2012 – Year of Tribute to Doctor D. Manuel Belgrano

COMMUNICATION “A” 5368
09/11/2012

TO FINANCIAL INSTITUTIONS:

Ref.: Circular
OPRAC 1 - 683
LISOL 1 - 565

"Financing to the non-financial public sector". "Credit grading". Public enti- ties with productive purposes.

---

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

“1. Incorporate as point 3.2.6. of Section 3. of the rules on "Financing to the non-financial public sector", the following:

“3.2.6. Financings to entities and/or companies of the non-financial public sector of the National Government and of the provincial, municipal and Autonomous City of Buenos Aires governments, to the extent that they comply with all of the following:

3.2.6.1. They have their own budget and their current income comes from the commercialization of goods and/or services derived from the usual course of their activity.

3.2.6.2. The purpose of the financing is:

i) the acquisition of capital goods -including services associated with the operation of those goods- and/or;

ii) the execution of investment projects involving infrastructure works -such as the construction of facilities necessary for the production of goods and/or the provision of services- aimed at increasing productive capacity and/or;

iii) the financing of working capital destined to facilitate the production of capital goods.

3.2.6.3. The operation is guaranteed by an amount that, at a minimum, covers the principal, interest and accessories of the financing through:

i) guarantees, payment orders or debt instruments issued -in all cases- by the National Treasury; or

ii) the assignment of income from the sale of goods or the provision of services -invoiced or to be invoiced whose collection is expected to be effective within a maximum term of 120 months counted from the date of granting of the credit assistance- that form part of the main, normal and usual activity of the applicant for the credit assistance. In no case may the total amount of financings in force under this regime exceed by 10 times the income obtained during the last closed annual fiscal year corresponding to the concepts set forth above.”

2. Replace point 2.2.13. of Section 2. of the rules on "Credit grading", with the following:

“2.2.13. Financings granted to the non-financial public sector considering for such purposes the definition of point 1.1. of the rules on "Financing to the non-financial public sector", except those provided for in points 1.2.1. and 3.2.6. of that body of rules.”

Finally, we send you the sheets that, in replacement of those previously provided, should be incorporated into the ordered texts of the reference. Likewise, it is recalled that on the page of this Institution www.bcra.gov.ar, accessing "regulations" ("ordered texts"), you will find the modifications made with texts highlighted in special characters (strikethrough and bold).

We greet you attentively.

CENTRAL BANK OF THE ARGENTINE REPUBLIC

Matías A. Gutiérrez Girault
Manager of Issuance of Regulations

Alfredo A. Besio
Deputy General Manager of Regulations

ANNEX

FINANCING TO THE NON-FINANCIAL PUBLIC SECTOR B.C.R.A.
Section 3. Operations included.

Financial institutions that grant financial assistance to trusts or fiduciary funds for the financing of the construction of the aforementioned infrastructure works and/or that subscribe the debt instruments or participation certificates they issue, must report any of those operations to the Superintendency of Financial and Exchange Institutions within 2 business days following the date on which said assistance and/or subscription is made effective.

3.2.5. Temporary advances to the non-financial public sector, in accordance with the concept defined in point 1.1. of Section 1., to the extent that the following is verified previously and concurrently:

3.2.5.1. They are granted not before the first business day of each month -except when there is a different instruction issued by the competent application authority and/or arises from agreements in force as of 31.07.10-, for a maximum term of 5 business days, whose purpose is the payment of personnel salaries and do not exceed, considering each paying entity individually, the total net amount to be credited for that cause, foreseen for each month.

3.2.5.2. The intervening financial institution has the character of paying agent for those salaries and obtains prior to the disbursement of each advance, a certificate issued by the paying entity informing -as a sworn statement- the existence of the corresponding payment order issued by the public dependency that corresponds in its favor, with said purpose and for its payment through that financial institution.

3.2.5.3. It is verified that in the 12 months prior to the date of each disbursement, the temporary advances granted to that entity have not been in force, in no case, for more than 5 business days and that said advances are fully cancelled.

3.2.6. Financings to entities and/or companies of the non-financial public sector of the National Government and of the provincial, municipal and Autonomous City of Buenos Aires governments, to the extent that they comply with all of the following:

3.2.6.1. They have their own budget and their current income comes from the commercialization of goods and/or services derived from the usual course of their activity.

3.2.6.2. The purpose of the financing is:

i) the acquisition of capital goods -including services associated with the operation of those goods- and/or;

ii) the implementation of investment projects involving infrastructure works -such as the construction of facilities necessary for the production of goods and/or the provision of services- aimed at increasing productive capacity and/or;

Version: 4th. COMMUNICATION “A” 5368
Validity:
09/11/2012
Page 5

FINANCING TO THE NON-FINANCIAL PUBLIC SECTOR B.C.R.A.
Section 3. Operations covered.

iii) the financing of working capital destined to facilitate the production of capital goods.

3.2.6.3. The operation is guaranteed by an amount that, at a minimum, covers the principal, interest and accessories of the financing through:

i) guarantees, payment orders or debt instruments issued -in all cases- by the National Treasury; or

ii) the assignment of income from the sale of goods or the provision of services -invoiced or to be invoiced whose collection is expected to be made effective within a maximum term of 120 months counted from the date of granting of the credit assistance- that form part of the main, normal and habitual activity of the applicant for the credit assistance. In no case may the total amount of financing in force under this regime exceed by 10 times the income obtained during the last closed annual fiscal year corresponding to the concepts set forth above.

Version: 1st. COMMUNICATION “A” 5368
Validity:
09/11/2012
Page 6

CENTRAL BANK OF THE ARGENTINE REPUBLIC

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 SOURCE RULE Observations
Section Point Paragraph Com. Annex Point Paragraph
1.1. “A” 3054 sole 1.1. According to Com. “A” 4798, 4838
(point 12.) and 4937.
1.
1.2. “A” 4527 According to Com. “A” 4581, “C”
51182, “B” 9745, “A” 5154,
5243 and 5301.
2.1. “A” 3054 sole 2.1. According to Com. “A” 4937, 5062,
2. “B” 9745 and “A” 5154.
2.2. “A” 3054 sole 2.2.
3.1. “A” 3054 sole 3.1. According to Com. “A” 5067.
3.
3.2. “A” 3054 sole 3.2. According to Com. “A” 4838 (point
10.), 4932 (points 1. 3. and 4.),
4937 (points 2 and 3.), 4996
(point 1.), 5015 (annex), 5062,
5069, 5125, 5368 and “B” 9745.
4.1.1. “A” 3054 sole According to Com. “A” 3548 and 3911 -
point 9. subsection c)-.
4.1.1.1.
“A” 3054 sole According to Com. “A” 3911 -point 9., subsection b)-, 4798 and “B” 9745.
4.1.1.2. “A” 4798 According to Com. “A” 4947.
4.1.1.3. “A” 4798
4.1.2.
“A” 3054 sole According to Com. “A” 4718 and “B” 9745.
4.
4.1.3. “A” 3054 sole According to Com. “A” 3144 and 5062.
5.1. “A” 4838 1. According to Com. “A” 4926, 4937,
5062 and “B” 9745.
5.1.1. “A” 4838 1.1. According to Com. “A” 4926, 4937
(point 4.) and “B” 9745.
5.1.2. “A” 4838 1.2. According to Com. “A” 4926, 4937
(point 4.), 5015 and “B” 9745.
5.1.3. “A” 4838 1.3. According to Com. “A” 4926, 4937
(point 4.).
5.1.4. “A” 4838 1.4. According to Com. “A” 4926, 4937
(point 4.) and 5036.
5.1.5. "A" 4838 1.6. According to Com. "A" 4937 (point
4.) and 5062.
5.1.6. "A" 4838 6. and 10. According to Com. "A" 4926, 4937
(point 4.), 4996 (point 1.),
5015 (annex), 5062 and "B" 9745 and normative interpretation.
5.1.7. "A" 4838 1.5. According to Com. "A" 4926, 4937
(point 4.), 5062 and "B" 9745.
5.
5.1.8. "A" 4937 4. According to Com. "B" 9745 and "A"
5062.

CLASSIFICATION OF CREDIT B.C.R.A.
Section 2. Financings included.

2.2.11. Credits that have guarantees extended by mutual guarantee companies or by public guarantee funds registered in the Registries enabled in the Central Bank of the Argentine Republic.

2.2.12. Loans to other local financial institutions.

2.2.13. Financings granted to the non-financial public sector considering for those purposes the definition of point 1.1. of the rules on "Financing to the non-financial public sector", except those provided in points 1.2.1. and 3.2.6. of that body of rules.

2.2.14. Commitments to provide funds assumed in loan syndication operations, until they are reflected in debt balances in the so-called "managing bank" or in the event that in that later stage the latter assumes the obligation to guarantee to the remaining participating institutions the repayment of the funds they contribute for the required financing.

2.2.15. Export financings -operations without recourse to the transferor- covered by commercial risk credit insurance and, if applicable, extraordinary risks (borne by the National State, Law 20.299), including credit risk insurance "with public buyer coverage". The policy covering commercial risk must be issued by:

a) Local insurance companies that have:

• an "AA" or higher rating granted by any of the risk rating companies registered in the registry of the National Securities Commission and

• reinsurance with insurance companies:

  i) local companies that have an "AA" or higher rating assigned by a national risk rating company, or

  ii) foreign companies that have an international risk rating of "A" or higher.

The amount of the reinsurance must comply with the regulations issued by the National Insurance Superintendency.

b) Local branches of foreign insurance companies that have an international risk rating of "A" or higher.

c) Local subsidiaries of foreign insurance companies provided that the following conditions are verified with respect to the controlling company:

• it has the rating cited in the preceding subparagraph b) and

• it has explicitly guaranteed the obligations of the subsidiary.

Version: 10th COMMUNICATION "A" 5368
Effective date:
09/11/2012
Page 4

B.C.R.A.
ORIGIN OF THE PROVISIONS INCLUDED IN THE RULES ON "CLASSIFICATION OF CREDIT"

TEXT AS AMENDED			SOURCE RULE				OBSERVATIONS
Section	Point	Paragraph	Com.	Annex	Point	Paragraph
1.	1.1.	1st	"A" 467	sole	2.
			"A" 467	sole	6.1.	last
	1.1.	2nd	"A" 3002				Incorporates interpretative clarification.
2.	2.1.		"A" 467	sole	2.
	2.2.1.		"A" 467	sole	4.1.
	2.2.2.	1st	"A" 467	sole	3.1.
	2.2.2.	last	"A" 490	sole	2.
	2.2.3.		"A" 467	sole	3.2.
	2.2.4.		"A" 467	sole	3.3.
	2.2.5.		"A" 467	sole	4.2.
	2.2.6.	1st	"A" 467	sole	4.3.
	2.2.6.	last	"A" 490	sole	4. and 5.
	2.2.7.		"A" 467	sole	4.4.
	2.2.8.		"A" 467	sole	4.5.		According to Com. "A" 2054.
	2.2.8.1.	viii	"A" 467	sole	4.5.8.		According to Com. "A" 2074.
	2.2.9.		"A" 467	sole	4.6.		According to Com. “A” 2054.
	2.2.10.		“A” 467	sole	4.7.		According to Com. “A” 2098, “B” 5477, “A” 4310 (point 3.), 4975 and 5311.
	2.2.11.		“A” 467	sole	4.8.		According to Com. “A” 2410, 3307, 4093 (penultimate paragraph), 4465 and 5275.
			“A” 2410		7.
	2.2.12.		“B” 5902		10.	last	According to Com. “A” 5013.
	2.2.13.		“B” 5902		10.	last	According to Com. “A” 5013, 5154 and 5368.
	2.2.14.		“B” 5902		10.	last	According to Com. “A” 5013.
	2.2.15.		“A” 3314
	2.2.16.		“A” 4891		5.
3.	3.1.1.		“A” 467	sole	1.	1°	According to Com. “A” 2373.
	3.1.2.1.		“A” 467	sole	1.	2°	According to Com. “A” 2373.
	3.1.2.2.	1° to 6°	“A” 467	sole	1.	2°	According to Com. “A” 2373 and “B” 5902. Includes interpretive clarification.
	3.1.2.2.	7°	“B” 5902		10.	1°
	3.1.2.2.	last	"A" 3002				Incorporates interpretive clarification.
	3.2.1.		"A" 467	sole	1.	3rd	According to Com. "A" 2373, as amended by Com. "A" 2960. Incorporates interpretive criterion.
	3.2.2.		"A" 2206		2.		According to Com. "A" 3183.
	3.2.2.1.		"A" 2206		2.		According to Com. "A" 3086 and 3183.
	3.2.2.2.		"A" 2056		1.		According to Com. "A" 3086 and 4093 (penultimate paragraph).
	3.2.2.3.		"A" 2384		1.	1st and 2nd	According to Com. "A" 3086 and 4093 (penultimate paragraph).
	3.2.2.	last	"A" 3086		1.
	3.3.		"A" 2156		5.
4.	4.1.		"A" 467	sole	5.