[Federal Register Volume 79, Number 91 (Monday, May 12, 2014)]
[Rules and Regulations]
[Pages 26834-26836]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-10830]


=======================================================================
-----------------------------------------------------------------------

AGENCY FOR INTERNATIONAL DEVELOPMENT

22 CFR Part 234


Ukraine Guarantees Issued Under the Support for the Sovereignty, 
Integrity, Democracy, and Economic Stability of Ukraine Act of 2014--
Standard Terms and Conditions

AGENCY: Agency for International Development (USAID).

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: This regulation prescribes the procedures and standard terms 
and conditions applicable to loan guarantees to be issued for the 
benefit of Ukraine pursuant to the Support for the Sovereignty, 
Integrity, Democracy, and Economic Stability of Ukraine Act of 2014.

DATES: Effective May 9, 2014.

FOR FURTHER INFORMATION CONTACT: D. Bruce McPherson, Office of General 
Counsel, U.S. Agency for International Development, Washington, DC 
20523-6601; tel. 202-712-1611, fax 202-216-3055.

SUPPLEMENTARY INFORMATION: Pursuant to the Support for the Sovereignty, 
Integrity, Democracy, and Economic Stability of Ukraine Act of 2014 
(Pub. L. 113-95), the United States of America, acting through the U.S. 
Agency for International Development, may issue certain loan guarantees 
applicable to sums borrowed by Ukraine (the ``Borrower''), not 
exceeding an aggregate total of U.S. $1 billion in principal amount. 
Upon issuance, the loan guarantees shall ensure the Borrower's 
repayment of 100% of principal and interest due under such borrowings 
and the full faith and credit of the United States of America shall be 
pledged for the full payment and performance of such guarantee 
obligations.
    This rulemaking document is not subject to rulemaking under 5 
U.S.C. 553 or to regulatory review under Executive Order 12866 because 
it involves a foreign affairs function of the United States. The 
provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.) do 
not apply.

List of Subjects in 22 CFR Part 234

    Foreign aid, Foreign relations, Guaranteed loans, Loan programs--
foreign relations.

Authority and Issuance

    Accordingly, a new part 234 is added to Title 22, Chapter II, of 
the Code of Federal Regulations, as follows:

PART 234--UKRAINE LOAN GUARANTEES ISSUED UNDER THE SUPPORT FOR THE 
SOVEREIGNTY, INTEGRITY, DEMOCRACY, AND ECONOMIC STABILITY OF 
UKRAINE ACT OF 2014, PUB. L. 113-95--STANDARD TERMS AND CONDITIONS

Sec.
234.1 Purpose.
234.2 Definitions.
234.3 The Guarantee.
234.4 Guarantee eligibility.
234.5 Non-impairment of the Guarantee.
234.6 Transferability of Guarantee; Note Register.
234.7 Fiscal Agent obligations.
234.8 Event of Default; Application for Compensation; payment.
234.9 No acceleration of Eligible Notes.
234.10 Payment to USAID of excess amounts received by a Noteholder.
234.11 Subrogation of USAID.
234.12 Prosecution of claims.
234.13 Change in agreements.
234.14 Arbitration.
234.15 Notice.
234.16 Governing Law.
Appendix A to Part 234--Application for Compensation

    Authority: Pub. L. 113-95, 128 Stat. 1088.


Sec.  234.1  Purpose.

    The purpose of the regulations in this part is to prescribe the 
procedures and standard terms and conditions applicable to loan 
guarantees issued for the benefit of the Borrower, pursuant to the 
Support for the Sovereignty, Integrity, Democracy, and Economic 
Stability of Ukraine Act of 2014 (Pub. L. 113-95). The loan guarantees 
will be issued as provided herein pursuant to the Loan Guarantee 
Agreement, dated April 14, 2014, between the United States of America 
and Ukraine (the ``Loan Guarantee Agreement''). The loan guarantee will 
apply to sums borrowed during a period beginning on the date that the 
Loan Guarantee Agreement enters into force and ending thirty days after 
such date, not exceeding an aggregate total of one billion United 
States Dollars ($1,000,000,000) in principal amount. The loan 
guarantees shall ensure the Borrower's repayment of 100% of principal 
and interest due under such borrowings. The full faith and credit of 
the United States of America is pledged for the full payment and 
performance of such guarantee obligations.


Sec.  234.2  Definitions.

    Wherever used in the standard terms and conditions set out in this 
part:
    Applicant means a Noteholder who files an Application for 
Compensation with USAID, either directly or through the Fiscal Agent 
acting on behalf of a Noteholder.
    Application for Compensation means an executed application in the 
form of Appendix A to this part which a Noteholder, or the Fiscal Agent 
on behalf of a Noteholder, files with USAID pursuant to Sec.  234.8.
    Borrower means Ukraine.
    Business Day means any day other than a day on which banks in New 
York, NY are closed or authorized to be closed or a day which is 
observed as a federal holiday in Washington, DC, by the United States 
Government.
    Date of Application means the date on which an Application for 
Compensation is actually received by USAID pursuant to Sec.  234.15.
    Defaulted Payment means, as of any date and in respect of any 
Eligible Note, any Interest Amount and/or Principal Amount not paid 
when due.
    Eligible Note(s) means [a] Note[s] meeting the eligibility criteria 
set out in Sec.  234.4.
    Fiscal Agency Agreement means the agreement among USAID, the 
Borrower and the Fiscal Agent pursuant to which the Fiscal Agent agrees 
to provide fiscal agency and trust services in respect of the Note[s], 
a copy of which Fiscal

[[Page 26835]]

Agency Agreement shall be made available to Noteholders upon request to 
the Fiscal Agent.
    Fiscal Agent means the bank or trust company or its duly appointed 
successor under the Fiscal Agency Agreement which has been appointed by 
the Borrower with the consent of USAID to perform certain fiscal agency 
and trust services for specified Eligible Note[s] pursuant to the terms 
of the Fiscal Agency Agreement.
    Further Guaranteed Payments means the amount of any loss suffered 
by a Noteholder by reason of the Borrower's failure to comply on a 
timely basis with any obligation it may have under an Eligible Note to 
indemnify and hold harmless a Noteholder from taxes or governmental 
charges or any expense arising out of taxes or any other governmental 
charges relating to the Eligible Note in the country of the Borrower.
    Guarantee means the guarantee of USAID pursuant to this part 234 
and the Support for the Sovereignty, Integrity, Democracy, and Economic 
Stability of Ukraine Act of 2014 (Pub. L. 113-95).
    Guarantee Payment Date means a Business Day not more than three (3) 
Business Days after the related Date of Application.
    Interest Amount means for any Eligible Note the amount of interest 
accrued on the Principal Amount of such Eligible Note at the applicable 
Interest Rate.
    Interest Rate means the interest rate borne by an Eligible Note.
    Loss of Investment means, in respect of any Eligible Note, an 
amount in Dollars equal to the total of the:
    (1) Defaulted Payment unpaid as of the Date of Application,
    (2) Further Guaranteed Payments unpaid as of the Date of 
Application, and
    (3) Interest accrued and unpaid at the Interest Rate(s) specified 
in the Eligible Note(s) on the Defaulted Payment and Further Guaranteed 
Payments, in each case from the date of default with respect to such 
payment to and including the date on which full payment thereof is made 
to the Noteholder.
    Note[s] means any debt securities issued by the Borrower.
    Noteholder means the owner of an Eligible Note who is registered as 
such on the Note Register.
    Note Register means the register of Eligible Notes required to be 
maintained by the Fiscal Agent.
    Person means any legal person, including any individual, 
corporation, partnership, joint venture, association, joint stock 
company, trust, unincorporated organization, or government or any 
agency or political subdivision thereof.
    Principal Amount means the principal amount of the Eligible Notes 
issued by the Borrower. For purposes of determining the principal 
amount of the Eligible Notes issued by the Borrower, the principal 
amount of each Eligible Note shall be the stated principal amount 
thereof.
    USAID means the United States Agency for International Development 
or its successor.


Sec.  234.3  The Guarantee.

    Subject to the terms and conditions set out in this part, the 
United States of America, acting through USAID, guarantees to 
Noteholders the Borrower's repayment of 100 percent of principal and 
interest due on Eligible Notes. Under this Guarantee, USAID agrees to 
pay to any Noteholder compensation in Dollars equal to such 
Noteholder's Loss of Investment under its Eligible Note; provided, 
however, that no such payment shall be made to any Noteholder for any 
such loss arising out of fraud or misrepresentation for which such 
Noteholder is responsible or of which it had knowledge at the time it 
became such Noteholder. This Guarantee shall apply to each Eligible 
Note registered on the Note Register.


Sec.  234.4  Guarantee eligibility.

    (a) Eligible Notes only are guaranteed hereunder. Notes in order to 
achieve Eligible Note status:
    (1) Must be signed on behalf of the Borrower, manually or in 
facsimile, by a duly authorized representative of the Borrower;
    (2) Must contain a certificate of authentication manually executed 
by the Fiscal Agent whose appointment by the Borrower is consented to 
by USAID in the Fiscal Agency Agreement; and
    (3) Shall be approved and authenticated by USAID by either:
    (i) The affixing by USAID on the Notes of a guarantee legend 
incorporating these Standard Terms and Conditions signed on behalf of 
USAID by either a manual signature or a facsimile signature of an 
authorized representative of USAID or
    (ii) The delivery by USAID to the Fiscal Agent of a guarantee 
certificate incorporating these Standard Terms and Conditions signed on 
behalf of USAID by either a manual signature or a facsimile signature 
of an authorized representative of USAID.
    (b) The authorized USAID representatives for purposes of the 
regulations in this part whose signature(s) shall be binding on USAID 
shall include the USAID Chief and Deputy Chief Financial Officer; 
Assistant Administrator and Deputy, Bureau for Economic Growth, 
Education, and Environment; Director and Deputy Director, Office of 
Development Credit; and such other individual(s) designated in a 
certificate executed by an authorized USAID Representative and 
delivered to the Fiscal Agent. The certificate of authentication of the 
Fiscal Agent issued pursuant to the Fiscal Agency Agreement shall, when 
manually executed by the Fiscal Agent, be conclusive evidence binding 
on USAID that an Eligible Note has been duly executed on behalf of the 
Borrower and delivered.


Sec.  234.5  Non-impairment of the Guarantee.

    After issuance of a Guarantee, that Guarantee will be an 
unconditional, full faith and credit obligation of the United States of 
America, and will not be affected or impaired by any subsequent 
condition or event. This non-impairment of the guarantee provision 
shall not, however, be operative with respect to any loss arising out 
of fraud or misrepresentation for which the claiming Noteholder is 
responsible or of which it had knowledge at the time it became a 
Noteholder. Moreover, the Guarantee shall not be affected or impaired 
by:
    (a) Any defect in the authorization, execution, delivery or 
enforceability of any agreement or other document executed by a 
Noteholder, USAID, the Fiscal Agent or the Borrower in connection with 
the transactions contemplated by this Guarantee; or
    (b) The suspension or termination of the program pursuant to which 
USAID is authorized to guarantee the Eligible Notes.


Sec.  234.6  Transferability of Guarantee; Note Register.

    A Noteholder may assign, transfer or pledge an Eligible Note to any 
Person. Any such assignment, transfer or pledge shall be effective on 
the date that the name of the new Noteholder is entered on the Note 
Register. USAID shall be entitled to treat the Persons in whose names 
the Eligible Notes are registered as the owners thereof for all 
purposes of this Guarantee and USAID shall not be affected by notice to 
the contrary.


Sec.  234.7  Fiscal Agent obligations.

    Failure of the Fiscal Agent to perform any of its obligations 
pursuant to the Fiscal Agency Agreement shall not impair any 
Noteholder's rights under this Guarantee, but may be the subject of 
action for damages against the Fiscal

[[Page 26836]]

Agent by USAID as a result of such failure or neglect. A Noteholder may 
appoint the Fiscal Agent to make demand for payment on its behalf under 
this Guarantee.


Sec.  234.8  Event of Default; Application for Compensation; payment.

    At any time after an Event of Default, as this term is defined in 
an Eligible Note, any Noteholder hereunder, or the Fiscal Agent on 
behalf of a Noteholder hereunder, may file with USAID an Application 
for Compensation in the form provided in Appendix A to this part. USAID 
shall pay or cause to be paid to any such Applicant any compensation 
specified in such Application for Compensation that is due to the 
Applicant pursuant to the Guarantee as a Loss of Investment not later 
than the Guarantee Payment Date. In the event that USAID receives any 
other notice of an Event of Default, USAID may pay any compensation 
that is due to any Noteholder pursuant to a Guarantee, whether or not 
such Noteholder has filed with USAID an Application for Compensation in 
respect of such amount.


Sec.  234.9  No acceleration of Eligible Notes.

    Eligible Notes shall not be subject to acceleration, in whole or in 
part, by USAID, the Noteholder or any other party. USAID shall not have 
the right to pay any amounts in respect of the Eligible Notes other 
than in accordance with the original payment terms of such Eligible 
Notes.


Sec.  234.10  Payment to USAID of excess amounts received by a 
Noteholder.

    If a Noteholder shall, as a result of USAID paying compensation 
under this Guarantee, receive an excess payment, it shall refund the 
excess to USAID.


Sec.  234.11  Subrogation of USAID.

    In the event of payment by USAID to a Noteholder under this 
Guarantee, USAID shall be subrogated to the extent of such payment to 
all of the rights of such Noteholder against the Borrower under the 
related Note.


Sec.  234.12  Prosecution of claims.

    After payment by USAID to an Applicant hereunder, USAID shall have 
exclusive power to prosecute all claims related to rights to receive 
payments under the Eligible Notes to which it is thereby subrogated. If 
a Noteholder continues to have an interest in the outstanding Eligible 
Notes, such a Noteholder and USAID shall consult with each other with 
respect to their respective interests in such Eligible Notes and the 
manner of and responsibility for prosecuting claims.


Sec.  234.13  Change in agreements.

    No Noteholder will consent to any change or waiver of any provision 
of any document contemplated by this Guarantee without the prior 
written consent of USAID.


Sec.  234.14  Arbitration.

    Any controversy or claim between USAID and any Noteholder arising 
out of this Guarantee shall be settled by arbitration to be held in 
Washington, DC in accordance with the then prevailing rules of the 
American Arbitration Association, and judgment on the award rendered by 
the arbitrators may be entered in any court of competent jurisdiction.


Sec.  234.15  Notice.

    Any communication to USAID pursuant to this Guarantee shall be in 
writing in the English language, shall refer to the Ukraine Loan 
Guarantee Number inscribed on the Eligible Note and shall be complete 
on the day it shall be actually received by USAID at the Office of 
Development Credit, Bureau for Economic Growth, Education and 
Environment, United States Agency for International Development, 
Washington, DC 20523-0030. Other addresses may be substituted for the 
above upon the giving of notice of such substitution to each Noteholder 
by first class mail at the address set forth in the Note Register.


Sec.  234.16  Governing Law.

    This Guarantee shall be governed by and construed in accordance 
with the laws of the United States of America governing contracts and 
commercial transactions of the United States Government.

Appendix A to Part 234--Application for Compensation United States 
Agency for International Development Washington, DC 20523

    Ref: Guarantee dated as of ----, 20----:
    Gentlemen: You are hereby advised that payment of $---- 
(consisting of $---- of principal, $---- of interest and $---- in 
Further Guaranteed Payments, as defined in Sec.  234.2 of the 
Standard Terms and Conditions of the above-mentioned Guarantee) was 
due on ------------, 20----, on $---- Principal Amount of Notes 
issued by Ukraine (the ``Borrower'') held by the undersigned. Of 
such amount $---- was not received on such date and has not been 
received by the undersigned at the date hereof. In accordance with 
the terms and provisions of the above-mentioned Guarantee, the 
undersigned hereby applies, under Sec.  234.8 of said Guarantee, for 
payment of $----, representing $----, the Principal Amount of the 
presently outstanding Note(s) of the Borrower held by the 
undersigned that was due and payable on ---- and that remains 
unpaid, and $----, the Interest Amount on such Note(s) that was due 
and payable by the Borrower on ---- and that remains unpaid, and $--
-- in Further Guaranteed Payments,\1\ plus accrued and unpaid 
interest thereon from the date of default with respect to such 
payments to and including the date payment in full is made by you 
pursuant to said Guarantee, at the rate of ----% per annum, being 
the rate for such interest accrual specified in such Note. Such 
payment is to be made at [state payment instructions of Noteholder 
or Fiscal Agent, as applicable].
---------------------------------------------------------------------------

    \1\ In the event the Application for Compensation relates to 
Further Guaranteed Payments, such Application must also contain a 
statement of the nature and circumstances of the related loss.
---------------------------------------------------------------------------

    All capitalized terms herein that are not otherwise defined 
shall have the meanings assigned to such terms in the Standard Terms 
and Conditions of the above-mentioned Guarantee.

[Name of Applicant]

By:--------------------------------------------------------------------

Name:
Title:
Dated:

    Dated: May 7, 2014.
D. Bruce McPherson,
Attorney Advisor, Office of the General Counsel, U.S. Agency for 
International Development.
[FR Doc. 2014-10830 Filed 5-9-14; 8:45 am]
BILLING CODE P