[Federal Register Volume 65, Number 130 (Thursday, July 6, 2000)]
[Notices]
[Pages 41741-41743]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-17038]
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SMALL BUSINESS ADMINISTRATION
Notice of Sale of Business and Disaster Assistance Loans
AGENCY: Small Business Administration.
ACTION: Notice of sale of business and disaster assistance loans--Loan
Sale #2.
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SUMMARY: This notice announces the Small Business Administration's
(``SBA'') intention to sell approximately 25,000 secured and unsecured
business and disaster assistance loans, (collectively referred to as
the ``Loans''). This is the first sale of Disaster Assistance Loans and
includes both business and consumer loans. The total unpaid principal
balance of the Loans is approximately $1 billion. SBA previously
guaranteed some of the Loans under various sections of the Small
Business Investment Act, as amended, 15 U.S.C. 695 et seq. Any SBA
guarantees that might have existed at one time have been paid and no
SBA guaranty is available to the successful bidders in this sale. The
majority of the loans originated from and are serviced by SBA. The
collateral for the secured Loans includes commercial and residential
real estate and other businesses 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 on or about May 26, 2000. The Bid Date is scheduled
for August 1, 2000, and closings are scheduled to occur between August
14, 2000 and September 8, 2000. These dates are subject to change at
SBA's discretion.
ADDRESSES: Bidder Information Packages will be available from the SBA's
Transaction Financial Advisor, Merrill Lynch Mortgage Capital Inc.
(``Merrill Lynch''). Bidder Information Packages will only be made
available to
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parties that have submitted a completed Confidentiality Agreement and
Bidder Qualification Statement and have demonstrated that they are
qualified bidders. The Confidentiality Agreement and Bidders
Qualification Statement are available on the SBA Website at
www.sba.gov/assets/sale2.html or by calling the SBA Loan Sale 2 Center
toll-free at Merrill Lynch at (888) 590-6872. The completed
Confidentiality and Bidder Qualification Statement can be sent to the
attention of John Winchester, SBA Loan Sale 2, by either fax, at (212)
449-2450 or by mail, to Merrill Lynch Mortgage Capital Inc., World
Financial Center, North Tower, 10th Floor, New York, NY, 10281-1310.
The Due Diligence Facility is scheduled to open on or about June 2,
2000 and close on or about July 28, 2000. These dates are subject to
change at SBA's discretion.
FOR FURTHER INFORMATION CONTACT: B. John Farmakides, Program Manager,
Small Business Administration, 409 Third Street, SW, Washington, DC
20416: 202-205-7134. 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's toll-free number at 1-800-877-8339.
SUPPLEMENTARY INFORMATION: SBA intends to sell approximately 25,000
secured and unsecured business and disaster assistance loans,
collectively referred to as the ``Loans''. The Loans include
performing, sub-performing and non-performing loans. The Loans will be
offered to qualified bidders in pools that will be based on such
factors as 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. The Loans
to be sold are located throughout the United States as well as Puerto
Rico, U.S. Virgin Islands, Guam and other Pacific Islands.
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 loan information such as total outstanding unpaid
principal balance, interest rate, maturity term, aggregate payment
history and collateral information including geographic location and
type. The Bidder Information Package also includes CD-ROMs that contain
information pertaining to the Loans.
The Bidder Information Package will be available approximately 9
weeks prior to the Bid Date. It 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 copy of the 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 recipients of the original Bidder Information Package.
It will contain the final list of loans included in Sale #2 and any
final instructions for the sale.
Deposit And Liquidated Damages
Each Bidder must include with its bid a deposit equal to 10 percent
of the amount of the bidder's 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 the deposit as liquidated damages.
Due Diligence Facility
A bidder due diligence period will take place beginning on or about
June 2, 2000. During the bidder due diligence period, qualified bidders
may, for a non-refundable assessment of $500 US, review all asset file
documents that have been imaged onto a database by visiting the due
diligence facility located at 499 South Capital, SW, Suite 300,
Washington, DC 20003 and/or via modem. Bidders that have paid the due
diligence assessment of $500 US may also request CD-ROMs that contain
substantial due diligence materials such as loan payment history and
updated third party reports.
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 at any time
prior to the Bid Date, and add loans prior to the Cut-Off 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 it sole
discretion and for any reason whatsoever to reject any and all bids.
SBA reserves the right to conduct a ``best and final'' round of
bidding 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.
SBA reserves the right to sell less than 100 percent of the Loans
offered for sale and ``re-offer'' the remaining loans subsequent to the
initial bid.
Ineligible Bidders
The following individuals and entities (either alone or in
combination with others) are ineligible to bid on the Loans included in
the sale:
(1) Any employee of SBA, any member of any such employee's
household and any entity controlled by a 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 prescribed 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 plans to use a competitive sealed bid process as the method to
sell the Loans. SBA believes this method of sale
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optimizes the return on the sale of Loans and attracts the largest
field of interested parties. This method also provides the quickest and
most efficient vehicle for the SBA to dispose of the Loans.
Post Sale Servicing Requirements
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
for the Life of the Loans.
In addition, the Loan Sale Agreement establishes certain
requirements that a servicer must satisfy in order to service the
Loans.
Scope of Notice
This notice applies to Loan Sale Number #2 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
Bidder Information Package shall prevail.
Jane Palsgrove Butler,
Associate Administrator for Financial Assistance.
[FR Doc. 00-17038 Filed 7-5-00; 8:45 am]
BILLING CODE 8025-01-M