interests will be settled annually starting from the date of the respective crediting of the funds.
   3.4. The loans will have a term of 4 years. The amortization will be carried out in two installments of 50% each: at two years and at maturity, with the adjustment indicated in point 3.1.
   3.5. If the dates for the settlement of interests, amortization, and cancellation of these loans coincided with a non-working day, the corresponding debits will be made on the next working day.
   3.6. As guarantee for these loans, entities must constitute in favor of the Central Bank a pledge over the documents of their liquid portfolio or a mortgage or pledge caution, in the latter case with notification of the constitution of the encumbrance to the debtors, for a value not lower than one hundred twenty percent (120%) of the sums owed for adjusted capital. The Central Bank may demand additional guarantees it considers necessary.

4. Application of the Funds.
   4.1. The resources awarded under this regime must be used in granting credits subject to monetary correction clauses, with agreements documented faithfully subsequent to the date of the respective call to bidding, destined to refinance current obligations of private sector companies.
   4.2. Entities must use no less than 85% of the funds they obtain, in the refinancing of credits of clients dedicated to primary production or manufacturing industry, according to the typification contained in the information on "Balance of financing of financial entities by activities" (Form. 3212 and its instructions), the remainder being applicable to the refinancing of the remaining activities.
   4.3. The refinancings carried out with adjustment to this operation may reach 30% of the total of the debts in current pesos in each entity at the time of consolidation, when it concerns companies that carry out activities in the primary production sector or manufacturing industries, and 15% of such obligations for the remaining economic sectors.
   This will not prevent, naturally, that entities may complement this debt refinancing action with their ordinary lendable resources.
   4.4. The credits will be formalized for a term of at least two years, with a first partial or total payment for capital and adjustment to be made no earlier than that minimum term. The interests of these operations will be settled with annual periodicity.
   4.5. Entities may equally apply the resources they obtain under this regime to the granting of credits among themselves.
   The receiving entities must observe in the use of those funds the same regulatory requirements established previously.
   4.6. Regarding savings banks, mortgage banks, and savings and loan societies for housing or other real estate, the provisions indicated in the previous points will not be of strict observance.

B.C.R.A. COMMUNICATION “A” 24.4.81
4.7. Intermediaries of other classes that do not have debtors dedicated to primary production or manufacturing industry may opt for the application of resources from this loan regime, between what is provided in point 4.5. preceding or by the formation of a new portfolio of credits subject to monetary correction clauses, observing the proportions indicated in point 4.2. and in identical conditions of term, amortization, and interest collection, as indicated in point 4.4.
4.8. The operations carried out with companies included in the industrial promotion regime must be reported to the National Development Bank with detail of amount, term, and other conditions stipulated in the respective agreements.

5. Operational Regime.
   5.1. The proposals must be presented in firm under closed envelope, using Form. 3563, whose model is attached, and deposited in the urn that will be enabled for this purpose in the Rediscount Sector of the Central Bank.
   5.2. Entities located in the interior of the country may make their proposals by telex to this Bank, based on the model attached.
   5.3. In each bidding, only one (1) offer may be made.
   5.4. The presentations are received until the day and hour determined in each case. Those that do not adhere to these rules or contain integration deficiencies in Form. 3563 or in the telex replacing it will not be considered.
   5.5. Entities that have been awarded quotas for use within this system will request, by Form. 3564 or telex, whose respective models are attached, the partial crediting for the amounts corresponding to the credits granted under the conditions established in the preceding point 4.
   Such requests will be received in the Rediscount Sector of the Central Bank from Monday to Wednesday of each week. The crediting will be carried out on Fridays.
   5.6. If the last day fixed for the reception of orders or the crediting of funds turns out to be a non-working day, both terms will be moved to the first following working day.
   5.7. In each bidding, the debt to be taken into account for the determination of the maximum amount that entities may demand, as indicated in point 2.2., will compute the requests for fund crediting entered until the Wednesday prior to the date of the call. In the case of entities that do not participate in subsequent biddings or whose offers were not accepted, they may not continue demanding the crediting of funds with imputation to the quota awarded in the previous contest.
   5.8. The fund movements that originate as a consequence of this operation will be carried out by the Central Bank in the current accounts that entities have enabled in this Institution.
   5.9. To operate within this regime, entities must send the guarantee letter that adjusts to their operation, among which are transcribed in the Annex, in original and two copies. This document is sent only once before or simultaneously with the first offer.

This guarantee letter must be presented in the Rediscount Sector separately from the envelope containing the offer, and a copy will be given to the entities with the record of its reception.

This regime is incorporated as point 4 of Chapter IV of Circular REMON 1, so we will send you the sheets that correspond to add to said Circular in due course.
We salute you very attentively.
BANCO CENTRAL DE LA REPÚBLICA ARGENTINA
Germán R. Pampillo
Deputy Manager for Norms for
Financial Entities
Daniel E. de Pablo
General Deputy Manager

ANNEXES

B.C.R.A.
GUARANTEE LETTER (Commercial Documents) MODEL
To the President
Of the Central Bank of the Republic Argentina, S/D.
Ref.: Guarantee Letter for the loans agreed to financial entities by the Central Bank for the purpose of regulation of monetary resources.
We have the pleasure of addressing you with reference to the loans that our Institution grants you within the regime of Circular REMON 1 – Chapter IV – point 3.
Regarding this and by the present, we leave express record that we commit and accept the following:
1 – That as guarantee for the loans that the Central Bank of the Republic Argentina grants us, with adjustment to the reference regime, a pledge will be constituted in favor of the Central Bank of the Republic Argentina over the documents of our liquid portfolio for a value that reaches or exceeds one hundred twenty percent (120%) of the sums owed to the Central Bank of the Republic Argentina for adjusted capitals. 2 – That the documents offered as guarantee will be endorsed with the legend “Value in guarantee in favor of the Central Bank of the Republic Argentina” and we commit to keep them separate from the rest of the portfolio and at the disposal of the Central Bank of the Republic Argentina in a determined and individualized area of the treasury of this Entity that we provide free of charge and to which the officials and inspectors of the Central Bank of the Republic Argentina will have pertinent access. 3 – That we accept the mission of depositaries of the documents offered as guarantee, which we will perform free of charge. 4 – That we leave perfectly understood that any subsequent management for the collection of the documents offered as guarantee will run exclusively at the charge and cost of this Entity, whether judicial or extrajudicial. 5 – That when by maturity of the documents or by other circumstances (early cancellation, signatories or endorsers entering civil bankruptcy, creditor summons, bankruptcies, successions, etc.) the minimum guarantee established in clause 1 may decrease, we commit to replenish with other documents from our liquid portfolio, until covering the indicated minimum guarantee. If we do not have documents to replace, we obligate ourselves to immediately communicate the amount we authorize that Central Bank to debit in the current account we maintain in that Institution, for the purpose of corresponding the debt with the amount of the documents that guarantee it. 6 – That the list of documents offered as guarantee will be detailed in formula 2894, numbered in a correlated manner, which will form an integral part of this guarantee, and will be kept in this entity at the disposal of the Central Bank of the Republic Argentina. 7 – That the Central Bank of the Republic Argentina reserves the right to reject or demand the replacement of any of the documents that guarantee the corresponding loans. 8 – That we commit that the maturity of the documents offered as guarantee will not exceed 30 days from the date of cancellation of each awarded loan. 9 – That for the purposes of establishing the date of the transfer of the values given as guarantee, we commit to record in the Minutes Book of this …………………………………, the
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GUARANTEE LETTER (Commercial Documents) MODEL quantity of documents, the total amount, order numbers of the same and the date and numbering of the sheets in which they are individualized. The cited sheets will remain in custody in this Entity at the disposal of the Central Bank of the Republic Argentina, which we obligate ourselves to send to that Institution at the time they are requested. 10 – That we commit to satisfy the additional guarantees that the Central Bank of the Republic Argentina may require for the debt resulting from this loan regime. NOTE: This guarantee letter must be signed by those authorized to legally commit the entity.
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B.C.R.A.
GUARANTEE LETTER (Commercial Documents) MODEL
To the President of the Central Bank of the Republic Argentina, S/D.
Ref.: Guarantee Letter for the loans agreed by the Central Bank to financial entities for the purpose of regulation of monetary resources.
We have the pleasure of addressing you. With reference to the loans that our Institution grants you within the regime of Circular REMON 1 – Chapter IV – point 3.
Regarding this and by the present, we leave express record that we commit and accept the following:
1 - That as guarantee for the loans that the Central Bank of the Republic Argentina grants us, with adjustment to the reference regime, a pledge caution will be constituted in favor of the Central Bank of the Republic Argentina over the (1) of our liquid portfolio for a value that reaches or exceeds one hundred twenty percent (120%) of the sums owed to the Central Bank of the Republic Argentina for adjusted capitals. 2 - That we commit to keep the (1) separate from the rest of the portfolio and at the disposal of the Central Bank of the Republic Argentina in a determined and individualized area of the treasury of this Entity that we provide free of charge and to which the officials and inspectors of the Central Bank of the Republic Argentina will have pertinent access. 3 - That simultaneously with the constitution of the caution over the (1) referred to in point 1 of this guarantee letter, we will notify faithfully of such circumstance to the debtors of the corresponding credits. 4 - That we accept the mission of depositaries of the (1) offered as guarantee, which we will perform free of charge. 5 - That we leave perfectly understood that any subsequent management for the collection of the (1) offered as guarantee will run exclusively at the charge and cost of this Entity, whether judicial or extrajudicial. 6 - That when by contractual amortization of the debt or by other circumstances (early cancellation, debtors entering civil bankruptcy, creditor summons, bankruptcies, successions, etc.) the minimum guarantee established in clause 1 may decrease, we commit to replenish with other (1) from our liquid portfolio, until covering the indicated minimum guarantee. If we do not have (1) to replace, we obligate ourselves to immediately communicate the amount we authorize that Central Bank to debit in the current account we maintain in that Institution, for the purpose of corresponding the debt with the amount of the documents that guarantee it. 7 - That the list of (1) offered as guarantee will be detailed in formula 3055, numbered in a correlated manner, which will form an integral part of this guarantee, and will be kept in this entity at the disposal of the Central Bank of the Republic Argentina. 8 - That the Central Bank of the Republic Argentina reserves the right to reject or demand the replacement of any of the (1) that guarantee the corresponding loans. 9 - That for the purposes of establishing the date of the transfer of the values given as guarantees, we commit to record in the Minutes Book of this …………………………………, the quantity of (1), the total amount of the debts owed, order numbers of said instruments and the date and numbering of the sheets in which they are individualized. The cited sheets will remain in custody in this Entity at the disposal of the Central Bank of the Republic Argentina, which we obligate ourselves to send to that Institution at the time they are requested.
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GUARANTEE LETTER (Mortgages and Pledges) MODEL 10 - That we commit to satisfy the additional guarantees that the Central Bank of the Republic Argentina may require for the debt resulting from this loan regime.
(1) - Specify: mortgage deeds or pledges, as applicable.
NOTE: This guarantee letter must be signed by those authorized to legally commit the entity.
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B.C.R.A.
NOTIFICATION LETTER TO DEBTORS MODEL
(To communicate the constitution of pledge caution in favor of the Central Bank of the Republic Argentina on the instrument representing the mortgage or pledge encumbrance, as applicable).
TO
PRESENT
Ref.: Credit (1) No.
We have the pleasure of addressing you with relation to the debt you maintain with this Entity, originated in the credit cited in the reference, which we granted you with encumbrance (1) in our favor.
Regarding this, we bring to your knowledge that on the instrument representing the cited encumbrance (1) a pledge caution has been constituted in favor of the CENTRAL BANK OF THE REPUBLIC ARGENTINA, as guarantee for loans granted by that Institution. Consequently, this implies the cession to the mentioned Central Bank of all the rights that it guarantees. Furthermore, we comply in informing you that this Entity, in its character as depositary of the pledged titles, is authorized to effect the collection of the agreed installments, as long as said procedure is not revoked by the Central Bank of the Republic Argentina, a circumstance that will be communicated to you expressly. By requesting you to kindly notify yourself of the foregoing, we salute you very attentively. authorized signature I receive a copy of the present and I notify myself of its content. Signature and clarification of signature Place and date. (1) – Specify: mortgage or pledge, as applicable.
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MODEL
CENTRAL BANK OF THE
REPUBLIC ARGENTINA
Rediscount Sector
LOAN REGIME FOR FINANCIAL
ENTITIES FOR THE PURPOSE OF MONETARY
RESOURCE REGULATION
Date of the bidding
Entity: Current Account No.
O F F E R S
No
AMOUNT

• In millions of pesos -
  TERM
• In days -
  EFFECTIVE ANNUAL RATE
• In % -
  NOTE: Integrate the fields from right to left.
  / / Authorized Signatures
  RESERVED FOR THE BANK OF THE REPUBLIC ARGENTINA Rediscount Sector Data Processing Center Form. 3525 (I-81) The provision of this form must be requested via Form. 337.
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B.C.R.A.
NOTIFICATION LETTER TO DEBTORS MODEL
(To communicate the constitution of pledge caution in favor of the Central Bank of the Republic Argentina on the instrument representing the mortgage or pledge encumbrance, as applicable).
TO
PRESENT
Ref.: Credit (1) No.
We have the pleasure of addressing you with relation to the debt you maintain with this Entity originated in the credit cited in the reference, which we granted you with encumbrance (1) in our favor.
Regarding this, we bring to your knowledge that on the instrument representing the cited encumbrance (1) a pledge caution has been constituted in favor of the CENTRAL BANK OF THE REPUBLIC ARGENTINA, as guarantee for loans granted by that Institution. Consequently, this implies the cession to the mentioned Central Bank of all the rights that it guarantees. Furthermore, we comply in informing you that this Entity, in its character as depositary of the pledged titles, is authorized to effect the collection of the agreed installments, as long as said procedure is not revoked by the Central Bank of the Republic Argentina, a circumstance that will be communicated to you expressly. By requesting you to kindly notify yourself of the foregoing, we salute you very attentively. authorized signature I receive a copy of the present and I notify myself of its content. Signature and clarification of signature Place and date. (1) – Specify: mortgage or pledge, as applicable.
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