Commercial paper and corporate debt securities.

CFR · 2024-01-01 · US · Title 12

Pursuant to HOLA section 5(c)(2)(D), a Federal savings association may invest in, sell, or hold commercial paper and corporate debt securities subject to the provisions of this section. (a) (i) Investment grade as of the date of purchase; or (ii) Guaranteed by a company having outstanding paper that meets the standard set forth in paragraph (a)(1)(i) of this section. (2) Corporate debt securities must be: (i) Securities that may be sold with reasonable promptness at a price that corresponds reasonably to their fair value; and (ii) Investment grade. (3) A Federal savings association's total investment in the commercial paper and corporate debt securities of any one issuer, or issued by any one person or entity affiliated with such issuer, together with other loans, shall not exceed the general lending limitations contained in § 32.3(a) of this chapter. (4) Investments in corporate debt securities convertible into stock are subject to the following additional limitations: (i) The purchase of securities convertible into stock at the option of the issuer is prohibited; (ii) At the time of purchase, the cost of such securities must be written down to an amount that represents the investment value of the securities considered independently of the conversion feature; and (iii) Federal savings associations are prohibited from exercising the conversion feature. (5) A Federal savings association shall maintain information in its files adequate to demonstrate that it has exercised prude

official document · source cfr-2024 · id 12:§ 160.40