Goto Section: 54.1507 | 54.1509 | Table of Contents
FCC 54.1508
Revised as of September 1, 2021
Goto Year:2020 |
2022
§ 54.1508 Letter of credit for stage 2 fixed support recipients.
(a) Letter of credit. Before being authorized to receive support from
Stage 2 of the fixed Uniendo a Puerto Rico Fund or the fixed Connect
USVI Fund, a winning applicant shall obtain an irrevocable standby
letter of credit which shall be acceptable in all respects to the
Commission. No later than the number of days provided by public notice,
the applicant shall submit a letter from a bank meeting the eligibility
requirements outlined in this section committing to issue an
irrevocable stand-by letter of credit, in the required form, to the
winning applicant. The letter shall at a minimum provide the dollar
amount of the letter of credit and the issuing bank's agreement to
follow the terms and conditions of the Commission's model letter of
credit. The letter of credit must remain open until the recipient has
certified it has deployed broadband and voice service meeting the
requirements in this subpart to 100% of the required number of
locations, and Universal Service Administrative Company (USAC) has
verified that the entity has fully deployed.
(b) Value. Each recipient authorized to receive the Uniendo a Puerto
Rico Fund and the Connect USVI Fund Stage 2 fixed support shall
maintain the standby letter of credit or multiple standby letters of
credit in an amount equal to at a minimum the amount of fixed support
that has been disbursed and that will be disbursed in the coming year,
until the USAC has verified that the recipient met the final service
milestone.
(1) Once the recipient has met its 60 percent service milestone, it may
obtain a new letter of credit or renew its existing letter of credit so
that it is valued at a minimum at 90 percent of the total support
amount already disbursed plus the amount that will be disbursed in the
coming year.
(2) Once the recipient has met its 80 percent service milestone, it may
obtain a new letter of credit or renew its existing letter of credit so
that it is valued at a minimum at 80 percent of the total support that
has been disbursed plus the amount that will be disbursed in the coming
year.
(c) Acceptable bank issuing letter of credit. The bank issuing the
letter of credit shall be acceptable to the Commission. A bank that is
acceptable to the Commission is:
(1) Any United States bank:
(i) That is insured by the Federal Deposit Insurance Corporation; and
(ii) That has a bank safety rating issued by Weiss of B- or better; or
(2) CoBank, so long as it maintains assets that place it among the 100
largest United States Banks, determined on basis of total assets as of
the calendar year immediately preceding the issuance of the letter of
credit and it has a long-term unsecured credit rating issued by
Standard & Poor's of BBB- or better (or an equivalent rating from
another nationally recognized credit rating agency); or
(3) The National Rural Utilities Cooperative Finance Corporation, so
long as it maintains assets that place it among the 100 largest United
States Banks, determined on basis of total assets as of the calendar
year immediately preceding the issuance of the letter of credit and it
has a long-term unsecured credit rating issued by Standard & Poor's of
BBB- or better (or an equivalent rating from another nationally
recognized credit rating agency); or
(4) Any non-United States bank:
(i) That is among the 100 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);
(ii) Has a branch office:
(A) Located in the District of Columbia, or
(B) Located in New York City, New York, or such other branch office
agreed to by the Commission, that will accept a letter of credit
presentation from the Administrator via overnight courier, in addition
to in-person presentations;
(iii) Has a long-term unsecured credit rating issued by a
widely-recognized credit rating agency that is equivalent to a BBB- or
better rating by Standard & Poor's; and
(iv) Issues the letter of credit payable in United States dollars
(d) Bankruptcy opinion letter. A winning applicant of the Uniendo a
Puerto Rico Fund and the Connect USVI Fund Stage 2 fixed 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.
(e) Authorization for Stage 2 support. Authorization to receive the
Uniendo a Puerto Rico Fund and the Connect USVI Fund Stage 2 fixed
support is conditioned upon full and timely performance of all of the
requirements set forth in this section, and any additional terms and
conditions upon which the support was granted.
(1) Failure by a Uniendo a Puerto Rico Fund and the Connect USVI Fund
Stage 2 fixed support recipient to meet its service milestones as
required by § 54.1506 will trigger reporting obligations and the
withholding of support as described in § 54.320(c). Failure to come into
full compliance within 12 months will trigger a recovery action by the
USAC. If the Uniendo a Puerto Rico Fund or Connect USVI Fund Stage 2
fixed support recipient does not repay the requisite amount of support
within six months, the USAC will be entitled to draw the entire amount
of the letter of credit and may disqualify the Uniendo a Puerto Rico
Fund or Connect USVI Fund Stage 2 fixed support recipient from the
receipt of any or all universal service support.
(2) A default will be evidenced by a letter issued by the Chief of the
Wireline Competition Bureau, or the Chief's designee, 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.
[> 84 FR 59963 , Nov. 7, 2019, as amended at 85 FR 75828 , Nov. 25, 2020]
Goto Section: 54.1507 | 54.1509
Goto Year: 2020 |
2022
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