Underwriting of publicly offered securities via the “book building” method

On December 6, 2007 the Argentine Tax Authority (“AFIP”) and the Argentine Securities and Exchange Commission (“CNV”) issued Joint Resolution AFIP No 2352 and CNV No 521/2007 (the “Resolution”), which amended Section 57 of Chapter VI of General Resolution CNV No 368/2001 (as previously amended by Joint Resolution AFIP No 1738 and CNV No 470/2004 and Joint Resolution AFIP No 2222 and CNV No 500/2007) relating to underwriting debt and trust securities via the “book building” method. The Resolution was published in the Official Gazette on December 14, 2007.

The Resolution states that the minimum term to carry out the invitation to place offers by means of public shall be of four business days. This implies a significant reduction in the subscription term for public offers via the “book building” method, previously set at nine business days.

The Resolution also enables the issuers to establish, as a special condition of the transaction, a chronological preference order in favor of those investors who formulate binding subscription offers, provided that such condition is clearly published and that the price is known or could be determined according to reasonable minimum and maximum standards. Furthermore, the issuers may terminate the subscription period before the expiration of the subscription term if, after at least two business banking days, non-binding subscription offers for the aggregate amount of the issuance are received.

With respect to the investors’ right to place subscription offers regarding the offered securities, the Resolution specifies that, during the subscription period, the investors can

(i)           waive their right to ratify their non-binding offers, which shall then become binding, and

(ii)           expressly withdraw their non-binding offers prior to the expiration of the subscription period.

The rules set out by the Resolution aim, in general, to grant greater flexibility to the issuers in relation to the underwriting of debt and trust securities and increase the investors’ options in connection with placing offers for such securities.