7 CFR 1720.8 - Issuance of the guarantee.

§ 1720.8 Issuance of the guarantee.

(a) The following requirements must be met by the applicant prior to the endorsement of a guarantee by the Secretary.

(1) A guarantee agreement suitable in form and substance to the Secretary must be delivered.

(2) Bond documents must be executed by the applicant setting forth the legal provisions relating to the guaranteed bonds, including but not limited to payment dates, interest rates, redemption features, pledged security, additional borrowing terms including an explicit agreement to make payments even if loans made using the proceeds of such bond or note is not repaid to the lender, other financial covenants, and events of default and remedies;

(3) Prior to the issuance of the guarantee, the applicant must certify to the Secretary that the proceeds from the guaranteed bonds will be applied to fund new eligible loans under the RE Act, to refinance concurrent loans, or to refinance existing debt instruments of the guaranteed lender used to fund eligible loans;

(4) The applicant provides a certified list of eligible loans and their outstanding balances as of the date the guarantee is to be issued;

(5) Counsel to the applicant must furnish an opinion satisfactory to the Secretary as to the applicant being legally authorized to issue the guaranteed bonds and enter into the bond documents;

(6) No material adverse change occurs between the date of the application and date of execution of the guarantee;

(7) The applicant shall provide evidence of an investment grade rating from a Rating Agency for the proposed guaranteed bond without regard to the guarantee;

(8) The applicant shall provide evidence of a credit rating on its senior secured debt or its corporate credit rating, as applicable, without regard to the guarantee and satisfactory to the Secretary; and

(9) Certification by the Chairman of the Board and the Chief Executive Officer of the applicant (or other senior management acceptable to the Secretary), acknowledging the applicant's commitment to submit to the Secretary, an annual credit assessment of the applicant by a Rating Agency, an annual review and certification of the security of the government guarantee that is audited by an independent certified public accounting firm or federal banking regulator, annual consolidated financial statements audited by an independent certified public accountant each year during which the guarantee bonds are outstanding, and other such information requested by the Secretary.

(b) The Secretary shall not issue a guarantee if the applicant is unwilling or unable to satisfy all requirements.

[ 69 FR 63049, Oct. 29, 2004, as amended at 75 FR 42574, July 22, 2010]

This is a list of United States Code sections, Statutes at Large, Public Laws, and Presidential Documents, which provide rulemaking authority for this CFR Part.

This list is taken from the Parallel Table of Authorities and Rules provided by GPO [Government Printing Office].

It is not guaranteed to be accurate or up-to-date, though we do refresh the database weekly. More limitations on accuracy are described at the GPO site.

United States Code
U.S. Code: Title 7 - AGRICULTURE

§ 901 - Short title

§ 902 - General authority of Secretary of Agriculture

§ 903 - Authorization of appropriations

§ 904 - Loans for electrical plants and transmission lines

§ 905 - Fees for certain loan guarantees

§ 906 - Funding for administrative expenses

§ 906a - Use of funds outside the United States or its territories prohibited

§ 907 - Acquisition of property pledged for loans; disposition; sale of pledged property by borrower

§ 908 - Repealed. Pub. L. 104–127, title VII, § 776, Apr. 4, 1996, 110 Stat. 1150

§ 909 - Administration on nonpolitical basis; dismissal of officers or employees for violating provision

§ 910 - Repealed. Pub. L. 104–127, title VII, § 777, Apr. 4, 1996, 110 Stat. 1150

§ 911 - Acceptance of services of Federal or State officers; application of civil service laws; expenditures for supplies and equipment

§ 911a - Repealed. Pub. L. 103–354, title II, § 235(a)(5), Oct. 13, 1994, 108 Stat. 3221

§ 912 - Extension of time for repayment of loans

§ 912a - Rescheduling and refinancing of loans

§ 913 - Definitions

§ 914 - Separability

§ 915 - Purchase of financial and credit reports

§ 916 - Criteria for loans

§ 917 - Prohibition on restricting water and waste facility services to electric customers

§ 918 - General prohibitions

§ 918a - Energy generation, transmission, and distribution facilities efficiency grants and loans in rural communities with extremely high energy costs

§ 918b - Acquisition of existing systems in rural communities with high energy costs

§ 918c - Rural and remote communities electrification grants

§ 940c - Cushion of credit payments program