Circular No. 3.415

CIRCULAR No. 003415 ------------------ Provides for foreign currency loan operations referred to in Resolution No. 3.622 of 9 October 2008. The Board of Governors of the Central Bank of Brazil, in an extraordinary session, based on art. 11, item III, of Law No. 4.595 of 31 December 1964, and on art. 7 of Resolution No. 3.622 of 9 October 2008, D E C I D E D : Art. 1 The foreign currency loan referred to in Resolution No. 3.622 of 9 October 2008, as amended by Resolution No. 3.624 of 16 October 2008, shall be made by means of an auction by the Central Bank of Brazil. § 1 Only banking financial institutions authorized to operate in the foreign exchange market may participate in the auction. § 2 At the time of the auction, the Central Bank may determine that the funds be directed, in whole or in part, to foreign trade operations. Art. 2 The subject of the auction shall be the increase to the Libor rate used in calculating the charges provided for in item III of § 2 of art. 1 of Resolution No. 3.622 of 2008. Sole paragraph. Once the proposals are received, the Central Bank shall define the minimum limit of the increase and the volume of funds to be lent. Art. 3 The operational conditions of the auction shall be established by the Central Bank of Brazil, which shall determine: I - the eligible guarantees, among the following assets: a) sovereign securities denominated in United States dollars, issued by the Federative Republic of Brazil ("Global Bonds") or by countries with a risk rating not lower than A, or equivalent grade, assigned by at least two rating agencies; b) Advance on Foreign Exchange Contracts (ACC), Advance on Delivered Foreign Exchange Contracts (ACE), import financing and operations contracted under Resolution No. 2.770 of 30 August 2000, denominated or referenced in United States dollars; II - the term of the operation. Sole paragraph. The Central Bank of Brazil shall disclose the result of each auction by means of a communiqué. Art. 4 In the event of maturity of the assets given as collateral for the loan during the term of the operation referred to in this Circular, the financial institution shall be obliged to supplement the collateral in the same proportion, except for the option to amortize the corresponding amount. Sole paragraph. The administration of the assets given as collateral may be entrusted to the financial institution taking the loan, at the sole discretion of the Central Bank of Brazil. Art. 5 The Department of International Reserve Operations (Depin) is authorized to adopt the measures necessary for the execution of the provisions of this Circular. Art. 6 This Circular enters into force on the date of its publication. Brasília, 16 October 2008. Mario Torós Director