I do know that the Federal Senate has approved, and I, Renan Calheiros, President, in the terms of art. 48, inciso XXVIII, of the Internal Rules, promulgated the following

RESOLUTION NO. 8, OF 2006

Authorizes the State of Bahia to hire external credit operation, with guarantee from the Federative Republic of Brazil, worth up to US$ 49,296,000.00 (forty nine million, two hundred and ninety and Six thousand U.S. dollars), from principal, to the International Bank for Reconstruction and Development-Bird, aimed at the partial financing of the Integrated Areas Development Project in the State of Bahia-Living Better II.

The Federal Senate resolves:

Art. 1º It is the State of Bahia authorized to hire external credit operation, with guarantee from the Republic Federative of Brazil, worth up to US$ 49,296,000.00 (forty-nine million, two hundred and ninety and six thousand U.S. dollars), with the International Bank for Reconstruction and Development-Bird.

Paragraph single. The resources arising from the external credit operation referred to in the caput will be earmarked for the partial financing of the Integrated Areas Development Project in the State of Bahia-Viver Better II.

Art. 2º It is the Union authorized to grant guarantee to the credit operation to which art relates. 1º, having as a countermeasure offered by the State of Bahia shares of constitutional apportionment provided for in the arts. 157 and 159, complemented by the tax revenues set out in art. 155, and other guarantees admitted in law, pursuant to § 4º of the art. 167 of the Federal Constitution.

Art. 3º The credit operation referred to in art. 1º of this Resolution contains the following basic characteristics and conditions:

I-debtor: State of Bahia;

II-creditor: International Bank for Reconstruction and Development- Bird;

III-guarantor: Federative Republic of Brazil;

IV-value of the loan: up to US$ 49,296,000.00 (forty-nine million, two hundred and ninety-six thousand dollars Americans);

V-modality: loan at fixed margin (?fixed spread loan?);

VI-period of disbursement: until January 31, 2011;

VII-amortization: 24 (twenty four) semi-annual and consecutive installments, due each May 15 and 15 of November, between May 15, 2011 and November 15, 2022, being the 23 (twenty-three) first installments worth US$ 2,055,643.20 (two million, fifty and five thousand, six hundred and forty-three U.S. dollars and twenty cents) 4.17% (four whole and seventeen hundredths per cent) and 24ª (twenty-fourth) worth US$ 2,016,206.40 (two million, sixteen thousand, two hundred and six U.S. dollars and forty cents) 4.09% (four integers and nine hundredths per cent per cent per cent per cent. one);

VIII-interest: required semially, due on May 15 and November 15, calculated on the periodic debtor balance of the loan, at an annual rate composed of the?Libor? half-yearly to U.S. dollar, plus one? spread? to be determined by Bird every fiscal year and fixed on the date of the Contract's signature;

IX-commission of commitment: 0.85% a.a. (eighty-five hundred percent a year) on non-disbursed debtor balances, required semiannually, on the same dates of the payment of interest, entering into force 60 (sixty) days after the signing of the Contract, up to the 4º (fourth) year of its entry into force, and 0.75% a.a. (seventy-five hundreth percent a year) onwards;

X-commission in sight: up to 1% (one per cent) on the value of the loan, to be debited on the date on which the Contract enters into effectivity.

Paragraph single. The dates of disbursements, payment of the principal and the financial burdens may be changed depending on the date of signing of the loan Agreement.

Art. 4º The realization of the contracting of the credit operation referred to in this Resolution is conditional on the prior formalization of the contragarantia contract between the State and the Union, binding on the revenue referred to in art. 2º of this Resolution.

Art. 5º The authorization granted by this Resolution should be exercised within 540 (five hundred and forty) days, counted from the date of its publication.

Art. 6º This Resolution goes into effect on the date of its publication.

Federal Senate, on January 25, 2006.

Senator Renan Calheiros

President of the Federal Senate