§689d Debentures

Summary

The Administrator may guarantee that principal and interest on debentures sold by New Markets Venture Capital companies get paid on time. The Administrator can set the terms of those guarantees, but no guaranteed debenture can run longer than 15 years. The United States promises to pay whatever is needed under these guarantees. A company can have guaranteed debentures only up to a total face amount equal to 150 percent of its private capital, as the Administrator decides. “Private capital” also includes money treated as Federal funds if the investor is not a federal agency or department. A “covered New Markets Venture Capital company” means one that got final approval by the Administrator on or after March 1, 2002 and that received financing from the Administrator. Unless the Administrator allows it, a covered company may not invest in or commit securities for any single enterprise for more than 10 percent of the sum of its regulatory capital plus the total leverage shown in its participation agreement.