§690e Issuance and Guarantee of Trust Certificates

Summary

The Administrator may issue trust certificates that show ownership of all or part of debentures from a Renewable Fuel Capital Investment company, as long as those certificates come from a trust or pool made only of debentures the Administrator has already guaranteed. The Administrator can also guarantee that holders of those trust certificates will get timely principal and interest, but each guarantee only covers the principal and interest of the debentures actually in the trust or pool. If a debenture is prepaid or defaults, the guarantee is cut back in the same proportion that the debenture represented in the pool. Interest on a prepaid or defaulted debenture is covered only up to the date the guarantee pays. The United States government promises to pay whatever is required under any such guarantee. The Administrator will not charge a fee for the guarantee, although an approved agent may charge a fee for certain services. If the Administrator pays a claim, it gets the same rights the paid investor had. No law can stop the Administrator from using its ownership rights in the debentures. The Administrator can keep a central registry for these certificates and hire agents to run the pools, bank accounts, and issue certificates. Agents must carry a fidelity bond or insurance to protect the United States. The Administrator may regulate brokers and dealers, and electronic registration is allowed.