[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: 14CFR1300.16]



[Page 524-525]

 

                     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. 1300.16  Application process.



    (a) Applications are to be submitted by the borrower. Borrowers may 

submit applications to the Board any time after October 12, 2001 through 

June 28, 2002. All applications must be received by the Board no later 

than 5 p.m. EDT, June 28, 2002, in the Board's offices. Borrowers should 

submit an original application and four copies. Applications will not be 

accepted via facsimile machine transmission or electronic mail. No 

application will be accepted for review if it is not received by the 

Board on or before June 28, 2002.

    (b) Applications shall contain the following:

    (1) A completed Form ``Application for Air Carrier Guaranteed Loan';

    (2) All loan documents that will be signed by the lender and the 

borrower, if the application is approved, including all terms and 

conditions of, and security or additional security (if any), to assure 

the borrower's performance under, the loan;

    (3) A certification by the borrower that the borrower meets each of 

the requirements of the program as set forth in the Act, the regulations 

in this part, and any supplemental requirements issued by the Board;

    (4) A certification by the lender that the lender meets each of the 

requirements of the program as set forth in the Act, the regulations in 

this part, and any supplemental requirements issued by the Board, and 

that the lender will provide the loan under the terms outlined in the 

loan documents if the Board approves the requested guarantee;

    (5) A statement that the borrower is not under bankruptcy protection 

or receivership when the application is submitted, unless the guarantee 

and the underlying financial obligation is to be part of a bankruptcy 

court-certified reorganization plan;

    (6) Consolidated financial statements of the borrower for the 

previous five years that have been audited by an independent certified 

public accountant, including any associated notes, as well as any 

interim financial statements and associated notes for the current fiscal 

year;

    (7) Copies of the financial evaluations and forecasts concerning the 

air carrier's air service operations that were prepared by or for the 

air carrier within the three months prior to September 11, 2001;

    (8) The borrower's business plan on which the loan is based that 

includes the following:

    (i) A description of how the loan fits within the borrower's 

business plan, the purposes for which the borrower will use the loan, 

and an analysis showing that the loan is prudently incurred. If loan 

funds are to be used to purchase



[[Page 525]]



an existing firm (or the substantial assets of an existing firm), the 

business plan of the combined entity shall contain a discussion of the 

way in which any required regulatory or judicial approvals will be 

obtained, including antitrust approval for any proposed acquisition;

    (ii) A discussion of a complete cost accounting and a range of 

revenue, operating cost, and credit assumptions;

    (iii) A discussion of the financing plan on which the loan is based, 

showing that the operational needs of the borrower will be met during 

the term of the plan;

    (iv) An analysis demonstrating that, at the time of the application, 

there is a reasonable assurance that the borrower will be able to repay 

the loan according to its terms, and a complete description of the 

operational and financial assumptions on which this demonstration is 

based;

    (v) A discussion of the borrower's five-year history and five-year 

projection for revenue, cash flow, average realized prices, and average 

realized operating costs and a demonstration that the borrower will be 

able to continue operations if the requested guarantee is approved; and

    (vi) If appropriate, a description of a plan to restructure the 

borrower's obligations, contracts, and costs. In preparing this 

description, the borrower shall jointly develop, with its existing 

secured and unsecured creditors, employees, or vendors, an agreed-upon 

plan to restructure the borrower's obligations, contracts and costs and 

incorporate this into the business plan submitted;

    (9) A description of the losses that the borrower incurred (or is 

incurring) as a result of the terrorist attacks on the United States 

that occurred on September 11, 2001, including losses due to the 

unavailability of credit on reasonable terms or a decrease in demand for 

the air carrier's services;

    (10) An analysis that demonstrates that the issuance of the 

guaranteed loan is a necessary part of maintaining a safe, efficient, 

and viable commercial aviation system in the United States and that 

credit is not reasonably available at the time of the transaction;

    (11) A description of all security (if any) for the loan, including, 

as applicable, current appraisals of real and personal property, copies 

of any appropriate environmental site assessments, and current personal 

and corporate financial statements of any guarantors for the same period 

as required for the borrower. Appraisals of real property shall be 

prepared by State licensed or certified appraisers, and be consistent 

with the ``Uniform Standards of Professional Appraisal Practice,'' 

promulgated by the Appraisal Standards Board of the Appraisal 

Foundation. Financial statements of guarantors shall be prepared by 

independent certified public accountants;

    (12) If appropriate, a description of the Federal government's 

ability to participate, contingent on the financial success of the 

borrower, in the gains of the borrower or its security holders through 

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

preferred stock, or other appropriate equity instruments; and

    (13) Any other information requested by the Board.

    (c) The collections of information in this section and elsewhere in 

this part that are subject to the Paperwork Reduction Act (44 U.S.C. 

3501 et seq.) have been approved by OMB and assigned control number 

0348-0059. Under the Paperwork Reduction Act, an agency may not conduct 

or sponsor, and a person is not required to respond to, a collection of 

information unless it displays a currently valid OMB control number.