Section 900.115  Requirements of Guaranteed Participating Loans

Guaranteed participating loans, or commitments for guaranteed participating loans, shall be make by the Authority when:  

a)         The participating bank has committed to make an on-loan to an eligible exporter, or has made an on-loan to an eligible exporter, in an amount which does not exceed 90% of the total value of the pre-export or eligible export, and which on-loan shall be equal to or greater than 111.1111% of the guaranteed participating loan;

b)         The eligible exporter, as part of its application for the on-loan to be supported by the guaranteed participating loan, or for the comprehensive export credit insurance, has certified that the purpose of the on-loan is to finance an eligible export or pre-export, and that the goods or services to be so financed are eligible exports or pre-exports, as defined in this Part.

c)         Certificates of insurance, under policies of comprehensive export credit insurance, of fire, casualty, theft and cargo loss, and of other coverages required hereunder, have been issued to the eligible exporter, and 100% of the right, title and interest in and to the proceeds of such insurance policies have been assigned to the Authority and the financial intermediary, as their interests may appear;

d)         The Authority has determined:  

1)         that the making of the guaranteed participating loan will create or maintain employment in Illinois; and

2)         the financial intermediary will use 100% of the proceeds of the guaranteed participating loan to support an on-loan which will be used exclusively to finance eligible exports or pre-exports;

e)         The financial intermediary has covenanted to suspend its right to payment from the eligible exporter pursuant to any post-shipment on-loan for the period of any moratorium on payment of the guaranteed participating loan granted by the Authority pursuant to Section 900.176 of this Part;

f)         The financial intermediary has covenanted to reduce the principal obligation of the eligible exporter to the financial intermediary by a percentage equal to the Authority's percentage reduction, if any, of the financial intermediary's obligation to it under the guaranteed participating loan, as may be required by law;

g)         The contract of sale:  

1)         Describes the goods or services sold;

2)         Establishes the price in United States dollars and provides that payment will be made in United States dollars;

3)         Specifies the time, mode and place of delivery;

4)         Specifies the time, mode, and place for payment;

5)         Specifies the interest rate, if any, to be applied to any late payment;

6)         States any and all quality requirements in terms capable of objective measurement; and

7)         Provides for payment within a term which corresponds to the term of the guaranteed participating loan, as set forth in Section 900.118 of this Part;

h)         The on-loan has been collateralized in accordance with Section 900.140 of this Part;

i)          The guaranteed participating loan and the on-loan conform to the provisions and purposes of the Act and this Part, and comply with the requirements of any applicable policy or policies of comprehensive export credit or other insurance;

j)          All documents required by the Authority to be executed in connection with both the guaranteed participating loan and the on-loan have been so executed, including an agency and security agreement as specified in Section 900.115(k) of this Part, and such other security agreements as are specified in the commitment, copies of same have been delivered to the Authority, and all fees required to be paid to the Authority pursuant to the Act and this Part, have been paid; and

k)         The financial intermediary shall have assigned to the Authority or its designee the first security interest described in Section 900.140(a) of this Part, and shall also have entered into an agency and security agreement with the Authority and its designee pursuant to which such designee shall be authorized and empowered to distribute the proceeds of the comprehensive export credit insurance after first having applied a portion thereof (which would otherwise have been payable to the financial intermediary) to pay the then remaining outstanding principal and interest on the financial intermediary's guaranteed participating loan in connection with which such proceeds are paid.

(Source:  Amended at 11 Ill. Reg. 3100, effective February 3, 1987)