Section 900.10  Definitions

 

As used in this Part, the following words or terms mean:  

 

a)         "Act":  The Illinois Export Development Act of 1983, Ill. Rev. Stat. 1985 ch. 127, pars. 2501 et seq., as now or hereafter amended.

 

b)         "Authority":  The Illinois Export Development Authority.

 

c)         "banking organization":  Any organization defined in Section 2 of the Illinois Banking Act., 1985 Ill. Rev. Stat., ch. 17, par. 302, any agency or branch of a foreign banking corporation licensed by the Illinois Commissioner of Banks and Trust Companies, any national bank, federal savings and loan association, or any federal credit union located within the State.

 

d)         "Board of Directors", or "Board":  The Board of Directors of the Authority.

 

e)         "commitment":  A writing issued by the Authority to a financial intermediary approving an application for a guaranteed participating loan and committing the Authority to make such guaranteed participating loan to the financial intermediary.

 

f)         "comprehensive export credit insurance":  An insurance policy obtained by the Authority providing insurance to an eligible exporter for an eligible export transaction insuring against political and commercial risks of loss as defined in Section 2.1 of the Act.

 

g)         "contract of sale":  A writing or group of writings setting forth an agreement between an eligible exporter and a buyer regarding the purchase and sale of one or more eligible exports.

 

h)         "director":  A member of the Board of Directors of the Authority.

 

i)          "eligible export":  Goods sold or services rendered pursuant to a contract of sale for delivery or performance outside the United States and its possessions or territories, where:  

 

1)         the final manufacturing of the goods, or final performance of the services, occurs in Illinois; and

 

2)         at least twenty-five percent (25%) of the total value of the goods sold, or services rendered, exclusive of price markup thereof, has been added by labor or materials exclusively in Illinois; and

 

3)         the making of the guaranteed participating loan in connection with such contract of sale will create or maintain employment within the State of Illinois.  Such eligible exports may include, without limitation, semi-finished materials, components, spare parts, and other goods which will be subject to further manufacturing or incorporation into a finished product outside of the United States, its possessions and territories.

 

j)          "eligible exporter":  A manufacturer, trader, export management company, export trading company, or other organization, incorporated, or having offices and being authorized to transact business, in the State of Illinois, which sells Illinois goods or services for delivery to locations outside the United States and its possessions or territories, and meets the requirement of this Part.

 

k)         "executive director":  The individual appointed to the position of executive director by the Board.

 

l)          "financial intermediary":  A participating bank which applies for, and upon approval of its application, obtains a guaranteed participating loan from the Authority.

 

m)        "gross invoice amount":  The invoice amount in United States dollars of the eligible export, plus any insurance, freight, or other charges paid or to be paid in the United States in United States dollars by the eligible exporter on behalf of the buyer of the eligible export.

 

n)         "guaranteed participating loan":  A loan from the Authority to a financial intermediary the proceeds of which are used exclusively to support an on-loan, which on-loan is secured under a policy or policies of comprehensive export credit insurance.

 

o)         "insurer":  The entity providing the comprehensive export credit insurance.

 

p)         "net borrowing rate":  The cost of funds to the Authority at any given time, including, without limitation, the costs of issuance, credit enhancements (e.g., letter of credit), fees of any nature (including legal fees), premiums, discounts, and any other costs to the Authority associated with obtaining funds used to make a guaranteed participating loan.

 

q)         "on-loan":  Any pre-shipment on-loan or post-shipment on-loan from a financial intermediary to an eligible exporter which is, or will be, supported by, or funded in whole or in part with, the proceeds of a guaranteed participating loan.

 

r)          "outstanding on-loan":  Any on-loan which has not been repaid in full by the eligible exporter.

 

s)         "participating bank":  Any banking organization which is approved pursuant to Section 900.20 of this Part.

 

t)          "post-shipment on-loan":  A loan from a financial intermediary to an eligible exporter secured by the eligible exporter's right to payment pursuant to a contract of sale and by an assignment of the proceeds of a comprehensive export credit insurance policy where:

 

1)         the goods or services are to be delivered to a place outside of the United States of America or its possessions or territories;

 

2)         the eligible exporter has sold the goods or services pursuant to a contract of sale;

 

3)         the proceeds of the loan are used exclusively to finance an eligible export; and

 

4)         the loan is supported by a guaranteed participating loan.

 

u)         "pre-export":  The act, or acts, of creating, developing, or producing goods or services pursuant to a contract of sale which, when completed, will be:

 

1)         an eligible export; and

 

2)         exported from Illinois by the person or entity creating, developing, or producing the goods or services.

 

v)         "pre-shipment on-loan":  A loan from a financial intermediary to an eligible exporter the proceeds of which are used by the eligible exporter exclusively to finance a pre-export, and which:

 

1)         is supported by a guaranteed participating loan; and

 

2)         is secured by an assignment of the proceeds of the comprehensive export credit insurance policy.

 

w)        "Staff":  The employees of the Authority.

 

x)         "total value":

 

1)         When used with reference to the monetary worth of an eligible export, the unit price of each item of eligible export as stated in the contract of sale times the number of units sold.

 

2)         When used in reference to the monetary worth of a pre-export, the sales price as set forth in the contract of sale (in United States dollars) at the time and place intended for delivery, exclusive of all shipping and insurance costs.

 

3)         When used with reference to the Illinois value added component of the definition of "eligible export," the unit price as stated in the contract of sale exclusive of all shipping and insurance costs times the number of units sold.

 

(Source:  Amended at 11 Ill. Reg. 3100, effective February 3, 1987)

 

Section 900.20  Designation of Participating Banks

 

a)         Qualification Procedure

 

1)         To become eligible to participate in the programs of the Authority, a banking organization shall submit to the Authority an application to be designated as a participating bank, accompanied by such organization's latest audited financial statements, and including the designation of one or more individuals employed by the organization who will be responsible for working with the Authority.

 

2)         The Authority will endeavor to process all complete applications for designation as a participating bank within thirty (30) days of receipt thereof.  Incomplete applications will not be processed, and the applicant will be notified of any deficiencies in its application.  Approval of complete applications shall be based upon the applicant's present financial condition.  In evaluating an applicant banking organization, the following factors will be considered:  

 

A)        Capitalization (adequacy and ratios);

 

B)        Profitability (adequacy and ratios);

 

C)        Asset risk indicators and ratios;

 

D)        Management (qualifications and experience);

 

E)        Lending practices; and

 

F)         Regulatory compliance status and history.

 

3)         If, based upon its consideration of the factors set out in Section 900.20(a)(2), the Authority determines that the applicant banking organization is qualified to become eligible to participate in the programs of the Authority, it shall designate such organization as a participating bank, and communicate such decision to the applicant banking organization.

 

4)         At least annually, participating banks shall submit to the Authority financial statements prepared by certified public accountants.  Staff will review each such statement to determine that the participating bank remains qualified to be eligible to participate in the Authority's programs.  If Staff determines that the participating bank is no longer qualified to be eligible, it shall issue to such bank a notice of intent to revoke such bank's eligibility.

 

5)         If it is determined by Staff that, based upon its initial application, an applicant banking organization is ineligible to participate in the programs of the Authority, or that, subsequently, the eligibility of a participating bank should be revoked because of the failure of the participating bank to comply with the standards set forth in this Part, Staff will communicate the decision to the applicant or participating bank. The notice of denial of eligibility, or intent to revoke eligibility, shall specify the basis for the denial or revocation.

 

6)         A notice of denial or intent to revoke of eligibility may be appealed to the Board.  If it so desires to appeal, the applicant or participating bank, as the case may be, shall deliver a notice of appeal to the Authority within 15 business days of its receipt of the notice of denial or intent to revoke eligibility.  The notice of appeal shall specify the basis for the appeal.

 

7)         The Board shall designate one director, or a member of the Staff, as a hearing officer to conduct a hearing to consider the basis for the denial of eligibility or notice of intent to revoke eligibility, and any response thereto made by the applicant or participating bank.  The hearing officer shall thereupon submit a written recommendation to the Board which will render a decision at one of the next two regularly scheduled meetings as to whether or not to sustain or overturn the notice of denial or intent to revoke eligibility, based upon the standards set forth in Section 900.20(a) and Section 900.200.

 

Section 900.100  General

 

The Authority will offer to participating banks two programs of guaranteed participating loans.  The first program will be offered to support pre-shipment on-loans, and the second to support post-shipment on-loans. All on-loans shall be secured by a policy or policies of comprehensive export credit insurance, the proceeds of which shall have been assigned by the eligible exporter to the financial intermediary, and by the financial intermediary to the Authority, all on a form or forms the substance and content of which have been agreed to by the Authority and the insurer. Additionally, all guaranteed participating loans shall be collateralized as set forth in Section 900.115(k) of this Part, and further secured by an assignment of a general comprehensive fire, casualty, theft and cargo insurance policy or policies insuring the eligible exporter for the full amount of the eligible export, and such other insurance as the Authority deems shall be necessary based upon the type of goods or services being exported, the mode of transportation, and the country of their destination.

 

(Source:  Amended at 11 Ill. Reg. 3100, effective February 3, 1987)

 

Section 900.110  Purpose of Guaranteed Participating Loans

 

Guaranteed Participating Loans made to financial intermediaries shall be solely for the purpose of supporting on-loans to eligible exporters to finance either pre-exports or eligible exports.  At any one time, each eligible exporter may only have a maximum of $500,000, in the aggregate, of outstanding on-loans or commitments for on-loans.  The maximum on-loans, or commitments for on-loans, for each eligible exporter shall be measured by the principal amount of all outstanding on-loans, and all unexpired on-loan commitments for the eligible exporter as of the date the application for a guaranteed participating loan is received by the Authority.  A guaranteed participating loan shall be available only where the financial intermediary demonstrates that it is necessary to stimulate or facilitate the making of an on-loan at terms that are reasonably competitive with similar loans available in other states or countries, and where the granting of such guaranteed participating loan would be in accordance with the Act and this Part.

 

Section 900.115  Requirements of Guaranteed Participating Loans

 

Guaranteed participating loans, or commitments for guaranteed participating loans, shall be make by the Authority when:  

 

a)         The participating bank has committed to make an on-loan to an eligible exporter, or has made an on-loan to an eligible exporter, in an amount which does not exceed 90% of the total value of the pre-export or eligible export, and which on-loan shall be equal to or greater than 111.1111% of the guaranteed participating loan;

 

b)         The eligible exporter, as part of its application for the on-loan to be supported by the guaranteed participating loan, or for the comprehensive export credit insurance, has certified that the purpose of the on-loan is to finance an eligible export or pre-export, and that the goods or services to be so financed are eligible exports or pre-exports, as defined in this Part.

 

c)         Certificates of insurance, under policies of comprehensive export credit insurance, of fire, casualty, theft and cargo loss, and of other coverages required hereunder, have been issued to the eligible exporter, and 100% of the right, title and interest in and to the proceeds of such insurance policies have been assigned to the Authority and the financial intermediary, as their interests may appear;

 

d)         The Authority has determined:  

 

1)         that the making of the guaranteed participating loan will create or maintain employment in Illinois; and

 

2)         the financial intermediary will use 100% of the proceeds of the guaranteed participating loan to support an on-loan which will be used exclusively to finance eligible exports or pre-exports;

 

e)         The financial intermediary has covenanted to suspend its right to payment from the eligible exporter pursuant to any post-shipment on-loan for the period of any moratorium on payment of the guaranteed participating loan granted by the Authority pursuant to Section 900.176 of this Part;

 

f)         The financial intermediary has covenanted to reduce the principal obligation of the eligible exporter to the financial intermediary by a percentage equal to the Authority's percentage reduction, if any, of the financial intermediary's obligation to it under the guaranteed participating loan, as may be required by law;

 

g)         The contract of sale:  

 

1)         Describes the goods or services sold;

 

2)         Establishes the price in United States dollars and provides that payment will be made in United States dollars;

 

3)         Specifies the time, mode and place of delivery;

 

4)         Specifies the time, mode, and place for payment;

 

5)         Specifies the interest rate, if any, to be applied to any late payment;

 

6)         States any and all quality requirements in terms capable of objective measurement; and

 

7)         Provides for payment within a term which corresponds to the term of the guaranteed participating loan, as set forth in Section 900.118 of this Part;

 

h)         The on-loan has been collateralized in accordance with Section 900.140 of this Part;

 

i)          The guaranteed participating loan and the on-loan conform to the provisions and purposes of the Act and this Part, and comply with the requirements of any applicable policy or policies of comprehensive export credit or other insurance;

 

j)          All documents required by the Authority to be executed in connection with both the guaranteed participating loan and the on-loan have been so executed, including an agency and security agreement as specified in Section 900.115(k) of this Part, and such other security agreements as are specified in the commitment, copies of same have been delivered to the Authority, and all fees required to be paid to the Authority pursuant to the Act and this Part, have been paid; and

 

k)         The financial intermediary shall have assigned to the Authority or its designee the first security interest described in Section 900.140(a) of this Part, and shall also have entered into an agency and security agreement with the Authority and its designee pursuant to which such designee shall be authorized and empowered to distribute the proceeds of the comprehensive export credit insurance after first having applied a portion thereof (which would otherwise have been payable to the financial intermediary) to pay the then remaining outstanding principal and interest on the financial intermediary's guaranteed participating loan in connection with which such proceeds are paid.

 

(Source:  Amended at 11 Ill. Reg. 3100, effective February 3, 1987)

 

Section 900.118  Terms of Guaranteed Participating Loans

 

All guaranteed participating loans shall:  

 

a)         Have a repayment term of 24 months or less, including any extensions or renewals thereof;

 

b)         Set forth the number and timing of principal and interest installments;

 

c)         Bear interest at the rate stated by the Authority in its commitment, which rate may fluctuate during the life of the commitment, as set forth therein, but which rate shall in no event be less than a rate equal to the net borrowing rate of the Authority;

 

d)         Have a principal amount which is equal to or less than 81% of the total value of the pre-export or the eligible export;

 

e)         Contain an affirmative covenant that the on-loan to be supported by the guaranteed participating loan is collateralized as set forth in Section 900.140 of this Part;

 

f)         Contain an affirmative covenant that the eligible exporter's financial risk in the pre-export or eligible export is at least 10% of the total value of the pre-export or eligible export;

 

g)         Contain an affirmative covenant that, within three (3) business days of receipt by the financial intermediary from the eligible exporter of collected funds constituting any payment of the eligible exporter's obligations to the financial intermediary pursuant to an on-loan, the financial intermediary will pay to the Authority an amount equal to

 

1)         the amount of collected funds so received, times

 

2)         an amount equal to the initial principal of the guaranteed participating loan divided by the initial principal of the on-loan;

 

h)         Contain an affirmative covenant that the rate of interest charged the eligible exporter in the on-loan does not exceed the rate set forth in the Authority's commitment;

 

i)          Contain an affirmative covenant that the terms of the on-loan conform to the requirements of the guaranteed participating loan, the Act, this Part, and the comprehensive export credit insurance policy;

 

j)          State that the financial intermediary is unconditionally liable to the Authority for the repayment of the full amount of the principal, interest and other sums due under and in connection with the guaranteed participating loan; and

 

k)         Be collateralized in accordance with Sections 900.115(c) and (k) of this Part.

 

(Source:  Amended at 11 Ill. Reg. 3100, effective February 3, 1987)

 

Section 900.119  Fees

 

a)         In granting an on-loan, the financial intermediary may charge the eligible exporter a loan origination fee of up to the equivalent of 1% per annum of the principal amount of the on-loan.  This fee shall be paid prior to, or concurrent with, the disbursement of the proceeds of the guaranteed participating loan.

 

b)         The Authority shall charge the financial intermediary a commitment fee of ¹/₁₀ of 1% of the amount of the guaranteed participating loan.  The commitment fee shall be payable on or before the 5^th business day after the date of the commitment.  The commitment will be valid and enforceable against the Authority only for a period of no more than 30 calendar days after the date of the commitment.

 

c)         The Authority shall charge the financial intermediary a guarantee fee in an amount equal to the cost of any policy or policies of comprehensive export credit insurance applicable to the transaction, plus any administrative or other costs of the Authority applicable to the transaction.  The guarantee fee shall be paid either prior to, or concurrent with, the disbursement of the guaranteed participating loan.

 

d)         If the Authority requires any legal services with respect to a guaranteed participating loan, the financial intermediary shall pay all fees and costs connected therewith.

 

Section 900.120  Applications for Guaranteed Participating Loans

 

a)         Applications for on-loans shall be made by the eligible exporter to the participating bank.  Each application for a guaranteed participating loan shall be accompanied by the participating bank's binding agreement to make the on-loan subject only to the granting by the Authority of the guaranteed participating loan, and all supporting documents used by the participating bank to determine that the granting of such on-loan would be consistent with the Act and this Part.

 

b)         An application for a guaranteed participating loan shall be filed with the Authority by a participating bank on such forms as the Authority shall provide.

 

c)         Staff shall review all applications for guaranteed participating loans to determine

 

1)         whether the location of the buyer identified in the contract of sale complies with the country limitations, if any, contained in the applicable policy or policies of comprehensive export credit insurance;

 

2)         whether the participating bank's on-loan will meet all of the underwriting requirements imposed by the Authority's insurers; and

 

3)         whether the on-loan complies with all of the requirements of the Act and this Part.  Before any guaranteed participating loan may be granted, each eligible exporter must have submitted to the Authority a complete application for comprehensive export credit insurance, and both the eligible exporter and its buyer under the contract of sale must have been approved by the insurer.

 

d)         The Authority will endeavor to process all complete applications for guaranteed participating loans within 30 business days of receipt thereof. Incomplete applications will not be processed, and the applicant will be notified of such deficiencies.

 

e)         At the request of a participating bank, informal statements of the probabilities of approval of a guaranteed participating loan in accordance with Section 900.115 may be obtained from the Staff following submission of a completed application therefor.  Any such informal statement will not bind the Authority to make a guaranteed participating loan.

 

Section 900.130  Approval and Notification

 

a)         General

 

1)         The Authority's decision with respect to any completed application for a guaranteed participating loan shall be made either by the Board or the Executive Director pursuant to Section 900.130(b) of this Part.  Applicants will be notified in writing of the decision.  If the application is approved, the notification to the financial intermediary shall constitute the Authority's commitment to make the guaranteed participating loan in the amount, at the interest rate, and pursuant to all the terms and conditions therein set forth.

 

2)         An approved guaranteed participating loan shall be disbursed upon request of the financial intermediary but only during a period of 30 calendar days after the date of the commitment.  If not so disbursed during such time, the commitment shall be null and void.

 

3)         Approved applications for guaranteed participating loans may be accepted by a financial intermediary, and disbursements thereof may only be make after the financial intermediary has paid all fees and costs incurred or imposed pursuant to Section 900.119 of this Part, within the time therein set forth.

 

b)         Approval Process

 

1)         An initial review of each application for a guaranteed participating loan shall be under-taken by a member of the Staff of the Authority designated by the Authority as a loan officer.  The loan officer shall verify all facts presented in the application and any credit information available to the Authority concerning the applicant.  The loan officer shall then complete a credit and loan report, and submit the application and such report, together with a written recommendation, to the Executive Director.  Where the guaranteed participating loan application is in the amount of $50,000 or more, the Executive Director shall present the application, report, and recommendation to the Board for final action.

 

2)         Upon the favorable recommendation by a loan officer for a guaranteed participating loan in an amount which is less than $50,000 the Executive Director shall have the authority to approve or disapprove such loans without further action of the Board.  The Executive Director shall not approve any guaranteed participating loan to any financial intermediary which has outstanding on-loans or commitments of $500,000 or more.  An application for a guaranteed participating loan to any financial intermediary in an amount in excess fo $500,000 may only be approved or disapproved by the Board.

 

3)         Upon the favorable recommendation of a loan officer for a guaranteed participating loan in the amount of $50,000 or more, the Board shall have the exclusive authority to grant or deny the same.

 

4)         Upon review of the loan officer's report, the Board, or the Executive Director, as the case may be, may seek additional information from the applicant, and shall thereupon approve or deny the application based upon Section 900.115.

 

5)         Approval of any application for a guaranteed participating loan of $50,000 or more shall require the affirmative vote of at least five members of the Board present and voting.  All decisions and votes pertaining to an application for a guaranteed participating loan shall be reduced to writing, together with reasons for any denial of an application, and entered into the minutes of the Board, or for guaranteed participating loans approved by the Executive Director, the records of the Authority.

 

Section 900.135  Amendments to Guaranteed Participating Loan Agreements  

 

Requests for amendments to guaranteed participating loan agreements shall be made in writing by the financial intermediary.  Requests for non-substantive changes in a guaranteed participating loan agreement shall be acted on by the Executive Director within 30 days.  All other changes may only be made upon approval of the Board, which approval shall be granted, if at all, as expeditiously as possible but in no event later than 6 months from the date of the request.  The Board shall grant such request if and only if the guaranteed participating loan agreement, as so changed, would still comply with Section 900.115.  For purposes of this Section 900.135, a substantive change shall be any change in the obligations or duties of the parties under the agreement.  All other changes are non-substantive.

 

Section 900.139  Review of Denial of Guaranteed Participating Loans

 

a)         Where a guaranteed participating loan has been denied, the financial intermediary may petition the Board to review such denial.  Such petition will be reviewed by the Board at one of the Board's next two regularly scheduled meetings.

 

b)         The petition must be delivered by the financial intermediary to the Authority within 15 business days of the date of the notice of denial.

 

c)         The Board's decision on the petition shall be based upon Section 900.115.

 

Section 900.140  Collateralization

 

All on-loans supported by guaranteed participating loans must be collateralized as follows: 

 

a)         The financial intermediary must have obtained a security agreement from the eligible exporter granting a first security interest in the collateral specified in the commitment, and assigned such interest to the Authority or its designee as set forth in Section 900.115(k) of this Part. Such collateral may be the export receivable or other security acceptable to the Authority.  If the collateral consists of the export receivable, then the gross invoice amount of such collateral must equal at all times at least 111.1111% of the outstanding amount of the on-loan; and if, the collateral consists of security other than the export receivable, the value thereof, measured at the lesser of cost or market, must be equal at all times at least 111.1111% of the outstanding amount of the on-loan; and

 

b)         The eligible exporter must have assigned to the Authority and the financial intermediary, as their interests may appear, 100% of its right, title and interest in and to the proceeds of each and every policy or policies of insurance required by this Part.

 

(Source:  Amended at 11 Ill. Reg. 3100, effective February 3, 1987)

 

Section 900.145  Responsibilities of Financial Intermediaries

 

Each financial intermediary shall be responsible for:  

 

a)         Receiving on-loan applications from eligible exporters and making on-loan credit judgments;

 

b)         Arranging for, and perfecting a security interest in, necessary collateral;

 

c)         Disbursing and monitoring on-loans;

 

d)         Collecting repayments of on-loans; and

 

e)         Remitting payments to the Authority pursuant to the provisions of the guaranteed participating loan, the Act, and this Part.

 

Section 900.150  Disbursements

 

a)         A financial intermediary shall disburse its on-loan to the eligible exporter in full either prior to, or concurrently with, the disbursement by the Authority of the proceeds of the guaranteed participating loan.  The financial intermediary's on-loan may be disbursed in multiple disbursements, however the Authority's guaranteed participating loan shall be disbursed in only one lump sum.

 

b)         The individual designated by the financial intermediary as set forth in Section 900.20(a)(1) of this Part shall certify in writing to the Authority that disbursements on pre-shipment on-loans are being made to finance pre-export activity; and, for post-shipment on-loans, that disbursements are being, or have been, made in relation to the particular export receivable being financed, and that the term of the guaranteed participating loan corresponds to the term of the related on-loan.  In all cases, such certification shall include a warranty that collateral meeting the requirements of Section 900.140 has been or will be secured by the financial intermediary prior to or concurrently with the disbursement of the proceeds of a guaranteed participating loan.

 

c)         The financial intermediary shall keep accurate and complete records of all disbursements and collateral.  These records shall be held by the financial intermediary for examination, inspection, review, audit and copying if and when requested by the Authority, its Staff, authorized agents or auditors, as specified in Section 900.250 of this Part.

 

d)         The financial intermediary shall deliver to the Authority, prior to or concurrently with the disbursement of the guaranteed participating loan, a duplicate copy of the properly executed promissory note made by the eligible exporter to the financial intermediary, the security agreement, and any fees specified in Section 900.119 of this Part not yet paid.

 

Section 900.170  Loan Repayment

 

a)         The financial intermediary shall be responsible for all servicing of its on-loan including, without limitation, notifying the eligible exporter of payments due, receiving all on-loan repayments, processing, crediting, and remitting such repayments, and enforcing any and all rights and remedies applicable thereto.

 

b)         The financial intermediary shall, within 3 business days of its receipt from the eligible exporter of collected funds constituting payment of any obligation under an on-loan, pay to the Authority, as payments against the financial intermediary's obligations to the Authority under a guaranteed participating loan, a portion thereof as set forth in Section 900.118(g) of this Part.

 

c)         If default in any of the terms of an on-loan occurs based upon any risk defined under the policy of comprehensive export credit insurance, the financial intermediary may make claim to the Authority and request that it be excused from payment or to recover a payment made by the financial intermediary to the Authority.

 

d)         The financial intermediary's obligation to pay under the guaranteed participating loan agreement associated with the claim will be excused to the extent of, a payment of a claim from the insurer to the Authority.

 

Section 900.174  Prepayments

 

Prepayments on any guaranteed participating loan may be made at any time or from time to time without penalty of fee.

 

Section 900.176  Moratorium

 

a)         At the time that a claim is made for a loss under the terms of the comprehensive export credit insurance policy, the financial intermediary may request a moratorium on the payment of principal sums due under its guaranteed participating loan.  The Authority, based upon a review of the provisions of the comprehensive export credit insurance policy, shall determine whether the basis asserted in the claim appears to be for a covered loss.  If the Authority determines that the basis asserted in the claim appears to be for a covered loss, then the Authority may, under the standards set forth in Section 900.200 of this Part, grant a moratorium on payments under the associated guaranteed participating loan.  The moratorium shall expire at the earlier of:

 

1)         180 days after the date that the moratorium is granted; or

 

2)         Five (5) business days after the making of an offer of payment as settlement of the claim by the insurer.

 

b)         The moratorium will be evidenced by a written agreement between the Authority and the financial intermediary.  The financial intermediary will continue to be liable for interest on the guaranteed participating loan during the period of the moratorium.  A moratorium will not be effective until the financial intermediary has granted the eligible exporter a moratorium on the payment of the on-loan supported by the guaranteed participating loan on terms no less favorable than the terms of the moratorium offered by the Authority.

 

Section 900.178  Defaults

 

a)         If the financial intermediary is late in any payment to the Authority of any sum due under a guaranteed participating loan, the financial intermediary shall be in default.  All sums due the Authority under the guaranteed participating loan shall then be immediately due and payable, and the Authority shall have available to it all rights and remedies available in law or equity and under the guaranteed participating loan note and loan agreement.  The Authority shall suspend any further disbursements to the defaulting financial intermediary and may declare all other guaranteed participating loans to the financial intermediary immediately due and payable.

 

b)         Except as specifically set forth in Sections 900.170 and 900.176 of this Part, the financial intermediary's obligation to the Authority under the guaranteed participating loan is absolute and unconditional.  The failure of the eligible exporter to fulfill its obligations under any on-loan, the failure of the insurer to honor or pay any claim under the policy of comprehensive export credit insurance, or any other event will not relieve the financial intermediary of its obligations under the guaranteed participating loan.

 

(Source:  Amended at 11 Ill. Reg. 3100, effective February 3, 1987)

 

Section 900.180  Claim Payment

 

a)         Within 5 business days of such time as a financial intermediary has actual knowledge of the happening of any event likely to cause a loss covered under the terms of the policy or policies of comprehensive export credit insurance, the financial intermediary shall notify the Authority of such event in writing. Failure to do so shall constitute a default under the guaranteed participating loan agreement and give the Authority any and all rights and remedies available to it thereunder.

 

b)         The financial intermediary shall include with its notification, as required in Section 900.180(a) of this Part, Notice of Claim and Proof of Loss full information regarding the basis for the claim, including copies of correspondence with the eligible exporter, a record of all attempts to collect the on-loan, and proof that the financial intermediary has taken all legal steps necessary to preserve the interest in the collateral, and such other documents as may be required by the insurer.

 

(Source:  Amended at 11 Ill. Reg. 3100, effective February 3, 1987)

 

Section 900.200  Standards

 

In administering its programs, the Authority shall, in those instances where the Act or this Part require or permit the making of any findings, determinations, or the exercise of discretion, in addition to any criteria specifically set forth in the Act or in this Part, consider the following factors:  

 

a)         The purpose of the Act;

 

b)         The current financial condition of a particular financial intermediary, and the Authority's experience with loans to such financial intermediary;

 

c)         The experience of a financial intermediary in making any on-loan to a particular eligible exporter;

 

d)         The Authority's ability to borrow;

 

e)         The Authority's ability to meet its financial obligations;

 

f)         The Authority's obligations under the terms of any trust agreement or indenture;

 

g)         The financial integrity of the Authority; and,

 

h)         The standards of a prudent investor or prudent lender.

 

Section 900.210  Forms

 

The Authority may adopt, prepare, use, supplement and amend such forms, agreements, and other documents as may be necessary to implement the Authority's programs.  The authority to approve the form of agreements and other documents is delegated to the Executive Director.

 

Section 900.230  Severability

 

If any clause, sentence, paragraph, Subsection, Section, or Subpart of this Part shall be adjudged by any court of competent jurisdiction to be invalid, such judgment shall not affect, impair, or invalidate the remainder thereof, but shall be confined in its operation to the clause, sentence, paragraph, Subsection, Section, or Subpart thereof as to which such judgment is rendered.

 

Section 900.240  Equal Opportunity Lending

 

A financial intermediary shall not deny an on-loan to any eligible exporter or discriminate against any eligible exporter in fixing the amount, interest rate, duration, or other terms and conditions thereof on account of race, color, religion, age, sex, marital status, handicap, or national origin.

 

Section 900.250  Inspection of Books and Records

 

The Authority, its Staff, authorized agents or auditors, may inspect, audit, examine, review, or copy the books, records, accounts, and loan documentation of any financial intermediary or any eligible exporter during normal business hours for the purpose of determining compliance with this Part, the Act, any contract or agreement between the Authority and such financial intermediary relating to the Authority's programs, or any contract or agreement between a financial intermediary and any eligible exporter relating, directly or indirectly, to the Authority's programs. Every financial intermediary and every eligible exporter shall maintain such books, records, accounts, and loan documentation for at least three years after the date on which the financial intermediary's obligation to the Authority under the terms of a guaranteed participating loan have been paid in full.