Circular RUNOR 1 - 211. Financial Entity Rating. New Regime — BCRA — AR

BANCO CENTRAL DE LA REPUBLICA ARGENTINA
__________________________________________________________________ COMUNICACION " A " 2521 25/03/97 __________________________________________________________________ TO FINANCIAL ENTITIES:
Ref.: Circular
RUNOR 1 - 211.
Financial Entity Rating. New Regime

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

"1. Replace point 2. of the resolution disseminated through Communication "A" 2510 with the following:
"2. Order that financial entities must have the required rating/s according to the following schedule:
Submission of reports
Deposits as of 12.31.96 without subsidiaries with subsidiaries in the outside in the outside (') Equal to or greater than $ 100 million 1.7.97 21.7.97 Less than $ 100 million 29.9.97 20.10.97

(') or subject to the consolidated basis supervision regime (Communication "A" 2227) in their capacity as controllers To this effect, all types of deposits and admitted investment modalities in pesos, foreign currency, and securities shall be considered. Entities included in point 2.3. of Section 2. of the Annex will submit on the corresponding dates the last reports issued by admitted international rating agencies, whose age cannot be greater than one year."

Replace point 3. of the resolution referred to in the preceding point with the following:
"3. Establish that the requirement to disseminate the ratings referred to in Section 6. of the Annex to this communication must be complied with as of 1.1.98. Prior to that date, neither financial entities nor rating companies may disclose the result of the ratings and/or the content of the reports. Non-compliance by financial entities with this measure will determine the application of the provisions of Article 41 of the Financial Entities Law. On the other hand, deviation from this provision by the aforementioned rating companies will imply exclusion, from the registry enabled for such effect at the Central Bank, until 12.31.97."
Incorporate as the last paragraph of point 1.1. of the financial entity rating regime (Annex to Communication "A" 2510) the text contained in Annex I to this communication.
Eliminate from the first paragraph of point 1.2. of that rating regime the expression: "The respective balance sheet must have an external audit report."
Replace point 1.3., the first and last paragraphs of point 2.1. and point 2.4. of the aforementioned rating regime with those included in the cited annex.
Eliminate point 2.2. of the financial entity rating regime.
Replace Sections 3., 4., 5. and 7. of the financial entity rating regime with the texts contained in Annex I to this communication.
Incorporate into Section 6. of the aforementioned norms the point appearing in the mentioned annex.
Determine that the compensation for administrative expenses for claims and processing must be paid regarding situations that arise from October 1, 1997.
Establish that the minimum analysis guidelines of the present regime will be applicable for the rating of financial entities in order to be recipients of investments with pension and retirement funds (Communication "A" 2484)."

In Annex II, the ordered text of the norms relating to the financial entity rating regime that replaces that disseminated by Communication "A" 2510 is attached.

We salute you very attentively.
BANCO CENTRAL DE LA REPUBLICA ARGENTINA
Juan Carlos Isi Alfredo A. Besio
Deputy Manager of Standards Manager of Standards for for Financial Entities Financial Entities ANNEXES

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I B.C.R.A.	MODIFICATIONS OF THE NORMS ON	Annex I to the
	RATING OF FINANCIAL ENTITIES	Com. "A" 2521
+----------+---------------------------------------+-------------+ "Section 1. Requirement of rating. ...
1.1. Required ratings.
...
When ratings show discrepancies greater than one level, the Central Bank may require that a rating from another evaluating company be provided. ...
1.3. Validity.
Ratings will have validity during the following periods:
Balance as of Validity
From Until
31.03 1.08 31.10
30.06 1.11 31.01
30.09 1.02 30.04
31.12 1.05 31.07
For entities that have subsidiaries abroad or that, in their capacity as controllers, are subject to the consolidated basis supervision regime, the validity is as follows:
Balance as of Validity
From Until
31.03 21.08 20.11
30.06 21.11 20.02
30.09 21.02 20.05
31.12 21.05 20.08
The validity period may be temporarily extended when the Superintendence of Financial and Exchange Entities considers it pertinent. This circumstance will be communicated by note to the entity and the evaluating company. If the rating approval by the Superintendence is not obtained or if the respective extension is not in force, the entity will be considered unrated." "Section 2. Rating companies. Designation.

2.1. Admitted companies.
The rating will be carried out by risk rating companies registered in the registry enabled by the Central Bank, for which they must have rated more than 5 financial entities in the year prior to the date of registration. ... The following will be grounds for automatic exclusion from the registry:
2.1.1. For a term of 3 years, when rating companies resign from that function for any reason, if it occurs prior to the termination of the validity of a rating contract linked to these provisions.
2.1.2. For a term of 1 year, when rating companies do not pay on time the amounts indicated by the Central Bank as compensation for administrative expenses for claims and processing (Section 5.).
2.1.3. For a term of 1 year, when more than 10 non-compliances (defined in point 5.2. of Section 5.) are verified within a calendar year.
When this situation recurs for 3 consecutive years, the exclusion will be for a term of 3 years.
2.1.4. For the term established, when an infringement of what is provided in the fourth paragraph of this point occurs, as derived from the application of the procedure provided in Article 41 of Law 21.526, in accordance with what is established in Article 42 "in fine" of Law 24.627.
...
2.4. Procedure.
2.4.1. Financial entities will communicate by note addressed to the Superintendence of Financial and Exchange Entities, with an advance of no less than 30 calendar days to the deadline for the presentation of reports, the risk rating companies by which they will be evaluated, chosen from the registry enabled by the Central Bank.
2.4.2. Quarterly, according to the model attached in Section 8., the entity must expressly state that said companies are not affected by the incompatibilities established in letters a) and e) of Article 17 of Decree 656/92, to the extent that it is known to the entity and that as far as it concerns, there are no incompatibilities or restrictions referred to in Articles 11, 12, 17, 18 and 19 of the cited decree and the fourth paragraph of point 2.1., regarding the intervening rating companies.
2.4.3. Financial entities that have contracted the services of evaluating companies that are excluded from the admitted list by the Central Bank will have a term of 15 calendar days to replace them, counted from the day they are notified of the aforementioned exclusion. The first evaluation formulated by the new chosen company must be presented within 60 calendar days from that date. The entity will maintain the last rating granted during that period.
2.4.4. Contracts will have a duration of 1 year, and may be renewed."
...
"Section 3. Rating reports.
The reports provided by rating companies must include the assigned rating, considering the minimum guidelines contained in Section 7. Rating reports and their updates must indicate, at a minimum, the following:

date of the rating council meeting;
member members, indicating who participated or not in it and the existence or not of discrepancies regarding the result and/or content of the report;
specific ratings for long-term deposits according to the minimum guidelines for rating contained in Section 7.;
summary of the result of the evaluation of the fundamental elements considered for the examination, as provided in points 7.3.1. to 7.3.3. of Section 7., in which the weighting factors of each of the determining elements of the rating will be described, the criteria that justify the weighting levels assigned to them and the corresponding rating level for each element, taking into account a note from 1 to 11 (where 1 corresponds to AAA as the best rating and 11 to I as the worst). In the case that the required information is not supplied, the note will be F, and
signature of the person or persons responsible for the rating company.

Once the first rating report is presented, the rating company that produced it must formulate the periodic updates that must be made during the year following the date to which that evaluation refers. This requirement must also be complied with in the case that, subsequently, another rating company is designated, until the required period is completed. To each report, the rating company will attach a sworn declaration -according to the model added in Section 9.- signed by its president or legal representative, in which it expressly states that said company and the persons who perform the different functions indicated in Decree 656/92 do not present the incompatibilities mentioned in Articles 11 and 12 of the decree and that they adhere to what is provided in Articles 17, 18 and 19 of that device and the fourth paragraph of point 2.1., particularly regarding the rating of deposits and debts of the financial entity, regarding which they issue the report. With the same periodicity, each of the physical persons included must formulate their respective sworn declaration on the aforementioned aspects, which will be kept by the rating company." "Section 4. Control of rating reports. The Superintendence of Financial and Exchange Entities will analyze the reports that companies produce according to the minimum analysis guidelines contained in Section 7., verifying that they are complete and consistent, within 30 calendar days of their receipt. Grounds for rejection of the report will be that the rating assigned to each item or chapter referred to in Section 7. is not consistent with what is exposed in the report or with the final rating. Inconsistency will be understood as the case in which a final rating does not match the partial ratings granted to each element comprising the aspects to be considered weighted according to the described criteria, as well as when the note granted to each item is not congruent with the information entered in it." "Section 5. Non-compliance. Non-compliance occurs at the discretion of the Superintendence of Financial and Exchange Entities in the event of non-observance of the provisions contained in this regime. When the responsibilities assigned in this regulation are not fulfilled, the following procedure will be applied:
5.1. Failure to submit reports and/or submission out of time.

The rating company must pay $ 500 to compensate for expenses in the concept of claim and processing. This amount must be deposited in the Central Bank within 72 business hours of the claim being communicated.
5.2. Omissions and/or inconsistencies.
When, at the discretion of the Superintendence of Financial and Exchange Entities, there are omissions and/or inconsistencies, produced between the information contained in each item or chapter of the report and its respective note, as well as between the partial notes and the corresponding final note, the report will be rejected. The rating company must pay $ 1,000 for each rejection, in the concept of compensation for administrative expenses for claim and processing. This amount must be deposited in the Central Bank within 72 business hours of the rejection being communicated. Non-compliance by financial entities with the requirements established in this regulation will determine the application of the provisions of Article 41 of the Financial Entities Law. Without prejudice to the above, rating companies and their members will be subject to the provisions of the last paragraph of Article 42 of Law 21.526, in accordance with what is established in Law 24.627." "Section 6. Dissemination of ratings. The report must contain the following legend: "This rating reflects the opinion of ... (the rating company), which does not necessarily coincide with or commit the opinion of the Central Bank of the Republic of Argentina."" ... "Section 7. Minimum analysis guidelines.
7.1. Objective.
The objective of these guidelines is to establish the minimum set of characteristics of financial entities that must be analyzed by rating companies to issue their opinion regarding the entity's payment capacity in the macroeconomic scenario prevailing at the time of the evaluation, as well as in alternative scenarios as provided in point 7.3.3.

These minimum guidelines do not constitute a manual for rating financial entities, since the rating company may give each of the elements mentioned in these guidelines the weighting it deems appropriate and may also consider all other additional elements that, in its opinion, are necessary to define the rating. In its rating, it must analyze each of the points mentioned below, following the order in which they are presented and adding in each chapter the analysis of the factors it considers relevant.
7.2. Rating system.
The rating must be issued for long-term deposits (payment period greater than one year). If deemed necessary based on alternative macroeconomic scenarios that the company foresees, it may discriminate between national currency and foreign currency instrument ratings. When discriminating between national and foreign currency, the letters P and E will be added to each rating, respectively. If the rating is equal to or lower than CC, as appropriate, the rating company must issue an opinion on the magnitude of the possible capital loss to which the creditor would be exposed. AAA : Minimum probability of default of the agreed terms. Excellent payment capacity, even in the most unfavorable foreseeable economic scenario. AA : Very low probability of default of the agreed terms. Excellent payment capacity. In the most unfavorable foreseeable economic scenario, the risk of default is very low. A : Very low probability of default of the agreed terms. Very good payment capacity. In the most unfavorable foreseeable economic scenario, the risk of default is low. BBB : Low probability of default of the agreed terms if the current economic scenario at the time of evaluation is maintained. Payment capacity is maintained even under more unfavorable economic and financial conditions, but is reduced in the most unfavorable scenario. BB : Low probability of default of the agreed terms if the current economic scenario at the time of evaluation is maintained. Payment capacity is significantly reduced under more unfavorable economic and financial conditions, being low in the most unfavorable scenario.

B : Low probability of default of the agreed terms if the current economic scenario at the time of evaluation is maintained. Payment capacity is significantly reduced under more unfavorable economic and financial conditions, being very low in the most unfavorable scenario. CCC : There are factors that may significantly increase the risk of default of the agreed terms, even in the current economic scenario at the time of evaluation. Payment capacity is low under more unfavorable economic and financial conditions, being very low in the most unfavorable scenario. CC : There is a risk of default of the agreed terms, even in the current economic scenario at the time of evaluation. Payment capacity is very low under more unfavorable economic and financial conditions, being null in the most unfavorable scenario. C : There is a clear risk of default of the agreed terms in the current economic scenario at the time of evaluation. It is a speculative investment, with low payment capacity, even if no more unfavorable economic scenarios intervene. D : Highly speculative, with high risk of default of the agreed terms. I : In a state of default. F : Entities that, having requested the rating, did not supply the required information. A "+" or "-" sign may be assigned to a rating to reflect an upward or downward trend within the corresponding category.
7.3. Basic chapters of the rating.
The three fundamental elements to consider for formulating the rating are: entity positioning; entity situation, and sensitivity to alternative scenarios for the Argentine economy. The rating company must describe in detail the weighting applied to each of the qualitative and quantitative elements that influence these three aspects. Each concept will be assigned a value on a scale of 1 to 11, in which 1 represents the best rating (AAA) and 11 the worst (I).

7.3.1. Entity positioning.
The possible evolution of the Argentine financial system as well as the current and future positioning of the entity within the system as a whole must be analyzed. To this effect, the following factors must be considered, at a minimum:
7.3.1.1. Evolution of the national financial system as a whole;
7.3.1.2. Evolution of the segment of the financial system in which the financial entity specializes;
7.3.1.3. Degree of competitiveness achieved by the entity in the products it offers, and
7.3.1.4. Evolution of the different products and markets in which the entity operates; its impact on its competitiveness.
7.3.2. Entity situation.
The fundamental qualitative and quantitative aspects that serve to determine the entity's repayment probability will be examined. Among them, the following will be analyzed:

Capitalization
Assets
Administration
Profits
Liquidity
Liability Structure
In each case, it is necessary to analyze the evolution of each variable in the past, its current level and its probable evolution in the future, and the value of each variable in relation to the average value for financial entities of similar characteristics.
7.3.2.1. Capitalization.
All factors that may be important to determine the level of backing that an entity provides with its capital to deposits must be analyzed, and at a minimum:

7.3.2.1.1. Ratio between capital and total assets, and between capital and risk assets; excess (or deficit) with respect to the minimum capitals required by the Central Bank. Analysis of the methodology used by the entity for the calculation of the minimum capital position. Impact of provisioning deficiencies determined in point 7.3.2.2.12.;
7.3.2.1.2. Quality of capital: its composition; participation of the different components; participation of subordinated debt in the total;
7.3.2.1.3. Capacity of current shareholders to increase capital in order to meet potential requirements; in the case of companies that trade on capital markets, the possibility of resorting to such markets to increase their capital must be analyzed;
7.3.2.1.4. Experience of the entity with subordinated debt issuances; possibilities of resorting to this instrument to increase capital, to the extent that the margins established by regulation are not exceeded;
7.3.2.1.5. Possibility of reducing without major losses the level of total assets, maintaining an adequate level of profitability, in order to meet capital requirements without having to increase capital, and
7.3.2.1.6. Existence of explicit guarantees on its operations (or part of them), and an opinion must be given on their quality.
7.3.2.2. Assets.
All factors that determine the quality of the bank's assets must be taken into account, and at a minimum:

7.3.2.2.1. Asset composition: immobilized assets, public securities, private securities, loans, bonds, others;
7.3.2.2.2. Concentration by clients and economic groups;
7.3.2.2.3. Sectoral concentration;
7.3.2.2.4. Regional concentration;
7.3.2.2.5. Sensitivity of assets in relation to the cash flows that back them against modifications in:

the level of activity
relative prices
the value of the currency;
7.3.2.2.6. Loans to companies and linked economic groups; level of implicit risk. Compliance with regulations;
7.3.2.2.7. Operations registered in off-balance sheet accounts and in particular derivative products; risk they introduce;
7.3.2.2.8. Maturity mismatch between the active and passive portfolio, at fixed and floating rates: interest rate risk;
7.3.2.2.9. Central Bank risk indicator for loans in national and foreign currency; implicit average rate;
7.3.2.2.10. Quality of assets:
Commercial Portfolio: The compliance with current regulations regarding clients that must be analyzed:
a) their debt balance is greater than 1% of the entity's computable net worth. b) their debt balance, in the entity under analysis,

represent 70% or more of the assistance received by the client in the total of the financial system and that their debt represents 0.5% or more, of the computable patrimonial responsibility of the entity. In no case, the number of debtors analyzed may not be less than 50. When the application of the procedure described determines that si- tuation, it will be necessary to comple- t said quantity by incorpo- ating the analysis of the clients who follow in order of decreasing importance.

Consumer portfolio: analysis
of the systems implemented to determine the quali- fication of the consumer por- tfolio. Analyze no less than 50 client files - selected under criteria of statistical use generalized- to establish compliance with current regulations. It must be taken into account that the same sample is not repeated during the year of qualification.
The reasonableness of the
provisions registered by the entity must be indicated based on the analysis carried out in accordance with the preceding paragraphs.
An annex must be attached
with the details of the clients analyzed from both portfolios: name, debt balance, guarantees and status;
7.3.2.2.11. Relations of the irregular portfolio
total portfolio and on the computable patrimonial responsibility; percentage of the irregular portfolio covered with guarantees;

7.3.2.2.12. Level of provisions; portfolio
given write-off; relationship between provisions and portfolio written off; provisions/profit ratio; ratio provisions constituted with provisions required by the regulations of the Central Bank;
7.3.2.2.13. Relation of irregular portfolio
net of provisions/average annual profit of the last exercises; idem on net equity;
7.3.2.2.14. Growth rate of risk ac-
tives: absolute and relative to the risk portfolio of the financial system as a whole, and
7.3.2.2.15. Analysis of the 50 main
clients who have guarantees that back up the risk assets; percentage of portfolio covered with guar- antees preferred and instru- mentation. Verify that the age of the valuation of such guarantees does not exceed one year.
7.3.2.3. Administration.
All aspects necessary must be analyzed to form an opinion on the quality of the organization and processes of decision making of the entity. Among them:
7.3.2.3.1. Suitability of general management
and the governing body; shareholder control: harmony in decisions. Organizational structure in relation to the level operational;
7.3.2.3.2 Analysis of the different
policies (commercial and finan- cial) and business plans;
7.3.2.3.3. Decision-making process:
granting of loans; quali- fication of loans ac- corded; systems for measuring the global risk of the portfolio. Frequency and characteristics of the review of decisions.

Delegation of functions by activity and by branches.
Concentration of authority;
7.3.2.3.4. Personnel policy: methods of
incorporation of personnel; sys- tem of training; system of qualification and promotion; eva- luation of the current staff; professional background and in the financial system of the main managers; rotation of managerial personnel;
7.3.2.3.5. Internal audit: mechanisms of
control implemented; level of execution of such controls;
7.3.2.3.6. External audit: review of
audit reports; control mechanisms imple- mented and level of execution of such controls; relationship with the Board of Directors and Management;
7.3.2.3.7. Information: information system
for decision making; quality, horizon and relevance of the information used for decision making;
7.3.2.3.8. Level of risk tolerance in
the operations assumed by the financial entity, systems of control or limits for the risk assumed by operations, product, business units, etc.;
7.3.2.3.9. Ability to maintain a control
consolidated of the financial en- tity and its subsidiaries;
7.3.2.3.10. Ability of Management to un-
derstand with precision the risks associated with the products derivatives;
7.3.2.3.11. Participation of the entity in
other financial or non- companies; role played by such en- terprises in the strategy and resul- ts of the entity;
7.3.2.3.12. Shareholders' participations in other
companies; pol- icy of credit assistance to affiliated companies;

7.3.2.3.13. Compliance with the regulations of
the Central Bank, especially the prudential; mechanisms develo- ped for its compliance.
Difficulties experienced by the entity in its relationship with the Central Bank during the last 5 years. Rehabilitation plan, its compliance; existence of sumarios; their possible economic impact. Assistance via rediscounts for illiquidity and loans granted by the Fiduciary Capitalization Funds or for Provincial Development, and
7.3.2.3.14. Follow-up and observance of me-
morandums or progress reports of inspections sent by the Superintendence.
7.3.2.4. Profits.
All factors necessary must be examined to form an opinion on the evolution of the profits of the entity. At a minimum, it must be reported on:
7.3.2.4.1. Level of profits with respect
to net equity, to the irregular portfolio -net of provisions- and to the total of assets;
7.3.2.4.2. Impacts of adjustments to the
accounting statements arising from the inspection of the Central Bank or proposed by Internal or External Audit;
7.3.2.4.3. Evolution of profits:
variability of quarterly profits;
7.3.2.4.4. Composition of profits:
by financial intermediation, by services, by other concepts, and
7.3.2.4.5. Costs of the entity: princi-
pal cost items. Evolu- tion.

7.3.2.5. Liquidity.
All factors necessary must be examined to form an opinion on the liquidity position of the financial entity. Among them:
7.3.2.5.1. Availability in relation to
total deposits: require- ments legal, require- ments technical, surplus;
7.3.2.5.2. Securities, private and pu-
blic, that trade in markets institutionalized, in relation to the total of liabilities; securities usable for the Program of Contingent Swap Operations of the Central Bank ("repo");
7.3.2.5.3. Access to credit lines of
other financial entities, lo- cal and foreign;
7.3.2.5.4. Maturity structure of li-
abilities; relationship with the three previous concepts;
7.3.2.5.5. Maturity mismatch between ac-
tives and liabilities; its impact on liquidity; verification of information regarding liquidity position supplied to the Central Bank;
7.3.2.5.6. Concentration of deposits by
type of depositor and at level regional; participation of the A.F.J.P. in the total of the deposits of the entity, and
7.3.2.5.7. Analysis of scenarios
alternative and its impact on liquidity: run on the entity and run on the financial system.
7.3.2.6. Structure of the Liability.
Special attention must be given to the situation of depositors in case of bankruptcy of the entity, having special- ly in mind the privileges that establishes the Law of Financial Entities. In particular, it must be analyzed:

7.3.2.6.1. The relationship privileged lia-
bilities (deposits plus obligations with real guarantee) with liabilities total;
7.3.2.6.2. The relationship deposits guar-
anteed by SEDESA with deposits and with privileged liabilities, and
7.3.2.6.3. The possible assistance of SEDESA
to meet the claims of depositors.
7.3.3. Sensitivity to alternative scenarios for the
Argentine economy.
The projection of the entity's cash flow financial will be carried out in the context of the scenario economic in force at the time of evaluation and of two alternative scenarios more unfavorable than the current. The company must define these alterna- tive scenarios and justify each of them, as well as the probability of their realization. In each of these scenarios, they must be described in detail:
7.3.3.1. The economic and financial conditions that
characterize it, and
7.3.3.2. As the different hypotheses developed
for each of those situations impact on the entity analyzed, especially on:
7.3.3.2.1. the determining factors of the
quality of its assets and its liquidity position;
7.3.3.2.2. the projected cash flow, and
7.3.3.2.3. its payment capacity."

+----------+---------------------------------------+-------------+ I B.C.R.A. I TEXT ORDERED OF THE NORMS ON THE IAnnex to II theI CLASSIFICATION OF FINANCIAL ENTITIES ICom. "A" 2521I +----------+---------------------------------------+-------------+ -IndexSection 1. Requirement of qualification.
1.1. Required qualifications.
1.2. Periodicity.
1.3. Validity.
Section 2. Rating companies. Designation.
2.1. Admitted societies.
2.2. Other admitted rating agencies.
2.3. Procedure.
Section 3. Rating reports.
Section 4. Control of rating reports.
Section 5. Non-compliance.
5.1. Failure to submit reports and/or presentation
out of time.
5.2. Omissions and/or inconsistencies.
Section 6. Dissemination of ratings.
Section 7. Minimum analysis guidelines.
7.1. Objective.
7.2. Rating system.
7.3. Basic chapters of the qualification.
Section 8. Model of sworn statement of financial en-
tities.
Section 9. Model of sworn statement of rating so-
cieties.
+--------------+----------------------+------------+-------------+ I Version: 2nd. I Communication I Validity I Page 1 I "A" 2521 I 25.3.97 I I +--------------+----------------------+------------+-------------+

deposit balance less than $ 50,000,000: one qualifica-
tion.
deposit balance equal to or greater than $ 50,000,000: two ca-
lifications.
When the qualifications show discrepancies superior to one level, the Central Bank may require that a qualification from another evaluator company be provided.
1.2. Periodicity.
Qualifications will have quarterly frequency. The socie- ties rating agencies must submit their reports to the Superintendence of Financial and Exchange Entities -except in the cases provided for in point 2.2. of the
Section 2.- within 90 calendar days following the
close of each calendar quarter or exercise.
For entities that have subsidiaries abroad or that, in their capacity as controllers, are subject to the regime of supervision on consolidated bases (Communication "A" 2227), the submission of the rating reports must be made within 110 calendar days following the aforementioned dates. +--------------+----------------------+------------+-------------+ I Version: 2nd. I Communication I Validity I Page 1 I "A" 2521 I 25.3.97 I I +--------------+----------------------+------------+-------------+

+----------+-----------------------------------------------------+ I I CLASSIFICATION OF FINANCIAL ENTITIES I I B.C.R.A. +-----------------------------------------------------+ I ISection 1. Requirement of qualification. I +----------+-----------------------------------------------------+
1.3. Validity.
Qualifications will be valid during the following periods:
Balance at Validity
From Until
31.03 1.08 31.10
30.06 1.11 31.01
30.09 1.02 30.04
31.12 1.05 31.07
For entities that have subsidiaries abroad or that, in their capacity as controllers, are subject to the regime of supervision on consolidated bases, the validity is the following:
Balance at Validity
From Until
31.03 21.08 20.11
30.06 21.11 20.02
30.09 21.02 20.05
31.12 21.05 20.08
The validity period may be temporarily extended when the Superintendence of Financial and Exchange Entities considers it appropriate. This circumstance will be made known by note to the entity and to the evaluator company. If the qualification is not approved by the Superintendence or if the respective extension is not valid, the entity will be considered unqualified. +--------------+----------------------+------------+-------------+ I Version: 2nd. I Communication I Validity I Page 2 I "A" 2521 I 25.3.97 I I +--------------+----------------------+------------+-------------+

among other aspects - implies having analysts
capable in sufficient quantity to develop the evaluations in an organizational context in accordance with the function. Periodically, the Superintendence of Financial and Exchange Entities will make known the updated list of the em- panies admitted rating agencies to perform this function. Societies cannot carry out qualifications when the incompatibilities mentioned in the articles 11 and 12 of Decree 656/92 arise. Without prejudice to this and even if the persons mentioned below abstain from intervening in the evaluation process as provided for in paragraph 1. of article 19 of Decree 656/92, the evaluator companies also cannot qualify the en- tities financial that have the service of advice or audit through:
any of the directors, managers or members of the
council of rating of those evaluator societies,
shareholders who own at least 10% of the capital of
companies and/or decisive action or participation, any is the character in which it is exercised, in the power of control and/or decision of those evaluator societies, and/or
companies dedicated to the aforementioned services in which
the aforementioned persons have action or participation, any is the character.
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+----------+-----------------------------------------------------+ I I CLASSIFICATION OF FINANCIAL ENTITIES I I B.C.R.A. +-----------------------------------------------------+ I ISection 2. Rating companies. Designation. I +----------+-----------------------------------------------------+ Furthermore, quarterly, rating societies must express their acceptance of the provisions of this rating regime. The following will be grounds for automatic exclusion from the regis- try:
2.1.1. For a term of 3 years, when the compa-
ies rating agencies resign from that function for any reason, if this occurs prior to the end of the validity of a rating contract linked to these provisions.
2.1.2. For a term of 1 year, when the compa-
ies rating agencies do not pay on time the amounts indicated by the Central Bank in compensation for administrative expenses for claims and processing (Section 5.).
2.1.3. For a term of 1 year, when more than
10 non-compliances (defined in point 5.2. of
Section 5.) are verified within a calendar year.
When this situation recurs for 3 years consecutive, the exclusion will be for a term of 3 years.
2.1.4. For the term established, when an
infringement of what is provided for in the fourth paragraph of this point occurs, as derived from the application of the procedure provided for in article 41 of Law 21.526, as established in article 42 "in fine" of Law 24.627.
2.2. Other admitted rating agencies.
The entities mentioned below may opt for an alternative regime in order to comply with the requirement of qualification:
i) local branches of foreign financial entities, +--------------+----------------------+------------+-------------+ I Version: 2nd. I Communication I Validity I Page 2 I "A" 2521 I 25.3.97 I I +--------------+----------------------+------------+-------------+

Duff & Phelps
Fitch Investors Service
IBCA Limited
Moody's Investors Service
Standard & Poor's Corporation
Thomson Bank Watch
Furthermore, updates must be presented whenever they are carried out by the evaluator agencies, within 10 calendar days of receipt by the parent company or the bank abroad, as applicable. The option for this regime may be exercised once per year.
2.3. Procedure.
2.3.1. Financial entities will communicate by note di-
rected to the Superintendence of Financial and Exchange Entities, with an advance of no less than 30 days calendar to the date of expiration for the presentation of the reports, the societies risk rating by which they will be evaluated, chosen from the registry enabled by the Central Bank.
2.3.2. Quarterly, according to the model attached in
Section 8., the entity must leave express
record that such societies are not affected by the incompatibilities established in paragraphs a) and e) of article 17 of Decree +--------------+----------------------+------------+-------------+ I Version: 2nd. I Communication I Validity I Page 3 I "A" 2521 I 25.3.97 I I +--------------+----------------------+------------+-------------+

+----------+-----------------------------------------------------+ I I CLASSIFICATION OF FINANCIAL ENTITIES I I B.C.R.A. +-----------------------------------------------------+ I ISection 2. Rating companies. Designation. I +----------+-----------------------------------------------------+ 656/92, to the extent known to the entity and that as far as it concerns, the incompatibilities or restrictions referred to in articles 11, 12, 17, 18 and 19 of the cited decree and the fourth paragraph of point 2.1., with respect to the intervening rating societies.
2.3.4. Financial entities that have contracted the
services of evaluator companies that are excluded from the admitted list by the Central Bank will have a term of 15 calendar days to replace them, counted from the day they were notified of the aforementioned exclusion. The first evaluation formulated by the new company chosen must be presented within 60 calendar days from that date. The entity will maintain the last qualification granted during that period.
2.3.5. Contracts will have a duration of 1 year, possibly
being renewed.
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Section 3. Rating Reports

The reports provided by rating agencies must include the assigned rating, considering the minimum guidelines contained in Section 7.

Rating reports and their updates must indicate, at a minimum, the following:

date of the rating council meeting;
member participants, indicating who participated or did not participate in it and the existence or non-existence of discrepancies regarding the result and/or content of the report;
specific ratings for long-term deposits according to the minimum guidelines for rating contained in Section 7;
summary of the result of the evaluation of the fundamental elements considered for the examination as provided for in points 7.3.1 to 7.3.3 of Section 7, in which the weighting factors of each of the elements determining the rating will be described, the criteria that justify the weighting levels assigned to them, and the corresponding rating level for each element taking into account a score from 1 to 11 (where 1 corresponds to AAA as the best rating and 11 to I as the worst). In the event that the required information is not supplied, the score will be F, and
signature of the person or persons responsible for the rating agency.

Once the first rating report is submitted, the rating agency that produced it must make the periodic updates that must be made during the year following the date to which that evaluation refers. This requirement must also be met in the event that, subsequently, another rating agency is appointed, until the required period is completed.

To each report, the rating agency will attach a sworn declaration - according to the model added in Section 9 - signed by its president or legal representative, in which it expressly states that said agency and the persons performing the various functions indicated in Decree 656/92 do not present the incompatibilities mentioned in articles 11 and 12 of the decree and that they comply with what is provided for in articles 17, 18 and 19 of that instrument and the fourth paragraph of point 2.1., particularly with regard to the rating of deposits and debts of the financial entity, regarding which they issue the report. With the same periodicity, each of the natural persons included must formulate their respective sworn declaration on the aspects mentioned, which will be kept by the rating agency.

Section 4. Control of Rating Reports

The Superintendence of Financial and Exchange Entities will analyze the reports produced by companies according to the minimum analysis guidelines contained in Section 7, verifying that they are complete and consistent, within 30 calendar days of their receipt.

A cause for rejection of the report will be that the rating assigned to each item or chapter referred to in Section 7 is not consistent with what is stated in the report or with the final rating.

Inconsistency will be understood as the case in which a final rating does not match the partial ratings granted to each element of the aspects to be considered weighted according to the described criteria, as well as when the score granted to each item is not congruent with the information entered in it.

Section 5. Non-compliance

Non-compliance occurs at the discretion of the Superintendence of Financial and Exchange Entities in the event of non-observance of the provisions contained in this regime. When the responsibilities assigned in this regulation are not met, the following procedure will be applied:

5.1. Failure to submit reports and/or late submission. The rating agency must pay $500 to compensate for expenses related to claims and processing. This amount must be deposited in the Central Bank within 72 business hours of the claim being communicated.

5.2. Omissions and/or inconsistencies.
When, at the discretion of the Superintendence of Financial and Exchange Entities, there are omissions and/or inconsistencies, produced between the information contained in each item or chapter of the report and its respective score, as well as between the partial scores and the corresponding final score, the report will be rejected. The rating agency must pay $1,000 for each rejection, as compensation for administrative expenses related to claims and processing. This amount must be deposited in the Central Bank within 72 business hours of the rejection being communicated.

Non-compliance by financial entities with the requirements established in this regulation will determine the application of the provisions of Article 41 of the Financial Entities Law.

Without prejudice to the above, rating agencies and their members will be subject to the provisions and sanctions of the last paragraph of Article 42 of Law 21.526, as established in Law 24.627.

Section 6. Dissemination of Ratings

6.1. The report must contain the following legend: "This rating reflects the opinion of ... (the rating agency), which does not necessarily coincide with or commit the opinion of the Central Bank of the Argentine Republic".

6.2. Within 5 calendar days after the Superintendence of Financial and Exchange Entities concludes the verification of the reports, the rating results must be displayed on notice boards placed in places of public attention, especially those informing interest rates offered for deposits, with prominent characters and specifying their meaning, according to the details contained in Section 7. Likewise, such ratings must appear in certificates of time deposits or other investment modalities and in current account, savings account, or time deposit summaries sent to clients. Current ratings, with the name of the evaluating company indicated, will be included in all advertising related to the collection of public funds.

6.3. Entities that, for any reason, do not have the ratings referred to in this regime, must state, in the situations provided for in point 6.2, the legend "ENTITY WITHOUT RATING".

6.4. Evaluating companies may disseminate, in whole or in part, the content and/or results of the reports.

Section 7. Minimum Analysis Guidelines

7.1. Objective.
The objective of these guidelines is to establish the minimum set of characteristics of financial entities that must be analyzed by rating companies to issue their opinion on the entity's payment capacity in the macroeconomic scenario prevailing at the time of the evaluation, as well as in alternative scenarios as provided for in point 7.3.3. These minimum guidelines do not constitute a manual for rating financial entities, since the rating agency may give each of the elements mentioned in these guidelines the weight it deems appropriate and may also consider all other additional elements that, in its opinion, are necessary to define the rating. In its rating, it must analyze each of the points mentioned below, following the order in which they are presented and adding in each chapter the analysis of the factors it considers relevant.

7.2. Rating System.
The rating must be issued for long-term deposits (payment period greater than one year). If deemed necessary based on alternative macroeconomic scenarios that the company foresees, it may discriminate between ratings for instruments in national currency and foreign currency. When discriminating between national and foreign currency, the letters P and E will be added to each rating, respectively. If the rating is equal to or lower than CC, as applicable, the rating agency must issue an opinion on the magnitude of the possible capital loss to which the creditor would be exposed.

AAA: Minimum probability of default on agreed terms. Excellent payment capacity, even in the most unfavorable foreseeable economic scenario.

AA: Very low probability of default on agreed terms. Excellent payment capacity. In the most unfavorable foreseeable economic scenario, the risk of default is very low.

A: Very low probability of default on agreed terms. Very good payment capacity. In the most unfavorable foreseeable economic scenario, the risk of default is low.

BBB: Low probability of default on agreed terms if the current economic scenario at the time of evaluation is maintained. Payment capacity is maintained even under more unfavorable economic and financial conditions, but is reduced in the most unfavorable scenario.

BB: Low probability of default on agreed terms if the current economic scenario at the time of evaluation is maintained. Payment capacity is significantly reduced under more unfavorable economic and financial conditions, being low in the most unfavorable scenario.

B: Low probability of default on agreed terms if the current economic scenario at the time of evaluation is maintained. Payment capacity is significantly reduced under more unfavorable economic and financial conditions, being very low in the most unfavorable scenario.

CCC: There are factors that may significantly increase the risk of default on agreed terms, even in the current economic scenario at the time of evaluation. Payment capacity is low under more unfavorable economic and financial conditions, being very low in the most unfavorable scenario.

CC: There is a risk of default on agreed terms, even in the current economic scenario at the time of evaluation. Payment capacity is very low under more unfavorable economic and financial conditions, being null in the most unfavorable scenario.

C: There is a clear risk of default on agreed terms in the current economic scenario at the time of evaluation. This is a speculative investment, with low payment capacity, even if more unfavorable economic scenarios were not present.

D: Highly speculative, with high risk of default on agreed terms.

I: In a state of default.

F: Entities that, having requested the rating, did not supply the required information.

A "+" or "-" sign may be assigned to a rating to reflect an upward or downward trend within the corresponding category.

7.3. Basic Chapters of the Rating.
The three fundamental elements to consider for formulating the rating are: entity positioning; entity situation; and sensitivity to alternative scenarios for the Argentine economy. The rating agency must describe in detail the weighting applied to each of the qualitative and quantitative elements that influence these three aspects. A score on a scale of 1 to 11 will be assigned to each concept, where 1 represents the best rating (AAA) and 11 the worst (I).

7.3.1. Entity Positioning.
The possible evolution of the Argentine financial system as well as the current and future positioning of the entity within the system as a whole must be analyzed. To this end, the following factors must be considered, at a minimum:

7.3.1.1. Evolution of the national financial system as a whole;
7.3.1.2. Evolution of the segment of the financial system in which the financial entity specializes;
7.3.1.3. Degree of competitiveness achieved by the entity in the products it offers, and
7.3.1.4. Evolution of the different products and markets in which the entity operates; its impact on its competitiveness.

7.3.2. Entity Situation.
The fundamental qualitative and quantitative aspects that serve to determine the entity's repayment probability will be examined. Among them, the following will be analyzed:

Capitalization
Assets
Administration
Profits
Liquidity
Liability Structure

In each case, it is necessary to analyze the evolution of each variable in the past, its current level, and its probable evolution in the future, and the value of each variable in relation to the average value for financial entities of similar characteristics.

7.3.2.1. Capitalization.
All factors that may be important to determine the level of backing that an entity provides with its capital to deposits must be analyzed, and at a minimum:

7.3.2.1.2. Quality of capital: its composition; participation of the different components; participation of subordinated debt in the total;

7.3.2.1.3. Capacity of current shareholders to increase capital to meet potential requirements; in the case of companies listed on capital markets, the possibility of resorting to such markets to increase capital must be analyzed;

7.3.2.1.4. Experience of the entity with subordinated debt issuances; possibilities of resorting to this instrument to expand capital, to the extent that the margins established by regulation are not exceeded;

7.3.2.1.5. Possibility of reducing the level of total assets without major losses, maintaining an adequate level of profitability, in order to meet capital requirements without having to increase capital, and

7.3.2.1.6. Existence of explicit guarantees on its operations (or part of them), with an opinion to be given on the quality thereof.

7.3.2.2. Assets.
All factors that determine the quality of the bank's assets must be taken into account, and at a minimum:

7.3.2.2.1. Asset composition: immobilized assets, public securities, private securities, loans, guarantees, others;

7.3.2.2.2. Concentration by clients and economic groups;

7.3.2.2.3. Sectoral concentration;

7.3.2.2.4. Regional concentration;

7.3.2.2.5. Sensitivity of assets in relation to the cash flows backing them against modifications in:

the level of activity
relative prices
the value of the currency;

7.3.2.2.6. Loans to companies and linked economic groups; level of implicit risk. Compliance with regulations;

7.3.2.2.7. Operations registered in off-balance sheet accounts and in particular derivative products; risk introduced;

7.3.2.2.8. Maturity mismatch between the active and passive portfolio, at fixed and floating rates: interest rate risk;

7.3.2.2.9. Central Bank risk indicator for loans in national and foreign currency; implicit average rate;

7.3.2.2.10. Quality of assets:

Commercial Portfolio: Compliance with current regulations regarding clients must be analyzed for those:
a) whose debt balance exceeds 1% of the entity's computable equity. b) whose debt balance, in the entity under analysis, represents 70% or more of the assistance received by the client in the total financial system and whose debt represents 0.5% or more of the computable equity of the entity. In no case, the number of debtors analyzed may be less than 50. When the application of the described procedure determines this situation, it will be necessary to complete that quantity by incorporating the analysis of the clients that follow in decreasing order of importance.

Consumer portfolio: analysis of
the systems implemented to determine the classification of the consumer portfolio. Analyze no less than 50 client files -selected under criteria of generalized statistical use- to establish compliance with the current regulations. It must be taken into account that the same sample is not repeated during the year of qualification.
The reasonableness of the provisions recorded by the entity based on the analysis carried out in accordance with the preceding paragraphs shall be indicated.
An annex must be attached with
detail of the clients ana- lized from both portfolios: des- nomination, debt balance, guarantees and situation;
7.3.2.2.11. Relationships of the irregular portfolio
total portfolio and on the patrimonial responsibility compu-
table; percentage of the irregular portfolio covered with guarantees;
7.3.2.2.12. Level of provisions; portfolio written off; relationship between the provisions and the portfolio written off; relationship provisions/profit; relationship provisions established with provisions required by the Central Bank regulations;
7.3.2.2.13. Relationship of net irregular portfolio/net of provisions/average annual profit of the last exercises; idem on net equity;
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+----------+-----------------------------------------------------+ I I CALIFICACION DE ENTIDADES FINANCIERAS I I B.C.R.A. +-----------------------------------------------------+ I ISección 7. Pautas mínimas de análisis. I +----------+-----------------------------------------------------+
7.3.2.2.14. Growth rate of risk assets: absolute and rela-
tive to the risk portfolio of the sys- tem as a whole, and
7.3.2.2.15. Analysis of the 50 main
clients who have guarantees that back up the risk assets; percentage of the portfolio covered with preferred guarantees and instrumentation. Verify that the age of the valuation of such guarantees does not exceed one year.
7.3.2.3. Administration.
All those aspects necessary to form an opinion about the quality of the organization and processes of decision making of the entity shall be analyzed. Among them:
7.3.2.3.1. Suitability of general management and
the governing body; shareholding control: harmony in the decisions. Organizational structure in relation to the level operational;
7.3.2.3.2. Analysis of the different poli-
cies (commercial and financial) and business plans;
7.3.2.3.3. Decision-making process; o-
granting of loans:
classification of loans agreed upon; systems for measuring the global risk of the portfolio.
Frequency and characteristics of the review of decisions. Delegation of functions by activity and by branches. Concentration of authority; +--------------+----------------------+------------+-------------+ I Versión: 2a. I Comunicación I Vigencia I Página 9 I "A" 2521 I 25.3.97 I I +--------------+----------------------+------------+-------------+

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7.3.2.3.4. Personnel policy: methods of
incorporation of personnel; sys- tem of training; system of classification and promotion; eva- uation of the current staff; professional background and in the financial system of the main managers; rotation of managerial personnel;
7.3.2.3.5. Internal audit: mechanisms of
control implemented; level of execution of such controls;
7.3.2.3.6. External audit: review of the
audit reports; mechanisms of control implemented and level of execution of such controls; relationship with the Board of Directors and Management;
7.3.2.3.7. Information: information system
for decision making; quality, horizon and relevance of the information used for the decision making;
7.3.2.3.8. Level of tolerance to risk in
the operations assumed by the financial entity, systems of control or limits for the risk assumed by operations, product, business units, etc.;
7.3.2.3.9. Capacity to maintain a control
consolidated of the finan- cial entity and its subsidiaries;
7.3.2.3.10. Capacity of Management to under-
stand with precision the risks associated with the products derivatives; +--------------+----------------------+------------+-------------+ I Versión: 2a. I Comunicación I Vigencia I Página 10 I "A" 2521 I 25.3.97 I I +--------------+----------------------+------------+-------------+

+----------+-----------------------------------------------------+ I I CALIFICACION DE ENTIDADES FINANCIERAS I I B.C.R.A. +-----------------------------------------------------+ I ISección 7. Pautas mínimas de análisis. I +----------+-----------------------------------------------------+
7.3.2.3.11. Participation of the entity in
other financial or non-financial companies; role played by such companies in the strategy and results of the entity;
7.3.2.3.12. Shareholdings of shareholders
in other companies; policy of credit assistance to affiliated companies;
7.3.2.3.13. Compliance with the regulations of
the Central Bank, especially the prudential; mechanisms developed for its compliance.
Difficulties experienced by the entity in its relationship with the Central Bank during the last five years. Recovery plans, their compliance; existence of investigations; their possible impact economic. Assistance via rediscounts for illiquidity and loans granted by the Funds Trustee Capitalization Ban- karia or for the Development Provincial, and
7.3.2.3.14. Follow-up and observance of memo-
randa or progress reports of inspections sent by the Superintendence.
7.3.2.4. Profits.
All those factors necessary to form an opinion about the evolution of the profits of the entity will be examined. As a minimum, information must be provided on:
7.3.2.4.1. Level of profits with respect
to net equity, to the ir- regular portfolio -net of previ- sions- and to total assets; +--------------+----------------------+------------+-------------+ I Versión: 2a. I Comunicación I Vigencia I Página 11 I "A" 2521 I 25.3.97 I I +--------------+----------------------+------------+-------------+

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7.3.2.4.2. Impacts of adjustments to the ac-
counting statements arising from the inspection of the Central Bank or proposals by Internal or External Audit;
7.3.2.4.3. Evolution of profits: va-
riability of quarterly profits;
7.3.2.4.4. Composition of profits: by
financial intermediation, by services, by other concepts, and
7.3.2.4.5. Costs of the entity: main
items of costs. Evolution.
7.3.2.5. Liquidity.
All those factors necessary to form an opinion about the liquidity position of the financial entity will be examined. Among them:
7.3.2.5.1. Availability in relation to
total deposits: legal requirements, technical requirements, surplus;
7.3.2.5.2. Securities, private and public,
that trade in institutionalized markets in relation to the total liabilities; securities usable for the Program of Contingent Swap Operations of the Central Bank ("repo");
7.3.2.5.3. Access to credit lines of
other financial institutions, lo- cal and foreign;
7.3.2.5.4. Maturity structure of liabili-
ties; relationship with the three previous concepts; +--------------+----------------------+------------+-------------+ I Versión: 2a. I Comunicación I Vigencia I Página 12 I "A" 2521 I 25.3.97 I I +--------------+----------------------+------------+-------------+

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7.3.2.5.5. Mismatch of terms between assets and
liabilities; its impact on li- quidity; verification of the infor- mation regarding liquidity position supplied to the Central Bank;
7.3.2.5.6. Concentration of deposits by ti-
pe of depositor and at regional level; participation of the A.F.J.P. in the total of the deposits of the entity, and
7.3.2.5.7. Analysis of alternative scenar-
ios and their impact on liqui- dity: run on the entity and run on the financial system.
7.3.2.6. Liability Structure.
Special attention should be given to the situa- tion of depositors in case of bankruptcy of the entity, taking especially into account the privileges established by the Law of Financial Entities. In particular, it should be analyzed:
7.3.2.6.1. The relationship privileged liabilities
(deposits plus obligations with real guarantee) with total liabilities;
7.3.2.6.2. The relationship deposits guaranteed
by SEDESA with deposits and with privileged liabilities, and
7.3.2.6.3. The possible assistance of SEDESA
to meet the claims of the depositors.
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7.3.3. Sensitivity to alternative scenarios for the
Argentine economy.
The projection of the cash flow of the finan- cial entity will be carried out in the context of the scenario economic in effect at the time of evaluation and of two alternative scenarios more unfavorable than the current one. The company must define these alterna- tive scenarios and justify each of them, as well as the probability of their realization. In each of these scenarios, they must be described in detail:
7.3.3.1. The economic and financial conditions that
characterize it, and
7.3.3.2. How the different hypotheses developed
for each of those situations impact on the entity analyzed, especially on:
7.3.3.2.1. The determining factors of the
quality of its assets and its liquidity position;
7.3.3.2.2. The projected cash flow, and
7.3.3.2.3. Its payment capacity.
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none of the directors, managers, advisors or members of the
rating council of that evaluating society provide advice or external audit to the entity.
no shareholder who owns at least 10% of the capital of
companies and/or decisive action or participation, regardless of the nature in which it is exercised, in the power of control and/or decision of those evaluating societies, provides advice or external audit to the entity.
does not have external advice or audit provided by com-
panies in which the said persons have action or participation, regardless of the nature.
+--------------+----------------------+------------+-------------+ I Versión: 1a. I Comunicación I Vigencia I Página 1 I "A" 2510 I 13.1.97 I I +--------------+----------------------+------------+-------------+

is not affected by the incompatibilities of the in-
cisos a) and e) of article 17 of Decree 656/92, insofar as it is our knowledge.
We salute you attentively.
Place and date Signatures and clarifications
NOTE: This sworn declaration must be signed by those who are authorized to legally commit the entity (President, Vice President or officials with enabling power). +--------------+----------------------+------------+-------------+ I Versión: 1a. I Comunicación I Vigencia I Página 2 I "A" 2510 I 13.1.97 I I +--------------+----------------------+------------+-------------+

+----------+-----------------------------------------------------+ I I CALIFICACION DE ENTIDADES FINANCIERAS I I B.C.R.A. +-----------------------------------------------------+ I ISección 9. Modelo de declaración jurada de las so- I ciedades calificadoras. I +----------+-----------------------------------------------------+ Mr Superintendent of Financial Entities and Currency Exchange PRESENT Ref.: Sworn Declaration. Incompatibilities. We have the pleasure to address you regarding the regime for the classification of financial entities referred to Communication "A" . Regarding this and by means of this letter, we expressly state that we know and accept all the provisions emanating from the aforementioned regulation and manifest with the character of sworn declaration that the incompatibilities mentioned in articles 11 and 12 of Decree 656/92 do not apply, by this society and by the persons who perform the functions indicated in that decree and that we comply with what is provided for in the articles 17, 18 and 19 of the cited decree, having in our possession the pertinent sworn declarations of each of the persons included. Likewise, we declare under oath that with respect to (NAME OF THE ENTITY):

none of the directors, managers, advisors or members of the
rating council of this rating society provide advice or external audit to the aforementioned entity.
no shareholder who owns at least 10% of the capital and/or
decisive action or participation, regardless of the nature with which it is exercised, in the power of control and/or decision of this evaluating company, provides advice or external au- dit to the aforementioned entity. +--------------+----------------------+------------+-------------+ I Versión: 1a. I Comunicación I Vigencia I Página 1 I "A" 2510 I 13.1.97 I I +--------------+----------------------+------------+-------------+

+----------+-----------------------------------------------------+ I I CALIFICACION DE ENTIDADES FINANCIERAS I I B.C.R.A. +-----------------------------------------------------+ I ISección 9. Modelo de declaración jurada de las so- I ciedades calificadoras. I +----------+-----------------------------------------------------+

no company in which the said persons have action
or participation, regardless of the nature, provides advice or external audit to the aforementioned entity. We salute you attentively. Place and date Signatures and clarifications NOTE: This sworn declaration must be signed by those who are authorized to legally commit the Society (President, Vice President or officials with enabling power). +--------------+----------------------+------------+-------------+ I Versión: 1a. I Comunicación I Vigencia I Página 2 I "A" 2510 I 13.1.97 I I +--------------+----------------------+------------+-------------+

Circular RUNOR 1 - 211. Financial Entity Rating. New Regime

Section 3. Rating Reports

Section 4. Control of Rating Reports

Section 5. Non-compliance

Section 6. Dissemination of Ratings

Section 7. Minimum Analysis Guidelines

Lineage: No known changes

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