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Extension of Maximum Term for Pesos Conversion - International Law Office

International Law Office

Banking - Argentina

Extension of Maximum Term for Pesos Conversion

April 13 2007

On March 22 2007 the Argentine Central Bank issued Communication A4643, which extended the maximum term for the proceeds of foreign financial indebtedness to be transferred into Argentina and converted into pesos through the local foreign exchange market to 365 calendar days.

Communication A3712, which was passed by the Central Bank on September 3 2002, made compulsory the conversion of foreign indebtedness of the non-financial private sector under bonds and financial loans into pesos through the local foreign exchange market. The following year the Central Bank extended this obligation to the financial sector regarding its issuances of bonds, financial loans (including repurchase agreements with securities) and foreign financial lines of credit (Communication A3972, June 30 2003).

On May 18 2004, by means of Communication A4142, the Central Bank fixed a maximum term of 30 days from the date of disbursement of the funds for compliance with this obligation. On March 17 2005, by means of Communication A4321, the Central Bank extended the maximum term to 90 calendar days for disbursements of more than $50 million.

These maximum terms applied until Communication A4643 was issued. The new communication provides a single maximum term for all conversions. Irrespective of the size of the transaction, the maximum term for the conversion into pesos of the proceeds of new foreign financial indebtedness is 365 calendar days from the date of disbursement of the funds.

For further information on this topic please contact Gabriel G Matarasso or Cecilia Reynolds at Marval, O'Farrell & Mairal by telephone (+54 11 4310 0100) or by fax (+ 54 11 4310 0200) or by email (gm@marval.com.ar or cr@marval.com.ar). The Marval, O'Farrell & Mairal website can be accessed at www.marval.com.ar.

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