§690d Debentures

Summary

The Administrator may guarantee that principal and interest on debentures issued by a Renewable Fuel Capital Investment company are paid on time. The Administrator can set other terms, but each guaranteed debenture cannot run longer than 15 years. The debenture must have no front-end or annual fees, be issued at a discount, pay no interest for the first 5 years, be prepayable without penalty after 1 year, and pay interest every six months after the 5-year no-interest period. The U.S. government promises to cover any payments required under these guarantees. A company’s total outstanding guaranteed debentures cannot exceed 150 percent of its private capital, and “private capital” can include federal funds only if those funds come from an investor that is not a federal department or agency.