§  54.1007   Letter of credit.

   (a) Before being authorized to receive Mobility Fund Phase I support, a
   winning bidder shall obtain an irrevocable standby letter of credit
   which shall be acceptable in all respects to the Commission. Each
   winning bidder authorized to receive Mobility Fund Phase I support
   shall maintain its standby letter of credit or multiple standby letters
   of credit in an amount equal to the amount of Mobility Fund Phase I
   support that the winning bidder has been and is eligible to request be
   disbursed to it pursuant to § 54.1008 plus the additional performance
   default amount described in § 54.1006(f), until at least 120 days after
   the winning bidder receives its final distribution of support pursuant
   to § 54.1008(b)(3).

   (1) The bank issuing the letter of credit shall be acceptable to the
   Commission. A bank that is acceptable to the Commission is

   (i) Any United States Bank that

   (A) Is among the 50 largest United States banks, determined on the
   basis of total assets as of the end of the calendar year immediately
   preceding the issuance of the letter of credit,

   (B) Whose deposits are insured by the Federal Deposit Insurance
   Corporation, and

   (C) Who has a long-term unsecured credit rating issued by Standard &
   Poor's of A- or better (or an equivalent rating from another nationally
   recognized credit rating agency); or

   (ii) Any non-U.S. bank that

   (A) Is among the 50 largest non-U.S. banks in the world, determined on
   the basis of total assets as of the end of the calendar year
   immediately preceding the issuance of the letter of credit (determined
   on a U.S. dollar equivalent basis as of such date),

   (B) Has a branch office in the District of Columbia or such other
   branch office agreed to by the Commission,

   (C) Has a long-term unsecured credit rating issued by a
   widely-recognized credit rating agency that is equivalent to an A- or
   better rating by Standard & Poor's, and

   (D) Issues the letter of credit payable in United States dollars.

   (2) [Reserved]

   (b) A winning bidder for Mobility Fund Phase I support shall provide
   with its Letter of Credit an opinion letter from its legal counsel
   clearly stating, subject only to customary assumptions, limitations,
   and qualifications, that in a proceeding under Title 11 of the United
   States Code, 11 U.S.C. 101 et seq. (the "Bankruptcy Code"), the
   bankruptcy court would not treat the letter of credit or proceeds of
   the letter of credit as property of the winning bidder's bankruptcy
   estate under section 541 of the Bankruptcy Code.

   (c) Authorization to receive Mobility Fund Phase I support is
   conditioned upon full and timely performance of all of the requirements
   set forth in § 54.1006 and any additional terms and conditions upon
   which the support was granted.

   (1) Failure by a winning bidder authorized to receive Mobility Fund
   Phase I support to comply with any of the requirements set forth in
   § 54.1006 or any other term or conditions upon which support was
   granted, or its loss of eligibility for any reason for Mobility Fund
   Phase I support, will be deemed an automatic performance default, will
   entitle the Commission to draw the entire amount of the letter of
   credit, and may disqualify the winning bidder from the receipt of
   Mobility Fund Phase I support or additional USF support.

   (2) A performance default will be evidenced by a letter issued by the
   Chief of either the Wireless Bureau or Wireline Bureau or their
   respective designees, which letter, attached to a standby letter of
   credit draw certificate, shall be sufficient for a draw on the standby
   letter of credit for the entire amount of the standby letter of credit.