Financing to the Non-Financial Public Sector: Amendment of the Applicable Rules

2009 - Year of Tribute to Raúl SCALABRINI ORTIZ

CENTRAL BANK OF THE ARGENTINE REPUBLIC

COMMUNICATION “A” 4937
28/04/2009

TO THE FINANCIAL INSTITUTIONS:

Ref.: Circular
OPRAC 1 - 625
LISOL 1 - 499
COPEX 1 - 272
OPASI 2 - 400

Financing to the non-financial public sector. Amendment of the applicable rules.

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

1. Replace the second paragraph of point 1.1. of Section 1. of the rules on “Financing to the non-financial public sector”, with the following:

“It also includes trusts and fiduciary funds whose final beneficiary or trustor, determined by the respective contracts or provisions governing them, belongs to the non-financial public sector, including the remaining trusts or fiduciary funds in which the works being financed have said sector as their final recipient.”

2. Incorporate as the second paragraph of point 2.1. of Section 2. of the rules on “Financing to the non-financial public sector”, the following:

“Financial institutions may not grant financial assistance nor subscribe debt instruments of trusts or fiduciary funds referred to in point 1. of Communication “A” 4838 and complementary ones and point 3.2.4. of Section 3. of these rules when:

i) The rules and/or contracts governing their operation do not provide for the requirement of prior consent of the beneficiary or creditor financial institution in the case of modifications to the contracts of the trusts or their trust assets, that affect the conditions regarding the trust assets, their fiduciary assignment, in guarantee or pledge and/or priority of the claims of the financial institutions, and

ii) Such modifications do not have the prior approval of the Central Bank, within the framework of Section 4., of the incorporation of the financings into the exception regime provided for in Communication “A” 4838 and complementary ones or, as the case may be, have been classified in accordance with the provisions of point 3.2.4. of Section 3., as applicable.

Excepted from this restriction are trusts or fiduciary funds created prior to the date of issuance of these provisions and in which the conditions listed above have been established by national law.”

3. Replace the first paragraph of point 3.2.4. of Section 3. of the rules on “Financing to the non-financial public sector” and subsection i) of said point, with the following:

“3.2.4. Subscription of debt instruments issued by trusts constituted within the framework of Law 24.441 or fiduciary funds of infrastructure works of the Wholesale Electricity Market (“MEM”), to the extent that:”

…

“i) The participation of the National State as trustor in the financial trusts or fiduciary funds for the financing of the construction of the works does not exceed 50%, at any time. Otherwise, the trustee must notify that circumstance - with no less than 20 business days prior to the date on which such situation occurs - to the Superintendency of Financial and Exchange Institutions, remaining subject - for 100% of its balance for all concepts - to the general limits established for operations with the non-financial public sector in points 7. and 8. of the resolution disseminated by Communication “A” 3911 and complementary ones, without any other consequence.”

4. Replace the updated text of Communication “A” 4838 (made known through Communication “A” 4926), with the one attached as Annex to this resolution.

We send you in annex the updated text of Communication “A” 4838 (according to Communication “A” 4926) and the pages that, in replacement of those opportunely provided, it is appropriate to incorporate into the ordered text of the reference.

Likewise, it is recalled that on the page of this Institution www.bcra.gov.ar, accessing “regulations” (“ordered texts”), the modifications made will be found with texts highlighted in special characters (strikethrough and bold).

We greet you very attentively.

CENTRAL BANK OF THE ARGENTINE REPUBLIC

Darío C. Stefanelli
Issuance Manager of Rules

José I. Rutman
Deputy General Manager of Rules

ANNEX

FINANCING TO THE NON-FINANCIAL PUBLIC SECTOR B.C.R.A.
Section 1. Non-financial public sector.

1.1. Concept.

The non-financial public sector comprises the National Government and the provincial and municipal governments and of the Autonomous City of Buenos Aires, including the central administration, ministries, secretariats and their decentralized and autonomous agencies, and other entities controlled by them.

It also includes trusts and fiduciary funds whose final beneficiary or trustor, determined by the respective contracts or provisions governing them, belongs to the non-financial public sector, including the remaining trusts or fiduciary funds in which the works being financed have said sector as their final recipient.

1.2. Exclusions.

Mixed-economy companies are not covered by these provisions, so they will be subject to the general treatment provided for non-financial private sector companies.

1.3. Other exclusions.

1.3.1. State Companies.

The Central Bank of the Argentine Republic may grant State Companies governed in accordance with Law 20.705 the general treatment provided for non-financial private sector persons, for all purposes of the rules applicable in that matter, provided they comply with the following requirements:

a) Not require to develop its activity resources from the national, municipal, provincial, or Autonomous City of Buenos Aires budget - by way of transfers, capital contributions - except those corresponding to incorporation as a company - or reimbursable financial assistance destined to cover expenses and/or investments of its normal and habitual course of business, with the sole exception of those that could have been contemplated in the Budgets corresponding to fiscal years 2001 and 2002.

b) Technical and professional independence of its managerial staff for the implementation of corporate policies.

c) Market its goods and/or services at market prices.

d) Have fixed assets whose use in the activity is not subject to any condition by its shareholders.

e) Not distribute dividends among its shareholders.

f) All the above conditions must have been verified - uninterruptedly - during at least the ten years immediately prior to the date of granting the financial assistance.

Version: 3rd. COMMUNICATION “A” 4937
Effective date:
28/04/2009
Page 1

FINANCING TO THE NON-FINANCIAL PUBLIC SECTOR B.C.R.A.
Section 2. Financial assistance.

2.1. Limitation.

Financial entities, including their subsidiaries and their branches or subsidiaries abroad, may not refinance or grant financial assistance to the non-financial public sector.

Financial entities may not grant financial assistance nor subscribe debt instruments of trusts or fiduciary funds referred to in point 1. of Communication “A” 4838 and complementary and point 3.2.4. of Section 3. of these rules when:

i) The rules and/or contracts governing their operation do not provide for the requirement of prior consent of the beneficiary or creditor financial entity in the case of modifications to the contracts of the trusts or their trust assets, that affect the conditions regarding the trust assets, their fiduciary assignment, in guarantee or pledge and/or priority of the claims of the financial entities, and

ii) Such modifications do not have the prior approval of the Central Bank, within the framework of Section 4., of the incorporation of the financings into the exception regime provided for in Communication “A” 4838 and complementary or, as the case may be, have been classified in accordance with the provisions of point 3.2.4. of Section 3., as applicable.

Excepted from this restriction are trusts or fiduciary funds created prior to the date of issuance of these provisions and in which the conditions listed above have been established by national law.

2.2. Responsibility.

Financial entities must verify, for the purposes of the application of these provisions and through the documentation they deem necessary to require, whether the client is included within the non-financial public sector.

Version: 2nd. COMMUNICATION “A” 4937
Effective date:
28/04/2009
Page 1

Section 3. Covered operations.

3.1.10. Financings, in all their modalities, granted by the parent company or foreign bank that exercises control of the local financial entity under the terms provided in the rules on credit risk splitting, or by its branches in other countries, when they correspond to financing lines assigned to them by the local financial entity.

3.2. Excluded operations.

3.2.1. Holding of national public securities.

3.2.2. Opening of import documentary credits.

3.2.3. Guarantees for the payment of local taxes in foreign trade operations, provided that they only mean the assumption of a contingent liability.

3.2.4. Subscription of debt instruments issued by trusts constituted within the framework of Law 24.441 or fiduciary funds of infrastructure works of the Wholesale Electricity Market (“MEM”), to the extent that:

a) They have public offering authorized under the regime of Law 17.811.

b) They have been constituted for the financing of infrastructure works of the Wholesale Electricity Market (“MEM”), declared by the competent authority of public interest and/or critical.

c) The cancellation of said debt instruments is guaranteed by the assignment or pledge of the collection rights arising from contracts for the sale of electric energy in the forward supply market in which the administrator of the “MEM” is obligated to pay, provided that:

i) The works whose construction is financed have at least 75% progress.

ii) When the condition established in the preceding subparagraph is verified and the works whose completion is financed are not authorized by the competent authority for their commercial exploitation, there must be a repayment guarantee fund for the financial services of the trust or fiduciary fund with funds from the proceeds of the placement of the debt instruments issued by the trust or fiduciary fund for the financing of the construction of the works for at least 120% of the amount of the financial assistance services and/or those of the debt instruments issued by the financial trust for financing or fiduciary fund in charge of the construction of the works, whose maturity occurs until their effective projected commercial authorization.

d) The supply contracts have been signed as buyer, by the administrator of the “MEM”.

Version: 3rd. COMMUNICATION “A” 4937
Effective date:
28/04/2009
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FINANCING TO THE NON-FINANCIAL PUBLIC SECTOR B.C.R.A.
Section 3. Covered operations.

e) The obligations of the administrator of the “MEM”, in its capacity as buyer in the supply contracts referred to in the preceding subparagraph, are cancelled against the items from the tariffs that make up the Stabilization Fund of the “MEM”.

f) The seller in the supply contracts has made effective the assignment of the collection rights of the supply contracts to the trustee of the financial trust or trust fund for the financing of said works.

g) The debt instruments issued by the trust or trust fund for the financing of the construction of the works have for their public offering a rating not lower than "A" granted by a risk rating agency admitted by the Central Bank according to the rules on "Evaluation of financial entities".

h) The transfer of funds to cancel the assigned rights is contractually provided for and is made directly by the administrator of the funds and accounts of the market to the financial entity that is the assignee, in its capacity as creditor or trustee, without any prior credit to the account of any other holder.

i) The participation of the National State as settlor in the financial trusts or trust funds for the financing of the construction of the works does not exceed 50%, at any time. Otherwise, the trustee must notify that circumstance - with no less than 20 business days' notice prior to the date on which such situation occurs - to the Superintendency of Financial and Exchange Entities, remaining subject - for 100% of its balance for all concepts - to the general limits established for operations with the non-financial public sector in points 7. and 8. of the resolution disseminated by Communication "A" 3911 and complementary ones, without any other consequence.

j) Financial assistance to financial trusts or trust funds constituted for the financing of the works and/or the subscription of debt instruments issued by such trusts or funds may not exceed 90% of the value of the rights that are the object of assignment. For the purposes of calculating this ratio, only the cash flows from those obligated to pay the tariffs that make up the "MEM" Stabilization Fund shall be considered, not including the electric supply distribution companies, which shall be computed at the date of assignment up to an individual participation of 5% with respect to the total projected demand for the "MEM". In cases where the participation in demand exceeds said percentage, the computation may not exceed that individual cap.

The special treatment established above shall also apply to the transitional financial assistance granted to the aforementioned financial trusts or trust funds until the placement, by public offering, of their debt instruments.

Version: 2nd. COMMUNICATION "A" 4937
Effective date:
28/04/2009
Page 3

B.C.R.A.
ORIGIN OF THE PROVISIONS INCLUDED IN THE CONSOLIDATED TEXT OF THE RULES ON "FINANCING TO THE NON-FINANCIAL PUBLIC SECTOR"

CONSOLIDATED TEXT			ORIGINATING RULE				Observations
Section	Point	Paragraph	Com.	Annex	Point	Paragraph
1.	1.1.		"A" 3054	sole	1.1.		According to Com. "A" 4798 and "A" 4937.
	1.2.		"A" 3054
	1.3.		"A" 4527				According to Com. "A" 4581.
2.	2.1.		"A" 3054	sole	2.1.		According to Com. "A" 4937.
	2.2.		"A" 3054	sole	2.2.
3.	3.1.		"A" 3054	sole	3.1.
	3.2.		"A" 3054	sole	3.2.		According to Com. "A" 4932 and "A" 4937.
4.	4.1.		"A" 3054	only			According to Com. “A” 3144, 3548, 3911, 4718 and 4798.

B.C.R.A.
FINANCING TO THE NON-FINANCIAL PUBLIC SECTOR
(text updated according to Communications “A” 4838 and 4926)
Annex to
Com. “A”
4937

1. Establish that, within the framework of the provisions of Section 4. of the rules on “Financing to the non-financial public sector”, the Central Bank of the Argentine Republic may authorize financial institutions to grant financial assistance to financial trusts constituted under the regime of article 19 of law 24.441, public trusts or fiduciary funds, in the case of the latter, established by national law or decree of the National Executive Power, constituted or to be constituted, whose final beneficiary or trustor, determined by the respective contracts or provisions governing them, belongs to the non-financial public sector, and/or subscribe debt instruments issued by them. Also included are the remaining trusts or fiduciary funds in which the works being financed have said sector as their final recipient.

The authorization referred to in this point shall be granted on a general basis for each trust or fiduciary fund, covering both the initial incorporation of such financings into the financial institution's assets and those acquired through secondary trading.

For this purpose, all of the following requirements must be met:

1.1. The aforementioned trust or fiduciary fund:

1.1.1. Has as its purpose to finance the execution of works and/or services related to infrastructure projects and/or the acquisition of equipment and/or to guarantee the payments of the financial assistance granted and/or the debt instruments referred to in point 1. provided that the funds from the financing are applied to make capital investments that are declared as critical and/or of public interest by the competent authority, as they are necessary for the provision of public services, regardless of the public or private legal nature of the provider.

1.1.2. Has a trust asset consisting of income and/or collection rights from taxes, tariffs, rates, duties, specific charges or similar concepts or cash flows originating from term energy supply contracts in which the administrator of the respective market is obligated to pay and those contracts are settled with funds from the concepts listed above.

Except in the case of national taxes whose specific allocation must be provided by national law, in all other cases it shall be required that the item destined to form the aforementioned trust asset has been previously established by the competent authority or by national, provincial, of the Autonomous City of Buenos Aires law, or municipal ordinance.

In all cases, the pertinent fiduciary assignment of the corresponding income and/or collection rights to the trust or fiduciary fund must be executed, in accordance with the aforementioned legislation, which must not be subject to lien or other restriction affecting their free availability for the trustee within the framework of the rules governing the trust or fiduciary fund, except as provided in point 1.2.5.

B.C.R.A.
FINANCING TO THE NON-FINANCIAL PUBLIC SECTOR
(text updated according to Communications “A” 4838 and 4926)
Annex to
Com. “A”
4937

For the purposes of the declaration of criticality and/or public interest and the determination of the concepts that make up the asset of the trust patrimony, as provided in the preceding paragraphs, there must be a legal framework that, on a general basis, defines the regulatory and control structure of the corresponding service -national, provincial, of the Autonomous City of Buenos Aires law, municipal ordinance, according to the jurisdiction benefiting from the trust or fiduciary fund- that designates the application authority with powers in matters of regulation, control, price setting, forms of financing, etc.

1.2. The constitutive instruments of the trust or fiduciary fund provide that:

1.2.1. The collection or integration of the items destined to the asset of the trust patrimony according to point 1.1.2. is made effective together with the settlement of the other concepts that must be paid to receive the corresponding services and are transferred directly by the administrator or person responsible for collection to the fiduciary account without prior credit of such items in any other account of another ownership.

1.2.2. The effective settlement -to the users or final recipients of the services- of the concepts that make up the asset of the trust patrimony in accordance with point 1.1.2., is not conditioned, under any concept, on the progress of the works and/or the prior acquisition of the equipment being financed.

1.2.3. In the case of financial trusts constituted under the regime of art. 19 of Law 24.441, public trusts or fiduciary funds constituted under the corresponding legal framework, the placement by public offering or private placement of the debt instruments is provided for, within 365 days counted from the date of provisional subscription of such instruments by the financial institution.

In the cases of financial trusts constituted under the regime of art. 19 of Law 24.441, public trusts or fiduciary funds constituted prior to this resolution, this requirement must be observed for new issues of debt instruments, and the pertinent modifications must be incorporated into the original trust contract or into the provisions governing the fiduciary fund -when not contemplated- so that this is provided for.

1.2.4. The issuance conditions of the debt instruments issued by the trusts or the conditions of the financial assistance must establish a payment schedule for the cancellation of such financings within a term no greater than 12 years, counted from their corresponding date of issuance or disbursement of the financial assistance, through the application of the flow of income computable for the purposes of point 1.2.5.

1.2.5. Financial entities that grant the financial assistance or are holders of the debt instruments referred to in point 1. of this regime must have a collateral assignment or pledge in their favor over cash deposits in financial entities of the trust or fiduciary fund -destined exclusively to service the financial services of its debt instruments- and/or the collection rights that constitute the asset of the trust estate.

B.C.R.A.
FINANCING TO THE NON-FINANCIAL PUBLIC SECTOR
(text updated according to Communications “A” 4838 and 4926)
Annex to
Com. “A”
4937

Such guarantee must be, at all times, at least 120% of the sum of the amounts of all financial services (principal, interest and accessories) pending payment corresponding to the financial assistance granted and/or holdings of debt instruments referred to in point 1. of this regime according to the established payment schedule.

In the case of financing to trusts or fiduciary funds whose exclusive purpose is the issuance of debt instruments and the cancellation of their financial services is made with the proceeds of the collection rights fiduciary assigned to it, destined to meet the fund needs demanded by the works and services included in this regime, provided that the other conditions set forth in this point 1. are met, such collateral assignment or pledge shall not be required, to the extent that it is also verified that:

i) The cash deposits in financial entities of the trust or fiduciary fund -destined exclusively to service the financial services of its debt instruments- plus the future collection rights represent at least 120% of the sum of the amounts of the financial services (principal, interest and accessories) pending payment, and

ii) The cancellation of the financial assistance or of the debt instruments issued by the trusts or fiduciary funds has the best or equal priority of collection with respect to the rest of the creditors, except with respect to the tax obligations of said trust or fiduciary fund.

Such priority shall not be required when it concerns fiduciary funds created by national law and pre-existing as of the date of this communication, without prejudice to the observance of the coverage required as provided in section i).

For the purposes of determining the coverage of the debt of the trust or fiduciary fund according to the situations provided in this point, the pertinent information provided by the competent authority must be used, according to the corresponding regulatory and control structure that governs the activity of the sector to which the works whose construction is financed correspond.

1.3. In the instrumenting of the assignment to the fiduciary of the concepts provided in point 1.1.2. in favor of the trust, it must be established that the income to be applied to the cancellation of the collection rights assigned to the trust or fiduciary fund be received by the latter through direct transfer of the funds to the fiduciary account by whoever has the character of administrator or responsible for the corresponding collection, without prior credit in any other account.

1.4. The income from the obligors to the payment of the rights assigned to the trust or fiduciary fund, considered individually, as of the date of constitution of the respective trust or fiduciary fund, shall be computed for up to a participation no greater than 2.5% of the total of the amounts corresponding to the projected demand of the corresponding service.

B.C.R.A.
FINANCING TO THE NON-FINANCIAL PUBLIC SECTOR
(text updated according to Communications “A” 4838 and 4926)
Annex to
Com. “A”
4937

In those service provisions in which there are companies that have the character of distributors, the assigned rights of the respective obligors to payment shall be computed without exceeding the individual participation percentage less than or equal to that established above.

1.5. When the subscription of the debt instruments is made privately, it must have a special report from an external auditor, registered in the Special Registry of the Central Bank of the Argentine Republic, with a conclusion on the existence or not of observations to the compliance with the preceding requirements provided in this regime, according to the model that is made known in due course on the compliance with said requirements. This report will also be necessary for the granting of the financial assistance.

Likewise, this requirement must be met when the subscription of the debt instruments by public offering is foreseen and the issuance prospectus authorized by the National Securities Commission and/or by Stock Exchanges as applicable and/or the required risk rating report on the debt instruments of the trusts or fiduciary funds is not yet available.

The presentation to the Central Bank by financial entities of special reports containing observations will not be admitted.

The special report of the external auditor will not be necessary when any of the remaining elements indicated are available, in which case the verification of compliance with the requirements will be carried out by the financial entities involved in the operation on the basis of the information arising from them. When this is not possible, the special external auditor's report must be required.

1.6 The debt instruments provided for in the preceding point whose placement is carried out under the public offering regime must have a rating no lower than “BBB+” granted by a report from a risk rating agency admitted by the Central Bank.

1.7. The provisions of points 4.1.2. and 4.1.3. of Section 4. of the rules on “Financing to the non-financial public sector”.

2. Provide that, in the case that the trust or fiduciary fund belongs to the non-financial public sector of the provincial, municipal or Autonomous City of Buenos Aires jurisdictions, those jurisdictions must pledge as collateral the resources provided for in subparagraphs ii) and iii) of point 4.1.1.1 of Section 4. of the rules on “Financing to the non-financial public sector” -even in excess of the term established in said subparagraphs-, until reaching the sums necessary to cover all the income that the trust or fiduciary fund would receive while those works or equipment have not begun to be used economically -generating income to the trust through rates, fees, and other similar concepts- and in the proportion of the holding of the corresponding instrument with respect to the total assets of the trust patrimony.

B.C.R.A.
FINANCING TO THE NON-FINANCIAL PUBLIC SECTOR
(text updated according to Communications “A” 4838 and 4926)
Annex to
Com. “A”
4937

3. Provide that the financial assistance granted and/or the holding by financial entities of debt instruments and/or debt instruments issued by trusts or fiduciary funds under the provisions of point 1. of this regime shall not be subject to the general rules in force on “Credit Grading”.

4. Increase by 15 percentage points the individual limits for operations with the non-financial public sector provided for in point 7. of Communication “A” 3911 and amendments, and by 50 percentage points the global limit established therein, to the extent that said increase is applied to the financial assistance granted or to the holding of debt instruments and/or debt instruments issued by trusts or fiduciary funds under the provisions of point 1. of this regime.

For the purposes of calculating the aforementioned limits as well as the limit provided for in point 12. of that Communication, the financings referred to in point 1. of this regime shall be computed at:

4.1. 25% of their balance for all concepts, when it is not one of the cases contemplated in subparagraphs i) or ii) of point 1.2.5.

4.2. 50% of their balance when the situation provided for in subparagraph i), point 1.2.5, occurs.

4.3. 75% of their balance when the situation provided for in the second paragraph, subparagraph ii), of point 1.2.5 occurs.

5. Increase by one time the limits established regarding risk concentration - points 2.2.1. and 2.2.2. of Annex II of Communication “A” 2140-, setting them at 4 times and 6 times, respectively, the computable equity responsibility of the entity as of the last day of the month prior to the corresponding one, when the excesses to the limits provided for generally in said regulations originate as a consequence of the application of the provisions referred to in point 1. of this regime.

6. Provide that, in the month prior to that in which the financial assistance is made or each subscription of debt instruments and/or debt instruments of the trusts or fiduciary funds referred to in point 1. of this regime, the financial entity must record a minimum capital integration excess that exceeds at least the sum of the amount corresponding to that subscription plus its accumulated holding, as of that date, of such types of instruments.

Additionally, in the Business Plan and Projections submitted by the intervening financial entity, in compliance with the provisions of the information regime in that matter, in force at the time of the evaluation by the intervening financial entity, a projected monthly excess of minimum capital integration -individual position- must arise for the reported periods of such magnitude that it allows eventually absorbing the greater minimum capital requirement derived from the incorporation as “INC” referred to in point 7. of this regime. When the information corresponding to said projections refers to a half-year period, the projected computation to be considered must be proportional.

B.C.R.A.
FINANCING TO THE NON-FINANCIAL PUBLIC SECTOR
(text updated according to Communications “A” 4838 and 4926)
Annex to
Com. “A”
4937

7. Incorporate within the expression “INC” (minimum capital increase for credit risk) provided for in point 3.1. of Section 3. of the rules on “Minimum capital of financial entities” the excesses to the financial assistance granted or to the holdings of debt instruments and/or debt instruments of trusts or fiduciary funds referred to in point 1. of this regime and point 3.2.4. of Section 3. of the rules on “Financing to the non-financial public sector” computed according to the following schedule, which shall operate from the time the works or equipment that generate income to the trust or fiduciary fund through tariffs, rates, fees, and other similar concepts have begun to be used economically.

Computation of the holding as “INC” -in % of the same-	As of
25	First month
50	Seventh month
100	Thirteenth month

8. Authorize, on a general basis, within the framework of the rules on “Afectación de activos en garantía” that national public securities - that have volatility reported by this Central Bank -, and/or the monetary regulation instruments of the Banco Central de la República Argentina be pledged as collateral by financial institutions in favor of this Institution by virtue of what is required by regulation for operations instrumented through the ALADI Reciprocal Payments and Credits Agreement, to the extent that they are linked to infrastructure or equipment works - which, in both cases, constitute capital investments - referred to in point 1. of this regime as regards the type of work and/or equipment, regardless of the form in which their execution or acquisition and financing are instrumented, and therefore, in accordance with the rules currently in force on the matter, they are covered by the limit provided in point 3.1.1. of the aforementioned regulations.

9. Increase by 50 percentage points the limit provided in point 4.1. of Section 4. of the rules on “Relación para activos inmovilizados y otros conceptos” to the extent that the immobilization of the asset originates from the holding of national public securities and/or monetary regulation instruments of the Banco Central de la República Argentina pledged as collateral within the framework of the operations referred to in point 8. above.

10. Establish that the provisions contained in points 1. to 7. and 9. of this regime must be observed by financial institutions on an individual and consolidated basis, except for the provisions of the second paragraph of point 6. of this regime, which must be complied with on an individual basis.

11. Admit the coverage of guarantees for import operations processed through the ALADI agreement, within the framework of the provisions of point 8. of this regime, for at least 100% of the corresponding amount, to the extent that the financial institution authorizes the Banco Central de la República Argentina to debit on a daily basis from its demand account in U.S. dollars and, if necessary, to debit from its current account in pesos or, if the available balances in the aforementioned accounts are insufficient, that it authorizes the liquidation in the secondary market of its holdings of public securities - that have

B.C.R.A.
FINANCING TO THE NON-FINANCIAL PUBLIC SECTOR
(text updated according to Communications “A” 4838 and 4926)
Annex to
Com. “A”
4937

with volatility reported by this Central Bank -, and/or monetary regulation instruments, deposited in the “Central de registración y liquidación de pasivos públicos y fideicomisos financieros” (CRyL) to cover the collateral shortfall, through their pledge, that may occur due to price variation of public securities listed on institutionalized markets or due to the applicable exchange rate, it being possible to release and reinstate the excess collateral when it exceeds 105% of the guaranteed amount.