(a) Amount of
investments. In accordance with the procedures of section 211.34,
an eligible investor may invest no more than 5 percent of its consolidated
capital and surplus in one or more export trading companies, except
that an Edge or agreement corporation not engaged in banking may invest
as much as 25 percent of its consolidated capital and surplus but
no more than 5 percent of the consolidated capital and surplus of
its parent bank holding company.
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(b) Extensions of credit.
(1) Amount. An eligible investor in
an export trading company or companies may extend credit directly
or indirectly to the export trading company or companies in a total
amount that at no time exceeds 10 percent of the investor’s consolidated capital
and surplus.
(2) Terms.
(i) An eligible investor in an export
trading company may not extend credit directly or indirectly to the
export trading company or any of its customers or to any other investor
holding 10 percent or more of the shares of the export trading company
on terms more favorable than those afforded similar borrowers in similar
circumstances, and such extensions of credit shall not involve more
than the normal risk of repayment or present other unfavorable features.
(ii) For the purposes of this section,
an investor in an export trading company includes any affiliate of
the investor.
(3) Collateral requirements. Covered transactions
between a bank and an affiliated export trading company in which a
bank holding company has invested pursuant to this subpart are subject
to the collateral requirements of section 23A of the Federal Reserve
Act (12 U.S.C. 371c), except where a bank issues a letter of credit
or advances funds to an affiliated export trading company solely to
finance the purchase of goods for which—
(i) the export trading company has a bona fide contract for the subsequent sale of the goods; and
(ii) the bank has a security interest
in the goods or in the proceeds from their sale at least equal in
value to the letter of credit or the advance.
