[Code of Federal Regulations]

[Title 12, Volume 6]

[Revised as of January 1, 2006]

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

[CITE: 12CFR614.4233]



[Page 115-116]

 

                       TITLE 12--BANKS AND BANKING

 

                 CHAPTER VI--FARM CREDIT ADMINISTRATION

 

PART 614_LOAN POLICIES AND OPERATIONS--Table of Contents

 

                   Subpart E_Loan Terms and Conditions

 

Sec. 614.4233  International loans.



    Term loans made by banks for cooperatives and agricultural credit 

banks under the authority of section 3.7(b) of the Act and Sec. 

613.3200 of this chapter to foreign or domestic parties who are not 

shareholders of the bank shall be subject to the following conditions:

    (a) The loan shall be denominated in a currency to eliminate foreign 

exchange risk on repayment.

    (b) The borrower's obligations shall be guaranteed or insured 

against default under such policies as are available in the United 

States and other countries. Exceptions may be made where a prospective 

borrower has had a longstanding successful business relationship with an 

eligible cooperative borrower or an eligible cooperative which is not a 

borrower if the prospective borrower has a high credit rating as 

determined by the bank.

    (c) For a borrower in which a voting stockholder of the bank has a 

majority ownership interest, financing may be



[[Page 116]]



extended for the full value of the transaction; otherwise, financing may 

be extended only to approximate the percent of ownership.



[55 FR 24884, June 19, 1990, as amended at 55 FR 28886, July 16, 1990; 

55 FR 50544, Dec. 7, 1990; 56 FR 5927, Feb. 14, 1991; 62 FR 4445, Jan. 

30, 1997]