[Federal Register Volume 78, Number 216 (Thursday, November 7, 2013)]
[Rules and Regulations]
[Pages 66841-66844]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-26676]
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AGENCY FOR INTERNATIONAL DEVELOPMENT
22 CFR Part 230
Israel Loan Guarantees Issued Under the Emergency Wartime
Supplemental Appropriations Act of 2003--Standard Terms and Conditions
AGENCY: Agency for International Development (USAID).
ACTION: Final rule.
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SUMMARY: This regulation prescribes the revised procedures and revised
standard terms and conditions applicable to loan guarantees issued for
the benefit of the Government of Israel on behalf of the State of
Israel. Pursuant to the Emergency Wartime Supplemental Appropriations
Act of 2003, the United States of America, acting through the U.S.
Agency for International Development, may issue loan guarantees
applicable to sums borrowed by the Government of Israel on behalf of
the State of Israel (the ``Borrower''). The loan guarantees were
originally issued pursuant to a Loan Guarantee Commitment Agreement
between the Borrower and the United States Government dated August 18,
2003 and applied to sums borrowed from time to time between March 1,
2003 and September 30, 2006. Pursuant to an Amended and Restated Loan
Guarantee Commitment Agreement dated October 24, 2012, the loan
guarantees will now apply to sums borrowed from time to time between
March 1, 2003 and September 30, 2016.
[[Page 66842]]
DATES: Effective Date: November 7, 2013.
FOR FURTHER INFORMATION CONTACT: Lauren Boccardi, Office of General
Counsel, U.S. Agency for International Development, Washington, DC
20523-6601; tel. 202-712-4318, fax 202-216-3055.
SUPPLEMENTARY INFORMATION: Pursuant to the Emergency Wartime
Supplemental Appropriations Act of 2003, Public Law 108-11, as amended
by Section 534(p) of the Foreign Operations, Export Financing and
Related Programs Appropriations Act, 2005; Division D of the
Consolidated Appropriations Act, 2005, Public Law 108-447; Section
13(b) of the Department of State Authorities Act, 2006, Public Law 109-
472; and Section 5(b) of the United States-Israel Enhanced Security
Cooperation Act of 2012, Public Law 112-150, the United States of
America, acting through the U.S. Agency for International Development,
may issue loan guarantees applicable to sums borrowed by the Government
of Israel on behalf of the State of Israel (the ``Borrower''). The loan
guarantees were originally issued pursuant to a Loan Guarantee
Commitment Agreement between the Borrower and the United States
Government dated August 18, 2003 and applied to sums borrowed from time
to time between March 1, 2003 and September 30, 2006. Pursuant to an
Amended and Restated Loan Guarantee Commitment Agreement dated October
24, 2012, the loan guarantees will now apply to sums borrowed from time
to time between March 1, 2003 and September 30, 2016, but still not
exceeding an aggregate total of nine billion United States Dollars
($9,000,000,000) in principal amount. The loan guarantees shall insure
the Borrower's repayment of 100% of principal and interest due under
such loans. The full faith and credit of the United States of America
is 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 230
Foreign aid, Foreign relations, Guaranteed loans, Loan programs-
foreign relations.
Authority and Issuance
Accordingly, Part 230 of Title 22, Chapter II, of the Code of
Federal Regulations, is revised to read as follows:
PART 230--ISRAEL LOAN GUARANTEES ISSUED UNDER THE EMERGENCY WARTIME
SUPPLEMENTAL APPROPRIATIONS ACT OF 2003, PUB. L. 108-11--STANDARD
TERMS AND CONDITIONS
Sec.
230.01 Purpose.
230.02 Definitions.
230.03 The Guarantee.
230.04 Guarantee eligibility.
230.05 Non-impairment of the Guarantee.
230.06 Transferability of Guarantee; Note Register.
230.07 Fiscal Agent obligations.
230.08 Event of Default; Application for Compensation; payment.
230.09 No acceleration of Eligible Notes.
230.10 Payment to USAID of excess amounts received by a Noteholder.
230.11 Subrogation of USAID.
230.12 Prosecution of claims.
230.13 Change in agreements.
230.14 Arbitration.
230.15 Notice.
230.16 Governing law.
Appendix A to Part 230--Application for Compensation
Authority: Emergency Wartime Supplemental Appropriations Act,
2003, Pub. L. 108-11, as amended by Section 534(p) of the Foreign
Operations, Export Financing and Related Programs Appropriations
Act, 2005; Division D of the Consolidated Appropriations Act, 2005,
Pub. L. 108-447; Section 13(b) of the Department of State
Authorities Act, 2006, Pub. L. 109-472; and Section 5(b) of the
United States-Israel Enhanced Security Cooperation Act of 2012, Pub.
L. 112-150.
Sec. 230.01 Purpose.
The purpose of this regulation is to prescribe the procedures and
standard terms and conditions applicable to loan guarantees issued for
the benefit of the Government of Israel on behalf of the State of
Israel (``Borrower''), pursuant to the Emergency Wartime Supplemental
Appropriations Act of 2003, Public Law 108-11, as amended by Section
534(p) of the Foreign Operations, Export Financing and Related Programs
Appropriations Act, 2005; Division D of the Consolidated Appropriations
Act, 2005, Public Law 108-447; Section 13(b) of the Department of State
Authorities Act, 2006, Public Law 109-472; and Section 5(b) of the
United States-Israel Enhanced Security Cooperation Act of 2012, Public
Law 112-150. The loan guarantees will apply to sums borrowed from time
to time between March 1, 2003 and September 30, 2016, not exceeding an
aggregate total of nine billion United States Dollars ($9,000,000,000)
in principal amount. The loan guarantees shall insure the Borrower's
repayment of 100% of principal and interest due under such loans. The
full faith and credit of the United States of America is pledged for
the full payment and performance of such guarantee obligations. The
loan guarantees will be issued pursuant to an Amended and Restated Loan
Guarantee Commitment Agreement between the Borrower and the United
States Government dated October 24, 2012.
Sec. 230.02 Definitions.
Wherever used in these standard terms and conditions:
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. 230.08 of
this part.
Borrower means the Government of Israel, on behalf of the State of
Israel.
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. 230.15 of
this part.
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. 230.04 hereof.
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 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
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
[[Page 66843]]
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 this part 230
and the Emergency Wartime Supplemental Appropriations Act of 2003,
Public Law 108-11, as amended by Section 534(p) of the Foreign
Operations, Export Financing and Related Programs Appropriations Act,
2005; Division D of the Consolidated Appropriations Act, 2005, Public
Law 108-447; Section 13(b) of the Department of State Authorities Act,
2006, Public Law 109-472; and Section 5(b) of the United States-Israel
Enhanced Security Cooperation Act of 2012, Public Law 112-150.
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 such Eligible Note at the applicable
Interest Rate.
Interest Rate means the interest rate borne by an Eligible Note.
Loss of Investment respecting any Eligible Note means 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.
Noteholder means the owner of an Eligible Note who is registered as
such on the Note Register of Eligible Notes required to be maintained
by the Fiscal Agent.
Note[s] means any debt securities issued by the Borrower.
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 any Eligible Notes
issued by the Borrower. For purposes of determining the principal
amount of any Eligible Notes issued by the Borrower, the principal
amount of each Eligible Note shall be:
(1) In the case of any Eligible Note issued having a notional
amount, but no principal balance, the original issue price (excluding
any transaction costs) thereof; and
(2) In the case of any Eligible Note issued with a principal
balance, the stated principal amount thereof.
USAID means the United States Agency for International Development
or its successor.
Sec. 230.03 The Guarantee.
Subject to these terms and conditions, the United States of
America, acting through USAID, guarantees to Noteholders the Borrower's
repayment of 100 percent 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
required to be maintained by the Fiscal Agent.
Sec. 230.04 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 a 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 this
regulation whose signature(s) shall be binding on USAID shall include
the USAID Chief and Deputy Chief Financial Officer, Assistant
Administrator and Deputy, Bureau for Economic Growth, Agriculture and
Trade, 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. 230.05 Non-impairment of the Guarantee.
The full faith and credit of the United States of America is
pledged to the performance of this Guarantee. The Guarantee shall be
unconditional, and 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. 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.
Sec. 230.06 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 required to be maintained by the Fiscal Agent pursuant to the
Fiscal Agency Agreement. 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. 230.07 Fiscal Agent obligations.
Failure of the Fiscal Agent to perform any of its obligations
pursuant to the
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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. 230.08 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 three (3) Business Days after the Date of Application. 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. 230.09 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 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. 230.10 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. 230.11 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. 230.12 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. 230.13 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. 230.14 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. 230.15 Notice.
Any communication to USAID pursuant to this Guarantee shall be in
writing in the English language, shall refer to the Israel 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, Agriculture and Trade,
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. 230.16 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 230--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. 230.02(f) of the Standard
Terms and Conditions of the above-mentioned Guarantee) was due on --
----, 20----, on $-- principal amount of Notes held by the
undersigned of the Government of Israel, on behalf of the State of
Israel (the ``Borrower''). 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.
230.08 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].
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\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: October 31, 2013.
Mark Hyland,
Attorney Advisor, Office of the General Counsel, U.S. Agency for
International Development.
[FR Doc. 2013-26676 Filed 11-6-13; 8:45 am]
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