Sec. 4. authority for commitments for loan guarantees

1,145 words·~5 min read·/statute-compilations/comps-1339/sec-4

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

## Sec. 4 authority for commitments for loan guarantees ###

(a)Subject to the provisions of this Act, the Board, on such terms and conditions as it deems appropriate, may make commitments to guarantee the payment of principal and interest on loans to a borrower only if at the time the commitment is issued, the Board determines that— ####

(1)there exists an energy-savings plan which— #####

(A)is satisfactory to the Board; #####

(B)is developed in consultation with other appropriate Federal agencies; #####

(C)focuses on the national need to lessen United States dependence on petroleum; and #####

(D)can be carried out by the borrowers; ####

(2)the commitment is needed to enable the Corporation to continue to furnish goods or services, and failure to meet such need would adversely and seriously affect the economy of, or employment in, the United States or any region thereof; ####

(3)#####

(A)the Corporation has submitted to the Board a satisfactory operating plan (including budget and cash flow projections) for the 1980 fiscal year and the next succeeding three fiscal years demonstrating the ability of the Corporation to continue operations as a going concern in the automobile business, and after December 31, 1983, to continue such operations as a going concern without additional guarantees or other Federal financing; and #####

(B)the Board has received such assurances as it shall require that the operating plan is realistic and feasible; ####

(4)the Corporation has submitted to the Board a satisfactory financing plan which meets the financing needs of the Corporation as reflected in the operating plan for the period covered by such plan, and which includes an aggregate amount of nonfederally guaranteed assistance of at least $1,430,000,000 as determined under subsection (b)— #####

(A)from financial commitments or concessions from persons with an existing economic stake in the health of the Corporation in excess of commitments or concessions outstanding as of October 17, 1979, or from other persons; #####

(B)from capital to be obtained through merger, sale of securities or otherwise after October 17, 1979; #####

(C)from cash to be obtained from the disposition of assets of the Corporation after October 17, 1979; and #####

(D)from the issuance of $100,000,000 of common stock of the Corporation which shall be made available by the Corporation to its employees and labor organizations which are parties to collective bargaining agreements with the Corporation; ####

(5)the Board has received adequate assurances regarding the availability of all financing contemplated by the financing plan and that such financing is adequate (taking into account the amount of guarantees to be made available and the amount of wages and benefits not to be paid as a result of section 6) to meet all the Corporation's projected financing needs during the period covered by the financing plan; ####

(6)the Corporation's existing creditors have certified to the Board that they will waive their rights to recover under any prior credit commitment which may be in default unless the Board determines that the exercise of those rights would not adversely affect the operating plan submitted under paragraph

(3)or the financing plan submitted under paragraph (4); ####

(7)no credit extended or committed on a nonguaranteed basis prior to October 17, 1979, is being converted to a guaranteed basis pursuant to this Act; and ####

(8)the financing plan submitted under paragraph

(4)provides that expenditures under such financing plan will contribute to the domestic economic viability of the Corporation. ###

(b)####

(1)For the purpose of computing the aggregate amount of at least $1,430,000,000 in nonfederally guaranteed assistance required to be provided under subsection (a)(4)— #####

(A)the term “**financial commitment**” means a legally binding commitment to provide additional nonfederally guaranteed assistance to meet the financing needs of the Corporation in excess of any such commitments outstanding as of October 17, 1979; #####

(B)the term “**concession**” means a legally binding commitment (or in the case of a concession from a State, local, or other government, a concession for which the Board has received adequate assurances) which will result in a reduction in the financing needs of the Corporation by an amount which is more than the amount of any reduction accomplished by any concessions outstanding as of October 17, 1979, and, except for a loan or other credit, shall be nonrecoupable; #####

(C)the term “**capital**” means sales of equity securities, any other transactions involving non-interest-bearing investments in the Corporation, or subordinated loans on which payment of principal and interest is deferred until after all guaranteed loans are repaid; and #####

(D)the amount of “cash to be obtained from the disposition of assets of the Corporation” shall be determined by the Board based on a conservative estimate of the minimum value realizable in a sale, with reference to the potential circumstances surrounding such a sale. ####

(2)In computing the aggregate amount of at least $1,430,000,000 in nonfederally guaranteed assistance required to be provided under subsection (a)(4), there shall be excluded— #####

(A)the extent of any contribution, concession, or other element that does not actually and substantively contribute to meeting the Corporation's financing needs as defined in the financing plan required by this section; and #####

(B)deferral of any dividends on common or preferred stock outstanding as of October 17, 1979. ###

(c)The aggregate amount of nonfederally guaranteed assistance of at least $1,430,000,000 required to be provided under subsection

(a)shall include— ####

(1)at least $500,000,000 from United States banks, financial institutions, and other creditors, of which— #####

(A)at least $400,000,000 shall be new loans or credits, in addition to the extension of the full principal amount of any loans committed to be made but not outstanding as of October 17, 1979; and #####

(B)at least $100,000,000 shall be concessions with respect to outstanding debt of the Corporation; ####

(2)at least $150,000,000 shall be from foreign banks, financial institutions, and other creditors in the form of new loans or credits, in addition to the extension of the full principal amount of any loans committed to be made but not outstanding as of October 17, 1979; ####

(3)at least $300,000,000 shall be from the disposition of assets of the Corporation; ####

(4)at least $250,000,000 shall be from State, local, and other governments; ####

(5)at least $180,000,000 shall be from suppliers and dealers, of which at least $50,000,000 shall be in the form of capital as defined in subsection (b); and ####

(6)at least $50,000,000 shall be from the sale of additional equity securities. The Board may, as necessary, modify the amounts of assistance required to be provided by any of the categories referred to in this subsection, so long as the aggregate amount of at least $1,430,000,000 in nonfederally guaranteed assistance is provided under subsection (a)(4).