Guarantees: Adjustments to Rules on Preferred Guarantees

2017 - YEAR OF RENEWABLE ENERGIES

COMMUNICATION “A” 6250
02/06/2017

TO FINANCIAL INSTITUTIONS:
Ref.: Circular
LISOL 1 - 739

“Guarantees”. Adjustments.

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

“1. Replace points 1.2.1., 1.2.5. and 1.2.8. of the rules on “Guarantees” with the following:

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

“1.2.5. Credits for financial leases (“leasing”) that have been agreed in accordance with the provisions of the Civil and Commercial Code of the Nation on real estate 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).”

“1.2.8. Trusts for guarantee constituted in accordance with the provisions of the Civil and Commercial Code of the Nation (article 1666 and following) for the purpose of backing the payment of financings granted for the construction of real estate provided that, at a minimum, the following requirements are verified:

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

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 under the terms established in the trust contract.

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 assets are free of liens.

1.2.8.5. In cases where there are other beneficiaries besides the lending financial institution, 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 institution will have preference in collection over the remaining beneficiaries of the trust's product.

1.2.8.6. The fiduciary transfer deed of the trustor real estate and the trust contracts 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 contract, the trustee is enabled to dispose of the asset and transfer its full ownership, with the consequent registry effect.

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

2. Incorporate as points 1.2.9., 1.2.10., 3.1.22. and 3.1.23. of the rules on “Guarantees” the following:

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

“1.2.10. Assignment in 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 notary of the corresponding contract instrumented by public deed, from which the obligation of the trustee or the company –as applicable– to carry out the work to whose financing the guarantee is imputed arises.

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

CENTRAL BANK
OF THE ARGENTINE REPUBLIC

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

1.2.10.4. Copy of the insurance policy constituted in favor of the acquirers of the projected functional units, when applicable according to the provisions of article 2071 of the Civil and Commercial Code of the Nation.

1.2.10.5. The trust agreement, whose rights are the object of the assignment, must include clauses by which the borrowers authorize or grant a mandate to the lending financial institution so that the funds granted as a loan are held in trust for the purpose of fulfilling the object of the trust.

In the case of the assignment as collateral of rights over functional units for financings granted directly to the acquirers, in addition to the aforementioned requirements, the following shall be required: i) the presentation of a copy authenticated by a notary public of the instruments by which those rights were constituted in favor of the respective acquirers and ii) a copy of the construction plan approved by the competent authority in which it is observed that all the projected functional units to be subdivided appear.”

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

3.1.22.1. On real property intended for housing: 75 % of the value of the real property.

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

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

3.1.23.1. On real property intended for housing: 75 % of the value of the real property.

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

Lastly, we send you in an annex the sheets that, in replacement of those previously 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, by accessing “Sistemas Financiero y de Pagos - MARCO LEGAL Y NORMATIVO - Ordenamientos y resúmenes - Textos ordenados de normativa general”, you will find the amendments made with texts highlighted in special characters (strikethrough and bold).

We greet you attentively.

CENTRAL BANK OF THE ARGENTINE REPUBLIC

Matías A. Gutiérrez Girault
Gerente de Emisión de Normas

Darío C. Stefanelli
Senior Issuance Manager and
Aplicaciones Normativas

ANNEX

The following are included in this category, as a taxative enumeration:

1.2.1. First-degree mortgage on real property, and whatever its priority rank, provided that the entity is the creditor in all ranks. Also included are real property over which a fiduciary property has been constituted, to the extent that the lending financial institution has 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 registry of motor vehicle ownership 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 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 transaction, 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 registry of motor vehicle ownership and have a market that allows obtaining a reference value).

1.2.6. Export credit insurance, to the extent that the periods for 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 transaction, and the other requirements provided in point 1.1.16 are observed.

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

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

1.2.8. Guarantee trusts 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 holder of the domain assigns to the guarantee trust 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 granted under 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 for in point 1.2.8.1., as well as to remove from their duties the natural or legal persons that have been designated to carry them out and to appoint their replacements, in the event of non-compliance or poor performance of their duties.

1.2.8.4. The assigned assets are free of liens.

1.2.8.5. In cases where there are other beneficiaries in addition to the lending financial institution, the respective contracts contemplate a clause establishing that in the event of non-compliance by the borrower with the payment –partial or total– of the financing granted, the lending/beneficiary financial institution shall have preference in collection over the other beneficiaries of the trust's proceeds.

1.2.8.6. The fiduciary transfer deed of the trustor's real property and the trust contracts contain a clause by which the trustor grants in advance the required consent so that in the event the objective conditions of non-compliance contained in the trust contract are verified, the trustee is authorized to dispose of the asset and transfer full ownership thereof, with the consequent registry effect.

1.2.8.7. In the purchase and sale agreement of the assets resulting from the development, whose model shall be included in an annex forming part of the guarantee trust contract, a specific clause must indicate that there is fiduciary ownership over the property on which the construction is being developed, stating the identification data of the trustee of the guarantee trust.

1.2.9. Assignment in guarantee –including fiduciary– of the purchase and sale agreement of land, lots or parcels –whether urban or rural–, or of warehouses, premises, offices, parking spaces and already constructed dwellings for 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 full price of the property is paid, possession is delivered to the acquirer and there is an irrevocable power to execute the deed –with signature certified by a public notary– in favor of the latter.

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

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B.C.R.A.
GARANTÍAS
Sección 1. Clases.

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

1.2.10.2. Certificate of ownership of the land issued by the corresponding Real Estate Registry, from which arises the title in favor of the trustee or the construction company. In the absence thereof, purchase and sale agreement executed by public deed with a date no older 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. Permit or authorization of work, granted by the corresponding jurisdictional authority for the start of construction.

1.2.10.4. Copy of the insurance policy constituted in favor of the acquirers of the projected functional units, when applicable according to the provisions of article 2071 of the National Civil and Commercial Code.

1.2.10.5. The trust contract, whose rights are the object of the assignment, must contemplate clauses by which the borrowers authorize or grant a mandate to the lending financial institution so that the funds granted in loan are trustor with the purpose of fulfilling the object of the trust.

When it concerns the assignment in guarantee of rights over functional units for financing granted directly to the acquirers, in addition to the aforementioned requirements, the following shall be required: i) the presentation of a copy authenticated by notary of the instruments by which those rights were constituted in favor of the respective acquirers and ii) 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.

The guarantees not explicitly included in the preceding points, such as the mortgage in a degree other than first and the pledge or surety of shares or commercial documents and the liens constituted abroad in accordance with legislations other than the local one –except in the cases expressly provided for–, shall be considered non-preferred.

1.4. Reference amount.

The amount to be considered shall 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 the condition of micro, small or medium enterprise”.

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GARANTÍAS B.C.R.A.
Sección 3. Cómputo.

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

3.1.19.1. Real property for the lessee's own housing –single, family and permanent occupancy–, in the case of new financing of up to the equivalent of 11 % of the reference amount established in point 1.4. and it is not a renegotiation of the contract: 100 % of the value of the asset.

3.1.19.2. Properties for the borrower'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 up to the equivalent of 17% of that established in point 1.4. and it is not a renegotiation of the contract: 90% of the value of the asset.

3.1.19.3. Properties for the borrower'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 for guarantee on properties transferred to the trust (point 1.2.8.):

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

3.1.21.2. On 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-sale agreement for land, lots or parcels or other already constructed properties (point 1.2.9.):

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

3.1.22.2. On 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. On properties intended for housing: 75% of the value of the property.

3.1.23.2. On properties whose use is other than housing: 50% of the value of the property.

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Effective date:
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GUARANTEES B.C.R.A.
Section 3. Computation.

CENTRAL BANK OF THE ARGENTINE REPUBLIC

3.2. Partial coverage with preferred guarantees.

When the existing preferred guarantees do not cover the entirety of the assistance to the client, the portion not covered by that coverage shall have the treatment established for debts without preferred guarantees.

For these purposes, the market value of those assets that are quoted shall be permanently taken into account, as contemplated in points 1.1.1., 1.1.2., 1.1.5. and 1.1.13.

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

CONSOLIDATED TEXT			SOURCE RULE			OBSERVATIONS
Section	Point	Paragraph	Com.	Annex	Point Paragraph
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. 3°, 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 and 6250.
	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.
	1.2.8.		"A" 4491		1.	According to Com. "A" 4501, 5998 and 6250.

GUARANTEES

							GUARANTEES
ORDERED TEXT			SOURCE STANDARD				OBSERVATIONS
Section	Point	Paragraph	Com.	Annex	Point	Paragraph
1.	1.2.9.		"A" 6250
	1.2.10.		"A" 6250
	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' situation (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	sole	3.1.11.		According to Com. “A” 3104 and 4522.
	3.1.11.		“A” 2932	sole	3.1.12.		According to Com. “A” 3918.
	3.1.12.		“A” 2932	sole	3.1.13.
	3.1.13.		“A” 2932	sole	3.1.14.
	3.1.14.		“A” 2419	1.	1º, ii)		According to Com. “A” 2932, 3314, 3918, 4551 (point 2.), 4559 (point 3) and 5998.
	3.1.15.		“A” 2932	sole	3.1.18.		According to Com. “A” 3918 and 6162.
	3.1.16.		“A” 6162		4.
	3.1.17.		“A” 2932	sole	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
	3.2.		“A” 2216	II		5°	According to Com. “A” 3918.
4.	4.1.		“A” 5975		7.