Sec. 202. Loan terms and repayment
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A direct loan or loan guarantee under this Act with respect to an eligible infrastructure project shall be on such terms, subject to such conditions, and contain such covenants, representations, warranties, and requirements (including requirements for audits) as the chief executive officer determines appropriate. A direct loan or loan guarantee under this Act— shall— be payable, in whole or in part, from tolls, user fees, or other dedicated revenue sources derived from users or beneficiaries; and include a rate covenant, coverage requirement, or similar security feature supporting the project obligations; and may be secured by a lien— on the assets of the obligor, including revenues described in paragraph (1); and which may be subordinated to any other lien securing project obligations.
The base interest rate on a direct loan under this Act shall be not less than the yield on Treasury obligations of a similar maturity to the maturity of the direct loan on the date of execution of the loan agreement. Before entering into an agreement for assistance under this Act, the chief executive officer, in consultation with the Director of the Office of Management and Budget and each rating agency providing a preliminary rating opinion letter under this section, shall determine an appropriate Federal credit subsidy amount for each direct loan and loan guarantee, taking into account that preliminary rating opinion letter, as well as any comparable market rates available for such a loan or loan guarantee, should any exist.
With respect to each agreement for assistance under this Act, the chief executive officer shall charge a credit fee to the recipient of that assistance to pay for, over time, all or a portion of the Federal credit subsidy determined under subsection (d), with the remainder paid by the account established for IFA. In the case of a direct loan, the credit fee described in paragraph
(1)shall be in addition to the base interest rate established under subsection (c). The final maturity date of a direct loan or loan guaranteed by IFA under this Act shall be not later than 35 years after the date of substantial completion of the eligible infrastructure project, as determined by the chief executive officer. The chief executive officer shall require each applicant for assistance under this Act to provide a preliminary rating opinion letter from at least 1 rating agency, indicating that the senior obligations of the eligible infrastructure project, which may be the Federal credit instrument, have the potential to achieve an investment-grade rating. With respect to a rural infrastructure project, a rating agency opinion letter described in paragraph
(1)shall not be required, except that the loan or loan guarantee shall receive an internal rating score, using methods similar to the rating agencies generated by IFA, measuring the proposed direct loan or loan guarantee against comparable direct loans or loan guarantees of similar credit quality in a similar sector. The execution of a direct loan or loan guarantee under this Act shall be contingent on the senior obligations of the eligible infrastructure project receiving an investment-grade rating. The average rating of the overall portfolio of IFA shall be not less than investment grade after 5 years of operation. The chief executive officer shall establish a repayment schedule for each direct loan under this Act, based on the projected cash flow from eligible infrastructure project revenues and other repayment sources. Scheduled loan repayments of principal or interest on a direct loan under this Act shall commence not later than 5 years after the date of substantial completion of the eligible infrastructure project, as determined by the chief executive officer of IFA. If, at any time after the date of substantial completion of an eligible infrastructure project assisted under this Act, the eligible infrastructure project is unable to generate sufficient revenues to pay the scheduled loan repayments of principal and interest on the direct loan under this Act, the chief executive officer may allow the obligor to add unpaid principal and interest to the outstanding balance of the direct loan, if the result would benefit the taxpayer. Any payment deferred under subparagraph
(A)shall— continue to accrue interest, in accordance with the terms of the obligation, until fully repaid; and be scheduled to be amortized over the remaining term of the loan. Any payment deferral under subparagraph
(A)shall be contingent on the eligible infrastructure project meeting criteria established by the Board of Directors. The criteria established under clause
(i)shall include standards for reasonable assurance of repayment. Any excess revenues that remain after satisfying scheduled debt service requirements on the eligible infrastructure project obligations and direct loan and all deposit requirements under the terms of any trust agreement, bond resolution, or similar agreement securing project obligations under this Act may be applied annually to prepay the direct loan, without penalty. A direct loan under this Act may be prepaid at any time, without penalty, from the proceeds of refinancing from non-Federal funding sources. The terms of a loan guaranteed by IFA under this Act shall be consistent with the terms set forth in this section for a direct loan, except that the rate on the guaranteed loan and any payment, prepayment, or refinancing features shall be negotiated between the obligor and the lender (as defined in section 601(a) of title 23, United States Code) with the consent of the chief executive officer. Except as provided in paragraph (2), direct loans and loan guarantees authorized by this Act shall be subject to the provisions of the Federal Credit Reform Act of 1990 ( 2 U.S.C. 661 et seq. ). Section 504(b) of the Federal Credit Reform Act of 1990 ( 2 U.S.C. 661c(b) ) shall not apply to a loan or loan guarantee under this Act. It is the policy of Congress that IFA shall only make a direct loan or loan guarantee under this Act if IFA determines that IFA is reasonably expected to recover the full amount of the direct loan or loan guarantee.
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