Circular OPRAC 1-523: Regulation of Scope for Active Operations and Interbank Loans under Law 25.561 and Decrees 214 and 410 of 2002

BANCO CENTRAL DE LA REPÚBLICA ARGENTINA __________________________________________________________________ COMUNICACIÓN " A " 3507 I 13/03/02 __________________________________________________________________ TO FINANCIAL ENTITIES:
Ref.: Circular
OPRAC 1 - 523
Law 25.561. Decrees 214 and 410 of
2002. Regulation of its scope
for active operations and interbank loans

We address you to inform you that this Institution has adopted the following resolution:

"1. Convert to pesos, pursuant to Article 3 of Decree 214/02 and complementary provisions, at a rate of one peso for each dollar or its equivalent in other foreign currencies, the balances as of 3.2.02 of the financing (capital and interest) in foreign currency active as of 5.1.02, regardless of their amount or nature, including contingent liabilities, that debtors corresponding to the non-financial private sector, maintain with financial entities and financial trusts whose assets are constituted by credits transferred by financial entities.

The following balances are excluded from this treatment:

• Settlement of financings implemented through credit
  cards whose maturity occurred on 3.2.02, to the extent that they correspond to purchases made in the exterior.

• Financings linked to foreign trade, in the cases
  provided for in points 3. and 4. of this resolution.

• Futures and options contracts, including forward
  operations.

• Contracts for whose compliance foreign law is
  applicable.

2. Establish for the settlement and payment of the financings
   converted to pesos, as provided in the preceding point, the application of the following methodology:

2.1. Periodic payment obligations.

The capital and interest services with maturity in the period 4.2/3.8.02 will be paid in pesos on the dates contractually agreed. To this effect, the amount corresponding to the last installment paid prior to 4.2.02 will be converted to pesos at a rate of one peso for each dollar or its equivalent in other foreign currencies. Payments made under these conditions will be considered as advances on the services whose maturities have occurred or will occur from 4.2.02 with respect to the capital due as of that latter date, recalculated as indicated below.

The capital due on 4.2.02 must be recalculated with the application of the Reference Stabilization Coefficient ("CER") published by the Central Bank of the Republic Argentina.

To this end, in the first service with maturity from 4.2.02, inclusive, the factor resulting from comparing the value of the "CER" of the day prior to such maturity and the value as of 2.2.02 will be taken into account.

For subsequent services, the balance of the financing on the date of each maturity will be recalculated using the values of the "CER" of the day prior to the maturity of the relevant service and the day prior to the maturity of the immediately preceding service.

To the amount of the recalculated balance for each service, according to the methodology described, the amount corresponding to each payment will be deducted as provided in the first paragraph of this point 2.1. and so on until the last service whose maturity occurs up to 3.8.02.

The recalculated debt balance will be subject, from 3.2.02, to the interest resulting from applying the rate that is agreed, which may not exceed the percentage that corresponds as established below:

Interest Rates

• in % nominal annual -

Individuals Legal Entities

With preferred guarantees "A", mortgage on real estate or fixed pledge with registration in first degree. 3.5 6

Others, including the finan- cings that have the preferred guarantees admitted but whose value does not reach to cover, at minimum, 75% of the financing granted in origin (capital and in- terest). 5 8

The resulting balance -as of 3.8.02- will be subject to restructuring, repacting the conditions regarding term and rates -taking into account the established caps-, in order that the amount of the first resulting installment at the time of the debt restructuring does not exceed the amount of the last installment paid according to the originally agreed conditions.

The capital and interest services of the debt restructured will be calculated applying the methodology adopted as provided previously.

For installments not paid at their maturity, compensatory and/or punitive interest may be applied under the conditions freely agreed.

In the event that the cancellation -total or partial- of the debt takes place prior to 3.8.02, the recalculation of the services paid between the date of cancellation of the financing and 4.2.02 will be adjusted to the procedure established previously on a general basis, which will apply with effect on the date that the cancellation is verified.

2.2. Other obligations.

For the cancellation of the capital due, for the service whose maturity occurs in the period 4.2/3.8.02, the debtor will enjoy a waiting period of six months counted from the date of maturity of the obligation, this waiting period not being able to extend beyond 8.31.02.

The capital amount on the date of maturity originally agreed, will be recalculated until the date of its cancellation, through the application of the Reference Stabilization Coefficient ("CER") according to the methodology established in point 2.1. preceding.

The payment of interest services with maturity in that period, calculated on the capital resulting from applying said methodology, without exceeding the maximum nominal annual rates established there, will be effected in the originally agreed terms.

Refinancings will be subject to the conditions that the financial entity and the borrower freely agree taking into account what is established in Article 5 of Decree 214/02 regarding the non-application of adjustment clauses.

3. Provide that the balances as of 3.2.02 of the financings in
   foreign currency active as of 5.1.02 for obligations originated in the pre-financing and financing of exports must be cancelled in foreign currency or in pesos according to the exchange rate of the market by which corresponds to settle the collection of exports, always provided that the following conditions have been met:

3.1. Export pre-financing.

3.1.1. It will be required that the exporter is registered
in the export registry, that there is habituality in the execution of operations of export and that the financial assistance granted has a relationship with the FOB value of the exports normally carried out by the customer.

3.1.2. If any or some of the conditions
established in point 3.1.1. are not met, nevertheless the financings will remain in foreign currency, provided that:

a) there is an irrevocable letter of credit from the exterior opened in favor of the borrower of the pre-financing, or

b) a sales contract has been signed with the importer of the country of destination, or

c) a firm purchase order is available, opened in favor of the borrower of the pre-financing, which specifies the condition of the operation, background and references of the purchasing firm and certification -in each case- of the firms that sign the contract or purchase order, or

d) a production plan for the goods to be exported, an export program to be carried out within the validity period of the financing and an estimated cash flow for its execution justifying the credit line granted.

The compliance with the requirements established in subsections a) to d) must have been verified with prior to 5.1.02 and the financial assistance granted must bear a relationship with the amounts involved according to the cited elements, as corresponds.

3.2. Export financing.

The existence of the shipping documentation of the goods exported prior to the disbursement of the funds will be required.

In all cases, the maturity of the payment of the pre-financing and financing must bear a relationship with the collection of exports as contractually agreed.

When, according to the cases provided previously, the conditions indicated are not met, the balances of the financings included will be subject to what is provided in the first paragraph of point 1. of this resolution.

4. Provide that the balances as of 3.2.02 of the financings in
   foreign currency active as of 5.1.02 linked to operations of importation, must be cancelled in foreign currency or in pesos at the exchange rate freely agreed.

The following are excluded from this treatment, therefore being subject to the treatment established in the first paragraph of point 1. of this resolution, the financings with respect to which one of the following conditions is met:

• the intervening financial entity had not effected
  its cancellation on the date of the agreed maturity, having the necessary amounts available in an account open in the name of the importer in that entity, or

• they have been subject to a second refinancing -including
  renewals, implicit or explicit stays- with or without express request to that end by the borrower, except what is provided in the previous section.

5. Convert to pesos, pursuant to Article 2 of
   Decree 410/02, at a rate of one peso with forty cents ($ 1.40) for each dollar or its equivalent in other currencies, the balances as of 3.2.02 of the interbank obligations -for capital and interest- in foreign currency, admitting the early cancellation of the cited obligations.

The following interbank obligations are excepted from such conversion, including those originated in operations with second-degree financial entities, destined to the granting of assistance to customers for the pre-financing and financing of exports and imports, and to the attention of expenditures linked to such operations, which will be processed through the single and free foreign exchange market.

6. Repeal points 1. and 2. of the resolutions made known
   through Communications "A" 3429 and 3433, respectively, and the resolution disseminated by Communication "A" 3435."

We salute you very attentively.

BANCO CENTRAL DE LA REPUBLICA ARGENTINA

Alfredo A. Besio José Rutman
Manager of Emission Principal Manager of of Norms Norms and Authorizations