Minimum Capital of Financial Entities. Modification of Risk Weighter Applicable to Mortgage Loans for Primary Residence up to $100,000

"2006 - Year of Tribute to Dr. Ramón CARRILLO" BANCO CENTRAL DE LA REPÚBLICA ARGENTINA COMMUNICATION "A" 4551 27/07/2006 TO FINANCIAL ENTITIES:
Ref.: Circular
LISOL 1 - 459
Minimum Capital of Financial Entities. Modification of the risk weighter applicable to mortgage loans for primary residence up to $ 100,000. ______ We address you to inform you that this Institution has adopted the following resolution:

"1. Incorporate as subsection ii) of point 3.1.1.6. of Section 4. of the regulations on 'Minimum Capital of Financial Entities' the following:

"ii) In first degree, and regardless of its priority level as long as the entity is the creditor in all levels, on real estate for own housing - unique, family, and of permanent occupation - that are subject to the encumbrance. a) Regarding new financing, only when they imply fund disbursements, of up to $ 100,000, which are agreed and effective from 1.8.06, do not involve refinancing, and do not exceed 90% of the appraisal value of such properties. The condition of unique, family, and permanent occupation housing must be evidenced in the terms stated in the loan contract or in the deed by which the mortgage guarantee was constituted. 50 b) On the amount that exceeds 90% of the appraisal value of such properties. 100"

-2-

2. Substitute point 3.1.14. of Section 3. of the regulations on 'Guarantees' with the following:

"3.1.14. First-degree mortgage on real estate, and regardless of its priority level as long as the entity is the creditor in all levels (point 1.2.1.):
3.1.14.1. On real estate for own housing - unique, family, and of permanent occupation - and that are subject to the encumbrance, in case of new financing, only when they imply disbursements of up to $ 100,000 that are agreed and effective from 1.8.06 and do not involve refinancing: 90% of the appraisal value of the property.
3.1.14.2. On real estate for own housing that are subject to the encumbrance in other financing: 75% of the appraisal value of the property.
3.1.14.3. On real estate for uses other than own housing: 50% of the appraisal value of the property."

We send you attached the sheets that, in replacement of those previously provided, must replace the ordered texts of the regulations on 'Minimum Capital of Financial Entities' and 'Guarantees'. Likewise, it is recalled that on this Institution's website www.bcra.gov.ar, accessing 'regulations' ('ordered texts'), the modifications made with texts highlighted in special characters (strikethrough and bold) will be found. We greet you very attentively. BANCO CENTRAL DE LA REPUBLICA ARGENTINA Darío C. Stefanelli Juan C. Isi Manager of Issuance of Regulations a/c Principal Manager of Research and Regulatory Issuance

ANEXO

3.1.1.4. Provincial guarantee funds, always that these have the special allocation of resources from the federal tax sharing. 50
3.1.1.5. In national public securities, computed at 75% of their market value. 20
3.1.1.6. Mortgage.
i) In first degree, and regardless of its priority level as long as the entity is the creditor in all levels, on real estate for own housing that are subject to the encumbrance. a) Regarding the credit support that does not exceed 75% of the appraisal value of such properties. 50 b) On the amount that exceeds 75% of the appraisal value of such properties. 100 ii) In first degree, and regardless of its priority level as long as the entity is the creditor in all levels, on real estate for own housing - unique, family, and of permanent occupation - that are subject to the encumbrance. a) Regarding new financing, only when they imply fund disbursements, of up to $ 100,000, which are agreed and effective from 1.8.06, do not involve refinancing, and do not exceed 90% of the appraisal value of such properties. The condition of unique, family, and permanent occupation housing must be evidenced in the terms stated in the loan contract or in the deed by which the mortgage guarantee was constituted. 50 b) On the amount that exceeds 90% of the appraisal value of such properties. 100 iii) In first degree, and regardless of its priority level as long as the entity is the creditor in all levels, on real estate for uses other than own housing.

MINIMUM CAPITAL OF FINANCIAL ENTITIES
B.C.R.A.
Section 4. Risk Weighter Table.
Version: 6a. COMMUNICATION "A" 4551
Validity:
27/07/2006

a) Regarding the credit support that does not exceed 50% of the appraisal value of such properties. 75 b) On the amount that exceeds 50% of the appraisal value of such properties. 100
3.1.1.7. Fixed pledge with first-degree registration or with displacement towards the entity on motor vehicles and agricultural, road, and industrial machinery (to the extent that they are registered in the pertinent national vehicle property registry and have a market that allows obtaining a reference value).
i) Regarding the credit support that does not exceed 75% of the market value of motor vehicles and agricultural machinery. 50 ii) Regarding the credit support that does not exceed 60% of the market value of road and industrial machinery. 50 iii) On the amount that exceeds 75% or 60% of the market value of the goods, as applicable. 100
3.1.1.8. "Warrants" on fungible goods that have normal and habitual quotation in local or international markets, of wide dissemination and easy access to public knowledge:
i) Regarding the credit support that does not exceed 80% of the market value of such properties. 75 ii) On the amount that exceeds 80% of the market value of such properties. 100
3.1.1.9. Constituted by accounts receivable from consumers, issued by public service companies providing electricity, gas, water, telephone, etc.
i) Regarding the assistance that does not exceed 80% of the nominal value. 75 ii) On the excess. 100

MINIMUM CAPITAL OF FINANCIAL ENTITIES
B.C.R.A.
Section 4. Risk Weighter Table.
Version: 7a. COMMUNICATION "A" 4551
Validity:
27/07/2006

3.1.1.10. Constituted by credit card coupons.
i) Regarding the assistance that does not exceed 75% of the nominal value. 75 ii) On the excess. 100
3.1.1.11. Granted by reciprocal guarantee societies registered in the registry authorized by the B.C.R.A. or by national and provincial funds constituted with the same object as those societies, admitted by this Institution. 50
3.1.1.12. Export credit insurance - operations without responsibility for the assignor - that cover commercial risk and, if applicable, extraordinary risks (borne by the National State, Law 20.299), including credit risk insurance "with the reach of public buyer". The policy covering commercial risk must be issued by:
a) Local insurance companies that have:

• "AA" or higher rating granted by one of the risk assessment companies registered in the registry of the National Securities Commission and
• Reinsurance in insurance companies:
  i) local that have "AA" or higher rating assigned by a national risk assessment company, or ii) foreign that have international risk rating "A" or higher. The amount of reinsurance must comply with the regulations issued by the Superintendence of Insurance of the Nation. 50 b) Local branches of foreign insurance companies that have international risk rating "A" or higher. 50 Version: 5a. COMMUNICATION "A" 4551 Validity:
  27/07/2006
  MINIMUM CAPITAL OF FINANCIAL ENTITIES
  B.C.R.A.
  Section 4. Risk Weighter Table.

c) Local subsidiaries of foreign insurance companies to the extent that the following conditions regarding the controlling company are verified:

• have the rating cited in the preceding paragraph b) and
• have explicitly guaranteed the obligations of the subsidiary. 50
  3.1.1.13. Guarantee trusts constituted with the object of backing the payment of financing granted for the construction of real estate.
  i) for housing. a) Regarding the credit support that does not exceed 75% of the total investment planned for the construction project (land plus work progress). 50 b) By the amount exceeding 75% of the value of the total planned investment. 100 ii) for uses other than housing. a) Regarding the credit support that does not exceed 50% of the total investment planned for the construction project (land plus work progress). 75 b) By the amount exceeding 50% of the value of the total planned investment. 100
  3.1.2. Documentary credits used, except those with deferred payment, whose shipping documentation has not yet been delivered to the client. 50
  3.2. To the non-financial public sector.
  3.2.1. National Government companies without their express guarantee. 100
  3.2.2. Provincial, municipal, and Buenos Aires City governments and their companies - regardless of their legal nature - that do not have the express guarantee of the National Government or resources from the federal tax sharing or the Federal Housing System (Law 24.464) through the assignment (direct or indirect) of the corresponding rights and that have the pertinent intervention of the Ministry of Economy and Production of the Nation. 100
  Version: 10a. COMMUNICATION "A" 4551
  Validity:
  27/07/2006
  MINIMUM CAPITAL OF FINANCIAL ENTITIES
  B.C.R.A.
  Section 4. Risk Weighter Table.

MINIMUM CAPITAL OF FINANCIAL ENTITIES
ORDERED TEXT SOURCE REGULATION
Section Point Paragraph Com.
Cap./
Annex
Point Paragraph
Observations
3.5.2.1. "A" 2136 I According to Com. "A" 2541, annex, criteria, g).
3.5.2.2. "A" 2136 I According to Com. "A" 2541, annex, criteria, d), 1st paragraph.
3.5.2.3. "A" 2136 I According to Com. "A" 2541, annex, criteria, b).
1º "A" 2136 I According to Com. "A" 2541, annex, criteria, c).
3.5.2.4.
2º Incorporates interpretative clarification.
3.5.2.5. "A" 2136 I According to Com. "A" 2541, annex, criteria, i).
3.5.2.6. "A" 2249
3.
3.5.2.7. "A" 2136 I According to Com. "A" 2541, annex, criteria, k).
1.1. "A" 2136 I According to Com. "A" 2541, annex, "A"
3274 and "A" 3558.
1.2. "A" 2136 I According to Com. "A" 2541, annex and "A"
4141.
1.3. "A" 2136 I According to Com. "A" 2541, annex.
1.4. "A" 2136 I According to Com. "A" 2541, annex.
1.4.1. "A" 2192 penultimate
1.4.2. "A" 2290 1º and 2º
1.5. "A" 2136 I According to Com. "A" 2541, annex.
2. "A" 2136 I According to Com. "A" 2541, annex. Modified by Com. "A" 2793,
2872, 3039, 3274, 3925, 3959 and
4141. Point 2.2.1. includes interpretative clarification.
3.1.1.1. a
3.1.1.5.
"A" 2136 I According to Com. "A" 2541, annex, "A" 3925 and "A" 3959.
3.1.1.6. i) "A" 2136 I According to Com. "A" 2632, "A" 2939,
"A" 3314 and "A" 3959. ii) "A" 4551 1. iii) "A" 2136 I According to Com. "A" 2541, annex, "A" 3314 and "A" 3959.
3.1.1.7. "A" 2136 I According to Com. "A" 3314 and "A" 3959.
3.1.1.8. a
3.1.1.10.
"A" 2136 I According to Com. "A" 3959.
3.1.1.11. "A" 2136 I According to Com. "A" 2541, annex, "A"
3141, "A" 3314, "A" 3959 and "A"
4465.
3.1.1.12. "A" 3314
3.1.1.13. "A" 4491 2. According to Com. "A" 4501
4.
3.1.2. "A" 2136 I According to Com. "A" 2541, annex.

3.1.11. Direct guarantees of foreign governments (point 1.1.11.): 100%.
3.1.12. Assignment of rights on 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 quotation value.
3.1.14. First-degree mortgage on real estate, and regardless of its priority level as long as the entity is the creditor in all levels (point 1.2.1.):
3.1.14.1. On real estate for own housing - unique, family, and of permanent occupation - and that are subject to the encumbrance, in case of new financing, only when they imply disbursements of up to $ 100,000 that are agreed and effective from 1.8.06 and do not involve refinancing: 90% of the appraisal value of the property.
3.1.14.2. On real estate for own housing that are subject to the encumbrance in other financing: 75% of the appraisal value of the property.
3.1.14.3. On real estate for uses other than own housing: 50% of the appraisal value of the property.
3.1.15. Fixed pledge with first-degree registration or with displacement towards the entity (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: 60% of market value.
3.1.16. From reciprocal guarantee societies or national and provincial funds constituted with the same object as those societies (points 1.1.15. and 1.2.3.): 100%.
3.1.17. Credit instruments (point 1.1.14.): 100% of the nominal value of the documents.
3.1.18. Goods in financial leasing (point 1.2.4.):
3.1.18.1. Real estate for the tenant's housing: 75% of the appraisal value of the property.
3.1.18.2. Other real estate: 50% of the appraisal value of the property.
3.1.18.3. Motor vehicles and agricultural machinery: 75% of the appraisal value of the property.
B.C.R.A. GUARANTEES
Section 3. Calculation.
Version: 10a. COMMUNICATION "A" 4551
Validity:
27/07/2006

GUARANTEES
ORDERED TEXT SOURCE REGULATION
Section Point Paragraph Com. Annex Point Paragraph
Observations
2.1. 1º "A" 2448 Status of debtors (point 6.1.2.2.2.).
2.1. 2º "A" 2932 unique 2.1. 2º
2.
2.2. "A" 2216 I 1. 4º
3.1. "A" 2932 unique 3.1.
3.1.1. "A" 2932 unique 3.1.1. According to Com "A" 3918.
3.1.2. "A" 2932 unique 3.1.2.
3.1.3. "A" 2932 unique 3.1.3. According to Com "A" 3918.
3.1.4. "A" 2932 unique 3.1.4.
3.1.5. "A" 2932 unique 3.1.5. According to Com. "A" 3918 and "A"
4242.
3.1.6. "A" 2932 unique 3.1.6. According to Com. "A" 3918.
3.1.7. "A" 2216 I 1. 3º, g) According to Com. "A" 2932.
3.1.8. "A" 2216 I 1. 3º, h) According to Com. "A" 2932.
3.1.9. "A" 2216 I 1. 3º, i) According to Com. "A" 2932.
3.1.10. "A" 2932 unique 3.1.11. According to Com. "A" 3104 and "A"
4522.
3.1.11. "A" 2932 unique 3.1.12. According to Com "A" 3918.
3.1.12. "A" 2932 unique 3.1.13.
3.1.13. "A" 2932 unique 3.1.14.
3.1.14. "A" 2419 1. 1º, ii) According to Com. "A" 2932, "A"
3314, "A" 3918 and "A" 4551, point 2.
3.1.15. "A" 2932 unique 3.1.18. According to Com "A" 3918.
3.1.16. "A" 2932 unique 3.1.19. According to Com. "A" 3141,"A"
3918 , "A" 4242 and "A" 4465.
3.1.17. "A" 3114 2. According to Com. "A" 4242
3.1.18. "A" 3259 2. According to Com. "A" 3314.
3.1.18.1
.
"A" 3259 2 According to Com. "A" 3314 and "A"
3918.
3.1.18.2
.
"A" 3259 2 According to Com. "A" 3314 and "A"
3918.
3.1.19. "A" 3314
3.1.20. "A" 4491 1. According to Com. "A" 4501
3.
3.2. "A" 2216 II 5° According to Com "A" 3918.