103 STAT. 272 PUBLIC LAW 101-73—AUG. 9, 1989 v^,. .., "(ii) determined that the transfer represents a com-
" • plete and effective divestiture of the corporate debt , , security not of investment grade and is in compliance '• with the provisions of this subsection; and "(G) any gain on the sale of the corporate debt security . not of investment grade is recognized, and included for applicable regulatory capital requirements, by the insured savings association only at such time and to the extent that the insured savings association receives payment of prin- cipal on the note in cash in excess of the fair market value of the transferred corporate debt security not of investment ^ grade as carried on the accounts of the insured savings association immediately prior to the transfer. "(3) QuAUFiED NOTE DEFINED,—The term 'qualified note' means any note that^ "(A) is at all times fully secured by the corporate debt security not of investment grade transferred in exchange for the note, or by other collateral of at least equivalent value that is acceptable to the Director of the Office of ' Thrift Supervision; "(B) contains provisions acceptable to the Director of the Office of Thrift Supervision that would— "(i) prevent any action to encumber or impair the value of the collateral referred to in subparagraph (A); _. ^^^^^ "(ii) allow the sale of the corporate debt security not '^ [' of investment grade if the proceeds of the sale are reinvested in assets of equivalent value; "(C) is on market terms, including interest rate, which must in all cases be above the insured savings association's borrowing rate for similar term funds; '> ~' "(D) is fully repayable over a period of time not to exceed 5 years from the date of transfer; "(E) is repaid with annual principal payments at least as large as would be necessary to repay the note within 5 years if it were on a level payment amortization schedule and the interest rate for the first year of repayment were fixed throughout the amortization period; "(F) is fully guaranteed by each holding company of the insured savings association that acquires such note; and ., , "(G) is repaid in full in cash in accordance with its terms and this subsection. "(4) FAILURE TO REPAY ON SCHEDULE. —The exemption pro- vided by this subsection from subsections (a), (b), and (c) of section 11 of the Home Owners' Loan Act any other applicable provision of Federal or State law shall terminate immediately if the insured savings association or any affiliate of such associa- tion fails to comply with the terms of the qualified note or this subsection. "(f) DETERMINATIONS. — The Corporation shall make determina- tions under this section by regulation or order. "(g) ACTIVITY DEFINED. —For purposes of subsections (a) and (b)— "(1) IN GENERAL.— The term 'activity' includes acquiring or retaining any investment. "(2) DIVESTITURE OF CERTAIN ASSETS.— Notwithstanding para- graph (1), subsections (a) and (b) shall not be construed to require a savings association to divest itself of any assets ac-
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