On October 13, 2022, the Central Bank of Argentina (hereinafter “BCRA“) issued Communiqué “A” 7621 (the “Communiqué“), and resolved to extend until December 31, 2023 the following measures provided for in the Foreign Exchange regulations:
a. Principal payments on foreign financial indebtedness with related counterparties
The BCRA extended the term foreseen to have its approval to access to the foreign exchange market for the cancellation of principal services of foreign financial indebtedness when the creditor is a counterparty related to the debtor.
It is worth mentioning that, for the determination of the relationship between the resident debtor and a foreign counterparty, the types of relationships are described in section 1.2.2. of the ordered text on “Large exposures to credit risk” published by the BCRA are applicable.
In the case of principal payments of financial indebtedness abroad, the Communiqué extended the term for such indebtedness to be covered by the provisions related to the Refinancing of principal maturities of foreign currency liabilities until December 31, 2023.
Local financial entities are excluded from the requirement to have the prior approval of the BCRA for their own transactions.
b. Payments of debt securities with public registry in the country denominated in foreign currency and obligations in foreign currency between residents.
In the event that the payment corresponds to maturities of principal of debt securities issues with public registration in the country denominated in foreign currency, the provisions on Refinancing of maturities of principal of liabilities in foreign currency set forth in the Foreign and Exchange regulations must be complied with, until December 31, 2023.
Originally, by means of Communiqué “A” 7422 of the BCRA, the deadline for compliance with the aforementioned points was set as June 30, 2022, and then it was extended until December 31, 2022.
It should be recalled that the criteria for submitting the refinancing plan consists of (i) the net amount to access the foreign exchange market in the original terms will not exceed 40% of the principal amount maturing; (ii) the remaining principal has been, at least, refinanced with new external indebtedness with an average maturity of two years.
The refinancing plan must be submitted to the BCRA at least 30 calendar days prior to the maturity of the principal to be refinanced.
Access the full text of the Communique here.
This publication does not constitute a legal opinion on specific issues. If necessary, expert legal advice should be sought.
For more information, please contact Sebastián Luegmayer (LuegmayerS@eof.com.ar)