Norm on Risk Rating Agencies

Resolution No. CD-SIBOIF-579-2-ABR1-2009 Dated April 1, 2009

NORM ON RISK RATING AGENCIES

The Board of Directors of the Superintendence of Banks and Other Financial Institutions,

CONSIDERS

I That Title IX, Single Chapter of Law No. 587, Capital Markets Law, empowers the Board of Directors to regulate Risk Rating Agencies in the following aspects: the type of activities they may perform, social capital, the provision of rating services by entities established abroad, as well as their sanctioning regime, among others;

II That Article 1 of Law 552, Law of Reforms to Law 316, Law of the Superintendence of Banks and Other Financial Institutions, which reforms Article 10, Number 7 of Law 316, Law of the Superintendence of Banks and Other Financial Institutions, states that it corresponds to the Board of Directors to approve norms to regulate "everything related to risk rating agencies";

In exercise of its powers,

HAS ISSUED

The following:

NORM ON RISK RATING AGENCIES Resolution No. CD-SIBOIF-579-2-ABR1-2009

CHAPTER I

CONCEPTS, OBJECT AND SCOPE

Art. 1. Concepts.- For the purposes of application of the provisions contained in this norm, the terms indicated in this article, both in uppercase and lowercase, singular or plural, shall have the following meanings:

a. Board of Directors: Board of Directors of the Superintendence of Banks and Other Financial Institutions. b. Group of economic interest: Related parties, significant linkages and indirect manifestations of participation, of the rating agencies and issuers of securities to be rated. The foregoing in accordance with the guidelines established regarding this matter by Article 55 of the General Banking Law and the regulations governing the matter on concentration limits. c. General Banking Law: Law 561, General Banking Law, Non-Banking Financial Institutions and Financial Groups. d. Capital Markets Law: Law No. 587, Capital Markets Law. e. Superintendence: Superintendence of Banks and Other Financial Institutions. f. Superintendent: Superintendent of Banks and Other Financial Institutions. g. Rating Agencies: National Risk Rating Agencies.

Art. 2. Object.- This norm aims to establish the minimum requirements that Rating Agencies must comply with to operate in the country; the matters related to the objects of rating; the independence requirements with respect to the entities whose securities they rate; the manner of making ratings public; the participation in the country of foreign and internationally recognized rating agencies; the sanctioning regime; supervisory aspects, among others.

Art. 3. Scope.- The provisions of this norm are applicable to the Rating Agencies referred to in Title IX, Single Chapter, of the Capital Markets Law.

CHAPTER II

RATING AGENCIES

Art. 4. Objects of rating.- All issuances of serial debt securities registered in the Securities Register of the Superintendence shall be subject to rating by a Rating Agency in accordance with the provisions established in this norm. The foregoing does not apply to issuances of securities by the State and the Central Bank of Nicaragua.

Also subject to rating, in accordance with the established legal and regulatory provisions, are securities resulting from securitization processes and open or closed investment funds, financial and non-financial.

Rating Agencies may also rate those securities or entities that, either voluntarily or by law, so require.

Rating Agencies may also carry out complementary activities authorized by the Superintendent, must include in their name the expression "Risk Rating Agency".

Art. 5. Legal form and social capital.- Rating Agencies must be constituted as anonymous companies, subject to the prevailing commercial legal provisions.

The minimum social capital of Rating Agencies shall be one million two hundred thousand córdobas (C$1,200,000.00). The Board of Directors shall update, by means of a general application norm, the amount of social capital at least every two years in case of exchange rate variations of the national currency.

CHAPTER III

AUTHORIZATION TO CONSTITUTE AND OPERATE

Art. 6. Authorization and operation process.- In accordance with what is established by Article 170 of the Capital Markets Law, for the authorization of Rating Agencies, the same procedure required by the General Banking Law for the authorization of banks shall be followed, insofar as applicable, as well as for the start of their operations.

In accordance with the foregoing, the requirements to be met and the procedures to be followed shall be those indicated in this Chapter.

Art. 7. Authorization of constitution.- To obtain the authorization of constitution, Rating Agencies must present a request signed by the partners, whether natural or legal persons, which must be accompanied by the information and documentation indicated in Annex 1, which is an integral part of this norm, and a draft indicating deposit in the current account of the Superintendence, for the value of 1% of the amount of social capital, for the processing of the request. Once they have started their operations, said deposit shall be returned to the promoters. In case the request is denied, 10% of the deposited amount shall accrue to the Treasury of the Republic; the balance shall be returned to the interested parties. In case of withdrawal, 50% of the deposit shall accrue to the Treasury.

Art. 8. Study of the request and authorization to constitute.- Once the study of the request by the Superintendent is concluded, he shall submit the request to the consideration of the Board of Directors, who shall grant or deny the authorization to constitute as a Rating Agency, all within a period not exceeding ninety (90) days from the presentation of the request with all the required documentation and information.

Art. 9. Validity of deed and statutes.- In case of a positive resolution, the authorizing notary must mention the edition of "La Gaceta" in which the resolution of authorization to constitute was published, and insert in its entirety in the deed the certification of said resolution. The registration in the Public Mercantile Register shall be null if this requirement is not met.

Art. 10. Requirements to start activities.- Rating Agencies that have been authorized to constitute must present to the Superintendent a request to start their activities with evidence of compliance with the following aspects:

a. Their minimum social capital fully paid in cash. b. Eighty percent (80%) of this amount on demand deposit at the Central Bank of Nicaragua. c. Testimony of the social deed and its statutes with the corresponding reasons for registration in the Public Register. d. Opening balance sheet. e. Certification of the appointments of the Directors for the first period, the Manager or main executive, and the members of the Rating Committee. f. The Agency's Rating Manual, in which at least the following aspects shall be established:

1. Functions, powers and responsibilities of the administrators, members of the Rating Committee and employees;
2. Procedures, methodology, definitions, symbols and rating criteria;
3. The rules to be followed to ensure the impartiality of the Rating Agency;
4. The number of members of the Rating Committee;
5. The frequency with which the Committee will meet; g. Be registered in the Register of Rating Agencies of the Superintendence. For these purposes, the Register of Rating Agencies is created, which hereinafter will be known simply as the Register.

If the request with evidence of compliance with the aforementioned requirements is not presented within one hundred eighty (180) days from the notification of the resolution authorizing its constitution, it shall become void, and the amount of the deposit referred to in Article 7 shall accrue to the Treasury of the Republic.

Art. 11. Verification of requirements. Authorization of operation.- The Superintendent shall verify whether the applicants have met all the requirements required by the previous article and if he finds them met, he shall grant the authorization of operation within a maximum period of 15 days counted from the date of presentation of the request referred to in the preceding article; otherwise, he shall communicate to the petitioners the deficiencies he notes so that they meet the omitted requirements and once the deficiency is remedied, he shall grant the requested authorization within a term of five (5) days counted from the date of correction. The interested parties must remedy the deficiency within a period not greater than 30 business days, otherwise the authorization of constitution shall become void and the amount of the deposit shall accrue to the Treasury of the Republic.

The authorization must be published in "La Gaceta", Official Diary, at the expense of the Rating Agency and must be registered in the corresponding Public Mercantile Register in Book Two, Companies, of said Register also at its expense.

CHAPTER IV

ORGANIZATIONAL AND OPERATIONAL STRUCTURE

Art. 12. Rating Committee.- In Rating Agencies, there must exist and function permanently a Risk Rating Committee integrated by at least three members, who may or may not be shareholders and/or directors of the company, corresponding to this Committee to adopt the rating agreements of securities. The deliberations and agreements of the Committee on each rating shall be recorded in a minutes book authorized by the Superintendent, which must be signed by all attendees to the corresponding session, including by the Committee member who reasons his vote due to disagreement.

The opinion of the Rating Committee shall not constitute a recommendation to invest, nor an endorsement or guarantee of the issuance; but its members shall be jointly liable, together with the Rating Agency, when negligence or fraud in their opinions or ratings is proven.

Art. 13. Requirements to be a member of the Rating Committee.- Members of the Rating Committee must meet the following requirements:

a. Have technical knowledge and experience in financial and credit analysis of at least 5 years. b. Be of recognized honor and integrity. c. Not have been convicted by final judgment for any crime. To prove compliance with the aforementioned letters, the information required by Annex 1 must be presented.

Art. 14. Requirements for members of the board of directors.- Members of the board of directors of Rating Agencies must be persons of recognized honor and professional competence and in their deliberations they are subject to the terms of Article 35 of the General Banking Law.

Art. 15. Impediments.- Members of the Rating Committee, directors and shareholders of a Rating Agency must not be subject to the impediments established in Article 29 of the General Banking Law insofar as applicable. Likewise, in this case, the provisions of articles 30, 31, 34 and 35 of the same legal framework shall apply.

CHAPTER V

CONDUCT OF RATING AGENCIES

Art. 16. Independence.- Rating Agencies may not rate securities issued by companies related to them or with which they form a group of economic interest, nor may they directly or through an intermediary hold titles or securities issued by the companies they rate.

They may not be members of the boards of directors of the rated issuers nor have credit relationships of any type with them.

Likewise, the Rating Agency is prevented from rating when any of its partners, directors, members of the Rating Committee and persons responsible for the rating of an issuer, is involved in any of the following situations in relation to the issuer of the securities to be rated:

a. When they are employees or provide services or have any link of subordination or dependence with the issuer, or with the entities of the group of economic interest of which it is part. b. When they have or have had during the last 6 months, directly or through other persons, an important professional or business relationship with the entity to be rated, or with the entities of the group of economic interest of which it is part; other than the rating itself. c. When they are spouses or relatives up to the first degree of consanguinity and first of affinity of the main officials of the issuer. d. When they are shareholders of the entity to be rated, or when their spouses or relatives up to the first degree of consanguinity and first of affinity are shareholders of said entity. e. When they present, for consideration by the Superintendent, links with the issuer that could significantly compromise their ability to express an independent opinion on the risk of the issuing entity, its securities or on its financial information.

Rating Agencies, their partners, directors, members of the Rating Committee and persons responsible for the rating of an issuer, as well as their spouses or relatives up to the first degree of consanguinity and first of affinity, may under no circumstances acquire securities that have been rated by themselves. This prohibition will expire after two years have passed since the last rating.

Art. 17. Confidentiality of information. Insider information.- Partners, directors, members of the rating committee and in general any person who by reason of their position or position has access to reserved information of the rated companies, are prohibited from using said information to obtain for themselves or others, economic advantages of any type. For these purposes, the board of directors of the rating agencies must develop and implement policies to comply with the aforementioned.

Art. 18. Diligence of raters.- Persons and entities that participate in risk ratings must employ care and diligence in the exercise of their functions, and shall be jointly liable for damages caused to third parties by their fraudulent or negligent acts.

CHAPTER VI

METHODOLOGIES, SUBSTANTIATION AND UPDATE OF THE RATING

Art. 19. Rating methodologies and their modifications.- The rating methodology must be contained in the manuals prepared by the Rating Agency, detailing the procedures that will be used in the analysis of a specific security and in the analysis of the entities submitted to the rating process. Each Rating Agency shall establish its own categories and symbols including the respective definitions.

Without prejudice to the presentation, by the Rating Agencies, of the evaluation methodologies as one of the requirements to be met to start activities, modifications to these shall be agreed upon, before their application, by the Rating Committee of each Rating Agency, and informed to the Superintendent, by identifying the document in which they are contained, within three (3) subsequent business days in which they are agreed. The Superintendent may make observations, for the purpose of strengthening the procedures, methodologies and rating criteria.

Art. 20. Substantiation of the rating.- The rating resolutions of the Risk Committee must be technically substantiated. The Superintendent, in order to verify the application of the methodology and corroborate the independence of the Rating Agency, may request any information or clarification regarding this.

CHAPTER VII

DISCLOSURE AND UPDATE OF THE RATING

Art. 21. Disclosure of the rating.- The rating opinion must be available to the investing public by physical (printed copies) and electronic (Web page) means of the issuer, the rating agency, the stock exchange, the stock exchange desks representing the issuer, among others. When a link to the rating agency's page is established on the issuer's Web page, said link must refer directly to the rating opinion and not simply to the Web page of the rating agency.

The following warning must be included in said opinion: "The ratings issued represent the opinion of the Rating Agency for the period and securities analyzed and do not constitute a recommendation to buy, sell or hold specific instruments".

Art. 22. Minimum content of the risk rating opinion.- The opinion on the risk rating of issuances and entities shall contain, at least, the following:

a. Background of the risk rating:

1. Name of the issuer or entity;
2. Date of the Rating;
3. Current and previous rating, if the latter is available;
4. In the case of issuances: denomination, type of security, currency, amounts, terms, series and their characteristics, when they can be identified. In case that the series could not be obtained, at minimum it must refer to the denomination, type of security, currency and the amounts and terms that according to the issuer correspond to the securities; b. General background of the issuer; c. Substantiation of the rating through the analysis of the main financial indicators, analysis of the environment: including economic risk, industry risk, short-term perspectives, strengths and opportunities, weaknesses and threats and market position; d. Other relevant comments and indicators specific to the entity.

Art. 23. Additional disclosure.- In addition to its obligation to disclose the ratings it makes, Rating Agencies must carry out a wide dissemination of their symbols and definitions.

Art. 24. Update of the risk rating opinion.- Rating Agencies are obliged, at least semi-annually, to update and review the opinion on the risk rating assigned to the securities and to the entities submitted to the rating process, leaving a record of the agreements adopted in the respective minutes.

Such update must incorporate any new reference or informative element that affects or may affect the rating of a security or of the rated entity.

The foregoing is without prejudice to the extraordinary meetings that the Rating Agency must hold, to analyze possible changes in existing ratings.

The agreements by which a risk rating is updated must be sent to the Superintendent, to the Stock Exchange and to the stock exchange desks representing the issuer at the latest within the first 7 days following the meeting of the Rating Committee in which said rating is assigned. Likewise, it must comply with the disclosure requirements referred to in articles 21 and 22 of this norm.

Art. 25. Continuous review of the rating.- For the purposes of the semi-annual reviews referred to in the previous article, Rating Agencies must carry out such updates based on the information that the issuer provides to them voluntarily or that is available to the public.

Notwithstanding the foregoing, the Rating Agency that has been hired by the issuer may request from it the information that, not being available to the public, is strictly necessary to carry out a correct analysis. This information, at the request of the issuer, shall be kept as reserved.

CHAPTER VIII

OFFENSES AND SANCTIONS

Art. 26. Offenses.- The Rating Agency, its shareholders, members of the board of directors, of the Rating Committee and other persons who participate in the risk rating or sign the rating reports incur in an offense when any of the following cases occur:

a. Provide false and inaccurate information to the Superintendence in the registration, renewal or update of information; b. Fail to comply in the performance of their rating activities, with the provisions on the matter issued by the Superintendent; c. Incur in technical deficiencies and/or inconsistencies in the ratings made; d. Do not maintain, in the opinion of the Superintendent, independence of criterion with respect to the rated entity; e. Have the status of accused in cases that damage their professional image; f. Issue ratings based on false facts; g. Others that, in the opinion of the Superintendent, constitute sufficient cause to apply the sanctions provided for in the Capital Markets Law and this Norm.

Art. 27.- Applicable sanctions.- For the offenses incurred by Rating Agencies, the Superintendent shall impose, according to the gravity, the sanctions established in the Capital Markets Law.

Art. 28.- Criteria for the application of sanctions.- For the application of the corresponding sanctions, the Superintendent shall take into consideration what is established by Article 190 of the Capital Markets Law.

CHAPTER IX GENERAL PROVISIONS

Art. 29. Participation report.- Both directors, administrators, shareholders and members of the Rating Committee, as well as technical staff or analysts of the Rating Agencies, must inform the Superintendent about their direct or indirect participation in the share ownership of any Nicaraguan company.

Art. 30.- Update of information.- The information required for the registration of the Rating Agency regarding its shareholders, administrators, members of the Rating Committee and permanent representatives, among others, must be updated whenever facts occur that significantly modify it.

Art. 31. Submission of financial statements.- The annual audited financial statements of the rating agencies must be sent within ninety (90) days following the date of closing of the accounting period.

Art. 32. New rating.- When the Superintendent considers that there are facts, circumstances or situations that could have compromised the Rating Agency's ability to express an independent opinion on the risk of a specific issuer, its securities or on its financial information, said official may order the hiring of another Rating Agency in order to carry out a new rating of said issuer. The remuneration corresponding to this function shall be borne by the issuer. In case of refusal by the latter, its registration in the Securities Register of the Superintendent will be suspended.

Art. 33. Legalization of documents from abroad and their language. Copies.- All information and/or documentation required by this standard that is in a language other than Spanish must be presented with its corresponding translation, which must comply with what is stipulated in the national laws on the matter or with the laws of the country where the translation is carried out. The documents from abroad that are required of natural or legal persons in this standard must comply with the requirements that establish the laws on the matter so that they can produce legal effects in the country. Likewise, copies must be presented reasoned by a public notary in accordance with the law on the matter.

Art. 34. Modification of annexes.- The Superintendent is authorized to make modifications to the annexes attached to this standard when the case so requires.

CHAPTER X FOREIGN AND INTERNATIONALLY RECOGNIZED RATING AGENCIES

Art. 35. Foreign and Internationally Recognized Rating Agencies.- 1 In accordance with what is established in Article 170 of the Capital Markets Law, the following Rating Agencies may also offer the risk rating service in the country, requesting their registration in the Register: a. Foreign Rating Agencies that are registered with the supervisory body of the securities market of their respective country. For these purposes, the Agencies must comply with the requirements established in Annex 2, which is an integral part of this standard. b. Internationally Recognized Rating Agencies. For the purposes of this standard, these agencies are the following: • Fitch, Inc • Moody’s Investors Service, Inc • Standard & Poor’s • Dominion Bond Rating Service Limited • Kroll Bond Rating Agency, Inc For the Registration and authorization to operate in the country, they must send a request to the Superintendent signed by a duly accredited legal representative. The Superintendent will have a period of 90 days to resolve the request. Likewise, the provisions of Chapters IV, V, VI, VII, VIII and IX of this standard are applicable to this type of agency in its conduct in the country.

1 Art. 35, amended on April 24, 2018 - Resolution CD-SIBOIF-1053-3-ABRI24-2018

The Superintendent may update the list referred to in paragraph b of this article, when new internationally recognized risk rating agencies are determined; which he will inform the Board of Directors of the Superintendent prior to the notification by means of a circular to financial institutions.

CHAPTER XI FINAL PROVISION

Art. 36. Repeal.- The Norm on Risk Rating Agencies, Resolution No. CD-SIBOIF-464-1-ENE30-2007, dated January 30, 2007, is repealed.

Art. 37. Validity.- This standard will enter into force from its publication in La Gaceta, Official Gazette.

ANNEX No. 1 National Rating Agencies. a. Draft of social deed and its statutes; b. Organizational chart or organizational structure; c. List of shareholders certified by the Legal Representative or the Secretary of the Board of Directors, with the following information: If it is a natural person:

1. Name;

2. Number of shares;

3. Percentage of participation;

4. Nationality;

5. RUC No. and photocopy of personal identity document;

6. Curriculum Vitae;

7. Name of the spouse and relatives within the second degree of consanguinity and second degree of affinity. If it is a legal person:

8. The legal domicile and registration data of the company,

9. Number of shares;

10. Percentage of participation;

11. RUC Number or its equivalent,

12. Date of constitution,

13. Purpose and name or trade name,

14. Activity to which it is dedicated,

15. Amount of subscribed and paid-up social capital,

16. The name, the identity card number (or passport) and the percentage of share participation of its owners,

17. The name of the legal representative, and

18. Members of the board of directors. d. List of members of the Board of Directors, General Manager and administrative attorneys, informing the following:

19. Name of the persons who will be members of the Board of Directors; as well as their General Manager;

20. Copy of personal identity documents and RUC No.;

21. Curriculum Vitae and demonstrate having a university degree and proven experience in finance or related professions (5 years); and

22. Name of the spouse and relatives within the second degree of consanguinity and second degree of affinity. e. List of members of the Risk Rating Committee, who must meet the requirements of paragraphs 2 to 4 of the members of the Board of Directors (paragraph d). f. Documentary evidence, to the satisfaction of the Superintendent, of the lawful origin of the assets invested or to be invested in the Rating Agency. As a minimum, such documentation must include:

23. Information on the bank accounts from which the money comes.

24. Information on the origin of the money deposited in said accounts.

25. Information on the origin of the assets (information on the activities from which the assets come such as businesses, inheritances, donations, etc.) and evidence that the money comes from them. g. Detail of the persons responsible for signing the rating reports; detailing the following about them: the name of the spouse and

relatives within the second degree of consanguinity and second degree of affinity; h. Detail of the companies in which the Rating Agency, its shareholders, members of the Board of Directors and the Rating Committee have business relationships, indicating the type of relationship; i. Copy of the contract models to be used for the provision of their services; j. Minutes Book of the Risk Rating Committee, duly paginated;

Annex 2 Foreign Rating Agencies a. Demonstrate that it is registered with the Supervisory Body of the securities market of its respective country. b. Additionally, they must comply with the following:

1. Copy of the articles of incorporation of the company;

2. Certification of the authorization to operate, from the regulatory entity of the country of origin,

3. Appointment of a representative in the country, along with the general power of attorney granted, which must grant broad powers. The Superintendent may require the permanent presence of the representative when the volume of business of the Rating Agency so requires. c. List of shareholders certified by the Legal Representative or the Secretary of the Board of Directors, with the following information: Natural Person

4. Name;

5. Number of shares;

6. Percentage of participation;

7. Nationality;

8. Curriculum Vitae;

9. Notarized declaration of independence, not being a debtor of the financial system, relationship with other companies and not being insolvent;

10. Name of the spouse and relatives within the second degree of consanguinity and first degree of affinity. Legal Person:

11. The legal domicile and registration data of the company,

12. Number of shares,

13. Percentage of participation

14. RUC Number or its equivalent,

15. Date of constitution,

16. Purpose and name or trade name,

17. Activity to which it is dedicated

18. Amount of subscribed and paid-up social capital,

19. The name, the identity card number (or passport) and the percentage of share participation of its owners,

20. The name of the legal representative, and

21. Members of the board of directors. d. List of members of the Board of Directors, General Manager and administrative attorneys, informing the following:

22. Copy of the credential of the Board of Directors and General Manager;

23. Copy of the administrative powers granted;

24. Copy of personal identity documents;

25. Curriculum Vitae and demonstrate having a university degree and proven experience in finance or related professions (5 years);

26. Name of the spouse and relatives within the second degree of consanguinity and first degree of affinity. e. List of members of the Risk Rating Committee, who must meet the requirements of paragraphs 3 to 5 of the members of the Board of Directors. f. Detail of the persons responsible for signing the rating reports; detailing the following about them: the name of the spouse and relatives within the second degree of consanguinity and first degree of affinity; g. Detail of the companies in which the Company, its shareholders, members of the Board of Directors and the Rating Committee have business relationships, indicating the type of relationship (Ownership and Administration);

h. The Agency's Rating Manual, in which at least the following aspects will be established:

1. Functions, attributes and responsibilities of administrators, members of the Risk Rating Committee and employees;
2. Procedures, methodology and rating criteria;
3. The rules they will follow to ensure the impartiality of the Rating Agency;
4. The number of members of the Rating Committee;
5. The frequency with which the Committee will meet; i. Copy of the contract models to be used for the provision of their services;

(f) Antenor Rosales B. (f) V. Molina H. (f) Gabriel Pasos Lacayo (f) Roberto Solórzano Ch. (f) A. Cuadra G. (f) U. Cerna B. URIEL CERNA BARQUERO Secretary of the Board of Directors SIBOIF