CMN Resolution No. 229 - External Borrowing: New Operational Modalities Under Law 4131 of September 3, 1962

RESOLUTION NO. 000229

THE CENTRAL BANK OF BRAZIL, in accordance with Article 9 of Law No. 4,595, of December 31, 1964, makes public that the National Monetary Council, in a session held on September 1, 1972, considering the provisions of Article 4, items V and XXXI of the aforementioned Law,

RESOLVED:

I - The external loans referred to in Law No. 4,131, of September 3, 1962, with the amendments of Law No. 4,390, of August 29, 1964, and the regulatory provisions in force, granted directly to companies in the country may, at the creditor's option, be renewed with the same borrower or contracted successively with different borrowers, for terms shorter than that of the final amortization abroad, provided that the external resources remain in the country in accordance with the payment term conditions abroad that are admitted by the Central Bank of Brazil, at the time of authorization of the initial loan.

II - For the purposes of the provisions of this Resolution, it will be admitted, in loan contracts, a clause stipulating the redemption of the debt balance, in the country, before the period admitted by the Central Bank of Brazil for total payment of the operation abroad.

III - The value of the balance that is to be internally redeemed, while not reapplied in the Country in a new loan, will be maintained at the Central Bank of Brazil, in an account in foreign currency in the name of the external creditor.

IV - On the balance of the account referred to in the previous item, interest will be paid under the interest rate conditions to be fixed by the Central Bank of Brazil.

V - The amounts registered in the aforementioned account will be released, at the account and order of the creditor, to meet the amortizations abroad provided for in the payment scheme of the respective loan or for reaplication, in the Country, in the manner admitted in this Resolution.

VI - The Central Bank of Brazil will issue the complementary instructions that are necessary for the execution of the provisions of this Resolution, with all previous norms on prior authorization for external loans and their registration remaining in force.

Brasilia-DF, September 1, 1972

Ernane Galveas
President