Regulatory Alerts2008-03-11 | Resolución 024/2008Added · Updated
Resolution 024/2008 Approving Emergency National Credit to the General Treasury
The Board of Directors of the Central Bank of Bolivia approves a credit facility of up to US$600,000,000 for the General Treasury of the Nation to address needs arising from the national disaster declared by Supreme Decree No. 29438. The loan carries a 30-year term, a 2% annual interest rate, and a one-year grace period on principal, secured by amortizable US Dollar Treasury Bonds registered in the Securities Market Registry. Disbursements are to be made upon written request within two years of contract signing, with annual principal and interest payments commencing in the second year.
BOARD RESOLUTION NO. 024/2008 SUBJECT: MONETARY OPERATIONS MANAGEMENT – APPROVES EMERGENCY NATIONAL CREDIT TO THE GENERAL TREASURY OF THE NATION FOR AN AMOUNT OF US$ 600,000,000.-
SEEING: Law No. 1670 of October 31, 1995. Supreme Decree No. 29438 of February 12, 2008. Board Resolution No. 095/2006 of November 7, 2006, which approves the Regulations for Credits to the Public Sector. Notes from the Ministry of Finance MH/VTCP/DGCP/UGAD/N° 215/08 of February 26, 2008, MH/VTCP/DGCP/UGAD/N° 272/08 of March 7, 2008, MH/VTCP N° 275/08 of March 12, 2008. Report from the Monetary Operations Management GOM - SOSP N° 002/2008 of March 12, 2008. Report from the Economic Policy Advisory APEC/SMyF 004/2008 of March 14, 2008. Report from the Legal Affairs Management SANO N° 053/2008 of March 14, 2008.
CONSIDERING: That the Supreme Government has promulgated D.S. No. 29438 declaring a national disaster situation due to adverse hydrometeorological and climatic phenomena caused by the “La Niña Phenomenon 2007-2008,” which has caused serious damage to 57 municipalities in 8 of the country's Departments.
That for these purposes, it has authorized the Ministries of Development Planning and Finance to manage and process before the Central Bank of Bolivia the granting of a credit to attend to urgent needs derived from the natural disasters that have affected the national territory, in accordance with Article 22, subsection a) of Law No. 1670.
That the Ministry of Finance, through note MH/VTCP/DGCP/UGAD/N° 215/08, has requested a credit line of up to six hundred million United States Dollars (US$ 600,000,000.-) or its equivalent in Bolivianos.
That as a complement to the aforementioned note, in notes MH/VTCP/DGCP/UGAD/N° 272/08 and MH/VTCP N° 275/08, the Ministry of Finance attaches the disbursement and expenditure schedule corresponding to the request for a National Emergency credit line.
That the Monetary Operations Management, in accordance with Article 5 of the Regulations for Credits to the Public Sector, has issued Report SOSP N° 002/2008, which informs about the outstanding debt balance of the General Treasury (TGN) with the BCB and its future maturities.
That in Report SOSP N° 002/2008, the Monetary Operations Management states that the public value that will guarantee the operation is an ideal financial asset, as it consists of Treasury Bonds, which will be registered in the Securities Market Registry and will be negotiable on the Stock Exchange.
That the Monetary Operations Management considers that the value guaranteeing the operation must be in the same currency in which the credit is contracted.
That the Economic Policy Advisory, in its Report APEC/SMyF 004/2008, at the time of evaluating the impact of the credit on the Monetary Program in accordance with Article 5, numeral 5.3 of the Regulations for Credits to the Public Sector, recommends that the financial program to be incorporated into the 2008 Memorandum of Understanding establish a fiscal surplus and accumulation of deposits of the non-financial public sector in the BCB, reflecting the commitment of the Fiscal Authority to contribute to the sterilization of liquidity.
That in the opinion of the Legal Affairs Management in Internal Communication SANO N° 053/2008, there is no legal impediment for the Board to approve the requested credit.
That in application of Article 7 of the Regulations for Credits to the Public Sector, the BCB will effect the disbursement of the credit requested by the Ministry of Finance, in conformity with the plan presented by the Ministry of Finance in notes MH/VTCP/DGCP/UGAD/N° 272/08 and MH/VTCP/N° 275/08.
THEREFORE, THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA RESOLVES:
Article 1.- Approve, within the framework of Article 22 subsection a) of Law No. 1670 of October 31, 1995, the granting of a credit to the General Treasury of the Nation under the following terms and conditions:
Currency: United States Dollars. Total Credit Amount: Up to US$ 600,000,000.-. Term: 30 years. Annual Interest Rate: 2% (two percent). Disbursement Plan: Upon written request of the G.T.N. Disbursement Deadline: 2 (two) years from the signing of the contract. Guarantee: Amortizable Bonds in United States Dollars issued by the G.T.N. registered in the Securities Market Registry, against disbursement. Grace Period: One (1) year on principal with interest payments. Payment Plan: From the second year, annual payments of principal and interest.
Article 2.- Authorize the President to sign the respective contract with the Ministry of Finance.
Article 3.- The Presidency and the General Management are entrusted with the execution and compliance of this Resolution.
La Paz, March 17, 2008
Raúl Garrón Claure
Gustavo Blacutt Alcalá Hugo Dorado Araníbar
Rolando Marín Ibáñez Ernesto Yáñez Aguilar Osvaldo Nina Baltazar
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