I do know that the Federal Senate has approved, and I, José Sarney, President, in the terms of art. 48, inciso XXVIII, of the Rules of Procedure, promulgated the following

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Authorizes the State of Rio Grande do Sul to hire external credit operation, with Union guarantee, with the Inter-American Development Bank (BID), worth up to US$ 200,000,000.00 (two hundred million dollars Americans), of principal, intended for the partial funding of the "Consolidation Program of the fiscal equilibrium of the Rio Grande do Sul (Proconfis RS)".

The Federal Senate resolves:

Art. 1º It is the State of Rio Grande of the South authorized to hire external credit operation, with Union guarantee, with the Inter-American Development Bank (BID) worth up to US$ 200,000,000.00 (two hundred million U.S. dollars).

Single Paragraph. The proceeds of this credit operation are intended to partially fund the "Consolidation Program of the State Balance Fiscal Equilibrium of the State of Rio Grande do Sul (Proconfis RS)".

Art. 2º The credit operation referred to in art. 1º should be carried out under the following conditions:

I-dever: State of Rio Grande do Sul ;

II-credor: Inter-American Development Bank (BID) ;

III-guarantor: Federative Republic of Brazil ;

IV-value: up to US$ 200,000,000.00 (two hundred million U.S. dollars), of principal ;

V-modality: loan with interest rate based on Libor;

VI-deadline of disbursement: up to 2 (two) years, counted from the duration of the contract ;

VII-amortization: semiannual, consecutive and customised benefits, winning the first 5 (five) years and 6 (six) months after the contract effective date, and the last, up to 20 (twenty) years after that date ;

VIII-interest: the borrower is expected to pay interest on the daily debtor balances, at a rate that will be determined in accordance with Article 3.03 of the General Standards. The first payment is expected to occur after 6 (six) months, counted from the duration of the contract. While the loan has not been the subject of any conversion, the borrower will pay interest at a rate based on Libor and, in this case, the interest will focus on an annual fee for each quarter determined by the Bank, on a date, as follows: i) the respective Liborrate, plus or less ; ii) the cost of caption of the Bank. Additionally, the borrower is expected to pay, on interest, the applicable margin for loans from the ordinary capital ;

IX-conversions: with the consent of the guarantor, through the Office of the National Treasury, the borrower may, as per clause 1.09 of the Special Provisions of the loan agreement, apply to the Bank for a currency conversion or an interest rate conversion, at any time for the duration of the contract, in accordance with the provisions of Chapter V of the General Standards:

a) currency conversion: the borrower may request that a disbursement or all or a portion of the debtor balance be converted into non-borrower country currency or in a local currency that the Bank can broker efficiently ;

b) interest rate conversion: the borrower may request, in relation to part or all of the debtor balance, the conversion of the interest rate based on Libor at a fixed rate of interest or any other option of rate conversion of interest requested by the borrover and accepted by the Bank ;

X-credit commission: to be established periodically by the Bank, calculated on the non-disbursed balance of the financing and required together with interest, entering into force 60 (sixty) days after signing of the contract and not may in no case exceed the percentage of 0.75% a.a. (seventy and five hundredths per cent a year) ;

XI-expenses with inspection and general supervision: by decision of current policy, the Bank will not charge amount to meet expenses with inspection and general supervision ; as per periodic review of its policies, the Bank shall notify the borrower a value due in a given semester, which may not be more than 1% (one per cent) of the financing, divided by the number of semesters understood within the original period of disbursements.

Art. 3º It is the Union authorized to grant guarantee to the State of Rio Grande do Sul in the contracting of the external credit operation referred to in this Resolution.

Single Paragraph. The exercise of the authorization provided in the caput is conditioned to which the Ministry of Finance check:

I-the adimation of the State of Rio Grande do Sul with the Union, including the controlled entities ;

II-the formalization of the contragarantia contract between the State of Rio Grande do Sul and the Union ;

III-the fulfillment of the preconditions to the first disbursement.

Art. 4º The maximum period for the exercise of this authorisation shall be 540 (five hundred and forty) days, counted from the duration of this Resolution.

Art. 5º This Resolution shall enter into force on the date of its publication.

Federal Senate, on December 19, 2012.

Senator JOSÉ SARNEY

President of the Federal Senate