Guarantees: Adjustments

2017 - YEAR OF RENEWABLE ENERGIES

COMMUNICATION “A” 6297
11/08/2017

TO FINANCIAL INSTITUTIONS:
Ref.: Circular
LISOL 1 - 751

“Guarantees”. Adjustments.

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

“- Replace points 1.2.1., 1.2.9., 1.2.10., 3.1.14. and 3.1.23. of the rules on “Guarantees” with the following:

“1.2.1. First-degree mortgage on real property or surface rights, and whatever their priority rank, provided that the entity is the creditor in all ranks. Also included are real property and/or surface rights over which a fiduciary property has been constituted, to the extent that the lending financial institution has been assigned –in the trust agreement– the best collection priority with respect to the rest of the creditors, whatever the modality by which that collection preference is granted.”

“1.2.9. Pledge or assignment as guarantee –including fiduciary– of the purchase-sale agreement for land, lots or parcels –whether urban or rural–, or of warehouses, premises, offices, parking spaces and already constructed dwellings with respect to which a mortgage cannot be constituted because the property is not registered in the real estate registry of the corresponding jurisdiction. This, to the extent that the total price of the property is paid, possession is delivered to the acquirer and there exists an irrevocable power to execute the deed –with signature certified by a public notary– in favor of the latter.”

“1.2.10. Pledge or assignment as guarantee of rights over real estate developments implemented through trusts –under the terms of article 1666 and following of the Civil and Commercial Code of the Nation– or construction companies, provided that the existence of the following elements is verified:

1.2.10.1. Copy authenticated by a notary of the corresponding contract instrumented by public deed, from which arises the obligation of the trustee or of the company –as applicable– to carry out the work to whose financing the guarantee is allocated.

1.2.10.2. Certificate of title of the land issued by the corresponding Real Property Registry, from which arises the ownership in favor of the trustee or the construction company. In its absence, purchase-sale agreement instrumented by public deed with an age no greater than 6 months, through which the trustee or the construction company has paid, at a minimum, 60 % of the purchase value of the land.

1.2.10.3. Permit or authorization of work, granted by the corresponding juris-
dictional authority for the start of construction.

1.2.10.4. The contract, whose rights are the object of the pledge or assignment, must contemplate clauses through which the borrowers authorize or grant a mandate to the lending financial institution so that the funds granted in loan are contributed or entrusted, as the case may be, for the purpose of carrying out the work.

The contracts that instrument the financings must clearly establish that the failure to contract insurance in favor of the acquirers of the projected functional units, as provided by article 2071 of the Civil and Commercial Code of the Nation, will not deprive the financial institution of any right arising from the financing granted.

When it concerns the pledge or assignment as guarantee of rights over functional units for financings granted directly to the acquirers, in addition to the aforementioned requirements, the following will be required: i) the presentation of a copy authenticated by a notary of the instruments by which those rights were constituted in favor of the respective acquirers and ii) a copy of the work plan approved by the competent authority in which it is observed that the totality of the projected functional units that will be subdivided appear.”

“3.1.14. First-degree mortgage on real property or surface rights, and whatever their priority rank, provided that the entity is the creditor in all ranks (point 1.2.1.):

3.1.14.1. On real property for own housing –single, family and permanent occupancy– and that are the object of the lien, in the case of new financings, only when they involve disbursements of up to the equivalent of 11 % of the reference amount established in point 1.4. and it does not concern refinancings: 100 % of the appraisal value of the asset.

3.1.14.2. On real property for own housing –single, family and permanent occupancy– and that are the object of the lien, in the case of new financings, only when they involve disbursements greater than the equivalent of 11 % of the reference amount established in point 1.4. and of up to the equivalent of 17 % of that established in point 1.4. and it does not concern refinancings: 90 % of the appraisal value of the asset.

3.1.14.3. On real property for own housing that are the object of the lien in the remaining financings: 75 % of the appraisal value of the asset.

3.1.14.4. On real property for uses other than own housing: 50 % of the appraisal value of the asset.

3.1.14.5. On surface rights: 50 % of the value of that right.”

“3.1.23. Trusts or other rights over real estate developments (point 1.2.10.):

3.1.23.1. On real property whose destination is for housing: 75 % of the value of that right.

3.1.23.2. On real property whose use is other than housing: 50 % of the value of that right.”

Lastly, we send you in annex the sheets that, in replacement of those opportunely provided, should be incorporated into the rules of the reference. Likewise, it is recalled that on the page of this Institution www.bcra.gob.ar, accessing “Financial System – LEGAL AND REGULATORY FRAMEWORK - Compilations and summaries – Ordered texts of general regulations”, 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

Darío C. Stefanelli
Senior Issuance Manager and
Aplicaciones Normativas

Agustín Torcassi
Subgerente General de Normas

ANNEX

The following are included in this category, as an exhaustive enumeration:

1.2.1. First-degree mortgage on real property or surface rights, and whatever their priority rank, provided that the entity is the creditor in all ranks. Also included are real property and/or surface rights over which a fiduciary property has been constituted, to the extent that the lending financial entity has been assigned –in the trust agreement– the best collection priority with respect to the rest of the creditors, whatever the modality by which that collection preference is granted.

1.2.2. Fixed pledge with first-degree registration or with transfer to the entity on motor vehicles and agricultural, road and industrial machinery (to the extent that they are registered in the pertinent national motor vehicle property registry and have a market that allows obtaining a reference value), or fixed pledge with registration on bovine cattle.

1.2.3. Floating pledge with registration on:

1.2.3.1. Motor vehicles and agricultural, road and industrial machinery (to the extent that it is instrumented on goods that have manufacturing certificates or other documents that limit the disposal of the good, which must be retained by the entity until the cancellation of the assistance granted), or

1.2.3.2. Bovine cattle.

1.2.4. Guarantees granted by mutual guarantee companies or by public guarantee funds registered in the Registries enabled in the Banco Central de la República Argentina, whatever the term of the operation, to the extent that the requirement mentioned in point 1.1.15 is not met.

1.2.5. Credits for financial leases (“leasing”) that had been agreed in accordance with the provisions of the Código Civil y Comercial de la Nación on real property and on motor vehicles and agricultural, road and industrial machinery (to the extent that they are registered in the pertinent national motor vehicle property registry and have a market that allows obtaining a reference value).

1.2.6. Export credit insurance, to the extent that the terms for effective payment of claims for commercial risk exceed 180 days without exceeding 270 days counted consecutively from the maturity of the credits, whatever the term of the operation, and the other requirements provided in point 1.1.16 are observed.

1.2.7. Preferred “A”, in operations with a residual term exceeding 6 months or the term specifically established.

Not included are the operations referred to in point 1.1.10 that exceed the term of 6 months.

1.2.8. Trusts of guarantee constituted in accordance with the provisions of the Código Civil y Comercial de la Nación (article 1666 et seq.) for the purpose of backing the payment of financings granted for the construction of real property provided that, at a minimum, the following requirements are verified:

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1.2.8.1. The owner of the domain assigns to the trust of guarantee the real property on which the construction of the development will be carried out and the rights and other goods resulting from the execution and completion of the works and their commercialization in fiduciary property, with the scope agreed in the trust agreement.

1.2.8.2. The proceeds of said commercialization are destined to the partial or total cancellation of the obligations contracted by the borrower by reason of the financing agreed in the terms established in the trust agreement.

1.2.8.3. The trustee has broad powers to carry out effective control of the tasks provided in point 1.2.8.1., as well as to remove from their functions the natural or legal persons that have been designated to carry them out and designate their replacements, in case of non-compliance or poor performance of their functions.

1.2.8.4. The assigned goods are free of liens.

1.2.8.5. In cases where there are other beneficiaries besides the lending financial entity, the respective contracts contemplate a clause establishing that in the event of non-compliance, by the borrower, of the payment –partial or total– of the financings granted, the lending/beneficiary financial entity will have preference in collection over the remaining beneficiaries of the product of the trust.

1.2.8.6. The fiduciary transfer deed of the trustor real properties and the trust agreements contain a clause by which the trustor grants in advance the required conformity such that in the case of verifying the objective conditions of non-compliance contained in the trust agreement, the trustee is enabled to dispose of the good and transfer its full ownership, with the consequent registry effect.

1.2.8.7. In the purchase-sale ticket of the goods resulting from the development, whose model will be included in an annex forming part of the trust of guarantee agreement, it must be indicated by a specific clause that there is fiduciary domain over the real property on which the construction is developed, in which the identification data of the trustee of the trust of guarantee will be recorded.

1.2.9. Pledge or assignment in guarantee –including fiduciary– of the purchase-sale ticket of lands, lots or parcels –whether urban or rural–, or of warehouses, premises, offices, parking spaces and already constructed dwellings with respect to which a mortgage cannot be constituted because the real property is not registered in the real estate registry of the corresponding jurisdiction. This is the case insofar as the entire price of the property is paid, possession is delivered to the acquirer and there is an irrevocable power of attorney to execute the deed –with signature certified by a notary public– in favor of the latter.

1.2.10. Pledge or assignment as security of rights over real estate developments implemented through trusts –under the terms of Article 1666 et seq. of the Civil and Commercial Code of the Nation– or construction companies, provided that the existence of the following elements is verified:

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1.2.10.1. Notarized copy of the corresponding contract executed by public deed, from which the obligation of the trustee or of the company –as applicable– to carry out the work to whose financing the security is allocated arises.

1.2.10.2. Certificate of title of the land issued by the corresponding Real Property Registry, from which ownership in favor of the trustee or the construction company arises. Failing that, a purchase and sale agreement executed by public deed with a term of no more than 6 months, through which the trustee or the construction company has paid at least 60 % of the purchase value of the land.

1.2.10.3. Work permit or authorization, granted by the corresponding jurisdictional authority for the start of construction.

1.2.10.4. The contract, whose rights are the object of the pledge or assignment, must include clauses through which the borrowers authorize or grant a mandate to the lending financial institution so that the funds granted as a loan are contributed or entrusted, as the case may be, for the purpose of carrying out the work.

The contracts instrumenting the financings must clearly establish that the failure to take out insurance in favor of the acquirers of the projected functional units, in accordance with the provisions of Article 2071 of the Civil and Commercial Code of the Nation, will not deprive the financial institution of any right arising from the financing granted.

In the case of the pledge or assignment as security of rights over functional units for financings granted directly to the acquirers, in addition to the requirements mentioned above, the following will be required: i) the presentation of a notarized copy of the instruments by which those rights were constituted in favor of the respective acquirers and ii) a copy of the work plan approved by the competent authority in which it is observed that it includes all the projected functional units that will be subdivided.

1.3. Remaining guarantees.

Guarantees not explicitly included in the preceding points, such as mortgages in a rank other than first and the pledge or surety of shares or commercial documents and liens constituted abroad in accordance with legislation other than local –except in cases expressly provided for–, will be considered non-preferred.

1.4. Reference amount.

The amount to be considered will be the maximum level of total annual sales value for the “Micro” category corresponding to the “Commerce” sector, according to point 1.1. of the rules on “Determination of micro, small or medium enterprise status”.

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GUARANTEES
B.C.R.A.
Section 3. Computation.

3.1.11. Direct guarantees of foreign governments (point 1.1.11.): 100 %.

3.1.12. Assignment of rights over the collection of tariffs and fees in public works concessions (point 1.1.12.): 80 %.

3.1.13. Private securities (point 1.1.13.): 70 % of their quoted value.

3.1.14. First-degree mortgage on real property or surface rights, and whatever their priority rank provided that the institution is the creditor in all ranks (point 1.2.1.):

3.1.14.1. On real property for own housing –single, family and permanently occupied– and that are subject to the lien, in the case of new financings, only when they involve disbursements of up to the equivalent of 11 % of the reference amount established in point 1.4. and are not refinancings: 100 % of the appraisal value of the asset.

3.1.14.2. On real property for own housing –single, family and permanently occupied– and that are subject to the lien, in the case of new financings, only when they involve disbursements greater than the equivalent of 11 % of the reference amount established in point 1.4. and up to the equivalent of 17 % of that established in point 1.4. and are not refinancings: 90 % of the appraisal value of the asset.

3.1.14.3. On real property for own housing that are subject to the lien in the remaining financings: 75 % of the appraisal value of the asset.

3.1.14.4. On real property for uses other than own housing: 50 % of the appraisal value of the asset.

3.1.14.5. On surface rights: 50 % of the value of that right.

3.1.15. Fixed pledge with first-degree registration or with transfer to the institution (point 1.2.2.):

3.1.15.1. Motor vehicles and agricultural machinery: 75 % of market value.

3.1.15.2. Road and industrial machinery and bovine cattle: 60 % of market value.

3.1.16. Floating pledge with registration (point 1.2.3.):

3.1.16.1. Motor vehicles and agricultural, road and industrial machinery: 60 % of market value.

3.1.16.2. Bovine cattle: 50 % of market value.

3.1.17. Of mutual guarantee companies or public guarantee funds (points 1.1.15. and 1.2.4.): 100 %.

3.1.18. Credit instruments (point 1.1.14.): 100 % of the nominal value of the documents.

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GUARANTEES B.C.R.A.
Section 3. Computation.

3.1.19. Credits for financial leases (point 1.2.5.):

3.1.19.1. Properties for the lessee's own housing – sole, family and permanently occupied –, in the case of new financings of up to the equivalent of 11% of the reference amount established in point 1.4. and provided it is not a renegotiation of the contract: 100% of the value of the asset.

3.1.19.2. Properties for the lessee's own housing – sole, family and permanently occupied –, in the case of new financings greater than the equivalent of 11% of the reference amount established in point 1.4. and of up to the equivalent of 17% of that established in point 1.4. and provided it is not a renegotiation of the contract: 90% of the value of the asset.

3.1.19.3. Properties for the lessee's housing not included in the preceding point: 75% of the appraisal value of the asset.

3.1.19.4. Other properties: 50% of the appraisal value of the asset.

3.1.19.5. Motor vehicles and agricultural machinery: 75% of the appraisal value of the asset.

3.1.19.6. Road and industrial machinery: 60% of the appraisal value of the asset.

3.1.20. Export credit insurance (points 1.1.16. and 1.2.6.): 100% of the nominal value of the documents.

3.1.21. Trusts of guarantee over properties transferred to the trust (point 1.2.8.):

3.1.21.1. Over properties for housing: 75% of the appraisal value of the property (land plus construction progress).

3.1.21.2. Over properties for uses other than housing transferred to the trust: 50% of the appraisal value of the property (land plus construction progress).

3.1.22. Purchase and sale agreement for land, lots or parcels or other already constructed properties (point 1.2.9.):

3.1.22.1. Over properties intended for housing: 75% of the value of the property.

3.1.22.2. Over properties whose use is other than housing: 50% of the value of the property.

3.1.23. Trusts or other rights over real estate developments (point 1.2.10.):

3.1.23.1. Over properties intended for housing: 75% of the value of that right.

3.1.23.2. Over properties whose use is other than housing: 50% of the value of that right.

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B.C.R.A.
ORIGIN OF THE PROVISIONS CONTAINED IN THE RULES ON “GUARANTEES”

CONSOLIDATED TEXT
SOURCE RULE

Section	Point	Paragraph	Com.	Annex	Point	Paragraph	OBSERVATIONS
1.	1.1.		“A” 2932	sole	1.1.		According to Com. “A” 4242.
	1.1.1.		“A” 2216	I	1.	3rd, a)	According to Com. “A” 2443, 2932, 3918 and 4242.
	1.1.2.		“A” 2216	I	1.	3rd, a)	According to Com. “A” 2443, 2932 and 3918.
	1.1.3.		“A” 2216	I	1.	3rd, b)	According to Com. “A” 2932, 3918 and 4242.
	1.1.4.		“A” 2216	I	1.	3°, c)	According to Com. “A” 2932 and 4242.
	1.1.5.		“A” 2216	I	1.	3°, d)	According to Com. “A” 2932, 4741 and 6091.
	1.1.6.		“A” 2216	I	1.	3°, e)	According to Com. “A” 2932, 3918, 4242, 5671 and 5740.
	1.1.7.		“A” 2216	I	1.	3°, g)	According to Com. “A” 2932.
	1.1.8.		“A” 2216	I	1.	3°, h)	According to Com. “A” 2932.
	1.1.9.		“A” 2216	I	1.	3°, i)	According to Com. “A” 2932.
	1.1.10.		“A” 2932	único	1.1.11.		According to Com. “A” 3104, 4242, 4522, 4957 and 5998.
	1.1.11.		“A” 2932	único	1.1.12.		According to Com. “A” 4141, 5671 and 5740.
	1.1.12.		“A” 2932	único	1.1.13.		According to Com. “A” 4242.
	1.1.13.		“A” 2932	único	1.1.14.		According to Com. “A” 3918, 5671 and 5740. Includes interpretive clarification.
	1.1.14.		“A” 3114		1.
	1.1.14.1.	1°	“A” 3114				According to Com. “A” 3918, 4055, 5671, 5740 and 5998. Includes interpretive clarification.
	1.1.14.2.		"A" 3114		1.		According to Com. "A" 3918, 4055, 5671, 5740 and 5998.
	1.1.15.		"A" 3141				According to Com. "A" 3307, 3918, 4465 and 5275.
	1.1.16.		"A" 3314				According to Com. "A" 4529, 5671 and 5740.
	1.2.		"A" 2932	sole	1.2.		According to Com. "A" 3104.
	1.2.1.		"A" 2419		1.	1°	According to Com. "A" 2563 (points 1. and 2.), 2932, 3314, 6250 and 6297.
	1.2.2.		"A" 2448				Statement of debtors' situation (point 6.1.2.2.2.). According to Com. "A" 2932, 3918 and 6162.
	1.2.3.		"A" 6162		4.
	1.2.4.		"A" 2448				Statement of debtors' situation (point 6.1.2.2.2.). According to Com. "A" 2932, 3918 and 5275.
			"A" 2410		7.		According to Com. "A" 3141.
	1.2.5.		"A" 3259		1.		According to Com. "A" 3314, 5067 and 6250.
	1.2.6.		"A" 3314				According to Com. "A" 4529.
	1.2.7.		"A" 2932	sole	1.2.4.		According to Com. "A" 4242.

GUARANTEES

						OBSERVATIONS
ORDERED TEXT			SOURCE STANDARD
Section	Point	Paragraph	Com.	Annex	Point	Paragraph
1.	1.2.8.		"A" 4491		1.		According to Com. "A" 4501, 5998 and 6250.
	1.2.9.		"A" 6250				According to Com. "A" 6297.
	1.2.10.		"A" 6250				According to Com. "A" 6297.
	1.3.		"A" 7				Specifications of the "other guarantees received" items, amended by Com. "A" 2932.
	1.4.		"A" 5998		1.
2.	2.1.	1°	"A" 2448				Statement of debtors' position (point 6.1.2.2.2.).
	2.1.	2°	"A" 2932	sole	2.1.	2°
	2.2.		"A" 2216	I	1.	4°
3.	3.1.		"A" 2932	sole	3.1.
	3.1.1.		"A" 2932	sole	3.1.1.		According to Com. "A" 3918.
	3.1.2.		"A" 2932	sole	3.1.2.
	3.1.3.		"A" 2932	sole	3.1.3.		According to Com. "A" 3918.
	3.1.4.		"A" 2932	sole	3.1.4.
	3.1.5.		"A" 2932	sole	3.1.5.		According to Com. "A" 3918, 4242 and 4741.
	3.1.6.		"A" 2932	sole	3.1.6.		According to Com. "A" 3918.
	3.1.7.		"A" 2216	I	1.	3°, g)	According to Com. "A" 2932.
	3.1.8.		"A" 2216	I	1.	3°, h)	According to Com. "A" 2932.
	3.1.9.		"A" 2216	I	1.	3°, i)	According to Com. "A" 2932.
	3.1.10.		"A" 2932	único	3.1.11.		According to Com. "A" 3104 and 4522.
	3.1.11.		"A" 2932	único	3.1.12.		According to Com. "A" 3918.
	3.1.12.		"A" 2932	único	3.1.13.
	3.1.13.		"A" 2932	único	3.1.14.
	3.1.14.		"A" 2419	1.	1º, ii)		According to Com. "A" 2932, 3314, 3918, 4551 (point 2.), 4559 (point 3), 5998 and 6297.
	3.1.15.		"A" 2932	único	3.1.18.		According to Com. "A" 3918 and 6162.
	3.1.16.		"A" 6162		4.
	3.1.17.		"A" 2932	único	3.1.19.		According to Com. "A" 3141, 3918, 4242, 4465 and 5275.
	3.1.18.		"A" 3114		2.		According to Com. "A" 4242.
	3.1.19.		“A” 3259		2.		According to Com. “A” 5067.
	3.1.19.1.		“A” 4559		5.		According to Com. “A” 5998.
	3.1.19.2.		“A” 4559		5.		According to Com. “A” 5998.
	3.1.19.3.		“A” 3259		2.		According to Com. “A” 3314, 3918 and 4559 (point 5.).
	3.1.19.4.		“A” 3259		2.		According to Com. “A” 3918 (point 4.).
	3.1.19.5.		“A” 3259		2.		According to Com. “A” 3314 (point 3.).
	3.1.19.6.		“A” 3314		6.
	3.1.20.		“A” 3314
	3.1.21.		“A” 4491		1.		According to Com. “A” 4501.
	3.1.22.		“A” 6250
	3.1.23.		“A” 6250				According to Com. “A” 6297.

GUARANTEES

			GUARANTEES
ORDERED TEXT			SOURCE STANDARD				OBSERVATIONS
Section	Point	Paragraph	Com.	Annex	Point	Paragraph
3.	3.2.		“A” 2216	II		5°	According to Com. “A” 3918.
4.	4.1.		“A” 5975		7.