§689e Issuance and Guarantee of Trust Certificates

Summary

Allows the Administrator to create and sell trust certificates that represent all or part of debentures issued by a New Markets Venture Capital company, as long as the certificates come from a trust or pool made only of guaranteed debentures. The Administrator can guarantee timely payment of principal and interest on those certificates, but only up to the amount that the underlying debentures provide. If a debenture is prepaid or defaults, the guarantee is cut back in the same proportion, and interest is guaranteed only up to the date the Administrator pays. The United States backing covers payments under these guarantees. The Administrator will not charge a fee for the guarantee, though approved agents may charge fees. If the Administrator pays a claim, it gains the rights the payment satisfied, and no law can stop it from using ownership rights in the debentures. The Administrator can keep a central record of all trust certificates and may hire agents to handle pooling, accounts, and issuing certificates. Agents must carry bonds or insurance to protect the United States. The Administrator can set rules for brokers and dealers, and electronic or book-entry registration is allowed.