Voglio sapere a riguardo di…

jbell on DSKJLSW7X2PROD with NOTICES

12786

Federal Register / Vol. 86, No. 41 / Thursday, March 4, 2021 / Notices
from non-Federal counterparties, provided the Secondary Borrower pledges all assets, rights and interests necessary to generate such revenue stream, and a Principal Loss Collateral Provision. Intangible assets, such as customer relationships and intellectual property rights, are not acceptable forms of collateral. Loans secured by real property that are still in a construction phase will only be permitted when backed by a letter of credit issued by a bank deemed acceptable by the Bond Guarantee Program, in a format deemed acceptable to the Bond Guarantee Program, that guarantees the full value of the pledged collateral until at minimum completion of the construction and stabilization phases.
2. The Regulations require that Bond Loans must be secured by a first lien on a collateral assignment of Secondary Loans, and further that the Secondary Loans must be secured by a first lien or parity lien on acceptable collateral.
3. Valuation of the collateral pledged by the Secondary Borrower must be based on the Eligible CDFIs credit policy guidelines and must conform to the standards set forth in the Uniform Standards of Professional Appraisal Practice USPAP and the Secondary Loan Requirements.
4. Independent third-party appraisals are required for the following collateral:
Real estate, leasehold interests, fixtures, machinery and equipment, movables stock valued in excess of $250,000, and contracted revenue stream from nonFederal creditworthy counterparties.
Secondary Loan collateral shall be valued using the cost approach, net of depreciation and shall be required for the following: accounts receivable, machinery, equipment and movables, and fixtures.
F. Qualified Issuer approval of Bond Loans to Eligible CDFIs. The Qualified Issuer shall not approve any Bond Loans to an Eligible CDFI where the Qualified Issuer has actual knowledge, based upon reasonable inquiry, that within the past five 5 years the Eligible CDFI: i Has been delinquent on any payment obligation except upon a demonstration by the Qualified Issuer satisfactory to the CDFI Fund that the delinquency does not affect the Eligible CDFIs creditworthiness, or has defaulted and failed to cure any other obligation, on a loan or loan agreement previously made under the Act; ii has been found by the Qualified Issuer to be in default of any repayment obligation under any Federal program; iii is financially insolvent in either the legal or equitable sense; or iv is not able to demonstrate that it has the capacity to comply fully with the
VerDate Sep<11>2014

20:27 Mar 03, 2021

Jkt 253001

payment schedule established by the Qualified Issuer.
G. Credit Enhancements; Principal Loss Collateral Provision.
1. In order to achieve the statutory zero-credit subsidy constraint of the CDFI Bond Guarantee Program and to avoid a call on the Guarantee, Eligible CDFIs are encouraged to include Credit Enhancements and Principal Loss Collateral Provisions structured to protect the financial interests of the Federal Government. Any Credit Enhancement or Principal Loss Collateral Provision must be pledged, as part of the Trust Estate, to the Master Servicer/Trustee for the benefit of the Federal Financing Bank.
2. Credit Enhancements may include, but are not limited to, payment guarantees from third parties or Affiliates, non-Federal capital, lines or letters of credit, or other pledges of financial resources that enhance the Eligible CDFIs ability to make timely interest and principal payments under the Bond Loan.
3. As distinct from Credit Enhancements, Principal Loss Collateral Provisions may be provided in lieu of pledged collateral and/or in addition to pledged collateral. A Principal Loss Collateral Provision shall be in the form of cash or cash equivalent guarantees from non-Federal capital in amounts necessary to secure the Eligible CDFIs obligations under the Bond Loan after exercising other remedies for default.
For example, a Principal Loss Collateral Provision may include a deficiency guarantee whereby another entity assumes liability after other default remedies have been exercised, and covers the deficiency incurred by the creditor. The Principal Loss Collateral Provision shall, at a minimum, provide for the provision of cash or cash equivalents in an amount that is not less than the difference between the value of the collateral and the amount of the accelerated Bond Loan outstanding.
4. In all cases, acceptable Credit Enhancements or Principal Loss Collateral Provisions shall be proffered by creditworthy providers and shall provide information about the adequacy of the facility in protecting the financial interests of the Federal Government, either directly or indirectly through supporting the financial strength of the Bond Issue. The information provided must include the amount and quality of any Credit Enhancements, the financial strength of the provider of the Credit Enhancement, the terms, specific conditions such as renewal options, and any limiting conditions or revocability by the provider of the Credit Enhancement.

PO 00000

Frm 00194

Fmt 4703

Sfmt 4703

5. For Secondary Loans benefitting from a Principal Loss Collateral Provision e.g., a deficiency guarantee, the entity providing the Principal Loss Collateral Provision must be underwritten based on the same criteria as if the Secondary Loan were being made directly to that entity with the exception that the guarantee need not be collateralized.
6. If the Principal Loss Collateral Provision is provided by a financial institution that is regulated by an Appropriate Federal Banking Agency or an Appropriate State Agency, the guaranteeing institution must demonstrate performance of financially sound business practices relative to the industry norm for providers of collateral enhancements as evidenced by reports of Appropriate Federal Banking Agencies, Appropriate State Agencies, and auditors, as appropriate.
7. In the event that the Eligible CDFI
proposes to use other Federal funds to service Bond Loan debt or as a Credit Enhancement, the CDFI Fund may require, in its sole discretion, that the Eligible CDFI provide written assurance from such other Federal program, in a form that is acceptable to the CDFI Fund and that the CDFI Fund may rely upon, that said use is permissible.
H. Reporting requirements.
1. Reports.
a. General. As required pursuant to the Regulations at 12 CFR 1808.619, and as set forth in the Bond Documents and the Bond Loan documents, the CDFI
Fund will collect information from each Qualified Issuer which may include, but will not be limited to:
i Quarterly and annual financial reports and data including an OMB
single audit per 2 CFR 200 Subpart F, as applicable for the purpose of monitoring the financial health, ratios and covenants of Eligible CDFIs that include asset quality nonperforming assets, loan loss reserves, and net charge-off ratios, liquidity current ratio, working capital, and operating liquidity ratio, solvency capital ratio, self-sufficiency, fixed charge, leverage, and debt service coverage ratios; ii annual reports as to the compliance of the Qualified Issuer and Eligible CDFIs with the Regulations and specific requirements of the Bond Documents and Bond Loan documents; iii Master Servicer/Trustee summary of program accounts and transactions for each Bond Issue; iv Secondary Loan certifications describing Eligible CDFI lending, collateral valuation, and eligibility; v financial data on Secondary Loans to monitor underlying collateral, gauge overall risk exposure across asset classes, and assess loan performance,
E:FRFM04MRN1.SGM

04MRN1