I. Introduction

 

Bolivia, with one of the smallest economies in Latin America, has yet to experience significant and continuous securitisations within its capital market.  At present and notwithstanding the fact that a modern regulatory structure is in place, the Bolivian market has produced few securitisations.  The national stock exchange (la “Bolsa Boliviana de Valores”) is in active existence for more than 15 years, but its transactions for the most part operate on a based fixed income basis. 

 

The general conception follows a firm belief in that once the economy reaches sustained growth; the stock market will automatically become a more attractive and important financial alternative, which in turn, will lend to the creation of new financial instruments and transactions.  Securitisations will surely become an integral part of these future developments.

 

 

II. Legal Framework

 

The Securities Law and its regulations,[1] consist of the main body of law regulating securitisations in Bolivia.  Under this set of norms, the creation of specialized companies known as “Securitisation Corporations” is duly recognized.  Any person or legal entity interested in conducting business through securitisations and similar transactions must incorporate a Securitisation Corporation.  In order to operate, such corporation must be registered before the National Stock Market Registry and must obtain an authorization from the Securities Intendency, the direct regulating body.  Securitisation Corporations must have a minimum starting capital as required by law and must also comply with other legal requisites in order to operate.

 

According to Bolivian law, the securitisation process commences once the assets to be securitized are irrevocably transferred under the control and management of a duly authorized Securitisation Corporation.  Such entity will then create an autonomous patrimony representing the assets and will in turn, provide the owner of the assets with a document in the form of a freely transferable, legally valid and enforceable security that must be subject to risk appraisal.  This process is tax exempt.  The securitisation process concludes once the autonomous patrimony representing the assets is extinguished.

 

In order for the Securitisation Corporation to issue securities derived from the securitized assets, it must first conduct an economic evaluation of such assets.  The value given to the assets by the Securitisation Corporation must then be registered before the regulator. The securities derived from the securitisation process must be registered and placed in the national stock exchange by a duly authorized broker within a minimum time frame.  The types of securities derived from a securitisation process may be any of the following:

 

a)     Credit securities – Those that incorporate the right to perceive capital payments and financial gains in accordance with the terms and conditions stated in the security.

 

b)    Participation securities – Those that represent participation rights over the autonomous patrimony.  The value of such participation will depend on the profits or losses generated by the autonomous patrimony.

 

c)     Mixed securities – Those that incorporate elements of both a) and b) above in accordance with the terms and conditions stated in the security.

 

The following assets may be securitized: public debt securities, registered securities, credit portfolio and credit documents, sale, services, leasing and factoring contracts, real and personal property and projects and others as may be considered by the regulator.  For registration purposes, any securitized assets must be duly registered before the National Registry of Securitized Assets.

 

 

III. Regulatory Structure

 

The Bolivian economy is regulated through the National Sectorial Regulation System. This system is broken down into separate Superintendencies acting as regulators for each sector of the economy (i.e. securities, telecommunications, hydrocarbons, energy, minerals etc.).  Securitisations fall under the general control of the Securities, Pensions and Insurance Superintendency. Any matter directly related with securities is regulated by the Securities Intendency, which forms part of the Securities, Pensions and Insurance Superintendency.

 

The regulator through administrative resolutions passes licenses, authorizations and administrative decisions.  Such resolutions are subject to the following approval process:

 

a)     The direct regulator (in the case of securities, the Securities Intendency) will issue an initial administrative resolution for any act or decision affecting a regulated person or entity.

b)    The regulated person or entity may appeal such administrative resolution to the General Superintendency, the highest regulating body in hierarchical order.

c)     Any decision from the General Superintendency that revokes or confirms the initial administrative resolution may be contested before the Bolivian Supreme Court.

d)    The judgment issued by the Bolivian Supreme Court revoking or confirming the second administrative resolution as issued by the General Superintendency is final and binding.

 

Securitisation Corporations and other parties participating in a securitisation process must follow certain procedures and legal requirements in order to complete the process.  Failure to comply with these requirements may result in economic penalties as imposed by the regulator, or may eventually result in a withdrawal of the authorization to operate, intervention and even mandatory dissolution of the Securitisation Corporation.

 

 

 

 

IV. Registered Securitisations

 

The following table describes the securitisations that have been registered to date in Bolivia.

 

Registered Fixed Income Securities  / October 1989 - December 2002
Coboce-Nafibo 001
Instrument	Series	Cr. Rating	Term	Date of issuance	Date of exp.	Issued Amoount ($us.)	Nominal Value	Interst	Agent
Credit Securities	CON-TD-E1N	AA3	1260 days	9/26/01	3/9/05	4,000,000,00	10000	10	BIA
Soboce-Nafibo 002
Instrument	Series	Cr. Rating	Term	Date of issuance	Date of exp.	Issued Amoount ($us.)	Nominal Value	Interst	Agent
Credit Securities	SBN-TD-E1A	A1	1845 days	11/01/02	11/20/07	500,000,00	50	7.50	NVA
Credit Securities	SBN-TD-E1B	AA3	1115 days	11/01/02	11/20/05	4,000,000,00	10	6.00	NVA
Credit Securities	SBN-TD-E1C	AA3	1480 days	11/01/02	11/20/06	4,000,000,00	20	6.75	NVA
Credit Securities	SBN-TD-E1D	AA3	1845 days	11/01/02	11/20/07	4,000,000,00	20	7.50	NVA

* Source: Bolsa Boliviana de Valores S.A.

 

 

Diego Rojas M.

C.R.&F. ROJAS - ABOGADOS

Tel.(591-3) 3377474

Fax.(591-3) 3377477

Santa Cruz - Bolivia

diego@rojas-lawfirm.com

www.rojas-lawfirm.com