§689d Debentures

Summary

The Administrator can guarantee that a New Markets Venture Capital company will pay the scheduled principal and interest on its debentures. The Administrator can set the guarantee rules, but no guaranteed debenture can have a term longer than 15 years. The U.S. government promises to cover any payments required under these guarantees. A company can only have guaranteed debentures up to 150% of its private capital, as the Administrator decides. Private capital can include federal money if it comes from a non‑federal investor. A “covered” company (approved on or after March 1, 2002 and financed by the Administrator) may not buy or promise securities for one business that total more than 10% of its regulatory capital plus the leverage shown in its participation agreement, unless the Administrator allows it.