Implementation of Emergency Loan Guarantee Act
PSAD-77-101: Published: Apr 25, 1977. Publicly Released: Apr 25, 1977.
- Full Report:
The Lockheed Corporation is the only holder of a guaranteed loan and has $80 million outstanding. The government's commitment terminates at year-end unless terminated earlier by the lending banks' voluntary release, but the commitment can also be extended.
Lockheed plans to have the guaranteed loan terminated at year-end and then switch to a normal revolving line of bank credit. Corporate assets, totalling $178.7 million in 1975, were pledged as security for the guaranteed loans, and the lending banks have agreed to subordinate their interest to those of the government. The emergency loan guarantee fund, used to pay expenses and fulfill board obligations, had accrued up to $6,607,152 in September 1976. Lockheed and its lending banks consummated a financial restructuring program to improve its equity position and extend the period of nonguaranteed bank loans. Lockheed's management policy, established in October 1975, to institute more effective controls over foreign payment practices, offers reasonable assurances against company payments to foreign officials but cannot control all external factors.