[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