Resolution CMN No. 2471 — Provides for the renegotiation of debts arising from rural credit

RESOLUTION NO. 2471

Provides for the renegotiation of debts arising from rural credit, as addressed in Article 5, paragraph 6, of Law No. 9,138, of November 29, 1995, and Resolution No. 2,238, of January 31, 1996.

The CENTRAL BANK OF BRAZIL, in accordance with Article 9 of Law No. 4,595, of December 31, 1964, makes public that the MONETARY COUNCIL, in a session held on February 19, 1998, considering the provisions of Article 4, item VI, of the aforementioned Law, Articles 4 and 14 of Law No. 4,829, of November 5, 1965, and Articles 8 and 10 of Law No. 9,138, of November 29, 1995,

HAS RESOLVED:

Article 1. Authorize the renegotiation of debts arising from rural credit under special conditions, prohibiting the equalization of financial charges by the National Treasury.

Paragraph 1. The renegotiation may cover debts:

I - eligible for classification under Resolution No. 2,238, of January 31, 1996, whether renegotiated or not, but which have not been subject to extension/securitization based on that regulation;

II - with a value exceeding R$200,000.00 (two hundred thousand reais), referred to in Article 5, paragraph 6, of Law No. 9,138, of November 29, 1995, and in Article 1, item IX, of Resolution No. 2,238/96;

III - resulting from loans of any nature, due or coming due, whose resources were used to amortize or settle rural credit operations formalized until June 20, 1995.

Paragraph 2. The renegotiation is conditioned upon the acquisition, by the debtors, through the lending financial institution, of National Treasury securities, typified in the annex to this Resolution, with a face value equivalent to that of the debt to be renegotiated, which must be delivered to the creditor as collateral for the principal.

Article 2. For the purposes of the renegotiation governed by this Resolution, the outstanding balance must be calculated observing the following conditions:

I - the values not renegotiated based on Article 5 of Law No. 9,138/95 and Resolution No. 2,238/96 are subject to:

a) until the due date stipulated in the credit instrument or the repactuation provided for in this Resolution, whichever occurs first: to the financial charges provided for in the original credit instrument for the normal situation;

b) from the stipulated due date until the date of renegotiation: the incidence of the basic remuneration of savings deposits plus an effective interest rate of up to 12% p.a. (twelve percent per annum), excluding charges related to default, penalty, and non-performance;

II - the values renegotiated based on Article 5, paragraph 6, of Law No. 9,138/95 and Article 1, item IX, of Resolution No. 2,238/96, including the index differential verified during the Economic Stabilization Plan issued in March 1990, are subject to:

a) from the date of the previously formalized renegotiation until the same day in January 1998: to the basic remuneration of savings deposits plus an effective interest rate of 12% p.a. (twelve percent per annum), with the necessary accounting adjustments made;

b) on the outstanding balance calculated in accordance with the previous item: the incidence of charges, including updating, defined in Article 3, item II, of this Resolution.

Article 3. The renegotiation governed by this Resolution will be carried out observing the following special conditions:

I - terms:

a) contracting: until July 31, 1998;

b) repayment: 20 (twenty) years, counted from the date of renegotiation;

II - financial charges:

a) on the value up to R$500,000.00 (five hundred thousand reais): IGP-M (General Market Price Index), published by the Getulio Vargas Foundation - FGV, plus an effective interest rate of 8% p.a. (eight percent per annum);

b) on the value of the portion exceeding R$500,000.00 (five hundred thousand reais) and up to R$1,000,000.00 (one million reais): IGP-M plus an effective interest rate of 9% p.a. (nine percent per annum);

c) on the value of the portion exceeding R$1,000,000.00 (one million reais): IGP-M plus an effective interest rate of 10% p.a. (ten percent per annum);

III - in the case of a total value exceeding R$500,000.00 (five hundred thousand reais), the financial charges will be calculated by the weighted average, observing the intervals established in item II of this article;

IV - guarantees:

a) of the principal: assignment, under a resolutive condition, of the securities issued by the National Treasury, typified in the annex to this Resolution, which must remain blocked while constituting collateral for the operation and there is no manifestation by the National Treasury regarding the exercise of the buyback option;

b) of the interest: the usual ones for rural credit, in the proportion of 50% (fifty percent) of the value of the renegotiated principal, allowing federal obligations registered in centralized settlement and custody systems;

V - repayment:

a) of the principal: at the final due date, through the redemption of the securities offered as collateral;

b) of the interest: according to the borrower's revenue flow, provided it does not exceed the annual period;

VI - early payment: in the case of early amortization or settlement, the securities exceeding the updated remaining outstanding balance will be released, observing the conditions of item "a" of item IV of this article.

Article 4. Alternatively, at the discretion of the parties, operations already renegotiated in accordance with Article 5, paragraph 6, of Law No. 9,138/95 and Article 1, item IX, of Resolution No. 2,238/96 may be repactuated under the following conditions:

I - revision of the outstanding balance: by applying, in the period between the date of the previously formalized renegotiation and the same day in January 1998, the basic remuneration of savings deposits plus an effective interest rate of 12% p.a. (twelve percent per annum), with the necessary accounting adjustments made;

II - financial charges applicable to the outstanding balance calculated in accordance with the previous item: basic remuneration of savings deposits plus an effective interest rate of 8% p.a. (eight percent per annum).

Article 5. The balances of the operations renegotiated under the terms of this Resolution may be computed for compliance with the exigibilities of the resource sources that will back them.

Paragraph 1. In the case of the requirement to apply funds to rural credit as addressed in MCR 6-2, the operations cannot commit more than the equivalent of 15% (fifteen percent) of the daily average balance of the accounting items of demand resources subject to compulsory deposit, of the respective financial institution.

Paragraph 2. The balances of the operations renegotiated based on Article 1, item IX, of Resolution No. 2,238/96 and supported by the exigibility of MCR 6-2 must be considered for the purposes of the limit established in the previous paragraph.

Article 6. The provisions of this Resolution do not inhibit the possibility of renegotiating debts under conditions adjusted between the parties, as provided in Article 1, item IX, "in fine", of Resolution No. 2,238/96 and supplementary regulation.

Article 7. Amend, from January 2, 1998, to July 31, 1998, the terms established in Articles 1 and 2 of Resolution No. 2,322, of October 15, 1996.

Sole Paragraph. The authorization provided for in Article 1 of Resolution No. 2,322/96 now covers rural credit operations contracted until June 20, 1995, and due or coming due until July 1998.

Article 8. This Resolution enters into force on the date of its publication.

Article 9. Resolution No. 2,457, of December 18, 1997, is hereby revoked.

Brasília, February 26, 1998

Gustavo H. B. Franco
President

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ANNEX TO RESOLUTION NO. 2,471, OF FEBRUARY 26, 1998
RENEGOTIATION OF RURAL SECTOR DEBTS

The National Treasury securities, intended to guarantee the value of the principal in the renegotiation of rural sector debts governed by this Resolution, will be issued by the National Treasury Secretariat (STN), with the following main characteristics and conditions:

I - term: 20 (twenty) years;

II - unit price: calculated at a discount rate of 12% p.a. (twelve percent per annum);

III - updating: IGP-M (General Market Price Index) published by the Getulio Vargas Foundation - FGV;

IV - modality: negotiable, observing that:

a) the securities will be assigned to the lending financial institution of the debt renegotiation operation, as collateral for the principal, with a resolutive clause, which must remain blocked while constituting collateral and there is no manifestation by the National Treasury regarding the exercise of the buyback option;

b) in the case of transfer of the securities to the financial institution, due to the execution of the guarantee, the securities will be considered non-negotiable, through the substitution of said assets by the STN, specifying this new characteristic;

V - buyback option by the issuer: at present value, calculated at a discount rate of 12% p.a. (twelve percent per annum), upon the release of the collateral (partial or total payment of the debt);

VI - redemption: in a single installment, on the maturity date of the security;

VII - form: registered book-entry securities, registered at the Central Custody and Financial Settlement of Securities (CETIP).