Implementation of the Emergency Loan Guarantee Act
PSAD-78-66: Published: Jan 18, 1978. Publicly Released: Jan 18, 1978.
- Full Report:
Lockheed Aircraft Corporation was the only business to apply for a guaranteed loan under the Emergency Loan Guarantee Act of 1971. After the Government's guarantee commitment was scheduled to terminate, Lockheed and its lending banks voluntarily terminated instead of renewing the commitment. On October 14, 1977, Lockheed and its 24 lending banks entered into a credit agreement, providing for a $100 million revolving line of credit, to replace the Government-guarantee commitment; this was used to retire $60 million worth of notes. The Emergency Loan Guarantee Board approved the new credit agreement on October 14, 1977, through a termination agreement which provides that: the obligation and rights of the Government under the guarantee agreement unconditionally and finally terminate; the Government unconditionally release its interests in all collateral; and Lockheed and each member of the banking consortium: (1) unconditionally release the Government from all liability and claims arising from the agreement and (2) agree to indemnify and hold the Government harmless against all such liability and claims. The Board ceased operation upon submission of its final report on administration of the act. Guarantee and commitment fees paid the Board totaled $26,503,683; cumulative interest earned on funds invested in U.S. Government securities amounted to $4,906,143; and operating expenses amounted to $938,094. Net earnings will be transferred to the Treasury.