Resolution CMN No. 2666 — Establishes criteria and conditions for extended/securitized rural credit operations under Law No. 9,138/1995 or renegotiated under Resolution No. 2,471/1998

RESOLUTION NO. 2666

Establishes the criteria and conditions applicable to extended/securitized rural credit operations supported by Law No. 9,138 of 1995, or renegotiated based on Resolution No. 2,471 of 1998.

The CENTRAL BANK OF BRAZIL, in accordance with Article 9 of Law No. 4,595 of December 31, 1964, makes public that the NATIONAL MONETARY COUNCIL, in a session held on November 11, 1999, considering the provisions of Articles 4, item VI, of the aforementioned Law, 4 and 14 of Law No. 4,829 of November 5, 1965, and 5, paragraph 5, item I, of Law No. 9,138 of November 29, 1995, with the wording given by Article 1 of Law No. 9,866 of November 9, 1999,

RESOLVES:

Article 1. Establish the following criteria and conditions applicable to extended/securitized operations supported by Law No. 9,138 of November 29, 1995:

I - operations under the responsibility of a single borrower, whose total outstanding balances on July 31, 1999, were up to R$15,000.00 (fifteen thousand reais): the installment due on October 31, 1999, and the installment due in the year 2000 are extended, respectively, to the first and second years subsequent to the maturity of the last installment previously agreed upon, considering the extensions formalized regarding installments due in the years 1997 and 1998;

II - operations under the responsibility of a single borrower, whose total outstanding balances on July 31, 1999, were greater than R$15,000.00 (fifteen thousand reais): requirement to pay 10% (ten percent) of the value of the installment due on October 31, 1999, and 15% (fifteen percent) of the value of the installment due in the year 2000, with the remaining values extended, respectively, to the first and second years subsequent to the maturity of the last installment previously agreed upon, considering the extensions formalized regarding installments due in the years 1997 and 1998;

III - compliance bonuses must be granted on each installment of the debt paid by its due date, in the event that the outstanding balance on July 31, 1999, was equal to or less than R$50,000.00 (fifty thousand reais), representing a discount of 30% (thirty percent);

IV - compliance bonuses must be granted on each installment of the debt paid by its due date, in the event that the outstanding balance on July 31, 1999, was greater than R$50,000.00 (fifty thousand reais), representing discounts of 30% (thirty percent) and 15% (fifteen percent), observing the following criteria for their respective calculation:

a) the quotients between:

1. R$50,000.00 (fifty thousand reais) and the outstanding balance of the operation;

2. the amount exceeding R$50,000.00 (fifty thousand reais) and the outstanding balance of the operation;

must be calculated in percentage terms;

b) the percentages calculated in the manner of the preceding item must be applied to the installment subject to payment, with a view to obtaining the bases for the application of the discounts;

c) on the incidence base obtained from the application of the percentage referred to in item "a", number 1, a discount of 30% (thirty percent) must be granted;

d) on the incidence base obtained from the application of the percentage referred to in item "a", number 2, a discount of 15% (fifteen percent) must be granted;

V - the compliance bonuses referred to in items III and IV must also be granted in the following cases:

a) debts fully settled in advance, in which case the discount must be calculated on the amount of the updated outstanding balance and the discounts inherent to the early settlement applied;

b) installments related to the years 1999 and 2000, for which borrowers opt not to join the extension and make the respective payments by their due dates;

c) early amortizations of a value equal to the discounted value of each of the debt installments due from the year 2000 onwards;

d) installments subject to partial payment, the remainder of which was extended by virtue of the provisions of MCR 2-6-9;

VI - a deadline of up to December 31, 1999, may be granted, maintaining the operations in a normal situation and the compliance financial charges, for payment:

a) of the value equivalent to 10% (ten percent) of the installment subject to extension, due on October 31, 1999;

b) of the installment due on October 31, 1999, for which borrowers opt not to join the extension admitted under the terms of items I and II;

VII - the extension of installments related to debts greater than R$15,000.00 (fifteen thousand reais) on July 31, 1999, may only be formalized after the payment of 10% (ten percent) of the value of the installment due in 1999;

VIII - the payment of the value equivalent to 15% (fifteen percent) of the installment subject to extension, with maturity initially scheduled for that date, must be made by October 31, 2000;

IX - the extensions must be carried out through an amendment to the credit instrument, requiring a formal declaration of withdrawal signed by the debtor, in the event of non-participation.

Paragraph 1. The installments extended in the manner provided for in items I and II must be expressed in quantities of equivalent units in product, plus an effective annual interest rate of 3% a.a. (three percent per annum), compounded annually.

Paragraph 2. The borrower who makes an early partial payment of the installments referred to in item V, items "b" and "c", is only entitled to the compliance bonus if the payment is completed by the respective due date.

Paragraph 3. The borrower who is in default regarding installments due in 1997 and/or 1998 is not entitled to the benefits provided for in this article.

Article 2. The benefits provided for in the previous article apply to the following debts, related to rural financings supported by resources of the Coffee Economy Defense Fund (FUNCAFÉ), provided that the borrowers have made the payment, by November 16, 1999, of the two installments of 8% (eight percent) of the debt, referred to in Article 1, sole paragraph, of Resolution No. 2,620 of July 16, 1999:

I - renegotiated under the support of Resolution No. 2,416 of August 14, 1997;

II - related to the financing and harvest operations of the 1997/1998 coffee crop, formalized under the support of Resolutions Nos. 2,431 of October 2, 1997, and 2,476 of March 26, 1998, observing that the outstanding balances of these operations must be fractionated into the same number of remaining installments as the debts renegotiated under the support of Resolution No. 2,416 of 1997.

Sole Paragraph. The operations referred to in this article may be kept in a waiting period and in a normal situation until December 31, 1999.

Article 3. For the purpose of granting the benefits provided for in Article 1, regarding operations under the responsibility of:

I - condominiums and partnerships, the value of each participant must be considered, for the calculation of the value of each participant, the result of the division of the outstanding balance of the operation on July 31, 1999, by the number of participants in the joint and several liability note, excluding spouses, observing that:

a) the existence of an operation, singular or joint and several, under the responsibility of one or part of the joint and several debtors will not result in a change of tier in a joint and several liability note in which at least one different debtor participates;

b) the same borrower may have a collective classification as a participant in a joint and several liability note, benefiting, together with the other issuers of the same note, from the discount related to the common operation, and another different individual classification, computing, in this latter classification, the value calculated as a participant in the joint and several liability note and its individual obligations;

c) the participants in the joint and several liability note must be identified by their respective number in the Individual Taxpayer Registry - CPF or in the National Registry of Legal Entities - CNPJ;

II - cooperatives, it must be observed that:

a) if the final borrower is identified, the outstanding balance under the responsibility of each cooperative member must be considered, including the balances of individual operations not linked to cooperatives;

b) if the final borrower is not identified, the total outstanding balance related to the operation formalized between the cooperative and the financial institution must be considered.

Article 4. Add items IV, V, and VI to paragraph 1 of Article 1 of Resolution No. 2,471 of February 26, 1998, so that the aforementioned article shall enter into force with the following wording:

"Article 1. Authorize the renegotiation of debts originating from rural credit under special conditions.

Paragraph 1. The renegotiation may cover debts:

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

II - of 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 of 1996;

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

IV - eligible for the Program for Revitalization of Agricultural Production Cooperatives - RECOOP;

V - resulting from rural credit loans that were formalized between June 20, 1995, and December 31, 1997, not subject to fixed financial charges and provided that there has been no practice of credit diversion or other fraudulent action;

VI - linked, provided that the conditions provided for in the preceding item are met, to resources:

a) from the Worker Support Fund (FAT) and from others operated by the National Bank for Economic and Social Development (BNDES);

b) from the Constitutional Financing Funds of the North, Northeast, or Central-West (FNO, FNE, and FCO);

c) from the Coffee Economy Defense Fund (FUNCAFÉ);

d) from the Japanese-Brazilian Cooperation Program for the Development of the Cerrados (PRODECER), covering, in this case, operations formalized before June 20, 1995;

e) referenced in exchange rate variation.

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

Article 5. Financial institutions are authorized to grant credit for the acquisition of National Treasury securities, for the purpose of the provisions of Article 1, paragraph 2, of Resolution No. 2,471 of 1998, with the wording given by Article 4 of this Resolution, provided that controlled resources of rural credit are not used for this purpose.

Article 6. Operations formalized under the support of Resolution No. 2,471 of 1998 are subject, from August 24, 1999, to a reduction of up to two percentage points in their respective interest rates, applicable in relation to each installment of financial charges paid by its due date.

Sole Paragraph. The application of the discount provided for in this article cannot result in an interest rate lower than 6% a.a. (six percent per annum), including in cases already renegotiated, with the practice of lower rates without the application of the aforementioned discount being prohibited.

Article 7. Financial institutions, observing banking procedures, must take the necessary measures to ensure the continuity of credit assistance to borrowers benefited by the measures established in this Resolution, when indispensable for the development of their operations and generation of revenue to honor the commitments assumed.

Article 8. The Secretariat of the National Treasury, of the Ministry of Finance, is authorized to promote contractual adjustment with financial institutions, with a view to adapting the values and deadlines for reimbursement, to that Secretariat, of the extended/securitized operations benefited by the measures established in this Resolution.

Article 9. The Secretariats of Economic Monitoring and of the National Treasury, of the Ministry of Finance, and of Agricultural Policy, of the Ministry of Agriculture and Supply, are authorized to jointly define the complementary measures necessary for the compliance with the provisions of this Resolution, which will be published by the Central Bank of Brazil.

Article 10. This Resolution enters into force on the date of its publication.

Article 11. Resolutions Nos. 2,634 and 2,635, both of August 24, 1999, and Article 2 of Resolution No. 2,579 of December 23, 1998, are revoked.

Brasília, November 11, 1999

Arminio Fraga Neto
President