04 Oct 24 The BCRA introduces additional options for the early repayment of debts

By Agustín L. Cerolini, Martín Chindamo y Maria Agustina Martín Triscali

The Argentine Central Bank (for its acronym in Spanish, the “BCRA”), through Communication «A» 8112, has implemented changes to the regulations regarding Foreign Exchange and Currency, specifically concerning access to the foreign exchange market. With this communication, the BCRA provides clients with the possibility to access the foreign exchange market for the early repayment of debts, in accordance with the provisions set forth in points 3.5.3.1. and 3.6.4.4. of the foreign exchange regulations of the BCRA.

Among the new available options, it is allowed to pay up to 5% of the principal amount of the debt as a premium, provided that the funds received from abroad for new debt instruments exceed the amount of the early repayment. Additionally, it is permitted to pay the accrued interest up to the closing of the transaction without requiring an equivalent settlement, as well as to cover issuance costs and services for non-residents on the same date, without the need for fund settlement.

The resolution stipulates that the requirement for income and settlement under point 3.5.1. of the the foreign exchange regulations of the BCRA shall be deemed fulfilled, provided that the new debt instruments delivered as a premium, buyback, or redemption do not exceed 5% of the principal of the exchanged debt. Furthermore, these instruments must include a grace period of one year for the payment of the principal and a minimum extension of two years regarding the average remaining life of the debt.

Finally, the communication clarifies that, pursuant to point 3.16.2. of the the foreign exchange regulations of the BCRA, entities may accept a sworn declaration from the client certifying that holdings exceeding a specific amount originate from funds deposited in bank accounts abroad, obtained from the subscription of new debt instruments in the last 60 days. These funds must be allocated for refinancing, buyback, or early redemption operations of debt instruments or financial debts with foreign entities.