Source: https://www.law.cornell.edu/uscode/text/15/697f
Timestamp: 2019-06-26 04:50:48
Document Index: 9026903

Matched Legal Cases: ['§ 697', '§\u202f697', '§\u202f509', '§\u202f503', '§\u202f208', '§\u202f208', '§\u202f208', '§\u202f502']

15 U.S. Code § 697f - Prepayment of development company debentures | U.S. Code | US Law | LII / Legal Information Institute
Section 697f. Prepayment of development company debentures
15 U.S. Code § 697f. Prepayment of development company debentures
(A) In generalIn making a prepayment under paragraph (1)—
(i) In generalFor purposes of subparagraph (A)(i), the repurchase premium is the amount equal to the product of—
the unpaid principal balance due on the debenture on the date of prepayment; and
the applicable percentage rate, as determined in accordance with clauses (ii) and (iii).
(ii) Applicable percentage rateFor purposes of clause (i)(II), the applicable percentage rate means—
with respect to a 10-year term loan, 8.5 percent;
with respect to a 15-year term loan, 9.5 percent;
with respect to a 20-year term loan, 10.5 percent; and
with respect to a 25-year term loan, 11.5 percent.
(b) RequirementsFor purposes of subsection (a), the requirements of this subsection are that—
the debenture is outstanding and neither the loan that secures the debenture, if any, nor the debenture is in default on the date on which the prepayment is made;
State, local, or personal funds, or the proceeds of a refinancing in accordance with subsection (d) under the programs authorized by this subchapter, are used to prepay or roll over the debenture; and
with respect to a debenture issued under section 697 of this title, the issuer certifies that the benefits, net of fees and expenses authorized herein, associated with prepayment of the debenture are entirely passed through to the borrower.
(1) In generalThe refinancing of a debenture under sections 697a and 697b of this title, in accordance with subsection (b)(2)—
shall not exceed the amount necessary to prepay existing debentures, including all costs associated with the refinancing and any applicable prepayment penalty or repurchase premium; and
except as provided in paragraphs (2) and (3), shall be subject to the provisions of sections 697a and 697b of this title and the rules and regulations promulgated thereunder, including rules and regulations governing payment of authorized expenses, commissions, fees, and discounts to brokers and dealers in trust certificates issued pursuant to section 697b of this title.
The Administration shall use certified mail and other reasonable means to notify each eligible borrower of the prepayment program provided in this subchapter. Each preliminary notice shall specify the range and dollar amount of repurchase premiums which could be required of that borrower in order to participate in the program. In carrying out this program, the Administration shall provide a period of not less than 45 days following the receipt of such notice by the borrower during which the borrower must notify the Administration of the borrower’s intent to participate in the program. The Administration shall require that a borrower who gives notice of its intent to participate to make an earnest money deposit of $1,000 which shall not be refundable but which shall be credited toward the final repurchase premium.
(B) “Borrower” defined
For purposes of this paragraph, the term “borrower”, in the case of a small business investment company or a specialized small business investment company, means “issuer”.
(1) the term “issuer” means—
the qualified State or local development company that issued a debenture pursuant to section 697 of this title, which has been purchased by the Federal Financing Bank; and
a small business investment company licensed pursuant to section 681 of this title; or
the term “borrower” means a small business concern whose loan secures a debenture issued pursuant to section 697 of this title.
(Pub. L. 85–699, title V, § 509, as added Pub. L. 103–403, title V, § 503, Oct. 22, 1994, 108 Stat. 4199; amended Pub. L. 104–208, div. D, title II, § 208(h)(1)(H), Sept. 30, 1996, 110 Stat. 3009–747.)
For definition of “this chapter”, referred to in subsec. (a)(1), see References in Text note set out under section 661 of this title.
1996—Subsec. (a)(1). Pub. L. 104–208, § 208(h)(1)(H)(i), struck out at end “A small business investment company operating under the authority of section 681(d) of this title that has issued a debenture that was purchased by and is held by the Administration, may, under the same terms and conditions, prepay such debenture, and the penalty as provided in this section, and shall thereafter be immediately eligible to apply for additional assistance from the Administration.”
Subsec. (e)(1)(B). Pub. L. 104–208, § 208(h)(1)(H)(ii), substituted “section 681 of this title” for “subsection (c) or (d) of section 681 of this title”.
Pub. L. 103–403, title V, § 502, Oct. 22, 1994, 108 Stat. 4198, provided that:
“(a)In General.—The Small Business Administration shall fully utilize the $30,000,000 appropriated in Public Law 103–317 [108 Stat. 1724] to reduce, in accordance with this title [enacting this section and provisions set out as a note under section 661 of this title] and the amendments made by this title, prepayment penalties imposed in connection with debentures issued under—
section 303 or 503 of the Small Business Investment Act of 1958 [15 U.S.C. 683, 697], which have been purchased by the Federal Financing Bank; and
title III [probably means title III of Pub. L. 85–699, which is classified to section 681 et seq. of this title] to companies operating under section 301(d) of such Act [15 U.S.C. 681(d)], which have been purchased by the Small Business Administration.
“(b)Equal Opportunity.—
In order to provide an equal opportunity to participate in the program authorized under this title, the Small Business Administration shall afford each borrower or issuer of a debenture subject to this title, not less than 45 days to elect to participate and to provide an earnest money deposit. The Administration shall subsequently allow a period of not less than 4 months, during which those borrowers or issuers that elect to participate shall be allowed to complete the prepayment process.
“(c)Restrictions on Participation.—In no event shall the Small Business Administration—
“(1) allow any borrower or issuer to participate in the program if the borrower or issuer fails to—
make a timely election and provide the deposit on a timely basis; or
complete the prepayment process within the required time; or
allow any borrower or issuer to participate in the program at a percentage rate other than the rate finally determined to be applicable to all other borrowers or issuers with similar terms of years.”