Circular No. 2935 — Discloses Instructions Regarding Credit Contingency Rules for the Public Sector and Limits for New Operations

CIRCULAR NO. 002935

Discloses instructions regarding the rules for credit contingency to the public sector and limits for the realization of new operations.

The Collegiate Board of the Central Bank of Brazil, in a session held on October 6, 1999, having regard to the provisions of Resolution No. 2,653, of September 23, 1999,

DECIDED:

Art. 1. For the purpose of complying with Article 7 of Resolution No. 2,653, of 1999, applications for the realization of new credit operations shall follow the order of registration in the System for Registration of Operations with the Public Sector (CADIP).

Sole Paragraph. Operations protocolized at the Central Bank of Brazil until September 23, 1999, shall also be subject to the registration referred to in the main text.

Art. 2. The Public Debt Department (DEDIP) will make available, in the CADIP transaction PDIP500, a specific modality for registering the applications mentioned in the previous article.

Sole Paragraph. For the purpose of registration, the institution of the National Financial System must necessarily inform, in addition to the other requested data, the public sector body or entity borrowing the credit, the type of operation, and the total value to be contracted.

Art. 3. Within a maximum period of five business days from registration, the institution of the National Financial System must send to the Central Bank of Brazil confirmation of the operation, via a Letter of Intent, signed jointly with the borrower.

Art. 4. Once the Letter of Intent is approved by the Central Bank of Brazil, the institution of the National Financial System must submit, within thirty days, the documentation for conclusive analysis of the operation.

Sole Paragraph. Upon receipt of the documentation, DEDIP will have a period of five business days to request any necessary complementation.

Art. 5. The loss of any of the deadlines referred to in Articles 3 and 4 will imply the cancellation of the operation's registration.

Art. 6. Credit operations for budgetary revenue anticipation (ARO) will follow, where applicable, the provisions of this Circular, with Circular No. 2,844, of October 8, 1998, remaining in force with the following modifications:

I - Article 3 thereof is revoked;

II - Article 5 shall be effective with the following wording:

"Art. 5. Institutions of the National Financial System that comply with the provisions of Articles 1 and 4 of Resolution No. 2,653, of September 23, 1999, may participate in the auction."

Art. 7. Credit operations for budgetary revenue anticipation (ARO) whose auction notices had already been published by the Central Custody and Financial Settlement of Securities - CETIP until September 23, 1999, may be processed according to the rules in effect until that date.

Art. 8. For the purpose of calculating the limit defined in Article 7 of Resolution No. 2,653, of 1999, values related to refinancings or refinancing that imply the settlement of operations already registered in CADIP will be deducted.

Art. 9. The methodology to be used for the calculation of the Primary Result and Net Real Revenue, referred to in Paragraph 1 of Article 2 of Resolution No. 2,653, of 1999, is that defined in Communication No. 6,749, of May 18, 1999, or another normative act that may replace it.

Art. 10. This Circular enters into force on the date of its publication.

Brasília, October 11, 1999

Carlos Eduardo de Freitas
Director