[Federal Register Volume 81, Number 184 (Thursday, September 22, 2016)]
[Rules and Regulations]
[Pages 65281-65283]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-22856]
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AGENCY FOR INTERNATIONAL DEVELOPMENT
22 CFR Part 240
USAID Sovereign Loan Guarantees--Standard Terms and Conditions
AGENCY: Agency for International Development (USAID).
ACTION: Final rule.
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SUMMARY: This regulation prescribes the procedures and standard terms
and conditions applicable to loan guarantees to be issued for the
benefit of Ukraine.
DATES: Effective September 21, 2016.
FOR FURTHER INFORMATION CONTACT: D. Bruce McPherson, Office of the
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 authority of section
7034(o)(1) of the Department of State, Foreign Operations, and Related
Programs Appropriations Act, 2016 (Div. K, Pub. L. 114-113), 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 240
Foreign aid, Foreign relations, Guaranteed loans, Loan programs-
foreign relations.
Authority and Issuance
0
Accordingly, part 240 is added to title 22, chapter II, of the Code of
Federal Regulations, to read as follows:
PART 240--SOVEREIGN LOAN GUARANTEE--STANDARD TERMS AND CONDITIONS
Sec.
240.1 Purpose.
240.2 Definitions.
240.3 The Guarantee.
240.4 Guarantee eligibility.
240.5 Non-impairment of the Guarantee.
240.6 Transferability of Guarantee; Note Register.
240.7 Fiscal Agent obligations.
240.8 Event of Default; Application for Compensation; payment.
240.9 No acceleration of Eligible Notes.
240.10 Payment to USAID of excess amounts received by a Noteholder.
240.11 Subrogation of USAID.
240.12 Prosecution of claims.
240.13 Change in agreements.
240.14 Arbitration.
240.15 Notice.
240.16 Governing Law.
Appendix A to Part 240--Application for Compensation
Authority: Section 7034(o)(1) of the Department of State,
Foreign Operations, and Related Programs Appropriations Act, 2016
(Div. K, Pub. L. 114-113).
Sec. 240.1 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 section
7034(o)(1) of the Department of State, Foreign Operations, and Related
Programs Appropriations Act, 2016 (Div. K, Pub. L. 114-113) (the
``Authority''). The loan guarantees will be issued as provided herein
pursuant to a Loan Guarantee Agreement signed on June 3, 2016, 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. 240.2 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. 240.8.
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. 240.15.
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. 240.4.
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 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 the Authority.
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
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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. 240.3 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% 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. 240.4 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 Assistant Administrator, Bureau for
Economic Growth, Education and Environment; Assistant Administrator,
Bureau for Europe and Eurasia; 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. 240.5 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. 240.6 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. 240.7 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 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. 240.8 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. 240.9 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
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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. 240.10 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. 240.11 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. 240.12 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. 240.13 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. 240.14 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. 240.15 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. 240.16 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 240--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. 240.02 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. 240.08 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].
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\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.
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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: September 19, 2016.
D. Bruce McPherson,
Attorney Advisor, Office of the General Counsel, U.S. Agency for
International Development.
[FR Doc. 2016-22856 Filed 9-21-16; 8:45 am]
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