7 CFR 2201.28 - Participation in guaranteed Loans.
(a) Subject to paragraphs (b), (c) and (d) of this section, a Lender may distribute the risk of a portion of a Loan guaranteed under the Program by sale of participations therein if:
(1) Neither the Loan note nor the Guarantee is assigned, conveyed, sold, or transferred in whole or in part as a result of the sale of such participations;
(2) The Lender remains solely responsible for the administration of the Loan as an Agent; and
(3) The Board's ability to assert any and all defenses available to it under the law and under the Loan Documents is not adversely affected.
(b) The following categories of entities may purchase participation interests in Loans guaranteed under the Program:
(1) Lenders that meet the eligibility requirements of § 2201.13 of this part;
(2) Qualified institutional buyers as defined in 17 CFR 230.144A (a), known as Rule 144A (a) of the Securities and Exchange Commission and issued under the Securities Act of 1933 (15 U.S.C. 77a et seq.); or
(3) Any other entity approved by the Board on a case-by-case basis.
(c) An Agent may not grant participations in that portion of its interest in a Loan that may not be assigned or transferred under § 2201.27(d) of this part. A Lender, other than the Agent, may not grant participations in that portion of its interest in a Loan that may not be assigned or transferred under § 2201.27(d) of this part.
(d) At least five percent of any participation interest in a Loan must be unguaranteed.