103 STAT. 270 PUBLIC LAW 101-73—AUG. 9, 1989 ., •••• I "(B) TREATMENT OF NONCOMPLIANCE DURING DIVEST- MENT. —With respect to any equity investment held by any savings association on May 1, 1989, the savings association shall be deemed not to be in violation of the prohibition in paragraph (1) or (2) on retaining such investment so long as J, the savings association complies with any applicable requirement established by the Corporation pursuant to subparagraph (A) for divesting such investments.
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" (d) CORPORATE DEBT SECURITIES NOT OF INVESTMENT GRADE. — "(1) IN GENERAL. —No savings association may, directly or through a subsidiary, acquire or retain any corporate debt security not of investment grade. "(2) EXCEPTION FOR SECURITIES HELD BY QUALIFiED AFFIUATE.— Paragraph (1) shall not apply with respect to any corporate debt security not of investment grade which is acquired and retained by any qualified affiliate of a savings association. " (3) TRANSITION RULE. — "(A) IN GENERAL.— The Corporation shall require any
- ,, savings association or any subsidiary of any savings associa-
tion to divest any corporate debt security not of investment grade the retention of which is not permissible under para- graph (1) as quickly as can be prudently done, and in any event not later than July 1, 1994. " (B) TREATMENT OF NONCOMPUANCE DURING DIVEST- MENT. —With respect to any corporate debt security not of investment grade held by any savings association or subsidiary on the date of enactment of the Financial ' Institutions Reform, Recovery, and Enforcement Act of 1989, the savings association or subsidiary shall be deemed not to be in violation of the prohibition in paragraph (1) on > retaining such investment so long as the association or subsidiary complies with any applicable requirement estab- lished by the Corporation pursuant to subparagraph (A) for divesting such securities. "(4) DEFINITIONS.— For purposes of this section— "(A) INVESTMENT GRADE. —Any corporate debt security is not of 'investment grade' unless that security, when ac- quired by the savings association or subsidiary, was rated in one of the 4 highest rating categories by at least one nationally recognized statistical rating organization. "(B) QUALIFIED AFFIUATE.— The term 'qualified affiliate' means— jfj^^.. "(i) in the case of a stock savings association, an affiliate other than a subsidiary or an insured deposi- torv institution; and ' (ii) in the case of a' mutual savings association, a ? ,. subsidiary other than an insured depository institution, so long as all of the savings association's investments in and extensions of credit to the subsidiary are deducted . -'t from the savings association's capital. "(C) CERTAIN SECURITIES NOT INCLUDED. — The term 'cor- porate debt security not of investment grade' does not include any obligation issued or guaranteed by a corpora- tion that may be held by a Federal savings association 3 without limitation as to percentage of assets under subpara- graphs (D), (E), or (F) of section 5(c)(l) of the Home Owners' Loan Act.
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