Resolution 160/97 Approving the Regulation of Credits to the Public Sector

BOARD RESOLUTION NO. 160/97 SUBJECT: ECONOMIC POLICY ADVISORY - APPROVES REGULATION OF CREDITS TO THE PUBLIC SECTOR.

HAVING SEEN: Law 1670 of October 31, 1995. The Report from the Economic Policy Advisory No. 47/97 of September 5, 1997. The Report from the Legal Advisory ALEG No. 166/97 of October 12, 1997.

CONSIDERING: That Articles 22, 23, and 25 of Law 1670 establish the conditions under which the Central Bank of Bolivia (BCB), on an exceptional basis, may grant public credit in favor of the General Treasury of the Nation (TGN). That it is necessary to regulate the procedure and the requirements that the TGN must meet so that the Board of Directors of the BCB considers the credit application, as well as the minimum terms and conditions required to grant it. That the reports from the Economic Policy and Legal Advisories recommend the approval of the aforementioned Regulation, which aligns with the provisions of Law 1670.

THEREFORE, THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA RESOLVES:

//2. B.D. No. 160/97 Article 1.- Approve the Regulation of Credits to the Public Sector in its 11 articles, which, as an annex, forms part of this Resolution. Article 2.- This Regulation shall enter into force as of November 15, 1997. Article 3.- The Presidency and the General Management are charged with the execution and compliance of this Resolution.

21.X.97

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Juan Antonio Morales A.

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Armando Pinell S. Jaime Ponce G.

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Juan Medinacelli V. Fernando Campero P.

//3. B.D. No. 160/97 REGULATION OF CREDITS TO THE PUBLIC SECTOR CHAPTER I OBJECT, TERMINOLOGY, AND ABBREVIATIONS

Article 1 (Object). This instrument aims to regulate Articles 22, 23, and 25 of Law 1670, establish the basic norms and the procedure for granting public credit in the cases provided for in Article 22, namely: 1.1. To meet urgent needs derived from public calamities, internal or international commotion, declared by Supreme Decree. 1.2. To meet temporary liquidity needs, within the limits of the monetary program.

Article 2 (Public Credit Operations). "Public Credit Operations" are defined as money loans with the guarantee of public securities, granted by the Central Bank of Bolivia in favor of the Ministry of Finance, to meet the needs indicated in Article 1.

Article 3 (Terminology and Abbreviations). For the purposes of this regulation, the following terms and abbreviations will be used: AL: Legal Advisory of the BCB. APE: Economic Policy Advisory of the BCB. BCB: Central Bank of Bolivia. GMC: Monetary and Credit Management of the BCB. LT: Treasury Bill, a public security issued at a discount.

MH: Ministry of Finance. //4. B.D. No. 160/97 TGN: General Treasury of the Nation: Representative of the MH, with sufficient legal capacity to incur obligations. Public Securities: Any negotiable debt security or public paper issued by the MH, whose public offering is authorized by the Securities Superintendence.

CHAPTER II CREDITS FOR PUBLIC CALAMITIES, INTERNAL OR INTERNATIONAL COMMOTION

Article 4 (Requirements). To consider the credit, it is necessary that the TGN submit to the BCB a plan incorporating at least the following documentation: 4.1. The corresponding Supreme Decree, under the terms indicated in Article 1 of this Regulation. 4.2. Credit application specifying: a) Amount b) Currency c) Term d) Public security backing the operation.

4.3. The disbursement schedule, the expenditure program, and the payment plan.

Article 5 (Procedure). The public credit application shall be subject to the following procedure: 5.1. The GMC will issue a report specifying the outstanding debt balance as of the date of the application and the future payment maturities of the TGN to the BCB. It will also rule on the suitability of the offered public security to back the operation.

//5. B.D. No. 160/97 5.2. The AL will issue a report regarding whether the application complies with the Law, this Regulation, and other pertinent legal norms. 5.3. The APE will issue a report considering the impact of such credit on the monetary program. 5.4. The application will be presented for consideration to the Board of Directors of the BCB, which may approve the public credit only if there is a favorable vote of at least two-thirds of the members present. For this purpose, it will issue an express resolution.

Article 6 (Financial Conditions). The financial conditions of the credits will be equal to the prevailing conditions in the long-term securities market. In the absence of such references, the financial conditions will be established by the Board of Directors of the BCB.

Article 7 (Conditions for Disbursement). To make the disbursement of the public credit resources effective, the following requirements must be met: 7.1. Execution of the respective public credit contract between the TGN and the BCB. 7.2. Written commitment by the TGN specifying the issuance dates in favor of the BCB and the physical delivery of the public security backing the operation. 7.3. Disbursements will be made in accordance with the proposed plan.

CHAPTER III CREDITS FOR TEMPORARY LIQUIDITY NEEDS

Article 8 (Requirements). To consider the credit, it is necessary that the TGN submit to the BCB the following documentation: //6. B.D. No. 160/97 8.1. Credit application specifying: a) Amount b) Currency c) Term d) Treasury Bills backing the operation. e) Payment plan 8.2. Monthly cash flow projections, incorporating repayments to the BCB according to the payment plan.

Article 9 (Procedure). The public credit application shall be subject to the following procedure: 9.1. The GMC will issue a report specifying the outstanding debt balance as of the date of the application and the future payment maturities of the TGN to the BCB. It will also rule on the suitability of the offered public security to back the operation. 9.2. The AL will issue a report regarding whether the application complies with the Law, this Regulation, and other pertinent legal norms. 9.3. The APE will issue a report regarding the compatibility of the requested public credit with the monetary program. 9.4. The application will be presented for consideration to the Board of Directors of the BCB, which may approve the public credit only if there is a favorable vote of at least two-thirds of the members present. For this purpose, it will issue an express resolution.

Article 10 (Financial Conditions). The credits described will be granted with the following financial conditions: 10.1. The Board will set the interest rate and the term. The interest rate shall not be lower than that prevailing in the securities market for similar securities of the same maturity.

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10.2. Maximum term of 90 days, renewable upon prior approval by the Board of Directors of the BCB and the issuance of a new security by the TGN. The total payment term, including renewals, shall not exceed one (1) year. 10.3. Upon maturity of the credit, the public security guaranteeing the obligation will be automatically redeemed through debit in any account that the TGN maintains at the BCB.

Article 11 (Conditions for Disbursement). To make the disbursement of the public credit resources effective, the following requirements must be met: 11.1. Execution of the respective public credit contract between the TGN and the BCB. 11.2. Issuance in favor of the BCB and physical delivery by the TGN of the LT backing the operation, specifying amount, currency, and term. The LT must be issued under the same interest rate and term conditions approved in the Board Resolution for the temporary liquidity public credit. -- o --