§689d Debentures

Summary

The Administrator can guarantee that a New Markets Venture Capital company will pay the principal and interest on its debentures on time. The Administrator sets the rules for those guarantees, but no guaranteed debenture can run for more than 15 years. The United States government promises to pay any amounts needed under these guarantees. A company’s total amount of guaranteed debentures cannot be more than 150 percent of its private capital, as the Administrator decides. Private capital can include federal money if it was put in by someone who is not a federal agency. Covered New Markets Venture Capital company — one that got final approval from 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 commit more than 10 percent of the sum of its regulatory capital and the total leverage shown in its participation agreement to any single enterprise.