Resolution 037/99 - Liquidity Credit to Banco Boliviano Americano S.A.

BOARD RESOLUTION NO. 037/99 SUBJECT: FINANCIAL SYSTEM - LIQUIDITY CREDIT TO BANCO BOLIVIANO AMERICANO S.A. FOR $US 10,000,000.

SEEN: The Law No. 1670 of the Central Bank of Bolivia (BCB) of October 31, 1995. The Legal Reserve Regulation for Institutions of the Financial System, approved by Board Resolution No. 180/97 of December 23, 1997. The Regulation on Liquidity Credits to Entities of the Financial Intermediation System, approved by Board Resolution No. 059/98 of June 9, 1998. The Note GOF-154/99 from Banco Boliviano Americano S.A. (BBA) of May 11, 1999. The Board Resolutions of the BCB Nos. 017/99 and 022/99 of March 11 and 31, 1999, respectively. The Report from the Financial System Management GSF-069/99 of May 11, 1999. The Report from the Economic Policy Advisory APEC-ARM and F No. 012/99 of May 11, 1999. The Report from the Legal Advisory ALEG No. 030/99 of May 11, 1999. The Minutes No. 019/99 of the Financial System Analysis Committee (COASIF) dated May 11, 1999.

CONSIDERING: That Article 36 of Law 1670 of October 31, 1995, authorizes the BCB to grant liquidity credits to banks and financial intermediation entities, in duly justified and qualified cases by its Board of Directors by an absolute majority of votes.

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That on March 11 and March 31, 1999, the BCB granted to the BBA, through its Board Resolutions Nos. 017/99 and 022/99, two liquidity credits for $US 8,000,000 and $US 12,000,000 respectively.

That Banco Boliviano Americano S.A. has requested the granting of a new credit to meet temporary liquidity needs for $US 10,000,000.

That the requested liquidity credit by the BBA will be backed by portfolio 1 and 2, in a 2 to 1 proportion, thus guaranteeing the recovery of State funds.

That the Financial System Management states in its report that Banco Boliviano Americano S.A. meets the requirements established in the aforementioned Regulation, and therefore, in its opinion, the liquidity credit request from said financial entity is appropriate.

That the Economic Policy Advisory establishes in its report that there is margin in the Monetary Program to attend to the liquidity credit requested by the BBA.

That in the opinion of the Legal Advisory, the BCB Board of Directors is authorized to grant liquidity credits in accordance with the Regulation on Liquidity Credits to Entities of the Financial Intermediation System.

That in Minutes No. 019/99 of May 11, 1999, the favorable opinion of the Financial System Analysis Committee (COASIF) for the granting of the aforementioned liquidity credit in the amount requested by the BBA appears.

THEREFORE,

THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA

RESOLVES:

Article 1.- Grant a liquidity credit to Banco Boliviano Americano S.A., in accordance with Law 1670 of October 31, 1995, and the requirements established in the Regulation on Liquidity Credits to Entities of the Financial Intermediation System, under the following conditions:

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Amount: Up to the sum of $US 10,000,000. Currency: United States Dollars. Interest Rate: 16.77% per annum. Term: 30 days from the signing of the contract. Amortization: A single payment at maturity. The BBA may pay the credit, including accumulated interest, in full or in part, in advance. Guarantees: a) Automatic debit in its checking accounts and legal reserve held at the BCB; and b) Credit portfolio with own resources of Banco Boliviano Americano S.A., with ratings 1 and 2, following the rating criteria established by the Superintendence of Banks and Financial Entities in its SB Resolution No. 155/98 of December 29, 1998. Said portfolio should, as far as possible, contain real guarantees. The temporary assignment of credit will be documented through a contract. The sum of the guarantees must be equivalent to twice the amount of the credit. Subsidiary Guarantee: This credit will also be guaranteed by the assignment of credits constituted as guarantee for the liquidity loans granted to the BBA through Board Resolutions 017/99 and 022/99.

Disbursements: $US 3,000,000 upon signing the contract. The BBA will have three business days to complete the delivery of the legal documentation for the assignment of the portfolio as guarantee for this first disbursement. The subsequent disbursements will be made as the BBA constitutes the respective documentation of the portfolio as guarantee.

Article 2.- The resources will be disbursed prior to the signing of the temporary portfolio assignment contract, through credits to the foreign currency checking account held at the BCB, upon written request from the BBA. These resources may only be used by Banco Boliviano Americano S.A. to cover its reserve deficiency, exchange deficiencies in the Clearing House, as well as overdrafts in its checking account at the BCB.

Article 3.- From the date of subscription of the credit assignment contract, Banco Boliviano Americano S.A. may not grant new loans or make new investments.

Article 4.- Instruct the BCB Administration to include Administrative Conditions in the credit assignment contract to be signed with the BBA, in accordance with the Regulation on Liquidity Credits to Entities of the Financial Intermediation System.

Article 5.- Request the Superintendence of Banks and Financial Entities to strictly monitor all provisions of this Resolution.

Article 6.- Authorize the President of the BCB to sign the loan contract and temporary portfolio assignment with Banco Boliviano Americano S.A.

Article 7.- The Presidency and General Management are charged with the execution and compliance of this Resolution.

La Paz, May 11, 1999

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Juan Antonio Morales A.

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Armando Pinell S. Jaime Ponce G. Juan Medinaceli

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Fernando Campero P. Armando Méndez M.