§ 107.1350 - Exchange by Section 301(d) Licensee of Debentures for Preferred or Participating Securities.

(a) Conditions for exchange of Debentures. A Section 301(d) Licensee may, in SBA's discretion, retire an eligible Debenture through the issuance of Preferred or Participating Securities. To do so, you must:

(1) Pay all unpaid accrued interest on the Debenture, plus any applicable prepayment penalties, fees, and other charges.

(2) Comply with all conditions that apply to the issuance of Preferred or Participating Securities.

(b) Debentures not eligible for exchange. You may not retire a Debenture by issuing Preferred or Participating Securities if SBA guaranteed or purchased it on the basis of funds not included in your Leverageable Capital. You must repay such a Debenture at its maturity date, unless SBA extends it. SBA has discretion to extend the maturity to a date not more than 15 years from the date of issuance if SBA believes the extension is necessary for orderly liquidation of the indebtedness.