Listing of Trust Notes in the BASE - New Regulations

The Comisión Nacional de Valores (“CNV”), the Argentine securities commission, has approved new regulations for the listing of notes issued by financial trust on the Buenos Aires Stock Exchange (“BASE”).

On July 19, 2006, Resolution No 15,421 from the CNV was published approving the BASE’s Council Resolution No 2/2006, regulating the listing of trust notes (“New Regulations”).

Prior to the New Regulations, the BASE had not included any regulations directly applicable to trust notes, therefore, the regulations for corporate bonds (“obligaciones negociables”) were analogously applied to them. The latter regulations, as well as other BASE regulations compatible with the nature of trust notes will still be applicable in case of circumstances not contemplated in the New Regulations.

The New Regulations provide that the trust assets of those trusts applying for listing must:

I.     Be clearly and individually identified; if not possible at the time of the execution of the trust agreement, then the prospectus must include a description of the requirements and characteristics that the assets must have.

II.    If they consist, in an exclusive or significant manner, in future flows, they must have one or more credit ratings so that the BASE may consider the feasibility that such future flows effectively take place or, upon existence, are acquired and their later treatment in the event of debt reorganization proceedings (“Concurso preventivo”), bankruptcy or prepackaged debt reorganization proceedings (“Acuerdo Preventivo Extrajudicial”). The BASE will be able to deny a listing application if the credit risk assessment is lower than “BB” or its equivalent (this is a new requirement).

III.   Not consist in, exclusively or in a significant manner, in financings owed by the company that is directly or indirectly financing itself by means of the trust. The New Regulations eliminate the possibility of creating trusts operating as debt substitutes, except to the extent that such issuance were the only means by which an issuer that is not able to issue corporate bonds may obtain financing in the capital markets. In this case, the BASE may require compliance with the corporate bonds information regime.

The trustee’s legal representative will be responsible for submitting the prospectus, the required financial information and the disclosure of relevant information. Current BASE’s criteria for the interruption, suspension and cancellation of the listing, as adjusted to trust notes, remain applicable.

Another novelty of the New Regulations is the possibility that the BASE temporarily interrupt the listing of trust notes when there is relevant information pending to be disclosed by the trustee. Based on the same criteria that BASE uses for the other securities that list therein, the New Regulations include a schedule with a non-exclusive description of those events that are considered as relevant information.

The New Regulations came into effect on July 20, 2006. In the absence of language in the New Regulations, we believe that the BASE’s criteria will be to require pending applications for listing to adjust to the new requirements.