Information Request on Financing Support for Covered Technology Categories-Specific to Lenders, 59903-59904 [2024-16180]

Agencies

• DEPARTMENT OF DEFENSE
• Office of the Secretary

[Federal Register Volume 89, Number 142 (Wednesday, July 24, 2024)]
[Notices]
[Pages 59903-59904]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-16180]


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DEPARTMENT OF DEFENSE

Office of the Secretary

[Docket ID: DoD-2024-OS-0074]


Information Request on Financing Support for Covered Technology 
Categories--Specific to Lenders

AGENCY: Office of Strategic Capital (OSC), Office of the Under 
Secretary of Defense for Research and Engineering, Department of 
Defense (DoD).

ACTION: Notice; request for information (RFI).

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SUMMARY: The OSC is seeking information from lenders and other private 
credit investors regarding capital needs for industries related to the 
Covered Technology Categories to inform the design and implementation 
of the DoD Loan Program Office.

DATES: Comments must be received by October 22, 2024. Written comments 
in response to this RFI should be submitted in accordance with the 
instructions in the ADDRESSES and SUPPLEMENTARY INFORMATION sections in 
this notice.

ADDRESSES: Interested parties may submit comments on this transaction 
electronically on www.regulations.gov. To submit a comment, enter 
``Information Request on Financing Support for Covered Technology 
Categories--Specific to Lenders'' under the heading ``Enter Keyword or 
ID'' and select Search. You can also search by the Docket ID, DoD-2024-
OS-0074. Follow the instructions provided at the `Submit a Comment' 
screen.
    Comments can also be sent by mail to Department of Defense, Office 
of the Assistant to the Secretary of Defense for Privacy, Civil 
Liberties, and Transparency, 4800 Mark Center Drive, Mailbox #24, Suite 
08D09, Alexandria, VA 22350-1700.
    Please include your name, company name (if any) and ``Information 
Request on Financing Support for Covered Technology Categories'' on any 
attached document.
    Comments sent by any other method, to any other address or 
individual, or received after the end of the comment period, may not be 
considered.

FOR FURTHER INFORMATION CONTACT: For questions about this notice, 
please contact David Vidal, Office of Strategic Capital Director of 
Credit Programs, at [email protected]. Tel. No. 703-545-
1903. Please direct media inquiries to the OSC Press Team at 
[email protected].

SUPPLEMENTARY INFORMATION:

Background

    In December 2022, the Secretary of Defense established OSC to 
attract and scale private capital to technologies critical to the 
national security of the United States. Furthermore, in 2024, Congress 
authorized OSC as part of the National Defense Authorization Act (NDAA) 
for Fiscal Year 2024. The NDAA states that OSC shall:
    (a) develop, integrate, and implement capital investment strategies 
proven in the commercial sector to shape and scale investment in 
critical technologies and assets;
    (b) identify and prioritize promising critical technologies and 
assets that require capital assistance and have the potential to 
benefit the DoD; and
    (c) make eligible investments in such technologies and assets, such 
as supply chain technologies not always supported through direct 
investment.

Covered Technology Categories

    The NDAA designates the following 31 categories as a ``Covered 
Technology Category.''

 Advanced bulk materials (including dielectrics, alloys, 
polymers, and composites)
 Advanced manufacturing (including upgrades for increasing the 
efficiency or quality of existing production processes or for enabling 
commercialization of new technologies)
 Autonomous mobile robots
 Battery storage (including lithium ion, advanced lead acid, 
and alternate batteries, as well as fuel cells)
 Biochemicals
 Bioenergetics
 Biomass (including conversion-ready feedstock)
 Cybersecurity
 Data fabric (including integration across disparate domains)
 Decision science (including ensemble learning methods for 
portfolio optimization)
 Edge computing
 External communication
 Hydrogen generation and storage
 Mesh networks (including off-grid communications)
 Microelectronics assembly, testing, or packaging
 Microelectronics design and development
 Microelectronics fabrication
 Microelectronics manufacturing equipment
 Microelectronics materials
 Nanomaterials and metamaterials
 Open RAN
 Optical communications (including free space and optical 
fiber)
 Sensor hardware
 Solar (including power system and management components)
 Space launch
 Spacecraft
 Space-enabled services and equipment (including in-space 
operations and associated ground equipment)
 Synthetic biology
 Quantum computing
 Quantum security
 Quantum sensing

    The NDAA authorizes OSC to provide capital assistance, defined as a 
``loan, loan guarantee, or technical assistance'' for eligible 
investments. Eligible investments are those made in a technology that 
is (a) in a Covered Technology Category and (b) not solely utilized in 
defense applications. OSC is seeking public comment on the capital 
needs of industries and assets related to the Covered Technology 
Categories to inform the design of DoD Loan Program.

Specific Requests for Information

    The following statements and questions cover the major topic areas 
for which OSC seeks comment. They are not intended to limit the topics 
that may be addressed. Responses may include any topic believed to 
inform the U.S. Government's efforts in developing recommendations for 
supporting the design of the DoD Loan Program, regardless of whether 
the topic is included in this document.

[[Page 59904]]

    Respondents are encouraged to respond to any or all of the 
following questions and topic areas. Responses may include estimates, 
which should be designated as such. Your responses may include 
supporting data and examples. We welcome submission of publications or 
studies that support your responses as attachments.

Questions

    The questions section of this Federal Register notice is split into 
four parts: (a) General, (b) Financing, (c) Experience with U.S. 
Government Financing, and (d) Economic Outlook.

General

    1. What are your (i) geographical and (ii) business sectoral 
coverage areas for lending or private credit investment efforts?
    2. Do you finance companies that largely produce, integrate, or 
otherwise use equipment or services with a purpose that aligns with any 
of the Covered Technology Categories? Please list each Covered 
Technology Category and define the relationship.
    3. What types of financing products do you make available to 
companies in Question #2?
    4. Are there any debt financing gaps in industries or assets 
related to the Covered Technology Categories (e.g., capital 
expenditure, working capital, acquisition financing, lease financing, 
etc.)?

Financing

    5. What terms are you offering the market? Please break down (i) 
the product type, (ii) the transaction size, (iii) the interest rate 
and credit spread, and (iv) the tenor range by Covered Technology 
Category.
    6. What fees do you typically charge for various debt product types 
associated with companies in Question #2 (e.g., underwriting fees, draw 
fees, prepayment fees, etc.)?
    7. What are the key credit risk categories that lead to a denial of 
financing to companies within the Critical Technology Categories 
relevant to your firm (e.g., technology commercialization risk, credit/
financial risk, customer concentration risk, market/merchant risk, 
sector's cyclicality, etc.)?
    8. How can the DoD Loan Program partner with financing firms to 
crowd capital into Covered Technology Categories and their supply 
chains?
    9. Do you believe the Covered Technologies Categories identified in 
Question #2 would benefit from credit support from the DoD Loan 
Program? If so, what are the most beneficial forms of credit support 
(e.g., Direct Loans, Loan Guarantees, etc.) and why?
    10. How should the DoD Loan Program be designed to be complementary 
to, rather than a substitute for private sector debt financing?
    11. Do you believe Federal loans and loan guarantees would help 
enhance the terms you provide to the market? If so, how and why?
    12. What is the ideal loan guarantee coverage percentage that would 
entice you to lend to companies in a Covered Technology Category? 
Please include the (i) sector, (ii) the company size, and (iii) the 
debt amount. Additionally, please describe how this loan guarantee 
coverage percentage enables your firm to finance the companies 
discussed in Question 2.

Experience With U.S. Government Financing

    13. Have you previously worked with financing tools from the U.S. 
Government? If so, please specify which (i) government programs your 
firm engaged in and (ii) what financing tools you utilized (e.g., loans 
or loan guarantees). If not, please specify why (e.g., not relevant, 
fees too high, etc.).
    14. What was the size of the financing tools mentioned above? For 
example, if the tool used was a loan, please indicate its size (e.g., 
$0-5MM, $5-25MM, $25-75MM, >$75MM).
    15. What types of fees were associated with these financing tools 
(e.g., underwriting fees, draw fees, prepayment fees, etc.)?
    16. What challenges (i) have you seen, and/or (ii) do you foresee, 
with Federal credit direct loans and loan guarantees as it relates to 
Covered Technology Categories?

Economic Outlook

    17. What is your outlook on the five-year macroeconomic projection 
for the Covered Technology Categories you selected previously? Which, 
if any, macroeconomic headwinds and tailwinds are most impacting (i) 
your ability to finance the Covered Technology Categories and (ii) the 
Covered Technology Categories themselves?

Requirements for Written Comments

    OSC encourages respondents, when addressing the points above, 
unless raising other challenges related to financing Covered Technology 
Categories not explicitly asked, to identify which point they are 
responding to by using the same numbers and heading as set forth above. 
For example, someone submitting comments responsive to (8), ``How can 
the DoD Loan Program partner with financing firms to crowd capital into 
Covered Technology Categories and their supply chains?'', would use 
that same text as a heading followed by the respondent's specific 
comments responding to it. This formatting will assist OSC in more 
easily reviewing and summarizing the comments received in response to 
these specific points of inquiry.
    Anyone submitting business confidential information should clearly 
identify the business confidential portion at the time of submission, 
file a statement justifying nondisclosure and referring to the specific 
legal authority claimed, and provide a non-confidential version of the 
submission. Users submitting a form that contains business confidential 
information will need to submit a non-confidential version of the same 
form that does not contain the confidential business information. The 
non-confidential version of the submission will be placed in the public 
file on https://www.regulations.gov. For comments submitted 
electronically containing business confidential information, the file 
name of the business confidential version should begin with the 
characters ``BC.'' Any page containing business confidential 
information must be clearly marked ``BUSINESS CONFIDENTIAL'' on the top 
of that page. The non-confidential version must be clearly marked 
``PUBLIC.'' The file name of the non-confidential version should begin 
with the character ``P.'' The ``BC'' and ``P'' should be followed by 
the name of the person or entity submitting the comments.

    Dated: July 18, 2024.
Aaron T. Siegel,
Alternate OSD Federal Register Liaison Officer, Department of Defense.
[FR Doc. 2024-16180 Filed 7-23-24; 8:45 am]
BILLING CODE 6001-FR-P