(ii)
(I)
(aa)
Except as provided under item (bb), the interest rate on a loan provided under clause (i) shall be not less than the yield on marketable United States Treasury securities of a similar maturity to the maturity of the loan on the date of execution of the loan agreement.
(bb)
The Director may waive the requirement under item (aa) with respect to an investment if the investment is determined by the Secretary of Defense to be vital to the national security of the United States.
(cc)
The Director shall establish separate and distinct criteria for interest rates for loan guarantees with private sector lending institutions.
(II)
The final maturity date of a loan provided under clause (i) shall be not later than 50 years after the date on which the loan was provided.
(III)
A loan provided under clause (i) may be paid earlier than is provided for under the loan agreement without a penalty.
(IV)
(aa)
A loan provided under clause (i) shall not be subordinated to the claims of any holder of investment obligations in the event of bankruptcy, insolvency, or liquidation of the obligor.
(bb)
The Director may waive the requirement under item (aa) with respect to the investment in order to mitigate risks to loan repayment.
(V)
The Director may sell to another entity or reoffer into the capital markets a loan provided under clause (i) if the Director determines that the sale or reoffering can be made on favorable terms.
(VI)
Any loan guarantee provided under clause (i) shall specify the percentage of the principal amount guaranteed. If the Secretary determines that the obligor of a loan guaranteed by the Department of Defense defaults on the loan, the Director shall pay the holder, or such other party, as specified in the loan guarantee agreement.
(VII)
The Director shall establish a credit rating system to ensure a reasonable assurance of repayment. The system may include use of existing credit rating agencies where appropriate.
(VIII)
Loans and loan guarantees provided under clause (i) shall be subject to such other terms and conditions and contain such other covenants, representations, warranties, and requirements (including requirements for audits) as the Secretary determines appropriate.
(IX)
Loans and loan guarantees provided under clause (i) shall be subject to the requirements of the Federal Credit Reform Act of 1990 (
2 U.S.C. 661 et seq.).