[Federal Register Volume 60, Number 217 (Thursday, November 9, 1995)]
[Notices]
[Pages 56561-56565]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-27819]
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DEPARTMENT OF AGRICULTURE
Rural Telephone Bank
Determination of the 1995 Fiscal Year Interest Rates on Rural
Telephone Bank Loans
AGENCY: Rural Telephone Bank, USDA.
ACTION: Notice of 1995 fiscal year interest rates determination.
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SUMMARY: In accordance with 7 CFR 1610.10, the Rural Telephone Bank
fiscal year 1995 cost of money rates have been established as follows:
6.04% and 6.88% for advances from the liquidating account and financing
account, respectively (fiscal year is the period beginning October 1
and ending September 30).
Except for loans approved from October 1, 1987, through December
21, 1987 where borrowers elected to remain at interest rates set at
loan approval, all loan advances made during fiscal year 1995 under
bank loans approved in fiscal years 1988 through 1991 shall bear
interest at the rate of 6.04% (the liquidating account rate). All loan
advances made during fiscal year 1995 under bank loans approved during
or after fiscal year 1992 shall bear interest at the rate of 6.88% (the
financing account rate).
The calculation of the Bank's cost of money rates for fiscal year
1995 for the liquidating account and the financing account are provided
in Tables 1a and 1b. Since the calculated rates are greater than the
minimum rate (5.00%) allowed under 7 U.S.C. Sec. 948(b)(3)(A), the cost
of money rates for the liquidating account and financing account are
set at 6.04% and 6.88%, respectively. The methodology required to
calculate the cost of money rates is established in 7 CFR 1610.10(c).
FOR FURTHER INFORMATION CONTACT: Barbara L. Eddy, Deputy Assistant
Governor, Rural Telephone Bank, room 4056, South Building, U.S.
Department of Agriculture, Washington DC 20250, telephone number (202)
720-9556.
SUPPLEMENTARY INFORMATION: The Federal Credit Reform Act of 1990
[[Page 56562]]
(``Credit Reform'') (2 U.S.C. Sec. 661a, et seq.) implemented a system
to reform the budgetary accounting and management of Federal credit
programs. Bank loans approved on or after October 1, 1991, are
accounted for in a different manner than Bank loans approved prior to
fiscal year 1992. As a result, the Bank must calculate two cost of
money rates: (1) The cost of money rate for advances made from the
liquidating account (advances made during fiscal year 1995 on loans
approved prior to fiscal year 1992) and (2) the cost of money rate for
advances made during fiscal year 1995 on loans approved on or after
October 1, 1991 (otherwise referred to as loans from the financing
account).
The cost of money rate methodology is the same for both accounts.
It develops a weighted average rate for the Bank's cost of money
considering total fiscal year loan advances; the excess of fiscal year
loan advances over amounts received in the fiscal year from the
issuances of Class A, B, and C stocks, debentures and other
obligations; and the costs to the Bank of obtaining funds from these
sources.
Sources and Costs of Funds--Liquidating Account
During fiscal year 1995, the Bank was authorized to pay the
following dividends: the dividend on Class A stock was 2.00% as
established in amended section 406(c) of the Rural Electrification Act;
no dividends were payable on Class B stock as specified in 7 CFR
1610.10(c); and the dividend on Class C stock was established by the
Bank at 7.5%.
In accordance with Section 406(a) of the RE Act, the Bank did not
issue Class A stock in fiscal year 1995. Total advances for the
purchase of Class B stock and cash purchases for Class B stock were
$1,111,708. Rescissions of loan funds advanced for Class B stock
amounted to $201,173. Thus, the amount received by the Bank from the
issuance of Class B stock, per 7 CFR 1610.10(c), was $910,535
($1,111,708 -201,173). The total amount received by the Bank in fiscal
year 1995 from the issuance of Class C stock was $12,330.
The Bank did not issue debentures or any other obligations related
to the liquidating account in fiscal year 1995. Consequently, no cost
was incurred related to the issuance of debentures subject to 7 U.S.C.
Sec. 948(b)(3)(D).
The excess of fiscal year 1995 loan advances from the liquidating
account over amounts received from issuances of stocks, debentures, and
other obligations amounted to $35,044,268. The cost associated with
this excess is the historical cost of money rate as defined in 7 U.S.C.
Sec. 948(b)(3)(D)(v). The calculation of the Bank's historical cost of
money rate for advances from the liquidating account is provided in
Table 2a. The methodology required to perform this calculation is
described in 7 CFR 1610.10(c). The cost for money rates for fiscal
years 1974 through 1987 are defined in section 408(b) of the RE Act, as
amended by Pub. L. 100-203, and are listed in 7 CFR 1610.10(c) and
Table 2a herein.
Sources and Costs of Funds--Financing Account
During fiscal year 1995, the Bank was authorized to pay the
following dividends: the dividend on Class A stock was 2.00% as
established in amended section 406(c) of the Rural Electrification Act;
no dividends were payable on Class B stock as specified in 7 CFR
1610.10(c); and the dividend on Class C stock was established by the
Bank at 7.5%.
In accordance with Section 406(a) of the RE Act, the Bank did not
issue Class A stock in fiscal year 1995. Total advances for the
purchase of Class B stock and cash purchases for Class B stock were
$1,769,597. Since there were no rescissions of loan funds advanced for
Class B stock, the amount received by the Bank from the issuance of
Class B stock, per 7 CFR 1610.10(c), was $1,769,597. No amounts were
received in fiscal year 1995 from the issuance of Class C stock
associated with the financing account.
During fiscal year 1995, issuances of debentures or any other
obligations related to the financing account were $28,627,516.67 at an
interest rate of 7.39% and $2,000,000 at an interest rate of 6.77%.
The excess of fiscal year 1995 loan advances from the financing
account over amounts received from issuances of stocks, debentures, and
other obligations amounted to $4,764,403. The cost associated with this
excess is the historical cost of money rate as defined in 7 U.S.C.
Sec. 948(b)(3)(D)(v). The calculation of the Bank's historical cost of
money rate for advances from the financing account is provided in Table
2b. The methodology required to perform this calculation is described
in 7 CFR 1610.10(c).
Dated: November 3, 1995.
Wally Beyer,
Governor, Rural Telephone Bank.
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[FR Doc. 95-27819 Filed 11-8-95; 8:45 am]
BILLING CODE 3410-15-C