[Federal Register Volume 65, Number 225 (Tuesday, November 21, 2000)]
[Notices]
[Pages 69986-69988]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-29561]


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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 #3.

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SUMMARY: This notice announces the Small Business Administration's 
(``SBA'') intention to sell approximately 19,200 secured and unsecured 
business and disaster assistance loans, (collectively referred to as 
the ``Loans''). This is SBA's third sale in its Asset Sales Program and 
the second sale that includes disaster assistance loans, which includes 
both business and consumer loans. The total unpaid principal balance of 
the Loans is approximately $1.15 billion (U.S.). SBA previously 
guaranteed some of the Loans under various sections of the Small 
Business 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. 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 were 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 October 3, 2000. The Bid Date is 
scheduled for December 5, 2000, and closings are scheduled to occur 
between December 15, 2000 and December 29, 2000. These dates are 
subject to change at SBA's discretion.

ADDRESSES: Bidder Information Packages will be available to qualified 
bidders from SBA's Transaction Financial Advisor, Hanover Capital 
Partners Ltd. (``Hanover''). Bidder Information Packages will only be 
made available to parties that have submitted a completed 
Confidentiality Agreement and Bidder Qualification Statement and have 
demonstrated that they are qualified bidders. The Confidentiality 
Agreement and Bidder Qualification Statement are available on the SBA 
Website at www.sba.gov/assets/sale3.html or by calling (877) 457-6754. 
The completed Confidentiality and Bidder Qualification Statement should 
be sent to the attention of Kathryn Merk, SBA Loan Sale 3, by fax, at 
(732) 572-5959 and mailed, to Hanover Capital Partners Ltd., 100 
Metroplex Drive, Suite 301, Edison, NJ 08817.
    The Due Diligence Facility is scheduled to open on or about October 
3, 2000 and close on or about December 4, 2000. These dates are subject 
to change at SBA's discretion.

FOR FURTHER INFORMATION CONTACT: Margaret L. Hawley, Program Manager, 
Small Business Administration, 409 Third Street, SW, Washington, DC 
20416; 202-401-8234. This is not a toll free number. Hearing or speech-
impaired individuals may access this

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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 19,200 
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 loan 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 by loan pool such as total 
outstanding unpaid principal balance, interest rate, remaining term, 
loan to value, 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, one or more Bidder Information Package 
Supplements will be mailed to all recipients of the original Bidder 
Information Package. The final list of loans included in Sale #3 will 
be contained in a Bidder Information Package Supplement as well as 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 close in accordance with the terms of the Loan Sale Agreement, SBA 
shall retain the deposit as liquidated damages.

Due Diligence Facility

    A bidder due diligence period will commence on or about October 3, 
2000. During the bidder due diligence period, a non-refundable 
assessment of $1,000 US (the Due Diligence Assessment) entitles 
qualified bidders to receive the Due Diligence CD-ROM, and enables 
qualifed bidders to access an imaged database of file documents 
relating to the Loans (``Asset Review Files'') either off-site 
electronically, by visiting SBA's Due Diligence Facility, or both. 
Alternatively, for a non-refundable assessment of $500 US, qualified 
bidders may review the Asset Review Files by visiting the Due Diligence 
Facility located at 499 South Capital, SW, Suite 300, Washington, DC 
20003. Bidders that have paid the due diligence assessment of $500 US 
will also receive the Due Diligence CD-ROM that contains due diligence 
materials such as loan payment history and updated third party reports.
    Specific instructions for accessing 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 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 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.

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 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 the 
Loans, this sale or the development of SBA's Asset Loan Sales Program.
    (4) Any individual who 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 the Loans, with 
this sale or the development of SBA's Asset Sales 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 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 SBA Sale #3 and does not establish agency 
procedures and policies for other loan sales. If there are any 
conflicts between

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this Notice and the Bidder Information Package, the Bidder Information 
Package shall prevail.

    Dated: November 2, 2000.
LeAnn M. Oliver,
Acting Associate Administrator for Financial Assistance.
[FR Doc. 00-29561 Filed 11-20-00; 8:45 am]
BILLING CODE 8025-01-U