CENTRAL BANK OF THE ARGENTINE REPUBLIC

COMMUNICATION “A“ 3987 25/07/2003

TO FINANCIAL INSTITUTIONS:

Ref.: Circular
OPRAC 1 - 560
LISOL 1 - 403
Decree 905/02. Loans with clause for appli- cation of the Reference Stabilization Coeffi- cient (“CER”).

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We address you to inform you that this Institution adopted the following resolu-tion:

“1. Admit financing operations with clause for application of the Reference Stabilization Coefficient (“CER”), in accordance with the current credit policy rules and under the following conditions:

i) Interfinancial loans. Currency: pesos. Interest rate: the one freely agreed between the parties, which shall be calculated on the adjusted principal.

ii) Commercial loans greater than or equal to $250,000. Currency: pesos. Minimum term: one year. Interest rate: the one freely agreed between the parties, which shall be calculated on the adjusted principal.

iii) Loans to natural persons -mortgage, pledge and personal- and commercial loans less than $250,000. Currency: pesos. Minimum term: one year. Interest rate: the one freely agreed between the parties, which shall be calculated on the adjusted principal. Amortization systems: French (constant installments) or German (decreasing installments).

The financial institution must offer the client the option to extend the maturity term, seeking that the value of each installment, in the case of monthly payments, does not exceed by 1% the amount of the immediately preceding installment. For this purpose, the financial institution must extend the number of installments originally planned up to 25% of the amount initially agreed in the case of financing of up to 5 years of original term or up to 50% for financing of longer terms.

In the case of financing with payment frequency greater than monthly, the percentage of increase of the installment shall be accumulated based on the number of months included in the payment period (for example quarterly services 3%).

In the corresponding file, there must be a record of the acceptance or not of this option by the client as well as that the client has become aware of the applicable interest rates in each case, at the time of granting the credit. If the option is accepted, the corresponding clause must be included in the contract.

At the time of granting financing to natural persons, special attention must be paid to the installment/income ratio so that the debtor can face possible increases in the amount of the installments without affecting their payment capacity, taking into account that their income may not follow the evolution of the Reference Stabilization Coefficient (“CER”).

The debt balances shall be updated in accordance with the variations experienced by the Reference Stabilization Coefficient (“CER”) after comparing the indices of the business day prior to the date of the financing and that of equal anticipation to the due date of each installment.

2. Replace the penultimate paragraph of point 6.2. of Section 6. of the rules on “Debtor classification” with the following:

“In that analysis, emphasis shall be placed on measuring the degree of exposure recorded in foreign currency based on its indebtedness and generation of income in that species, as well as with respect to those income and expenses that are linked to the evolution of the Reference Stabilization Coefficient.”

We send you in annex the sheets that, in replacement of those previously provided, must be incorporated into the ordered text of the rules on “Debtor classification”.

We greet you very attentively.

CENTRAL BANK OF THE ARGENTINE REPUBLIC

Ana María Lemmi
Deputy Manager of Issuance of Rules

José Rutman
Principal Manager of Rules

ANNEX

B.C.R.A.	DEBTOR CLASSIFICATION
	Section 6. Classification of debtors of the commercial portfolio.

6.1. Basic information.

The review of the commercial portfolio shall be carried out on the basis of updated financial information -financial statements and complementary information, investment projects, etc.- that clients must provide upon request of the entities, applying valid parameters for each sector and considering other circumstances of the economic activity.

6.2. Classification criteria.

The basic evaluation criterion is the debtor's repayment capacity based on the estimated financial flow and, only secondarily, on the basis of the liquidation of the client's assets, since the granting of financing must respond to their true credit needs and be made under amortization conditions in accordance with the real repayment possibilities that their activity and generation of funds allow.

In that analysis, emphasis shall be placed on measuring the degree of exposure recorded in foreign currency based on its indebtedness and generation of income in that species, as well as with respect to those income and expenses that are linked to the evolution of the Reference Stabilization Coefficient.

In the cases of financial institutions, the analysis must take into account the liquidity of the debtor intermediary and the quality of its portfolio.

6.3. Minimum classification periodicity.

The review must be carried out at least with the periodicity indicated below, leaving a record thereof in the file of the analyzed client:

6.3.1. In the course of each calendar quarter, with respect to clients individually considered whose financing included at some point are equivalent to 5% or more of the computable equity responsibility or of the assets of the financial trust of the month prior to the end of said period, as the case may be of entities or financial trusts, respectively. For these purposes, the group or economic set shall be treated as a single client.

6.3.2. In the course of each calendar semester, with respect to clients individually considered whose included financings amount at some point to between 1% -or the equivalent of $ 1,000,000, whichever is lower- and less than 5% of the computable equity or of the assets of the financial trust of the month prior to the end of said period, as the case may be for entities or financial trusts, respectively. For these purposes, the group or economic conglomerate shall be treated as a single client.

Version: 4th. COMMUNICATION “A“ 3987
Effective date:
25/07/2003
Page 1

	CLASSIFICATION OF DEBTORS
CONSOLIDATED TEXT			SOURCE STANDARD			Observations
Sect.	Point	Para.	Comm.	Annex	Point	Para.
5.	5.1.1.1.		“A” 2216	I	I.	1st According to Comm. “A” 2410
			“A” 2216	I	I.	2nd Amended by Comm. “A” 2410
			“A” 2216	I	II.	4th Amended by Comm. “A” 2410
	5.1.1.2.	1st	“A” 2216	I	6.	last According to Comm. “A” 2358
	5.1.1.2.	2nd	“A” 2216	I	I.	1st According to Comm. “A” 2410
	5.1.1.2.	last	“A” 2216	I	6.	last According to Comm. “A” 2358
	5.1.2.1.		“A” 2216	I	6.	1st
	5.1.2.2.		“A” 2216	I	6.	1st
	5.1.2.3.		"A" 2216	I	II.	3rd According to Com. "A" 2358
6.	6.1.		"A" 2216	I	I.	last
	6.2.	1st	"A" 2216	I	I.a.	1st
	6.2.	2nd	"A" 3918			According to Com. "A" 3987
	6.2.	3rd				Incorporates criterion not previously made known on a general basis
	6.3.		"A" 2216	I	I.a.	2nd
	6.3.1.		"A" 2216	I	I.a.	2nd, i) Amended by Com. "A" 2223 (point 1.) and "A" 3339
	6.3.2.		"A" 2216	I	I.a.	2nd, ii) Amended by Com. "A" 2223 (point 1.) and "A" 3339
	6.3.3.		"A" 2216	I	I.a.	2nd, iii)
	6.4.	1st	"A" 2216	I	I.b.	1st Amended by Com. "A" 3339
	6.4.1.		"A" 2216	I	I.b.	1st, i) Amended by Com. "A" 3339
	6.4.2.		"A" 2216	I	I.b.	1st, ii) Amended by Com. "A" 3339
	6.4.3.		"A" 2216	I	I.b.	1º, iii)
	6.4.4.		"A" 2893		4.
	6.4.5.		"A" 3339	único
	6.4.	último	"A" 2216	I	I.b.	último Modif. por la Com. "A" 2223 (punto 1.) y "A" 3339
	6.5.	1º	"A" 2216	I	I.d.	1º Modif. por Com. "A" 2440
	6.5.	2º	"A" 2216	I	I.d.	último Modif. por Com. "A" 3339
	6.5.	último	"A" 2216	I	I.d.	last Includes. interpretative clarification.
	6.5.1.		"A" 2216	I	I.d.1.	Según Com. "A" 2932 (punto 16.) y "A" 3339
	6.5.1.1.		"A" 2216	I	I.d.1.a)	Según Com. "A" 3955
	6.5.1.2.		"A" 2216	I	I.d.1.b)	Modif. por Com. "A" 3339
	6.5.1.3.		"A" 2216	I	I.d.1.c)
	6.5.1.4.		"A" 2216	I	I.d.1.d)	Según Com. "A" 2932 (punto 5.)
	6.5.1.5.		"A" 2216	I	I.d.1.e)
	6.5.1.6.		“A” 2216	I	I.d.1.f)	Amended by Com. “A” 3339
	6.5.1.	last	“A” 2216	I	I.d.1.	last Amended by Com. “A” 3339
	6.5.2.		“A” 2216	I	I.d.2.	Amended by Com. “A” 3339
	6.5.2.1.		“A” 2216	I	I.d.2.	1st, 2nd and 3rd According to Com. “A” 3339
	i)		“A” 2216	I	I.d.2.a)	According to Com. “A” 3339 and 3955
	ii)		“A” 2216		I.d.2.b)	Amended by Com. “A” 3339
	iii)		“A” 2216	I	I.d.2.c)	According to Com. “A” 3339