Title 7

SECTION 4290.740

4290.740 Portfolio diversification (“overline” limitation).

§ 4290.740 Portfolio diversification (“overline” limitation).

(a) Without the Agency's prior written approval, you may provide Financing or a Commitment to an Enterprise only if the resulting amount of your aggregate outstanding Financings and Commitments to that Enterprise and its Affiliates does not exceed 10 percent of the sum of:

(1) Your Regulatory Capital as of the date of the Financing or Commitment; plus

(2) Any permitted Distribution(s) you made during the five years preceding the date of the Financing or Commitment which reduced your Regulatory Capital; plus

(3) The total amount of Leverage provided to the Rural Business Investment Company by the Agency since it was licensed under § 4290.390.

(b) For the purposes of paragraph (a) of this section, you must measure each outstanding Financing at its original cost plus any amount of the Financing that was previously written off.

[69 FR 32202, June 8, 2004, as amended at 76 FR 80224, Dec. 23, 2011]

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