Louisiana Administrative Code › Title 7 - AGRICULTURE AND ANIMALS › Part III - Agricultural Finance › Chapter 1 - General Provisions › Section III-131 - Types of Loans to be Purchased or Made

Current through Register Vol. 50, No. 6, June 20, 2024
A. The issuer shall only purchase
				agricultural loans made by lenders or enter into repurchase obligations with
				certain national banks who will in turn make agricultural loans to
				borrowers.
B. Acquisition of
				Eligible Loans
1. Moneys in the loan fund
				shall be used only for the acquisition of eligible loans pursuant to agreements
				or to enter into repurchase obligations, as described below. No eligible loan
				shall be purchased unless such eligible loan bears interest, payable
				semiannually on April 1 and October 1 of each year, at a rate no less than 9.10
				percent, and matures no later than October 1, 1996. No repurchase obligation
				shall be entered into unless such repurchase obligation carries with it an
				interest component as a part of the resale price of 9.10 percent, and matures
				no later than October 1, 1996. No eligible loan or repurchase obligation shall
				be purchased unless it requires that any principal amounts prepaid under such
				eligible loan or repurchase obligation, for whatever reason, shall be paid to
				the trustee in accordance with Section 4.14 of the Indenture, and in no event
				shall any prepayment (including prepayments due to casualty or condemnation) be
				in an amount less than $100,000. Prior to the disbursement of any funds from
				the loan fund to acquire an eligible loan or enter into a repurchase
				obligation, the trustee shall complete a program checklist and submit the same
				to the issuer and to Standard and Poor's Corporation.
2. Moneys in the loan fund shall be used to
				acquire any eligible loans presented to the issuer and the trustee by a lender
				in accordance with the provisions set forth herein, pursuant to an agreement at
				a price described below upon receipt by the trustee of all documents, opinions
				and certificates required in the agreement and the program checklist. Each
				eligible loan shall be purchased at a purchase price of 99.78 percent of the
				outstanding principal amount of such eligible loan, less a surrender charge (as
				that term is defined in the investment agreement and which shall be payable to
				the insurance company), in the amount determined by the investment agreement
				provided that the purchase price of an eligible loan shall not be in an amount
				less than $100,000 and shall not exceed $5,000,000. The average principal
				amount of eligible loans must be at least $500,000. Eligible loans may not be
				acquired after September 30, 1991, and the total amount of withdrawals (as such
				term is defined in the investment agreement) at any point in time shall not
				exceed the applicable maximum cumulative withdrawal amounts (as defined in the
				investment agreement). Payments made by a credit provider under a letter of
				credit or guaranty shall be applied as a credit against amounts owing by a
				borrower under a financed eligible loan with respect to which such letter of
				credit or guaranty was issued.
3.
				The issuer will cooperate with each lender, and shall require each lender to
				cooperate with the issuer, such that all accrued interest through the date on
				which the eligible loan is acquired by the issuer is paid directly or
				reimbursed to each lender.
4. Each
				eligible loan shall be secured by an irrevocable letter of credit, a guaranty,
				or a comparable instrument which shall effectively guarantee payment of all
				principal and interest on such eligible loan, such letter of credit, guaranty
				or comparable instrument being issued by a credit provider whose long-term
				unsecured debt rating is rated at least as high as the initial rating on the
				bonds, as confirmed in writing by Standard and Poor's Corporation, or, if not
				so rated (and then only in the case of a letter of credit delivered by a
				savings and loan association insured by FSLIC or a state-chartered banking
				association insured by FDIC such credit provider shall pledge securities
				sufficient to maintain the initial rating on the bonds; the types of eligible
				collateral securities, and the level of collateralization required for each
				type of collateral security in order to obtain such a rating from Standard and
				Poor's Corporation, are set forth in Exhibit F; provided that if any such
				securities to be pledged consist of FHA/VA Mortgage Notes, Conventional
				Mortgage Notes, FHA/VA Mortgage Notes-ARMS and Conventional Mortgage Notes-ARMS
				(as those terms are used in the Collateral Pledge Agreement FSLIC), then prior
				to the acquisition of the eligible loan the trustee shall receive notice from
				Standard and Poor's Corporation (at the expense of the respective borrower) to
				the effect that the delivery of FHA/VA Mortgage Notes, Conventional Mortgage
				Notes, FHA/VA Mortgage Notes-ARMS and Conventional Mortgage Notes-ARMS by such
				credit provider will not adversely affect the rating on the bonds. In the event
				that an eligible loan is to be secured by an instrument other than a letter of
				credit or a guaranty in precisely the forms attached to the Indenture, such
				eligible loan shall not be purchased with bond proceeds until such time as the
				trustee receives written confirmation from Standard and Poor's Corporation (at
				the expense of the respective borrower) that such purchase will not adversely
				affect the rating of the bonds.