81 FR 65281 - USAID Sovereign Loan Guarantees-Standard Terms and Conditions

AGENCY FOR INTERNATIONAL DEVELOPMENT

Federal Register Volume 81, Issue 184 (September 22, 2016)

Page Range		65281-65283
FR Document		2016-22856
This regulation prescribes the procedures and standard terms and conditions applicable to loan guarantees to be issued for the benefit of Ukraine.
Federal Register, Volume 81 Issue 184 (Thursday, September 22, 2016)
[Federal Register Volume 81, Number 184 (Thursday, September 22, 2016)]
[Rules and Regulations]
[Pages 65281-65283]
From the Federal Register Online  [www.thefederalregister.org]
[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

[[Page 65282]]

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

[[Page 65283]]

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].
---------------------------------------------------------------------------

    \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]
 BILLING CODE P
Federal Register / Vol. 81, No. 184 / Thursday, September 22, 2016 / Rules and Regulations 65281

(iii) Instructions and explanation of Authority and Issuance Applicant means a Noteholder who
all user-interface components; and files an Application for Compensation
(iv) Information related to ■ Accordingly, part 240 is added to title
with USAID, either directly or through
electromagnetic compatibility and 22, chapter II, of the Code of Federal
the Fiscal Agent acting on behalf of a
optical radiation classification. Regulations, to read as follows:
Noteholder.
Dated: September 16, 2016. PART 240—SOVEREIGN LOAN Application for Compensation means
Leslie Kux, GUARANTEE—STANDARD TERMS an executed application in the form of
Associate Commissioner for Policy. AND CONDITIONS appendix A to this part which a
[FR Doc. 2016–22801 Filed 9–21–16; 8:45 am]
Noteholder, or the Fiscal Agent on
Sec. behalf of a Noteholder, files with USAID
BILLING CODE 4164–01–P 240.1 Purpose. pursuant to § 240.8.
240.2 Definitions. Borrower means Ukraine.
240.3 The Guarantee.
240.4 Guarantee eligibility.
Business Day means any day other
AGENCY FOR INTERNATIONAL
240.5 Non-impairment of the Guarantee. than a day on which banks in New
DEVELOPMENT
240.6 Transferability of Guarantee; Note York, NY are closed or authorized to be
22 CFR Part 240 Register. closed or a day which is observed as a
240.7 Fiscal Agent obligations. federal holiday in Washington, DC, by
USAID Sovereign Loan Guarantees— 240.8 Event of Default; Application for the United States Government.
Standard Terms and Conditions Compensation; payment. Date of Application means the date on
240.9 No acceleration of Eligible Notes. which an Application for Compensation
AGENCY: Agency for International 240.10 Payment to USAID of excess
is actually received by USAID pursuant
Development (USAID). amounts received by a Noteholder.
to § 240.15.
ACTION: Final rule. 240.11 Subrogation of USAID.
240.12 Prosecution of claims. Defaulted Payment means, as of any
SUMMARY: This regulation prescribes the 240.13 Change in agreements. date and in respect of any Eligible Note,
procedures and standard terms and 240.14 Arbitration. any Interest Amount and/or Principal
conditions applicable to loan guarantees 240.15 Notice. Amount not paid when due.
to be issued for the benefit of Ukraine. 240.16 Governing Law. Eligible Note(s) means [a] Note[s]
Appendix A to Part 240—Application for meeting the eligibility criteria set out in
DATES: Effective September 21, 2016. Compensation § 240.4.
FOR FURTHER INFORMATION CONTACT: D.
Authority: Section 7034(o)(1) of the Fiscal Agency Agreement means the
Bruce McPherson, Office of the General Department of State, Foreign Operations, and
Counsel, U.S. Agency for International agreement among USAID, the Borrower
Related Programs Appropriations Act, 2016 and the Fiscal Agent pursuant to which
Development, Washington, DC 20523– (Div. K, Pub. L. 114–113).
6601; tel. 202–712–1611, fax 202–216– the Fiscal Agent agrees to provide fiscal
3055. § 240.1 Purpose. agency and trust services in respect of
The purpose of the regulations in this the Note[s], a copy of which Fiscal
SUPPLEMENTARY INFORMATION: Pursuant
part is to prescribe the procedures and Agency Agreement shall be made
to the authority of section 7034(o)(1) of
standard terms and conditions available to Noteholders upon request to
the Department of State, Foreign
applicable to loan guarantees issued for the Fiscal Agent.
Operations, and Related Programs
the benefit of the Borrower, pursuant to Fiscal Agent means the bank or trust
Appropriations Act, 2016 (Div. K, Pub.
section 7034(o)(1) of the Department of company or its duly appointed
L. 114–113), the United States of
America, acting through the U.S. State, Foreign Operations, and Related successor under the Fiscal Agency
Agency for International Development, Programs Appropriations Act, 2016 Agreement which has been appointed
may issue certain loan guarantees (Div. K, Pub. L. 114–113) (the by the Borrower with the consent of
applicable to sums borrowed by Ukraine ‘‘Authority’’). The loan guarantees will USAID to perform certain fiscal agency
(the ‘‘Borrower’’), not exceeding an be issued as provided herein pursuant and trust services for specified Eligible
aggregate total of U.S. $1 billion in to a Loan Guarantee Agreement signed Note[s] pursuant to the terms of the
principal amount. Upon issuance, the on June 3, 2016, between the United Fiscal Agency Agreement.
loan guarantees shall ensure the States of America and Ukraine (the Further Guaranteed Payments means
Borrower’s repayment of 100% of ‘‘Loan Guarantee Agreement’’). The loan the amount of any loss suffered by a
principal and interest due under such guarantee will apply to sums borrowed Noteholder by reason of the Borrower’s
borrowings and the full faith and credit during a period beginning on the date failure to comply on a timely basis with
of the United States of America shall be that the Loan Guarantee Agreement any obligation it may have under an
pledged for the full payment and enters into force and ending thirty days Eligible Note to indemnify and hold
performance of such guarantee after such date, not exceeding an harmless a Noteholder from taxes or
obligations. aggregate total of one billion United governmental charges or any expense
This rulemaking document is not States Dollars ($1,000,000,000) in arising out of taxes or any other
subject to rulemaking under 5 U.S.C. principal amount. The loan guarantees governmental charges relating to the
553 or to regulatory review under shall ensure the Borrower’s repayment Eligible Note in the country of the
Executive Order 12866 because it of 100% of principal and interest due Borrower.
involves a foreign affairs function of the under such borrowings. The full faith Guarantee means the guarantee of
United States. The provisions of the and credit of the United States of USAID pursuant to the Authority.
Paperwork Reduction Act (44 U.S.C. America is pledged for the full payment Guarantee Payment Date means a
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3501 et seq.) do not apply. and performance of such guarantee Business Day not more than three (3)
obligations. Business Days after the related Date of
List of Subjects in 22 CFR Part 240 Application.
Foreign aid, Foreign relations, § 240.2 Definitions. Interest Amount means for any
Guaranteed loans, Loan programs- Wherever used in the standard terms Eligible Note the amount of interest
foreign relations. and conditions set out in this part: accrued on the Principal Amount of

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65282 Federal Register / Vol. 81, No. 184 / Thursday, September 22, 2016 / Rules and Regulations

such Eligible Note at the applicable § 240.4 Guarantee eligibility. Guarantee shall not be affected or
Interest Rate. (a) Eligible Notes only are guaranteed impaired by:
Interest Rate means the interest rate hereunder. Notes in order to achieve (a) Any defect in the authorization,
borne by an Eligible Note. Eligible Note status: execution, delivery or enforceability of
Loss of Investment means, in respect (1) Must be signed on behalf of the any agreement or other document
of any Eligible Note, an amount in Borrower, manually or in facsimile, by executed by a Noteholder, USAID, the
Dollars equal to the total of the: a duly authorized representative of the Fiscal Agent or the Borrower in
(1) Defaulted Payment unpaid as of Borrower; connection with the transactions
the Date of Application; (2) Must contain a certificate of contemplated by this Guarantee; or
(2) Further Guaranteed Payments authentication manually executed by (b) The suspension or termination of
unpaid as of the Date of Application; the Fiscal Agent whose appointment by the program pursuant to which USAID
and the Borrower is consented to by USAID is authorized to guarantee the Eligible
(3) Interest accrued and unpaid at the in the Fiscal Agency Agreement; and Notes.
Interest Rate(s) specified in the Eligible (3) Shall be approved and
§ 240.6 Transferability of Guarantee; Note
Note(s) on the Defaulted Payment and authenticated by USAID by either:
Register.
(i) The affixing by USAID on the
Further Guaranteed Payments, in each A Noteholder may assign, transfer or
Notes of a guarantee legend
case from the date of default with pledge an Eligible Note to any Person.
incorporating these Standard Terms and
respect to such payment to and Any such assignment, transfer or pledge
Conditions signed on behalf of USAID
including the date on which full shall be effective on the date that the
by either a manual signature or a
payment thereof is made to the name of the new Noteholder is entered
facsimile signature of an authorized
Noteholder. on the Note Register. USAID shall be
representative of USAID; or
Note[s] means any debt securities (ii) The delivery by USAID to the entitled to treat the Persons in whose
issued by the Borrower. Fiscal Agent of a guarantee certificate names the Eligible Notes are registered
Noteholder means the owner of an incorporating these Standard Terms and as the owners thereof for all purposes of
Eligible Note who is registered as such Conditions signed on behalf of USAID this Guarantee and USAID shall not be
on the Note Register. by either a manual signature or a affected by notice to the contrary.
Note Register means the register of facsimile signature of an authorized § 240.7 Fiscal Agent obligations.
Eligible Notes required to be maintained representative of USAID.
by the Fiscal Agent. Failure of the Fiscal Agent to perform
(b) The authorized USAID any of its obligations pursuant to the
Person means any legal person, representatives for purposes of the
including any individual, corporation, Fiscal Agency Agreement shall not
regulations in this part whose impair any Noteholder’s rights under
partnership, joint venture, association, signature(s) shall be binding on USAID
joint stock company, trust, this Guarantee, but may be the subject
shall include the USAID Chief and of action for damages against the Fiscal
unincorporated organization, or Deputy Chief Financial Officer;
government or any agency or political Agent by USAID as a result of such
Assistant Administrator and Deputy failure or neglect. A Noteholder may
subdivision thereof. Assistant Administrator, Bureau for
Principal Amount means the appoint the Fiscal Agent to make
Economic Growth, Education and demand for payment on its behalf under
principal amount of the Eligible Notes Environment; Assistant Administrator,
issued by the Borrower. For purposes of this Guarantee.
Bureau for Europe and Eurasia; Director
determining the principal amount of the and Deputy Director, Office of § 240.8 Event of Default; Application for
Eligible Notes issued by the Borrower, Development Credit; and such other Compensation; payment.
the principal amount of each Eligible individual(s) designated in a certificate At any time after an Event of Default,
Note shall be the stated principal executed by an authorized USAID as this term is defined in an Eligible
amount thereof. Representative and delivered to the Note, any Noteholder hereunder, or the
USAID means the United States Fiscal Agent. The certificate of Fiscal Agent on behalf of a Noteholder
Agency for International Development authentication of the Fiscal Agent hereunder, may file with USAID an
or its successor. issued pursuant to the Fiscal Agency Application for Compensation in the
Agreement shall, when manually form provided in appendix A to this
§ 240.3 The Guarantee.
executed by the Fiscal Agent, be part. USAID shall pay or cause to be
Subject to the terms and conditions conclusive evidence binding on USAID paid to any such Applicant any
set out in this part, the United States of that an Eligible Note has been duly compensation specified in such
America, acting through USAID, executed on behalf of the Borrower and Application for Compensation that is
guarantees to Noteholders the delivered. due to the Applicant pursuant to the
Borrower’s repayment of 100% of Guarantee as a Loss of Investment not
principal and interest due on Eligible § 240.5 Non-impairment of the Guarantee.
later than the Guarantee Payment Date.
Notes. Under this Guarantee, USAID After issuance of a Guarantee, that In the event that USAID receives any
agrees to pay to any Noteholder Guarantee will be an unconditional, full other notice of an Event of Default,
compensation in Dollars equal to such faith and credit obligation of the United USAID may pay any compensation that
Noteholder’s Loss of Investment under States of America, and will not be is due to any Noteholder pursuant to a
its Eligible Note; provided, however, affected or impaired by any subsequent Guarantee, whether or not such
that no such payment shall be made to condition or event. This non- Noteholder has filed with USAID an
any Noteholder for any such loss arising impairment of the guarantee provision Application for Compensation in
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out of fraud or misrepresentation for shall not, however, be operative with respect of such amount.
which such Noteholder is responsible or respect to any loss arising out of fraud
of which it had knowledge at the time or misrepresentation for which the § 240.9 No acceleration of Eligible Notes.
it became such Noteholder. This claiming Noteholder is responsible or of Eligible Notes shall not be subject to
Guarantee shall apply to each Eligible which it had knowledge at the time it acceleration, in whole or in part, by
Note registered on the Note Register. became a Noteholder. Moreover, the USAID, the Noteholder or any other

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Document Created: 2016-09-22 01:04:04
Document Modified: 2016-09-22 01:04:04
Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Rules and Regulations
Action		Final rule.
Dates		Effective September 21, 2016.
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.
FR Citation		81 FR 65281
CFR Associated		Foreign Aid; Foreign Relations; Guaranteed Loans and Loan Programs-Foreign Relations