Credits for Productive Investment (III)

On December 21, the Argentine Central Bank (the “Banco Central de la República Argentina” or “BCRA”) issued Resolution “A” 5380 which amends the regulation on credits for the productive investment, in terms of the 2013 financing quota, extending the provisions of Resolutions A" 5319, "A" 5235 and "A" 5338.

The new regulation states that the financing institutions obliged to grant credits under the 2013 quota are those that operate as financial actors of the national, provincial, City of Buenos Aires and/or municipal governments and whose nonfinancial private sector deposits in pesos equal or exceed by 1% of the total amount of the nonfinancial private sector deposits in the financial system (considering the average of the last three months prior to November 1, 2012).

The financing institutions shall allocate, at least, an amount equivalent to 5% of the nonfinancial private sector deposits, calculated on the balance at the end of November 2012. At least 50% of the credits shall be granted to micro, small and medium-sized enterprises. For that purpose, only the branches of the respective institution in the country would be considered.

The maximum interest rate will be 15.25% per annum fixed for the first 36 months. Having completed this period, if the financing continues, institutions may apply a variable rate that may not exceed the total BADLAR rate in pesos plus 400 basic points.

The eligible funding under BCRA Resolutions "A" 5319, "A" 5235 and "A" 5338 is the same for the 2013 financing quota, as well as the currency of the financing (denominated in pesos) and has an average term of 24 months or more, as long as the total period is less than 36 months.

All financing under the 2013 quota shall be agreed by 30 June of that year. In presence of a single payment, same shall be made before June 30, 2013. If the circumstances of a certain project demand more than one disbursement, the financing may be done in different stages before December 31, 2013.

In the event that an institution breaches the provisions provided for 2013 financing quota, as well as subject to the sanctions stipulated in Article 41 of the Financial Institutions Law N°21,516, it will be subject to an increase in its minimum cash requirement.