Issuance of Short Term Debt Securities by Mutual Associations

Short term debt securities ("VCPs") are debt securities with maturity of up to three hundred and sixty-five (365) days. VCPs can be acquired or negotiated exclusively by certain qualified investors, including the following: the federal state and provincial or municipal states or their de-centralized entities, corporations and limited liability companies, cooperatives and associations, individuals residing or unlimited companies domiciled in Argentina with certain minimum net worth, securities dealers or brokers, investment funds, individuals residing or companies domiciled abroad.

Under General Resolution No. 589/2011 ("Resolution 589/11"), mutual associations may apply for registration in the Argentine Securities Exchange Commission ("CNV") special registry to establish global issuance programs of VCPs, and once registered will be automatically authorized for public offering of VCPs up to the amount and the period authorized, which may not exceed five (5) years.

Mutual associations may issue VCPs represented as serial promissory notes (pagarés seriados) or short term debt securities and must have a guaranty provided by a mutual guarantee company (or other forms of security provided by Law No. 25,300) as primary and joint payer. In addition, as in the case of limited liability companies, the VCPs issued by mutual associations must have quotation authorization issued by any self-regulatory organization.

Lastly, Resolution 589/11 allows mutual associations to submit their financial statements in accordance with the standards of the Argentine Cooperatives and Social Economy Institute (Instituto Nacional de Asociativismo y Economía Social or INAES), in order to comply with the "Periodical Reporting System" established is the CNV regulations.

Mutual associations currently participate in the Argentine capital market through the securitization of assets (mainly consumer loans) by means of financial trusts. However, VCPs represent an alternative of funding that allows mutual associations to enter into the public offering regime and receive credit directly from the investors through on-balance indebtedness, benefiting from the cost and tax benefits applicable to this type of capital markets financings.