Resolution 031/2000 - Approval of Credit to Banco Boliviano Americano S.A. for Forced Sale

BOARD RESOLUTION NO. 031/2000
SUBJECT: FINANCIAL ENTITIES MANAGEMENT - APPROVES CREDIT TO BANCO BOLIVIANO AMERICANO S.A.
INTERVENED FOR FORCED SALE UP TO
$US 3,000,000.

SEEN:
The Law No. 1670 of the Central Bank of Bolivia dated October 31, 1995.
The Law No. 1977 dated May 14, 1999.
Supreme Decree No. 25681 dated February 25, 2000.
Resolution SB No. 053/99 of the Superintendency of Banks and Financial Entities (SBEF) dated May 14, 1999. Note IV-FCU 159/2000 from the Selling Trustee of Banco Boliviano Americano S.A. (BBA) dated April 24, 2000. Report from the Financial Entities Management GEF No. 046/2000 dated March 24, 2000.

Internal Communication GAL No. 102/2000 from the Legal Affairs Management dated March 28, 2000.
Internal Communication GAL No. 119/2000 from the Legal Affairs Management dated May 3, 2000.
Report from the Financial Entities Management No. 071/2000 dated April 26, 2000.

CONSIDERING:
That Law No. 1977, which modifies legal provisions of the Financial System, empowers the Central Bank of Bolivia to provide financial support for the process of forced sale of intervened financial entities. That the SBEF, by Resolution No. 053/99 of May 14, 1999, ordered the intervention of Banco Boliviano Americano S.A. for its forced sale.

//2. B.D. No. 031/2000
That at the request of the Selling Trustee, on May 17, 1999, the Central Bank of Bolivia granted to BBA a Financial Support Credit Line for the process of its forced sale for $US 50 million, which was increased to $US 80 million with an addendum dated May 19, 1999. That from the aforementioned amount, BBA used $US 66.5 million, a sum that was timely cancelled with portfolio, assets given in payment in kind, and in cash. That on September 14, 1999, BBA received from the Central Bank of Bolivia a Restricted Credit Line of up to $US 18.06 million, of which it used $US 9.9 million for the return of deposits from FOCOSSMAF and FONADAL, an amount that was cancelled in its entirety through the giving in payment of assets. That the Selling Trustee of BBA, through note GNC-EC-028/2000 dated March 14, 2000, states that the intervention is facing the payment of various liabilities and expenses with its own resources and that, to continue with the sale process of said financial entity, it requires the granting of a credit line of $US 5,000,000. That through Board Resolution No. 024/2000 of April 11, 2000, the CBO approved the granting of a credit of up to $US 2,000,000 to the intervened Banco Boliviano Americano for its forced sale. That after analyzing the remaining assets of the intervened BBA for forced sale, the Financial Entities Management states in its Report No. 071/2000 of April 16, 2000 that it has verified that the value of the assets offered as collateral reaches a credit/collateral ratio of approximately 1 to 1, although they are subject to preventive annotations according to information from the Legal Affairs Management. That in the opinion of the Legal Affairs Management, the Central Bank of Bolivia is empowered by Law No. 1977 of May 14, 1999 to provide financial support to the intervened BBA for its forced sale.

THEREFORE,
THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA RESOLVES:
Article 1.- Approve the granting of a credit to Banco Boliviano Americano
S.A.

intervened for forced sale, intended for the cancellation of liabilities, leading to the closure of its operations, under the following terms:
//3. B.D. No. 031/2000
Amount: Up to $US 3,000,000.

Currency: United States Dollars.
Annual interest rate: 7.96%, the annual effective passive interest rate weighted average of the banking system in foreign currency, corresponding to the week of April 24 to 28, 2000. Maturity: May 14, 2000. This term may be extended for up to 60 days, if the period of intervention for the forced sale of BBA is extended. Collateral: Assets in a 1 to 1 ratio, according to the detail listed in Annex 1. Payment method: Upon expiration of the term, the BBA intervened for forced sale will pay in cash to the CBO, in a single amortization, the resources used from the credit, including principal and interest or, in its absence, with the giving in payment of the assets detailed in Annex 1, up to the amount owed.

Article 2.- Prior to disbursement, BBA must comply with the
following conditions:
a) Regularize the financial support granted by the Central Bank of Bolivia previously. BBA must close all pending operations with the CBO, such as: the agreed substitution of portfolio, the restitution of the DIM and the delivery of portfolio and assets. b) Lift the liens weighing on the assets offered as collateral in
Annex 1. To this effect, BBA must deliver to the CBO the respective
freehold certificates.
Article 3.- Disbursements will be made prior to signing the
respective contract and once the conditions established in Article 2 of this Resolution are met, upon written and duly justified request from the Selling Trustee of BBA. //4. B.D. No. 031/2000
Article 4.- Authorize the President of the CBO to sign the credit contract with
the Selling Trustee of Banco Boliviano Americano S.A.
Article 5.- The Presidency and General Management are in charge of
the execution and compliance with this Resolution.
La Paz, May 9, 2000

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Juan Antonio Morales A.

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Armando Pinell S. Jaime Ponce G.

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Juan Medinaceli V.. Armando Méndez M.