[Federal Register Volume 61, Number 219 (Tuesday, November 12, 1996)]
[Notices]
[Pages 58030-58033]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-28856]


-----------------------------------------------------------------------

DEPARTMENT OF AGRICULTURE
Rural Telephone Bank


Determination of the 1996 Fiscal Year Interest Rates on Rural 
Telephone Bank Loans

AGENCY: Rural Telephone Bank, USDA.

ACTION: Notice of 1996 fiscal year interest rates determination.

-----------------------------------------------------------------------

SUMMARY: In accordance with 7 CFR 1610.10, the Rural Telephone Bank 
fiscal year 1996 cost of money rates have been established as follows: 
6.05% and 6.42% 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 1996 under 
bank loans approved in

[[Page 58031]]

fiscal years 1988 through 1991 shall bear interest at the rate of 6.05% 
(the liquidating account rate). All loan advances made during fiscal 
year 1996 under bank loans approved during or after fiscal year 1992 
shall bear interest at the rate of 6.42% (the financing account rate).
    The calculation of the Bank's cost of money rates for fiscal year 
1996 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 6.05% and 6.42%, 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 
(``Credit Reform'') (2 U.S.C. 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 1996 on loans 
approved prior to fiscal year 1992) and (2) the cost of money rate for 
advances made during fiscal year 1996 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 
issuance 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 1996, 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 1996. Total advances for the 
purchase of Class B stock and cash purchases for Class B stock were 
$1,026,869. Rescissions of loan funds advanced for Class B stock 
amounted to $254,735. Thus, the amount received by the Bank from the 
issuance of Class B stock, per 7 CFR 1610.10(c), was $772,134 
($1,026,869-254,735). The total amount received by the Bank in fiscal 
year 1996 from the issuance of Class C stock was $23,317.
    The Bank did not issue debentures or any other obligations related 
to the liquidating account in fiscal year 1996. Consequently, no cost 
was incurred related to the issuance of debentures subject to 7 U.S.C. 
948(b)(3)(D).
    The excess of fiscal year 1996 loan advances from the liquidating 
account over amounts received from issuance of stocks, debentures, and 
other obligations amounted to $30,169,736. The cost associated with 
this excess is the historical cost of money rate as defined in 7 U.S.C. 
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 1996, 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 1996. Total advances for the 
purchase of Class B stock and cash purchases for Class B stock were 
$2,142,725. 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 $2,142,725. No amounts were 
received in fiscal year 1996 from the issuance of Class C stock 
associated with the financing account.
    During fiscal year 1996, issuance of debentures or any other 
obligations related to the financing account were $37,480,232 at an 
interest rate of 6.77%.
    The excess of fiscal year 1996 loan advances from the financing 
account over amounts received from issuance of stocks, debentures, and 
other obligations amounted to $4,913,664. 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 4, 1996.
Wally Beyer,
Governor, Rural Telephone Bank.

BILLING CODE 3410-15-P

[[Page 58032]]

[GRAPHIC] [TIFF OMITTED] TN12NO96.000


[[Page 58033]]


[GRAPHIC] [TIFF OMITTED] TN12NO96.001


[FR Doc. 96-28856 Filed 11-8-96; 8:45 am]
BILLING CODE 3410-15-C