Nature of guarantee; acceleration of guaranteed bonds.

CFR · 2024-01-01 · US · Title 7

(a) Any guarantee executed by the Secretary under this part shall be an obligation supported by the full faith and credit of the United States and incontestable except for fraud or misrepresentation of which the guaranteed bondholder had actual knowledge at the time it purchased the guaranteed bonds. (b) Amounts due under the guarantee shall be paid within 30 days of demand by a bondholder, certifying the amount of payment then due and payable. (c) The guarantee shall be assignable and transferable to any purchaser of guaranteed bonds as provided in the bond documents. (d) The following actions shall constitute events of default under the terms of the guarantee agreements: (1) The guaranteed lender failed to make a payment of principal or interest when due on the guaranteed bonds; (2) The guaranteed bonds were issued in violation of the terms and conditions of the bond documents; (3) The guarantee fee required by 7 CFR 1720.10 of this part, has not been paid; (4) The guaranteed lender made a misrepresentation to the Secretary in any material respect in connection with the application, the guaranteed (5) The guaranteed lender failed to comply with any material covenant or provision contained in the bond documents. (e) In the event the guaranteed lender fails to cure such defaults within the notice terms and the timeframe set forth in the bond documents, the Secretary may demand that the guaranteed lender redeem the guaranteed bonds. Such redemption amount will be in an amount

official document · source cfr-2024 · id 7:§ 1720.14