3 AAC 170.040. Reserve accounts

(a) If the division determines that it will purchase a participation interest in a loan which is expected to be guaranteed by the Alaska Industrial Development and Export Authority under 3 AAC 99.700 - 3 AAC 99.785, the division will establish a reserve account within the fund for that loan. Before the division purchases the participation interest in the loan, but after the loan is guaranteed as described in this subsection, the division will transfer from the fund into the reserve account created for that loan an amount equal to 180 days of interest on the guaranteed portion of the loan at the interest rate applicable to that portion of the loan or a lesser amount if necessary under (b) of this section. The division will transfer money to a reserve account as provided in this section only in conjunction with the purchase of a participation interest in the loan under 3 AAC 170.030, and the amount deposited in the reserve account for a loan will not exceed the amount paid by the division for the purchase of the participation interest.

(b) If there is insufficient money in the fund to purchase a participation in a loan described in (a) of this section and to transfer money to a reserve account for the loan as described in (a) of this section, the division will notify the eligible lender of that fact. At the request of the eligible lender, the division will, depending upon the availability of money in the fund, (1) purchase a smaller participation in the loan, (2) transfer money to the reserve account at a smaller amount, or (3) both.

(c) The division will use money held in a reserve account created under this section solely for the purpose of paying accrued and unpaid interest on the guaranteed portion of the loan in the event of a default with respect to the loan. The division will make the payment of interest when the Alaska Industrial Development and Export Authority has paid the guaranteed portion of the loan. To the extent that the division uses any amount in a reserve account as described in this subsection, the division will be entitled to seek recovery of that amount, together with interest on that amount from the date of payment by the division, from the borrower. The division must be a secured party under, or an assignee of the eligible lender's interest in, any security agreements or documents relating to the loan.

(d) From time to time, the division will review the amount held in each reserve account established under this section and, to the extent the amount in a reserve account exceeds 180 days of interest, or the lesser amount established for a loan under (b) of this section, with respect to the loan for which the reserve account was established, the division will transfer the excess from the reserve account in to the fund. If there is money remaining in a reserve account after the loan for which the reserve account is created is fully paid, the division will transfer the money out of the reserve account and back into the fund.

History: Eff. 1/19/93, Register 125; am 6/13/93, Register 126

Authority: AS 44.33.765

AS 44.33.770

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