Sec. 9. Terms and conditions
630 words·~3 min read·
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Each direct loan and loan guarantee made under this Act shall be on such terms and conditions and contain such covenants, representations, warranties, and requirements (including requirements for audits) as the Administrator may prescribe. The interest rate applicable to a direct loan shall be the rate that is set by reference to a benchmark interest rate on marketable Treasury securities with a similar maturity to that direct loan, as of the date of issuance of the direct loan.
The Administrator may charge a higher interest rate on a direct loan if the Administrator determines that the risk profile of the eligible project indicates a higher interest rate is necessary to protect the interests of the United States. The Administrator may provide assistance under this Act only with respect to a credit instrument the final maturity date of which is not later than 35 years after the date on which funds are disbursed. The Administrator shall require a borrower receiving assistance under this Act to use a rate covenant, coverage requirement, or similar security feature supporting the project obligations to ensure repayment.
The Administrator shall establish a repayment schedule for each direct loan under this Act based on the projected cash flow from project repayment sources. Scheduled repayments of principal or interest on a direct loan made under this Act shall commence not later than 5 years after the date of substantial completion of the project, as determined by the Administrator in a manner set forth at the time the direct loan is made. If the Administrator determines that a borrower lacks the resources to make scheduled payments on a direct loan made under this Act based on circumstances not foreseeable at the time the direct loan is made, the Administrator may allow for the deferral of the payments.
Any payment deferred under subparagraph
(A)shall— continue to accrue interest until fully repaid; and be scheduled to be amortized over the remaining term of the direct loan. Any payment deferral under subparagraph
(A)shall be contingent on the project meeting criteria established by the Administrator, which shall include standards for reasonable assurance of repayment. Payments on the direct loan may be made in advance with no penalty. The terms of a credit instrument that is the subject of a loan guarantee under this Act shall be consistent with the terms set forth in this Act for a direct loan, except that the interest rate and any prepayment features on the credit instrument shall be negotiated between the borrower and the lender, with the approval of the Administrator. The Administrator may make a loan guarantee under this Act only if the Administrator determines that the interest rate on the credit instrument that is subject to the loan guarantee is appropriate, taking into account the prevailing rate of interest in the private sector for similar obligations. The Administrator may not make a loan guarantee under this Act unless the lender of the loan or purchaser of the debt security that will be the subject of the loan guarantee is a non-Federal, qualified institutional buyer (as defined in section 230.144A(a) of title 17, Code of Federal Regulations (or successor regulation)), including— a qualified retirement plan (as defined in section 4974(c) of the Internal Revenue Code of 1986) that is a non-Federal qualified institutional buyer; and a governmental plan (as defined in section 414(d) of the Internal Revenue Code of 1986) that is a non-Federal qualified institutional buyer. No loan guarantee may be made under this Act for a loan unless the Administrator determines that the lender with respect to the loan is responsible and that adequate servicing provisions have been made for the loan that is the subject of the loan guarantee that are reasonable and protect the financial interest of the United States.