[Code of Federal Regulations]

[Title 14, Volume 5]

[Revised as of January 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 14CFR1300.10]



[Page 522-523]

 

                     TITLE 14--AERONAUTICS AND SPACE

 

           CHAPTER VI--AIR TRANSPORTATION SYSTEM STABILIZATION

 

PART 1300_AVIATION DISASTER RELIEF_AIR CARRIER GUARANTEE LOAN PROGRAM

--Table of Contents

 

        Subpart B_Minimum Requirements and Application Procedures

 

Sec. 1300.10  General standards for Board issuance of Federal credit 

instruments.





    (a) In accordance with section 102(c)(1) of the Act, the Board may 

enter into agreements with one or more borrowers to issue Federal credit 

instruments only if the Board determines, in its discretion and in 

accordance with the minimum requirements set forth in this part, that--

    (1) The borrower is an air carrier for which credit is not 

reasonably available at the time of the transaction;

    (2) The intended obligation by the borrower is prudently incurred; 

and

    (3) Such agreement is a necessary part of maintaining a safe, 

efficient, and viable commercial aviation system in the United States.

    (b) In accordance with section 102(c)(2)(A) of the Act, the Board 

shall enter into an agreement to issue a Federal credit instrument in 

such form and on such terms and conditions and subject to such 

covenants, representations, warranties, and requirements (including 

requirements for audits) as the Board determines are appropriate for 

satisfying the requirements of this part and any supplemental 

requirements issued by the Board under section 102(c)(2)(B) of the Act.

    (c) In accordance with section 102(d)(1) of the Act, in entering 

into



[[Page 523]]



agreements to issue Federal credit instruments, the Board shall, to the 

extent feasible and practicable and in accordance with the requirements 

in this part, ensure that the Federal Government is compensated for the 

risk assumed in making guarantees.

    (d) In accordance with Section 102(d)(2) of the Act, the Board is 

authorized to enter into contracts under which the Federal Government, 

contingent on the financial success of the air carrier, would 

participate in the gains of the air carrier or its security holders 

through the use of such instruments as warrants, stock options, common 

or preferred stock, or other appropriate equity instruments, except that 

the Board shall not accept an equity interest in an air carrier that 

gives the Federal Government voting rights.

    (e) In accordance with Section 104(a) of the Act, the Board may only 

issue a Federal credit instrument to an air carrier after the air 

carrier enters into a legally binding agreement with the Board regarding 

certain employee compensation.