Global Engagement Call for Proposals - Supplemental Information

Answer: OPIC is able to make only US dollar denominated loans.

Question: Can the loan be greater than 33% of the total fund?

Answer: OPIC financing will generally represent no more than 33% of the fund’s total capitalization. It may be more or less depending on the structure and the needs of the fund. OPIC asks fund managers who apply through the Call to specify the amount of OPIC financing they are seeking.

Question: How would the draw downs be made? Pro-rata from the loan and the LPs?

Answer: Correct.

Question: Interest Rate: Floating or fixed?

Answer: The interest rate is fixed. The debt is priced in relation to U.S. Treasury STRIPs where final maturity is closest to the final maturity of the underlying OPIC loan transaction. This Base Interest rate is determined by the market separately for each disbursement, and is payable to the holders of OPIC guaranteed participations in the loan.

“Current Interest” (guaranty fee) equal to 150 bps is payable to OPIC on the outstanding loan balance on a current basis semi-annually in arrears. Also, OPIC is paid a small percentage of the Fund’s profits as “Deferred Interest” after all capital is returned to limited partners. Please see “Economic Issues” section of FAQs: http://www.opic.gov/what-we-offer/investment-funds/calls-for-proposals/global-engagement-faqs.

Question: Interest payment: How will this be paid if there are no exit proceeds or dividends from the portfolio companies? Can we make a drawdown to pay interest?

Answer: Base Interest is paid as investments are exited. The Fund can use draw downs on the loan to pay Current Interest.

Question: On exiting a deal do the proceeds go pro-rata to OPIC and the LPs or does OPIC get all the proceeds until it is repaid in full then the LPs receive any proceeds?

Answer: Generally, during approximately the first seven years of a ten-year fund, exit proceeds are distributed pro-rata to OPIC and other LPs as long as a negotiated prescribed loan to value threshold is maintained. During the later years of a fund’s life, and to the extent that OPIC-guaranteed loans and interest have not been satisfied, distributions are generally required first to be made to meet those obligations. Please see question “Does the OPIC guaranteed financing need to be fully repaid before any return of capital to equity investors?” in Economic Issues section of FAQ: http://www.opic.gov/what-we-offer/investment-funds/calls-for-proposals/global-engagement-faqs.

Question: Events of default of the loan, i.e. under what conditions can the loan be called or cancelled?

Answer: Events of default are those typical for a commercial financing agreement and include failure to make a scheduled payment, Key Person Events, and failure to comply with certain representations and covenants defined in the Finance Agreement, including a drop of fund’s Net Asset Value below a pre-defined threshold. These issues are discussed in more detail with fund managers at a later point in the process.

Question: Any way to have a feel of if we have a serious chance before embarking on the proposal preparation exercise which will eat of resources?

Answer: Applicants will be judged based on the selection criteria outlined in the Call and on OPIC’s portfolio and policy needs. OPIC and Altius Associates will consider each proposal individually and as part of the applicant pool. OPIC and Altius Associates are unable to provide guidance regarding the likelihood that a given proposal will be selected.

Question: Will the Fund have to be SEC registered? We are a Jersey based fund. Is this jurisdiction acceptable?

Answer: OPIC is open to working with vehicles registered in a variety of jurisdictions and has worked with funds formed in Jersey. Funds and investment advisers will need to comply with US securities laws which have various registration requirements and exemptions. Please consult your legal counsel regarding your particular fund.

Question: Does the Fund need to have US investors? Would it be a disadvantage not to have any?

Answer: OPIC has a U.S. nexus requirement that can be satisfied in one of two ways: (i) majority ownership of GP/investment manager by U.S. Persons; or (ii) raising an amount of equity from U.S. Persons that is equivalent to 25% of the OPIC commitment (e.g. if OPIC commits $50MM to a fund, the GP would be asked to raise $12.5MM from U.S. investors). All sponsors are required to use commercially reasonable efforts to ensure that a substantial portion of the fund is owned by US investors. Funds are not required to have U.S. capital raised by the time the proposal is submitted. Please see U.S. Participation section of FAQs: http://www.opic.gov/what-we-offer/investment-funds/calls-for-proposals/global-engagement-faqs.

Question: Does the Fund Manager have full control on the investment decision?

Answer: Yes. OPIC does not become involved in the fund’s investment decisions. However, OPIC reserves the right to opt out of certain investments for policy reasons.

Question: Does OPIC have to approve each investment?

Answer: No, OPIC does not approve each investment. However, OPIC’s policy department reviews each prospective investment for compliance with OPIC’s environmental, social, economic, and other policies.

Question: What are OPIC’s on-going reporting requirements from Managers?

Answer: In addition to quarterly and annual (audited) financial statements for both the Fund and portfolio companies, OPIC requires investment activity, narrative summary, and valuation reports (quarterly) and an investment monitoring report (annually). Report templates have been developed to assist with the reporting requirements, and are generally what are provided to a fund’s LPs.

Question: Since OPIC participates in the form of a loan, what will be its position/rank vs. limited partners in terms of seniority? Will exit proceeds be used to service the OPIC loan first before any proceeds can be distributed to LPs?

Answer: Generally, during approximately the first seven years of a ten-year fund, exit proceeds are distributed pro-rata to OPIC and other LPs as long as a negotiated prescribed loan to value threshold is maintained. During the later years of a fund’s life, and to the extent that OPIC-guaranteed loans and interest have not been satisfied, distributions are generally required first to be made to meet those obligations. Please see question “Does the OPIC guaranteed financing need to be fully repaid before any return of capital to equity investors?” in Economic Issues section of FAQ: http://www.opic.gov/what-we-offer/investment-funds/calls-for-proposals/global-engagement-faqs.

Question: Does OPIC, as normal practice, pay the GP management fees like the LPs?

Answer: The normal practice does allow for the Fund Manager to receive management fees on the OPIC capital.

Question: The website states “OPIC is paid a minimal share in cash distributions from the fund after the OPIC-guaranteed loan has been repaid and investors have recovered their full equity investment in the fund.” It seems to us this is part of the upside. For example, assume we make a $30 million investment in a company, where the pro rata capital call will be $20 million from LPs and $10 million from OPIC. If the investment returned $60 million 5 years later, the profit is $30 million. Ignoring management fees to simplify things, $20 million of this profit is “attributable” to the $20 million investment from LPs, and $10 million from OPIC. Questions:

a. In this case, what is OPIC’s expectation regarding the $10 million profit?

Answer: In the example above, assuming the OPIC loan balance (including accrued and accreted interest and all fees) and all LP capital has been fully repaid, OPIC would expect a small portion of thee $30 million profit, with the remaining accretive to other LPs.

b. What has been the “minimal share in cash distributions” in the past? Can you provide a range? Has it been a % of the “OPIC-attributable” profit, i.e. the $10 million in this example, or the entire $30 million pool of profits?

Answer: The “minimal share in cash distributions” applies to the $30 million of “profit” described in the example provided. Again this assumes, the OPIC balance (including accrued and accreted interest) has been repaid and all fees have been paid and all LP capital has been returned. The range of the minimal share varies from fund to fund but is disproportionally low considering the typical share of OPIC’s participation in a given fund.

c. What is the mechanism for this cash distribution? Please take into account LP hurdle rate and GP carried interest.

Answer: Note that the waterfall description in the FAQ on OPIC’s website addresses the specific mechanism. With regards to LP hurdle rate and GP carried interest, those amounts are paid after repayment of the OPIC fees and loan balance (including accrued and accreted interest) as well as the “minimal share in cash distributions”.

Question: The FAQ states that the Base Interest is defined as some T-bill rate plus premium that COP investors require. The FAQ also mentions that the Base Interest accrues “so that no repayment is required until the portfolio is liquidated. Current Interest (defined below) is paid semi-annually following the first disbursement of OPIC’s loan.” Let’s assume that we raise a $300 million fund where $200 million comes from ordinary LPs and $100 million comes from OPIC. Let’s further assume that the fund is fully drawn down in the first three years, i.e. $100 million invested in years 1, 2, and 3 (with OPIC contributing $33 1/3 million in each of those years). Let’s further assume that the fund exits its investments in years 5, 6, 7 equally with proceeds of $200 million in each of those years. Basically 2x. Fund would be fully liquidated by year 7. Questions:

a. When does the Base Interest become payable? Year 5, when the first distribution is made, or Year 7?

Answer: In the example, the Base Interest would become payable at the time of exits, in other words, starting in Year 5.

b. Is the Current Interest calculated off of $33.33 million in year 1, $66.67 million in year 2, and $100 million in year 3?

Answer: Pursuant to the example presented, the answer above is correct. However note that Current Interest is calculated off the actual OPIC balance outstanding, which would include any accrued and accreted interest.

c. What is the one-time facility fee? Is it up to 15 bp on the $100 million, and when is it payable?

Answer: The facility fee is an administrative fee for OPIC’s processing the commitment and loan. A portion of the facility fee is typically payable at delivery of the OPIC commitment letter. The balance is due on or before the first disbursement of the OPIC loan. Note that proceeds from the first disbursement may be used to pay the balance of the facility fee due and to reimburse the sponsor for the payment of the initial portion.

d. When is the commitment fee payable and on what amounts?

Answer: The commitment fee is calculated on the undrawn portion of the OPIC commitment. It is payable semi-annually in arrears on a current basis.

e. In your experience, how have other PE managers funded the interest and fee payments?

Answer: Through a combination of capital draw downs and exit distributions.

Question: The FAQ pages briefly mention some waterfall mechanism with certain debt-to-equity covenants. What is the typical debt-to-equity ratio required and how does it work?

Answer: In general, the NAV of the fund must be 2.25x the amount of OPIC debt outstanding (including accrued and accreted interest) for cash distributions to be paid to OPIC and LPs on a pari passu basis. If NAV falls below that threshold, then OPIC is due more than its pro rata share of cash distributions, until the ratio is restored. Note that OPIC may also be due a higher percentage (i.e. more than its pro rate share) of cash distributions after year 7 and/or when there are two or fewer portfolio companies remaining in the portfolio that account for two thirds of the fund’s NAV.

Question: We are contemplating a dual structure which would provide both debt and equity. Would it be possible for OPIC to provide a straightforward senior loan which would refinance debt investments, not equity, with an amortizing structure? What would be the terms of such a loan? Would it be also possible also for OPIC to provide a combination of the usual equity funding loan and a straightforward debt funding?

Answer: Fund structure is considered and evaluated during the proposal evaluation process. OPIC support at the fund level comes in the form of senior debt. If you are interested in debt financing for individual companies, you may contact the OPIC Structured Finance department outside this Call process: http://www.opic.gov/what-we-offer/financing-guarantees. The Global Engagement Call is solely for financing at the fund level.

Question: Is Ghana a location OPIC considers an emerging market and part of this proposal objective? Or is it still classified as a frontier market?

Answer: OPIC’s services are available in Ghana. You may find a list of all countries where OPIC services are available at this link: http://www.opic.gov/what-we-offer/where-we-work.

Question: We are interested in forming a fund of funds for investing in Asia and would like clarification regarding policy for investments in China (including Hong Kong). (1) Are fund investments with GPs located in China eligable? (2) Are fund investments in managers located outside of China, but their funds make some/most/all of their investments in Chinese companys eligible? (3) Must the underlying fund GPs be prohibited from investing in China? (4) What if a underlying fund portfolio company expands into China?

Answer: OPIC will not typically invest in fund managed by GPs that are headquartered in non OPIC eligible countries or are majority owned by non OPIC eligible country nationals. OPIC reserves the right to opt out of all fund investments in China, but can invest in a fund that invests in China. The action is determined on a case by case basis regarding an existing investment expanding to a non OPIC eligible country.

Question: Does the OPIC Call consider Special Purpose Vehicles ("SPV") for setting up a funding structure to take a company private through the Management Buyout (MBO) route? The investments in the SPV will be used to fund a MBO of a listed company in Emerging Markets that is involved in the social development field.

Answer: Through the Global Engagement Call, OPIC will seek to invest in funds that provide diversification by investing in more than one entity. An SPV structure could be considered if the entity will invest in multiple companies. Please see Structure and Form of Participation section of the FAQ page: http://www.opic.gov/what-we-offer/investment-funds/calls-for-proposals/global-engagement-faqs.

Question: Will private equity real estate development funds that have operations in the appropriate geographic focus areas be considered as eligible funds for the purposes of the proposal process?

Answer: Yes.

Question: Finance Cost: What is the typical range of COP premium and how is the premium calculated, what are the factors in its calculation, and is the COP premium published?

Answer: Please see question “What are the funding costs associated with the OPIC financing?” in the Economic Issues section of the FAQs: http://www.opic.gov/what-we-offer/investment-funds/calls-for-proposals/global-engagement-faqs. The premium is determined by the market when COPs are placed. COP premiums are not published.

Question: Can this financing be provided to: (1) A Turkish regulated Private Equity Investment Trust? (2) An Investment Trust which is a tax exempt company, has no end life, and can make only private equity investments? (3) An Investment Trust that should go public (IPO) by regulation and therefore will be treated as a close-ended fund? Especially considering that being public (close-ended) will require disclosures in line with the investments/exits. Is this a red flag?

Answer: You are welcome to submit a proposal, but OPIC cannot provide a view on the specific structure you are contemplating at this point. Fund structure is considered and evaluated during the proposal evaluation process. The above-mentioned structure is not a disqualifier, however.

Question: Any restrictions in the types of companies/businesses we can invest in?

Answer: Investments that receive OPIC capital must comply with OPIC’s policy requirements related to environment, workers rights, human rights, development impact, and impact on the U.S. economy. More information about OPIC’s policy requirements is available at the following link: http://www.opic.gov/what-we-offer/investment-funds. Among types of companies that OPIC does not invest in are businesses related to military production or sales, alcohol, tobacco, pornography, gambling, radioactive materials, forest conversion or degradation, projects that impact protected areas (e.g. World Heritage sites, national parks, wildlife preserves) and/or businesses that have majority ownership or management control by host country government. OPIC reserves the right to opt out of certain investments for policy reasons.

Question: What is the “applicable premium” referred to in (e) under the following question: “Does the OPIC guaranteed financing need to be fully repaid before any return of capital to equity investors?” in the FAQs: http://www.opic.gov/what-we-offer/investment-funds/calls-for-proposals/global-engagement-faqs?

Answer: The applicable premium refers to the redemption (also known as the make-whole premium) where there is payment before a COPs maturity date, a partial prepayment on the OPIC loan.

Question: I know you say you would consider all fund structures but you don't seem to mention side car funds. We are finishing our first closing and would prefer to have a side car fund. Would this work for you?

Answer: A side car structure is not a disqualifier. OPIC will consider this type of structure where it is clear that there will be sufficient investment in the OPIC leveraged vehicle to support a 1:2 debt to equity ratio. You are welcome to submit a proposal, and OPIC will review the fund structure as part of the proposal during the evaluation process.

Question: The fund will be managed by an entity which is majority owned by a fund management company registered in Singapore and 100% owned by U.S. Persons. Will this satisfy your U.S. Participation requirement?

Answer: Yes.

Question: Our first fund may cover “Greater Europe”, covering the EU Countries as well as Eastern European non-EU states, such as Ukraine and Turkey. Are we ineligible to apply for OPIC funding because the fund covers non emerging markets which are not eligible for OPIC support?

Answer: Exposure to countries where OPIC does not operate is not a disqualifier. However, please keep in mind that we would look to have substantial exposure to emerging markets where we work through any given fund we invest in. For your reference, here is a link where you may find where OPIC services are available: http://www.opic.gov/what-we-offer/where-we-work.

Question: A number of questions about the structure/terms of the loan:

a. Can we charge a management fee and take carry on OPIC's debt commitment on essentially the same terms as we do our equity investors?

Answer: Yes.

b. Where will OPIC expect to stand in priority for repayment in relation to third party commercial borrowings taken out at fund level?

Answer: OPIC financing comes in the form of a senior loan to the fund and is not less than pari passu with other indebtedness of the fund.

c. Would OPIC expect voting rights in our funds despite not being an equity investor?

Answer: OPIC generally participates as an observer on the Advisory Board. OPIC does not vote alongside the LPs.

d. Where a fund has already held a closing before OPIC invests, will OPIC be willing to buy into the fund's existing investments at cost plus a cost of capital rate (between 4 and 8% pa)?

Answer: OPIC may consider investing in a fund that has already made some investments, on a case by case basis. In doing so, OPIC would evaluate the circumstances, the existing investments and the remaining pipeline, and consider the appropriate carrying cost of the existing investments, based on a pre-negotiated valuation. OPIC would not give credit for a cost of capital rate in these circumstances.

Question: We would like to meet the US nexus requirement by forming a new majority US-owned GP. Our current GP is not US-owned. Do we need to form the new majority US-owned GP prior to applying to the Call for Proposals?

Answer: No. The US nexus requirement does not need to be fulfilled at the time of application. Therefore, you do not need to register the new GP you are contemplating prior to submitting an application to the call for proposals. If your proposal were to be selected, OPIC would then discuss with you and your team whether the US nexus would be met via GP ownership or percentage of US capital in the fund.

Question: For the Track Record Table - should this include divested companies also? Or just active ones?

Answer: Please include both divested and active investments.

Question: Our fund is an English Limited Partnership with Guernsey based ultimate GP. Is this structure acceptable to OPIC in principle?

Answer: OPIC is open to working with vehicles registered in a variety of jurisdictions. Please note that funds and investment advisers will need to comply with US securities laws which have various registration requirements and exemptions. Please consult your legal counsel regarding your particular fund.

Question: Has OPIC ever done “split structures” where the LPs who want leverage get the OPIC leverage into the structure and the LPs who don’t want it come without OPIC leverage to the fund?

Answer: OPIC has worked with split structures as you describe them. OPIC will consider this type of structure on a case by case basis where it is clear that there will be sufficient investment in the OPIC leveraged vehicle to support a 1:2 debt to equity ratio.

Question: A number of the questions seem to be directed mainly to primary funds and arguably less relevant to a fund of funds. Can we freely adapt our answers to any questions we consider non-applicable for a FOFs?

Answer: Yes

Question: This is a non-recourse loan to the Fund’s LPs. What does this mean with regards to collateral for the OPIC debt? Is it the invested portfolio?

Answer: To clarify, this is a loan to the fund and the loan is non-recourse to the fund’s LPs. The collateral for the OPIC debt is generally the invested portfolio and fund level bank accounts.

Question: The indicative drawdown period is 6 years, which seems short for a fund of funds given the longer investment cycle. What does OPIC target for a fund of funds?

Answer: This issue would be discussed with the fund manager if a fund is selected.

Question: If so, with regards to the time limit, it is mentioned that the fund may make distributions pari passu to OPIC and the equity investors for the first 7 years. Thereafter, OPIC gets preference. Although the philosophy seems very sensible to us, the time period appears short for a fund of funds, where cash flows from the portfolio typically do not start until year 6 or 7. Do you have another time frame in mind for a fund of funds?

Answer: OPIC would discuss this issue with fund of funds managers on a case by case basis if their proposed vehicles are selected.

Question: For the pricing of the debt, mention is made of US Treasury STRIPS with similar term and tenor. What level is the interest rate currently and is the pricing floating in line with market rates over time?

Answer: The OPIC COP interest rate is fixed for the interest period(s) of a given tranche of OPIC COPs as selected by the fund. The U.S. debt capital market determines both the U.S. Treasury STRIP yields and the OPIC market spread at the time of sale/issuance. Yields and spreads are unpredictable and fluctuate over time and, as a result, it is difficult to generalize about OPIC COPs interest rates and spread relationships.

Question: With regards to OPIC participating in the fund´s capital gain, it is mentioned that OPIC should be paid a “minimal share in cash distributions” Would it be possible to get some more clarity on how much this is? And when does it kick in, is it payable after the fund reaches its hurdle?

Answer: OPIC’s share in cash distributions is discussed with the fund manager if a fund is selected. It depends on the risk profile of the fund, terms, and OPIC participation in the fund, among other factors.

Question: Commitment and guarantee fees: The levels indicated (up to 50bp and 150bp) appear to be primarily intended for primary funds. Given that the management fee and carry levels for a fund of funds tend to be substantially lower (max 50% of those for a direct fund), do you have other numbers in mind for a fund of funds?

Answer: This issue would be discussed with the fund manager on a case by case basis if a fund is selected.

Question: Excluded investments: As a fund of funds, we typically have less ability to directly control into what companies our portfolio funds invest (most being generalist PE funds). How do you typically handle this issue for a fund of funds, e.g. with regards to OPIC prohibited geographies or for companies potentially competing with US businesses?

Answer: OPIC anticipates that policy review will be conducted on the fund of funds and the funds it invests in, but not the underlying portfolio company investments (unless the fund of funds is making a direct co-investment in the company). However, the fund of funds manager is required to comply with OPIC policies during its fund selection process as well as during the monitoring of funds and underlying portfolio companies.

Question: In the Track Record attachment, some of the column categories are not applicable to our credit strategy. Would it be recommended that we fill in an additional table with categories which we deem are relevant?

Answer: If you have to alter the format of the table, please provide information in a format that would allow OPIC to consider the fund’s performance. If you need to add columns to the table we’ve created or to provide an additional table, please do so.

Question: We currently have a Cayman domiciled fund and are in the process of launching a Brazilian domiciled fund. Does OPIC have a preference in regards to the domicile of the fund it chooses to invest in?

Answer: OPIC is open to working with vehicles registered in a variety of jurisdictions, including Brazil and the Cayman Islands.

Question: Our offshore fund has a dual share class: one in US dollars and one with BRL exposure. Would OPIC have a preference in funding the USD over the BRL class?

Answer: OPIC is open to supporting funds denominated in currencies other than USD, but it is up to the GP to determine where in the fund structure the OPIC loan would be suitable. OPIC is able to provide only USD denominated loans.

Question: The FAQ mentions that OPIC seeks to support funds that have U.S. participation in either the ownership of the fund manager/general partner, or in the equity capital of the fund. Is this a necessary condition or can this condition be relaxed/waived in certain situations? E.g. If because of provisions in the Volcker Rule a fund is not able to market to US Persons, then are there any exemptions for (a) OPIC to consider such a fund, and (b) to exempt the fund from the US Nexus requirement.

Answer: Funds will need to comply with the U.S. Nexus requirement as well as all applicable U.S. laws.

Question: If one of the key investors in the fund is a qualified foreign banking organization (QFBO) in the U.S. then would such a QFBO qualify as an U.S. Person? And therefore would such QFBO’s participation in the fund meet OPIC’s U.S. Participation criteria?

Answer: OPIC will discuss the U.S. Participation criteria with funds that are selected on a case by case basis.

Question: Is the commitment fee charged at a rate of 50 basis points per annum (i.e. 25 basis points for every 6 months) or 50 basis points for a 6 month period?

Answer: The commitment fee is charged per annum (i.e. 25 bp every 6 months). It is payable semi-annually in arrears.

Question: We have an existing Fund. The first closing was in June 2010 with a number of multilaterals. The final closing will be at the end of 2011. The Fund has made two investments already. Is this fund eligible for OPIC? If the answer is no, please specify the reasons.

Answer: The soonest we could take funds from the Global Engagement Call to the OPIC Board is June 2012. Once the Board approval is obtained, we negotiate the Commitment Letter (including agreed term sheet) in order to formalize the OPIC commitment. Please consider how this timeline would correspond with your target final closing at the end of 2011. The other factors you mention, including presence of multilaterals, first closing having taken place, and existing investments, would not typically prevent us from considering making a commitment. Each fund is evaluated individually on a competitive basis.

Question: Can we present two different funds as separate proposals?

Answer: Yes.

Question: We have a multilateral organization with an office in the U.S. as a Limited Partner/Investor in one of our Funds. Would such an organization count as a U.S. investor for OPIC?

Answer: Multilateral organizations would not be considered U.S. investors.

Question: How much time can OPIC wait so we can meet the U.S. Investor requirement for the funding?

Answer: The fund manager does not have to have the requested amount of U.S. capital raised at the time the application is submitted. OPIC is aware of the current fundraising challenges, and works with each fund manager on an individual basis regarding the fund manager’s ability to raise U.S. capital.

Question: Does a US company with an Advisory Agreement for investments with the General Partner count as a US General Partner for OPIC?

Answer: The determination of a U.S. nexus through ownership comes down to ownership of the fund manager or general partner by U.S. persons. If an entity that is incorporated in the U.S. owns part of the fund manager/ general partner, OPIC would seek to determine whether the ownership of the U.S.-incorporated entity rolls up to U.S. Persons, as defined in the call FAQs in Section 4: U.S. Participation: http://www.opic.gov/what-we-offer/investment-funds/calls-for-proposals/global-engagement-faqs.

Question: In your call, you mention that the Fund needs to have a developmental impact in some industries. Is there a list of said industries? How do you measure developmental impact?

Answer: The Checklist does include a question about developmental impact you believe the fund will make (e.g. creation of jobs, environmental and/or social impact). OPIC operates under the understanding that each fund and investment strategy is unique, and therefore leaves it up to each fund manager to describe how the given fund will make a developmental impact. OPIC does not maintain a list of industries for this purpose. However, investments that receive OPIC capital must comply with OPIC’s policy requirements related to environment, workers’ rights, human rights, developmental impact, and impact on the U.S. economy. More information about OPIC’s policy requirements is available at the following link: http://www.opic.gov/what-we-offer/investment-funds.

Question: For a given capital call, does the manager have the discretion not to require OPIC to make its respective capital contribution?

Answer: Yes. However, OPIC wants to see its capital contributed side-by-side with the LP capital, and would opt out of an investment only if it did not meet OPIC’s policy criteria.

Question: What happens if you give us funds at an interest rate considering a given fund life and then the LPs decide to extend this horizon? Is there an interest rate adjustment?

Answer: It sounds like there may be two parts to your Question:

1) The Base Interest rate is determined by the U.S. debt capital market at the time of OPIC COPs sale/issuance. While the OPIC loan is co-terminous with the life of the fund, the interest period of the OPIC COPs is determined by the fund manager at the time of sale/issuance. You may choose to reissue the COPs at the conclusion of the respective interest periods to a subsequent interest rate date or to final maturity, in which case the Base Interest rate would be reset by the U.S. debt capital market. Please see the Q&A above for more details.

2) Depending on the specific circumstances, OPIC would generally align its interests alongside the LPs on issues such as extending the fund’s life.

Question: To what extent would the Base Interest rate be linked to the country risk or geographic risk?

Answer: Because the OPIC COPs are guaranteed by the full faith and credit of the U.S. government, the U.S. debt capital market does not price OPIC COPs with any regard to the countries where the fund operates.

Question: If the fund has no dividend flow and we have to do a capital call to pay OPIC’s interest, will OPIC participate in that capital call?

Answer: Yes, the fund may use OPIC capital in order to pay the Current Interest (guarantee fee) and certain other fees. The Base Interest on the OPIC COPs accretes and accrues, so there are no current payments associated with it.

Question: In the Track Record Table, there is a column titled "Fund Ownership Percentage". Can you kindly clarify what do you mean by this "Ownership Percentage"? Is this the fund's percentage participation in a particular deal (in the case of co-investment), or is this the fund's equity stake in the investee (which in the case of mezzanine investment, would be none)?

Answer: “Fund Ownership Percentage” refers to the fund’s equity stake in the portfolio company, if any.

Question: We are a sectoral (financial services/ IT) fund focused on particular region Russia and CIS. Will we qualify for the proposal?

Answer: The Global Engagement Call is open to a wide variety of strategies, including the one you describe.

Question: When answering question i) regarding conflicts of interest in Section C: Organization and Governance, should we state the concrete situations and how we plan to resolve such conflicts or generally describe the potential conflicts and provide guidelines on resolving them (use of the Advisory Committee etc)?

Answer: OPIC is certainly interested in a general description of potential conflicts of interest and guidelines regarding their resolution that the fund will follow. If there are concrete situations/examples, whether potential or existing, that need to be explained, please address them specifically.

Question: We are setting up a new management company, and it has no track record to date. However the fund's team is highly experienced with a strong track record. Are we still eligible to apply despite the fact that the fund has no history of its own? Will we be at any disadvantage against other applicants due to being new?

Answer: The call is open to first time managers. If the team has never invested together, please provide individual track record information. Each fund will be evaluated holistically on a competitive basis. All Selection Criteria described in the call Overview will be taken into account: http://www.opic.gov/what-we-offer/investment-funds/calls-for-proposals/global-engagement-call/overview.

Question: We are considering a 2012 launch of our fund that would invest exclusively in public but illiquid securities. Is this a strategy that would suit the call criteria?

Answer: The Global Engagement Call is designed to support qualified private equity fund managers. While opportunistic investments in public equities as part of a broader private equity strategy may be considered, a strategy 100% dedicated to public equities, even illiquid securities, would not be the best fit for this call.