Paying_Agent_Q&A.pdf

PAYING AGENT CONTRACT Q&A

1. What is the assignment/trading volume between participants?

Generally, B Loan participants invest on a buy-and-hold basis and rarely choose to assign their participations, so trading volume is extremely light in this market. As the lead lender, OPIC needs to provide an option for participants to exit a loan facility, but in practice, OPIC would expect assignments to occur only on rare occasions.

2. How will the contractor be advised of a transfer or assignment from one lender to another?

In the participation agreement, participants are required to seek OPIC’s consent to any assignment and to notify OPIC when an assignment has taken place. When OPIC is informed of an assignment, OPIC will notify the contractor. This will be spelled out in the paying agency agreement.

3. Section 3.5 mentions additional calculations that could be in the agreements. Could you elaborate on what these calculations might be? Are they something other than interest accruals?

These calculations could be simply requests from a participant or from the borrower as to amounts outstanding, total repayments of principal or interest paid over a period, etc. It is not anticipated that frequent requests would be received involving complex calculations.

4. Can the master paying agent agreement and other agreements referred to in the RFQ be provided prior to contractor bid? Section 3.5 indicates that we must comply with the information reporting and recordkeeping requirements and therefore need samples of the agreements.

OPIC will prepare a draft Master Paying Agency Agreement for the Contractor’s review and comments. However, OPIC does not expect that this draft will be ready prior to the deadline for proposal submission (February 17). Please prepare your bid based on industry standards for items that have not been covered by the Scope of Work and RFQ or that are not addressed elsewhere in these questions.

5. Section 8 states “The Government will control access to the facility and will perform the inspection and acceptance of the completed work.” Please confirm that the language means the government will control access to their own facilities?

Yes, this means that OPIC will control access to its own facilities.

6. Is the intent to award the contract to just one financial institution?

Yes, we intend to have one paying agent bank that would manage payments for all of OPIC’s B Loan portfolio as it grows.

7. Who would be performing the” know your customer” requirements on these loans? The contractor or OPIC?

OPIC will do its own KYC assessment based on its own statutory and policy requirements. However, the Contractor will need to undertake its own KYC assessment to ensure compliance with its own requirements and will not be able to rely upon OPIC’s assessment.

8. In Section 11 given we are a financial institution our records retention policy exceeds three years. Is it acceptable that we retain records for seven years post termination of the transaction? The answer will be posted at a later date.

9. Are there any other specific reporting requirements not already documented in the RFQ?

Generally we have tried to address the standard reporting requirements, but depending on the specifics of an individual loan, it’s possible that there could be certain requirements that may be required for that loan. However, in general, we are not seeking an entity to act as administrative agent and handle reporting requirements, but rather a paying agent to manage funds flows and at times provide information on payment related amounts. OPIC will act as its own administrative agent.

10. Is the Contractor’s fee intended to be paid from OPIC or as a fee strip from the financing structure?

We intend for the fee to be paid directly by OPIC.

11. Does OPIC expect that the data held on the Contractor’s system will be considered Personally Identifiable

Information?

Some of the information held on the Contractor’s system could potentially be Personally Identifiable Information.

12. Does OPIC expect that the Contractor will house all applications and data in a FISMA compliant data environment?

Yes.

13. For Direct Loans, in relation to loan disbursements, will the entire loan amount be invoiced and collected at one time?

We’re not entirely clear as to the meaning of this question, but loans will be invoiced and collected based on the payment schedule specified in the loan documents, irrespective of when disbursements are made.

Each disbursement will not count as a separate loan with its own repayment schedule.

14. For Direct Loans, in relation to loan disbursements, will the loan amount be invoiced and collected in installments to coincide with successive disbursements?

Same answer as for question #13 above.

15. Please indicate the expected average loan balance and the anticipated range of loan balances.

This is difficult to gauge. OPIC is initiating its B Loan program, and initially, the total amount of loans being managed will be small, i.e., less than $300 million. Over time, if the syndicated loan program grows, it could amount to several billion dollars.

16. Please confirm that the loan and Contractor payment frequency will be quarterly.

OPIC’s loans are set up to have quarterly payments of interest, and either quarterly or semi-annual payments of principal. Contractor payment frequency for carrying out the terms set out in the contract would likely be less frequent, and probably annually or semi-annually would be more practical administratively.

17. Will the Contractor be a party to any of the loan documents for each loan?

No, the Contractor would be party to the Paying Agency Agreement but not to the loan documents for each loan. They would, however, be named in the participation agreement and the loan agreement as where payments should be remitted. Copies of the relevant executed documentation would be provided to the Contractor.

18. Please provide the proposed Master Paying Agency Agreement for review prior to submission of the response to the RFQ.

See response to question #4 above.

19. Will OPIC require background security checks for Contractor’s employees assigned to the contract?

OPIC typically does not require background checks for service providers.

20. Section 2.0 indicates the solicitation is being conducted as per FAR part 13 “Simplified Acquisition Procedures.”

Question: Does this mean the aggregate contract value is less than or equal to the Simplified Acquisition threshold amount?

Yes, that’s correct.

21. Section 2.1 States the syndicated loans program is in pilot stage of development. Question: Have any loans been issued under the program to date, if so, how many? If not, when is it anticipated the first loan(s) will be issued under the program?

We have not yet issued a loan under the pilot syndicated loan program. We anticipate that the first loan will be closed and disbursed in March 2017.

22. Section 2.2 Describes the A Loan B Loan structure whereby OPIC intends to act as Lender of record on behalf of itself and for the private lender institutions. Question: Will the program include a named Administrative Agent that will maintain the official ledger with the Lenders of Record? Will the loans be tracked on an internal system within OPIC or on another contractor system?

OPIC will act as its own administrative agent in terms of managing communication with the participants in the loan. We would expect the Contractor to track and provide regular reporting to OPIC regarding amounts outstanding, amounts repaid, accrued interest, etc.

23. Section 3.1 Section briefly describes the role of the Contractor as the Paying Agent (PA) under an anticipated Master PA Agreement. Question: Is the Contractor expected to track the loans on its own Loan System in order to calculate fees (if applicable), interest payments, Libor rates, etc., - or, simply make the payments to the private lenders based upon directions from OPIC?

The paying agent will be expected to track the loans on its own systems in order to calculate fees (if applicable), interest payments, Libor rates, etc. OPIC is not set up at present to make such calculations and will rely on the Contractor to do so.

24. Section 3.1 indicates OPIC will provide Contractor the names, payment details and other relevant information for each participant bank. Question: Is Contractor responsible for performing requisite KYC on the participant entities or will the Contractor be able to rely on OPIC?

See response to question #7 above.

25. Section 3.1 Indicates that, within 10 days prior to a disbursement date, Contractor will be expected to establish the appropriate sub-account(s) and make the payments to the specified participant banks. Question: Is Contractor primarily responsible for collecting appropriate tax documentation from participant banks or will they be provided by OPIC? The Contractor would need to be provided all relevant information including tax forms in order to make the payments without withholding, for example.

Yes, this would be the responsibility of the Contractor as paying agent.

26. Section 3.1 mentions the Contractor being provided with Participant Bank information including changes to administrative details such as name changes, mergers, assignments, etc. Clarification: Same as above noted, this wording seems to imply that the Contractor will be functioning not only as the PA, but also as the Registrar that maintains the official record of Lenders on its own Loan System. Is that accurate?

Yes, the paying agent will act as the registrar, and this will be stipulated in the Paying Agency Agreement.

The participation agreement will require the participant to send notices of any changes due to assignments, name changes, mergers, changes of booking offices, etc., to both OPIC and the paying agent.

27. Section 3.4 lists certain data elements Contractor would be expected to report on to OPIC. Question: Please explain what is meant by “amount undisbursed”? Also, can you provide a sample of the requested Report(s)?

Amount undisbursed means the amount of a loan that has not yet been disbursed to the borrower. A borrower may generally draw down a loan in multiple disbursements (as defined by the loan agreement between OPIC and the borrower), so any amount of the total loan that that has not yet been drawn by a borrower is the amount undisbursed. We do not have a sample of the requested reports, and would look to the Contractor to propose a format which works for them for which we could propose additions or modifications as needed.

28. Question: Are there any prohibitions on performing any portion of the work at Contractor’s overseas locations?

No, no particular prohibitions, as long as the Contractor is contactable during regular Washington, DC, business hours.

29. Will the Contractor have the ability to review and comment on each Loan Document prior to it being executed?

(Want to make sure the interest calculation & payment mechanics work) OPIC’s payment calculations tend to be fairly straightforward and standard from one agreement to the next, and thus should not present a problem for a paying agent to calculate interest, etc. While it will not be possible to share documentation for the initial B Loan with the paying agent in draft form due to timing, for the following transaction, we can share the interest calculation and payment mechanics language to ensure that it’s workable from the paying agent’s perspective. For successive transactions, OPIC will share final executed documents but unless there is something specific about mechanics or interest calculation that deviates from standard language, drafts would normally not be provided.

30. What type of indemnity language will we be able to receive from OPIC? Assuming we would receive an indemnity under a contractor agreement with them and not rely on each deal document. Please confirm.

OPIC is prohibited by law from providing indemnities. However, OPIC can explore the possibilities of indemnities being provided by the borrower in the Paying Agency Agreement.

31. Will the Contractor be entitled to outside counsel, and who bears the costs of that?

The Contractor may engage outside counsel if it so wishes, but OPIC is not able to bear the costs of such counsel, and any such costs would be expected to be covered out of fees received. It may be determined on a case by case basis whether a borrower may bear the costs of the Contractor’s outside counsel.

32. Will all deals be USD, or are there other currencies involved?

It’s expected that all deals will be in USD.

33. Would the work product (ex. notices, calculations, LIQ records) be deemed government property under Section 11 of the terms?

Yes, the work product would be OPIC’s property.

34. Would every person involved with the transaction need to execute an NDA, or would the Contractor enter into one NDA with OPIC?

The Contractor would enter one with OPIC.