[Federal Register Volume 64, Number 154 (Wednesday, August 11, 1999)]
[Notices]
[Pages 43807-43809]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-20654]
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SMALL BUSINESS ADMINISTRATION
Notice of Sale of Commercial Loans
AGENCY: Small Business Administration.
ACTION: Notice of Sale of Commercial Loans-Loan Sale #1.
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SUMMARY: This notice announces the Small Business Administration's
(``SBA'') intention to sell approximately 4,000 secured and unsecured
commercial loans (the ``Loans'') in a sealed bid auction. The total
unpaid principal balance of the Loans to be sold in Loan Sale #1 is
approximately $350 million (US). Some of the Loans were previously
guaranteed by SBA under various sections of the Small Business
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Act, as amended, 15 U.S.C. 631 et seq., or the Small Business
Investment Act, as amended, 15 U.S.C. 695 et seq. All SBA guarantees
have been paid and no SBA guaranty is available to the successful
bidders. In addition, the remainder of the Loans were directly
originated and funded by SBA. The collateral for those Loans that are
secured includes commercial and residential real estate and other
business and personal property located nationwide. This notice also
summarizes the bidding process for the Loans.
DATES: The Bidder Information Package will be available to qualified
bidders beginning July 2, 1999. The Bid Date is currently scheduled for
August 17, 1999, and closings are currently scheduled to occur between
September 7, 1999, and September 21, 1999.
ADDRESSES: Bidder Information Packages will be available from SBA's
Financial Advisor, KPMG, LLP (``KPMG'') 2001 M Street, N.W.,
Washington, D.C. 20036, 888-660-8060. KPMG will forward Bidder
Information Packages to qualified bidders via overnight courier. Bidder
Information Packages will be made available only to parties that have
submitted a completed Confidentiality Agreement and Bidder
Qualification Statement and demonstrated that they are qualified
bidders. Interested parties can obtain a Confidentiality Agreement and
Bidder Qualification Statement from the SBA Asset Sales website:
www.sba.gov/assets or by calling 888-660-8060. This is a toll free
number. Imaged files for the Loans included in the sale are available
for review by qualified bidders that have paid the due diligence fee
and visit the due diligence facility located at 409 Third Street, S.W.,
Suite C-970, Washington, D.C. 20416. To schedule a visit to the due
diligence facility qualified bidders should contact Wayne Thornton,
METEC Asset Management, L.C. at 202-401-3059. This is not a toll free
number. The due diligence facility will be open between the hours of 8
am and 8 pm, Monday through Friday and 9 am to 5 pm on Saturday. The
due diligence facility opened on July 6, 1999 and is currently
scheduled to close on or about August 13, 1999.
FOR FURTHER INFORMATION CONTACT: Richard C. Blewett, Director Asset
Sales, Small Business Administration, 409 Third Street, S.W.,
Washington, DC 20416; 202-205-4202. This is not a toll free number.
Hearing or speech-impaired individuals may access this number via TDD/
TTY by calling the Federal Information Relay Service at 1-800-877-8339.
This is a toll-free number.
SUPPLEMENTARY INFORMATION: SBA intends to sell approximately 4,000
commercial loans. The Loans include loans that are performing,
subperforming and non-performing. The Loans will be divided into loan
pools on the basis of performance status, collateral status, collateral
type and geographic location of the collateral. A list of the Loans,
loan pools and pool descriptions is contained in the Bidder Information
Package. SBA will offer interested persons an opportunity to bid
competitively on loan pools, subject to conditions set forth in the
Bidder Information Package. SBA shall use its sole discretion to
evaluate and determine winning bids. No Loans will be sold
individually.
SBA has fully honored its guaranty payment obligation for each Loan
in the sale. The Loans are not currently guaranteed and will be sold
without SBA guarantees. The majority of the Loans are currently
serviced by SBA. One group of Loans are currently serviced by a single
servicer/approved lender.
The Bidding Process
To ensure a uniform and fair competitive bidding process, the terms
of sale are not subject to negotiation.
SBA will describe in detail the procedure for bidding on the Loans
in the Bidder Information Package, which will include bid forms, a non-
negotiable loan sale agreement prepared by SBA (``Loan Sale
Agreement''), specific bid instructions, as well as pertinent
information on the Loans such as total outstanding unpaid principal
balances, interest rates, maturity terms, payment history and
collateral information including its geographic location and type. The
Bidder Information Package also includes computer diskettes containing
data on the Loans.
The Bidder Information Package will be available approximately 6
weeks prior to the Bid Date. The Bidder Information Package will
contain procedures for obtaining supplemental information about the
Loans. Any interested party may request a copy of the Bidder
Information Package by sending a written request together with a duly
executed Confidentiality Agreement and a Bidder Qualification Statement
to the address specified in the ADDRESSES section of this notice.
Prior to the Bid Date, a Bidder Information Package Supplement will
be mailed to all qualified bidders. It will contain the final list of
loans included in Sale #1.
Each bidder must include with its bid a deposit equal to 10% of the
amount of its highest bid. If a successful bidder fails to abide by the
terms of the Loan Sale Agreement, including paying SBA any remaining
sums due pursuant to the Loan Sale Agreement and closing within the
time period specified in the Loan Sale Agreement, SBA shall retain any
deposit as liquidated damages.
Due Diligence Facility
A bidder due diligence period will take place beginning on or about
July 6, 1999. During the bidder due diligence period, qualified bidders
may, for a non-refundable fee of $500 US, review all asset file
documents which have been imaged onto a database by visiting the due
diligence facility located at 409 Third Street, S.W., Washington, D.C.
20416 and/or via modem. Bidders that have paid the due diligence fee of
$500 US may also request CD ROM discs that contain substantial due
diligence materials such as payment histories for each Loan and
Brokers' Price Opinions, where available.
Specific instructions for ordering information in electronic format
or making an appointment to visit the due diligence facility are
included in the Bidder Information Package.
SBA Reservation of Rights
SBA reserves the right to remove loans from the sale and to add
loans at any time prior to the Bid Date, for any reason and without
prejudice to its right to include any loans in a later sale. SBA also
reserves the right to terminate this sale at any time prior to the Bid
Date.
SBA reserves the right to use its sole discretion to evaluate and
determine winning bids. SBA also reserves the right in its sole
discretion and for any reason whatsoever to reject any and all bids.
SBA reserves the right to conduct a ``best and final'' round
wherein bidders will be given the opportunity to increase their bids. A
best and final round shall not be construed as a rejection of any bid
or preclude SBA from accepting any bid made by a bidder.
Number of Bids
Bidders may submit a maximum of 30 bids of any type. A bidder may
divide its bids among any combination of a portfolio bid, multiple pool
bids and/or individual pool bids, however, a bidder can submit only
individual pool bids for certain loan pools identified in the Bidder
Information Package.
Ineligible Bidders
The following individuals and entities (either alone or in
combination with
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others) are ineligible to bid on any one or combination of the loans
included in the sale:
(1) Any employee of SBA, any member of any such employee's
household and any entity controlled by an SBA employee or by a member
of such employee's household;
(2) Any individual or entity that is debarred or suspended from
doing business with SBA or any other agency of the United States
Government;
(3) Any contractor, subcontractor, consultant, and/or advisor
(including any agent, employee, partner, director, principal, or
affiliate of any of the foregoing) who will perform or has performed
services for, or on-behalf of, SBA either in connection with this sale
or the development of SBA's loan sale program;
(4) Any individual that was an employee, partner, director, agent,
or principal of any entity, or individual described in paragraph (3)
above at any time during which the entity or individual performed
services for, or on behalf of, SBA either in connection with this sale
or the development of SBA's loan sale program;
(5) Any individual or entity that has used or will use the
services, directly or indirectly, of any person or entity ineligible
under any of paragraphs (1) through (4) above to assist in the
preparation of any bid in connection with this sale.
Loan Sale Procedure
SBA has selected a competitive sealed bid auction as the method to
sell the Loans. Historically, this method of sale optimizes the return
on the sale of loans and, affords the greatest opportunity for all
interested parties to bid. This method also provides the quickest and
most efficient vehicle for the SBA to dispose of the Loans.
Post Sale Servicing Requirement
The Loans will be sold servicing released. Purchasers of the Loans,
and their successors and assigns, will be required to service the Loans
in accordance with the applicable provisions of the Loan Sale
Agreement. In addition, the Loan Sale Agreement establishes certain
requirements that a servicer must satisfy to service the Loans.
Scope of Notice
This notice applies to Loan Sale Number #1, and does not establish
agency procedures and policies for other loan sales. If there are any
conflicts between this Notice and the Bidder Information Package, the
contents of the Bidder Information Package shall prevail.
Dated: August 4, 1999.
Jane Palsgrove Butler,
Associate Administrator for Financial Assistance.
[FR Doc. 99-20654 Filed 8-10-99; 8:45 am]
BILLING CODE 8025-01-P