[Code of Federal Regulations]
[Title 14, Volume 5]
[Revised as of January 1, 2007]
From the U.S. Government Printing Office via GPO Access
[CITE: 14CFR1300.10]

[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.  1300.10  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 525]]

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.