BCRA Communications “A” 7925 and “B” 12695 and BCRA Publication — BCRA details on the issuance of BOPREAL — Report on DNU No. 70/2023.
Banking & Financial Institutions Department Report | BCRA Communications “A” 7925 and “B” 12695 and BCRA Publication — BCRA details on the issuance of BOPREAL — Report on DNU No. 70/2023
On December 22nd, 2023, the BCRA issued Communication “A” 7925 and Communication “B” 12695, through which the details of the issuance of three rounds of Bonds for the Reconstruction of a Free Argentina (“BOPREAL”) are regulated, which may be subscribed by those who have outstanding debts abroad for the importation of goods with customs clearance or services provided on or before December 12th, 2023. It is also provided that these debts may be canceled with the funds received for payments under the BOPREAL.
Likewise, through the publication “The BCRA will offer the bonds that organize and give predictability to the debts of importers” (the “Publication”), the BCRA provides greater details of the BOPREAL, whose first round will be offered starting today.
Below, there is a comparative chart showing the main differences between the three BOPREAL series that the BCRA reported in its Communication “B” 12,695:
Click here to read our report on the Urgency and Necessity Decree No. 70/2023.
Below is a summary of the main characteristics of the BOPREAL.
(A) Background
Through the report sent on 12/21/2023, we remind you that to pay a commercial debt for imports of goods with customs entry registration or debt for services provided on or before 12/12/2023, there is no possibility of accessing the exchange market, without a BCRA prior authorization (with very few exceptions), so it is a “debt stock” with few options to make its payment (the “Debt Stock”).
The Publication confirms that the purpose of the issuance of these series of BOPREAL is to have “[…] vehicles to channel the demand for foreign currency from importers of goods and services with commercial debts for operations with customs registration or services provided until 12 December 2023.”
Thus, the BOPREAL staggers the BCRA’s foreign exchange supply commitments by distributing said supply through (i) a short-term bond (Series 2 maturing in June 2025); (ii) a medium-term bond (Series 3 due May 2026); and (iii) a third bond with the maximum term established in Communication “A” 7918 (Series 1 due October 2027).
(B) Subscription
Regarding the subscription of the different series of BOPREAL, Communication B distinguishes between the schemes applicable to importers of goods and services.
i. Subscription of BOPREAL by importers of goods
Communication B establishes that a subscription may be requested for up to the amount pending payment that appears in the payment monitoring system for imports of goods (“SEPAIMPO”), for officializations with customs entry registration before 12/12/2023.
Certifications of outstanding balances issued by the entities in charge of each monitoring (each, a “Certification”) must be submitted. It is expected that the monitoring entities will deduct the amount of each Certification from the residual amount available for dispatch in SEPAIMPO. When in the bidding an amount of BOPREAL is obtained for an amount lower than the Certification, the adjustment must be made in the registry to restore the difference in favor.
On the other hand, Communication A establishes that BOPREAL may be subscribed for up to the amount of the Debt Stock for imports of goods and that the entity that issues the Certification must verify a series of requirements:
· That the obligation qualifies as a debt for imports of goods in the terms of Point 10.2.4 of BCRA’s Ordered Text of Foreign Currency and Exchange (the “Ordered Text”) (i.e., that the conditions that a debt must meet to be qualified as commercial);
· That the operation is declared in the last due presentation of the Survey of External Assets and Liabilities (if applicable);
· That the conditions of Point 3.16.6 of the Ordered Text are met (the general ones for the payment of imports with customs entry registration), except for the requirement provided for in inc. viii (that the beneficiary of the payment is a foreign supplier or financial entities or agencies that have financed the purchase).
· That the complementary requirements of Points 3.16.2 to 3.16.6 of the Ordered Text are met (includes, for example, the sworn declarations of securities operations necessary to carry out cash settlement or MEP);
· That there is a sworn statement stating that the debt for which the Certification is accessed is pending payment.
Additionally, for certain special regimes, a declaration is required stating that this mechanism was not used in another entity for that same debt (these are: receipts of merchandise by private request or Courier; payments of equipment supplies and others related to the production of off-shore hydrocarbons; goods destined for sale in free shops; and goods entered into free warehouses in customs offices).
The entity, in all cases, must make an exchange sales ticket in the name of the importer under the name “B26. Registry of Imports of goods due to the award of BOPREAL bonds”, recorded in foreign currency of the awarded BOPREAL. That is, the subscription technically works as an exchange operation (please keep this detail in mind for the application of the PAIS tax that we reported in our previous report) on Decree 72/2023.
ii. BOPREAL subscription by service importers
Based on the provisions of Communication B, service importers may request a subscription to the BOPREAL series for up to the amount pending payment for their obligations for services provided dated 12/12/2023.
In this case, a sworn statement is requested informing the entity of the amount of the debt pending payment as of the date mentioned above (and not through a Certification). The amounts awarded in the placement will be deducted from the outstanding debt balances with access to the Exchange Market.
Communication A additionally establishes that the entities that specify the subscription offer must have documentation that proves the existence of the service, and verify that:
· The obligation qualifies as a debt for service imports under the terms of Point 3.2.4 of the Ordered Text (commercial debts);
· The operation is declared in the Survey of External Assets and Liabilities;
· The client meets the complementary requirements of Points 3.16.2 to 3.16.6 of the Ordered Text;
· It has a sworn statement from the client stating that the debt for which the subscription is requested is pending payment and that they have not requested the use of this mechanism in another entity for this debt.
The exchange sales ticket issued by the entity in the importer’s name must be made under the concept code “S33. Registration of imports of services by awarding BOPREAL bonds.
(C) Offer and mode of bidding
The offers of the different BOPREAL Series will be channeled through the SIOPEL system of the Mercado Abierto Electrónico S.A., in SIOPEL wheels to be informed on time.
The tenders will be carried out by indicating quantities, and the original nominal value amount in US dollars to be subscribed by each importer and their CUIT/CUIL must be entered.
(D) Mechanisms for the payment of Debt Stock
The Debt Stock may be paid within the framework of points (A) i. and ii. developed here, through exchange or arbitration with funds originating from BOPREAL collections.
Communication A establishes that those who subscribe to BOPREAL corresponding to the longest term offered (i.e., BOPREAL Series 1) before 12/31/2023 and for an amount equal to or greater than 50% of the total Debt Stock of each importer, will be able to access the Market of Exchanges as of 02/01/2024 to pay Debt Stock for a total amount equivalent to 5% of the subscribed amount of said BOPREAL (not 5% of the Debt Stock, but of the “subscribed”) (i.e., before receiving capital or bond interest).
(E) Enabling BOPREAL trading in the secondary market without losing access to the Exchange Market
Finally, Communication A establishes that in the presentation of the sworn statements of points 3.16.3.1 and 3.16.3.2 of the Ordered Text, sales with settlement in foreign currency in the country or abroad of BOPREAL should not be taken into account. or the transfers of these bonds to depositories abroad, when they are made for up to the amount acquired in the primary subscription by those who participated in the bidding. In this way, the negotiation of BOPREAL is enabled in the secondary market without these transactions excluding subscribers from the Exchange Market.
Please, do not hesitate to contact us should you require any additional information on this matter.
Sincerely,
Pablo J. Torretta