[Federal Register Volume 65, Number 64 (Monday, April 3, 2000)]
[Rules and Regulations]
[Pages 17435-17439]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-8116]
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Rules and Regulations
Federal Register
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Federal Register / Vol. 65, No. 64 / Monday, April 3, 2000 / Rules
and Regulations
[[Page 17435]]
FEDERAL HOUSING FINANCE BOARD
12 CFR Parts 951 and 997
[No. 2000-15]
RIN 3069-AA92
Determination of Appropriate Present-Value Factors Associated
With Payments Made by the Federal Home Loan Banks to the Resolution
Funding Corporation
AGENCY: Federal Housing Finance Board.
ACTION: Final rule.
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SUMMARY: The Federal Housing Finance Board (Finance Board) is amending
its regulations to implement provisions of the Gramm-Leach-Bliley Act
(Gramm-Leach-Bliley) that changed the methodology for determining the
amount of the payments to be made by the Federal Home Loan Banks
(Banks) to the Resolution Funding Corporation (REFCORP). These payments
are used to pay a portion of the interest owed on bonds issued by
REFCORP. Gramm-Leach-Bliley requires each Bank to pay 20 percent of its
net earnings each year to REFCORP and requires the Finance Board to
adjust the final payment date so that the value of the payments made
under the new methodology equals those that were to have been made
under prior law. The Finance Board proposed to discount the Banks'
payments using appropriate present-value factors selected by the
Finance Board in consultation with the Secretary of the Treasury. After
carefully considering the comments received on its proposal, the
Finance Board has decided to adopt the proposed rule with the technical
changes discussed below.
EFFECTIVE DATES: This final rule is effective on April 3, 2000.
FOR FURTHER INFORMATION CONTACT: Joseph A. McKenzie, Deputy Chief
Economist, Office of Policy, Research, and Analysis, (202) 408-2845,
[email protected]; Austin J. Kelly, Senior Financial Economist, Office
of Policy, Research, and Analysis, (202) 408-2541, [email protected]; or
Thomas E. Joseph, Attorney-Advisor, (202) 408-2512, [email protected].
Staff also can be reached by regular mail at the Federal Housing
Finance Board, 1777 F Street, NW, Washington, DC 20006. A
telecommunication device for deaf persons (TDD) is available at (202)
408-2579.
SUPPLEMENTARY INFORMATION:
I. Background Information
As discussed more completely in the proposed rule,\1\ the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA),
Pub. L. 101-73, 103 Stat. 183 (Aug. 9, 1989), established REFCORP to
provide funds for the Resolution Trust Corporation (RTC). 12 U.S.C.
1441b. To this end, as of September 20, 1999, REFCORP had issued and
had outstanding $29.9 billion in non-callable bonds with maturities
ranging from October 15, 2019, to April 15, 2030. FIRREA also amended
the Federal Home Loan Bank Act (Bank Act) to require the Banks to pay
$300 million annually toward the interest on those bonds. To the extent
amounts available from the other statutorily specified sources and the
Banks' $300 million are insufficient to pay the annual interest on the
REFCORP bonds, the Bank Act directs the United States Department of the
Treasury (Treasury) to pay to REFCORP the additional amounts needed to
pay the interest. 12 U.S.C. 1441b(f)(2)(E). Treasury has paid more than
three-quarters of the annual interest owed on REFCORP bonds.
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\1\ The proposed rule was published in the Federal Register at
65 FR 5447 (Feb. 4, 2000). In that proposal the Finance Board
described in some detail the analysis underlying the proposed
methodology for adjusting the date of the Banks' final REFCORP
payment. As the final rule largely adopts the proposed methodology,
the description is not repeated here. Interested parties should read
the proposed rule for more complete background information on and
the analysis underlying this final rule.
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Gramm-Leach-Bliley changed the Banks' REFCORP assessment from a
fixed-dollar $300 million annual payment to an annual payment of 20
percent of each Bank's net earnings. See 12 U.S.C. 1441b(f)(2)(C)).
Gramm-Leach-Bliley also contains provisions intended to assure that the
change in the method of assessing the Banks' REFCORP obligation does
not increase or decrease the burden of paying interest on the REFCORP
bonds either for the Banks or the Treasury. To implement these
provisions of Gramm-Leach-Bliley, the Finance Board proposed a
methodology for adjusting the date of the final REFCORP payment due
from the Banks. The methodology entails the simulated purchase or sale
each quarter of zero-coupon Treasury bonds.\2\ As discussed below,
after considering the comments received on its proposal, the Finance
Board has decided to adopt the methodology for adjusting the final
REFCORP payment due from the Banks substantially as proposed. The
Finance Board is also adopting the technical amendment to Sec. 951.1 of
its regulations, 12 CFR 951.1, as proposed.\3\
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\2\ Under the terms of this rule, the Finance Board will obtain
from the Treasury's Office of Market Finance interest rates based on
estimated market yields on zero-coupon Treasury bonds whose
maturities coincide with and bracket the date of the last non-
defeased $75 million quarterly payment and apply these rates to
Banks' excess or deficit quarterly payments as required by
Sec. 997.2 and Sec. 997.3. Because Treasury does not issue
marketable zero coupon bonds, the interest rate provided by the
Treasury's Office of Market Finance will be based on the current
market yield on marketable STRIPS (the principal or interest
component of Treasury Separate Trading of Registered Interest and
Principal of Securities program). As the yields on marketable STRIPS
are quoted on a semiannually compounding basis, the Office of Market
Finance will convert the semi-annual yields to their quarterly
equivalents when necessary. The Treasury's Office of Market Finance
will certify these rates to the Finance Board, as it does for
different interest rates for a number of other agencies.
\3\ The Finance Board recently renumbered and reorganized its
regulations, effective February 18, 2000. See 65 FR 8253 (Feb. 18,
2000). Prior to the effective date of this change, Sec. 951.1 of the
Finance Board's regulations was designated as Sec. 960.1, 12 CFR
960.1.
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II. Comparison of Proposed and Final Rules
A. Comments Received
The Finance Board received five comment letters on its proposed
methodology: four from Banks, and one from a national trade association
of community banks. All the comments were generally supportive of the
Finance Board's proposed methodology. Each of the four Banks, however,
proposed that the Finance Board use a zero-coupon bond rate other than
that for Treasury instruments in performing the present value
calculations. The trade
[[Page 17436]]
association requested that the Finance Board publish the results of its
quarterly determination. No comments were received on the proposed
technical amendment to Sec. 951.1 of the Finance Board regulations.
Each of the four Banks suggested that the Finance Board modify the
calculation set forth in Sec. 997.2 and Sec. 997.3 by replacing the
referenced Treasury zero-coupon interest rate with a different, and
higher, interest rate. The use of a higher interest rate would have the
effect of reducing the present value of the Banks' total REFCORP
obligation whenever the Banks' actual quarterly REFCORP payments exceed
$75 million.\4\ The suggested alternative interest rates were: the rate
on REFCORP bonds, the Bank System's cost of funds, and an average of
Treasury and agency zero-coupon bond rates. The various arguments made
by the Banks to support the requested change can be generally
summarized as follows: (1) The alternative rates better reflect the
Banks' cost of funds or are more appropriate for discounting the Banks'
obligation to pay on the REFCORP bonds; (2) use of the Treasury rate
would raise the burden of the REFCORP payment if the Banks' aggregate
annual REFCORP payments were to exceed $300 million, as is expected at
least in the near future; and (3) the expected reduction in Treasury's
issuance of government debt and the recently announced plans by
Treasury to retire outstanding government debt will result in
artificially low Treasury rates, relative to other rates, or will make
it difficult to find accurate Treasury rates to use as the referenced
zero-coupon rate for the purposes of making the calculations set forth
in this rule.
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\4\ By contrast, use of one of the higher, alternative interest
rates rather than the Treasury rate would increase the present value
of Treasury's share of the interest payments paid on REFCORP bonds,
if the Banks total quarterly REFCORP payments were to exceed $75
million.
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The Finance Board has considered the arguments made by the
commenters but continues to believe that the zero-coupon Treasury rate
remains the most appropriate rate for the use in the calculation set
forth in Sec. 997.2 or Sec. 997.3. Although the Banks have paid $300
million annually to REFCORP in the past, and are likely to pay well in
excess of $400 million in 2000, the total annual interest obligation to
REFCORP bondholders exceeds $2.5 billion, of which the Treasury pays in
excess of $2.0 billion. Therefore, the effect of an excess or deficit
quarterly payment by the Banks, as those terms are defined in
Sec. 977.1, will be to decrease, in the case of an excess quarterly
payment, or increase, in the case of a deficit quarterly payment, the
payment due from Treasury in the current quarter, but to have the
opposite effect on payments made by Treasury in future quarters. For
example, an excess quarterly payment can be viewed, in effect, as the
Banks ``lending'' to Treasury to reduce Treasury's current expenditures
for interest on REFCORP bonds, and as Treasury ``paying back'' the
Banks by paying amounts that would have been due from the Banks for
interest on the REFCORP bonds in the future. Similarly, a deficit
quarterly payment can be viewed, in effect, as the Banks ``borrowing''
from Treasury to meet current REFCORP obligations and then ``paying
back'' Treasury in the future by extending the term of the REFCORP
obligation.\5\ Given the overall effects of excess or deficit quarterly
payments on Treasury's residual obligation to REFCORP, the Finance
Board believes that the Treasury rates are the most appropriate
discount rates to use in the calculations set forth in Sec. 997.2 and
Sec. 997.3.
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\5\ As discussed in the preamble to the proposed rule, the use
of zero-coupon Treasury bonds is consistent with Office of
Management and Budget (OMB) Circular A-11, which implements the
Federal Credit Reform Act of 1990 (FCRA). Under the FCRA, cash flows
stemming form direct government loans and government loan guarantees
are discounted by the interest rate on zero-coupon Treasury
securities with the same maturity as each quarter's projected cash
flow. Thus, the approach adopted by this rule is consistent with the
budgetary treatment of government loan activities. Finance Board
staff have informally discussed this methodology with staff from OMB
and the Treasury, and they generally supported the overall approach.
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Several of the comment letters raised technical issues about the
use of Treasury interest rates, indicating that certain factors in the
bond market may cause the yield on a particular Treasury issue to be
temporarily or ``artificially'' high or low. For example, ``on-the-
run'' issues (i.e., the most recently auctioned bond of a particular
standard maturity such as the 10-year or 30-year Treasury bond) can
trade at a rate significantly lower rate than an adjacent issue, as one
Bank noted occurred recently in the 30-year Treasury market.
In response to this comment, there are three observations. First,
temporary technical factors may either increase of decrease the
interest rates on Treasury issues, and it is impossible to predict the
net effect these technical factors will have over the life of the
REFCORP obligation. Second, technical factors that have an effect on
the Treasury bond market are likely to have a larger effect on non-
Treasury bonds because such instruments are far less liquid and
potentially subject to widening and narrowing credit spreads. Third,
``on-the-run'' Treasury issues, the rates of which may be artificially
low, will seldom be used in the calculations set forth in this rule.
For example, if the benchmark quarterly payment to be ``defeased'' and
the maturity date for the applicable zero-coupon Treasury bond used for
that purpose are exactly thirty years from the date of the Banks'
actual quarterly payment date, an ``on-the-run'' Treasury bond would be
used in the calculation. However, the interest rate used to discount
the next outstanding benchmark quarterly payment would necessarily be
for a Treasury bond with a term of less than 30 years, and therefore
would not be an ``on-the-run'' issue. The next ``on-the-run issue'' is
the 10-year Treasury bond, which will not be the appropriate benchmark
to use in the calculations set forth in this rule for some time.
Several comments raise the issue about the potential refunding of
the United States government debt. Specifically, commenters expressed
concern that if the United States budget surpluses occur as projected,
the publicly held debt would disappear around 2015, and there would be
no Treasury bonds to use as a benchmark. The Finance Board does not
believe that this argument requires it to use a different interest
rate, as even under somewhat conservative assumptions, the Banks'
REFCORP obligation would be fully satisfied between 2013 and 2015,
which roughly coincides with the projected date of the elimination of
the publicly held debt.
Furthermore, the use of Treasury zero-coupon rates is not unique to
the REFCORP calculation. There are other programs and agencies that use
these rates. If the Treasury retires publicly held debt, then the
Finance Board along with these other agencies and programs would have
to determine successor discount factors. Gramm-Leach-Bliley provides
the Finance Board with sufficient authority to determine successor
discounting factors in consultation with the Secretary of the Treasury.
Thus, the Finance Board could reconsider the use of the zero-coupon
Treasury rate, if and when it appears imminent that a benchmark
Treasury rate would not be available, or would not provide an accurate
reference interest rate for the REFCORP calculations.
More generally, the Finance Board believes that the actual effects
of the planned reduction of outstanding government debt on the Treasury
bond market remain uncertain at this time. In addition, although
reduced issuance by
[[Page 17437]]
Treasury of government debt may result in declining yields on Treasury
bonds, these rates remain market rates and are not ``artificial.'' The
fact that some commenters believe that the rates on Treasury bonds may
be declining does not alter the Finance Board's underlying economic
rationale for viewing the Treasury zero-coupon bond rate as the most
appropriate present value factor to use for the purposes of this rule.
Moreover, Treasury staff has generally endorsed the Finance Board's use
of the zero-coupon Treasury bond rate for these calculations.
The trade association requested that the Finance Board regularly
publish the results of the calculation and its determination of the new
termination date for the REFCORP obligation. The issue of publishing
the determination made pursuant to the Gramm-Leach-Bliley requirements
was not directly addressed in the proposed rule. However, the Finance
Board expects that, after it has reviewed the results of the
calculations made in accordance with Sec. 997.4, it will publish its
determination as to the new termination date for the Banks' REFCORP
obligation in the quarterly and annual combined financial report of the
Bank System.\6\
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\6\ On January 4, 2000, the Finance Board published a proposed
rule for comment that would assign certain functions now performed
by the Finance Board, including preparation of the Bank system's
annual and quarterly financial reports, to the Office of Finance.
See 65 FR 324,335 (Jan. 4, 2000) (proposed Sec. 941.2(c)).
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B. Consultations With Treasury
Gramm-Leach-Bliley provides that the Finance Board shall select
appropriate present-value factors for making the statutorily required
determination in ``consultation with the Secretary of the Treasury.''
12 U.S.C. 1441b(f)(2)(C)(ii). Before proposing this rule, Finance Board
staff met with staff from OMB and Treasury. The Finance Board also
provided a copy of the proposed rule to the Secretary of the Treasury.
In response, staff from Treasury has informally suggested
clarifications to certain aspects of the Finance Board's proposed rule.
Primarily, Treasury staff wished to make clear its general approach to
estimating the rates that it will provide to the Finance Board, see n.
2, supra., and also asked that the final rule clarify the nature of the
REFCORP's role in performing the calculations described in Sec. 997.2
and Sec. 997.3. On this latter point, the Finance Board reiterates that
REFCORP has agreed to conduct the ministerial task of performing the
calculations specifically described in Sec. 997.2 and Sec. 997.3, which
will form the basis of the quarterly present value determination. The
Finance Board will make the actual quarterly present value
determination, after reviewing the results of REFCORP's calculation, as
required by Sec. 997.2 and Sec. 997.3. See 65 FR at 5451.
In addition, the Finance Board has made a slight change to the
wording of Sec. 997.4(c) concerning the maintenance of the official
record of the quarterly present value determinations, because the
proposed wording could be read to imply that REFCORP would make the
present value determination required by Gramm-Leach-Bliley. As
proposed, the provisions stated that the Finance Board will keep the
official records of all quarterly present value determinations ``made
under this part by either the REFCORP or the Finance Board.'' To avoid
any confusion, the Finance Board has deleted the phrase ``by either the
REFCORP or the Finance Board'' from the final version of Sec. 997.4(c).
This change does not alter the purpose of the provision, which is to
make clear that the Finance Board will maintain the official record
relating to the quarterly present value determinations. See id.
Treasury staff also commented that the maturity date for zero-
coupon bonds maturing after 2006 will not always correspond to the date
of the benchmark quarterly payment. In such a situation, the Finance
Board expects that Treasury will provide an estimated interest rate on
a zero-coupon bond with a maturity date that is closest to that of the
benchmark quarterly payment. The effect of this change on the present
value calculation should be minimal. The Finance Board has also added a
definition of ``estimated interest rate'' to Sec. 997.1 that makes
clear that the estimated interest rate will be for a zero-coupon
Treasury bond that matures on the date of the quarterly benchmark
payment that is being defeased or, if there is no zero-coupon Treasury
bond that matures on that date, then on the date that is closest to the
date of the quarterly benchmark payment being defeased. In addition,
after adding this definition, the repetitive descriptions of the
estimated interest rate that had appeared elsewhere in the rule,
especially in Sec. 997.2 and Sec. 997.3, are no longer necessary and
have been deleted.
C. Effective Date
This rule is effective immediately on publication so that the new
methodology may be applied without delay to the first REFCORP payment
that will be made by the Banks under the new Gramm-Leach-Bliley
provisions on April 17, 2000. Moreover, the implementation of this
final rule requires no action or change in activity on the part of the
Banks or other parties. The rule merely sets forth a methodology that
will be used by the Finance Board in determining the new end date of
the Banks' REFCORP obligation as required by Gramm-Leach-Bliley. Thus,
the Finance Board finds that it has good cause to adopt this rule with
an effective date that is immediate upon publication in the Federal
Register. See 5 U.S.C. 553(d).
After considering all the comments that it received, and for the
reasons discussed above and in the preamble to the proposed rule, the
Finance Board has decided to adopt new Part 997, with the changes
discussed above, and the amendment to Sec. 951.1 of the Finance Board's
regulations as proposed.
III. Regulatory Flexibility Act
The final rule applies only to the Finance Board and to the Banks,
which do not come within the meaning of small entities as defined in
the Regulatory Flexibility Act (RFA). See 5 U.S.C. 601(6). Therefore,
in accordance with section 605(b) of the RFA, 5 U.S.C. 605(b), the
Finance Board hereby certifies that this final rule will not have a
significant economic effect on a substantial number of small entities.
IV. Paperwork Reduction Act
The final rule does not contain any collections of information
pursuant to the Paperwork Reduction Act of 1995. See 44 U.S.C. 3501 et
seq. Therefore, the Finance Board has not submitted any information to
the Office of Management and Budget for review.
List of Subjects
12 CFR Part 951
Credit, Federal home loan banks, Housing, Reporting and
recordkeeping requirements.
12 CFR Part 997
Federal home loan banks, Resolution funding corporation.
For the reasons set forth in the preamble, the Finance Board hereby
amends 12 CFR part 951 and adds 12 CFR part 997 to read as follows:
PART 951--AFFORDABLE HOUSING PROGRAM
1. The authority citation for part 951 continues to read as
follows:
Authority: 12 U.S.C. 1430(j)
2. Amend Sec. 951.1 by removing the words ``pro rata share of the''
from the definition of the term ``net earnings of a Bank''.
3. Add part 997 to subchapter L to read as follows:
[[Page 17438]]
PART 997--RESOLUTION FUNDING CORPORATION OBLIGATIONS OF THE BANKS
Sec.
997.1 Definitions.
997.2 Reduction of the payment term.
997.3 Extension of the payment term.
997.4 Calculation of the quarterly present-value determination.
997.5 Termination of the obligation.
Authority: 12 U.S.C. 1422b(a) and 1441b(f).
Sec. 997.1 Definitions.
As used in this part:
Actual quarterly payment means the quarterly amount paid by the
Banks to fulfill the Banks' obligation to pay toward interest owed on
bonds issued by the REFCORP. The amount will equal the aggregate of 20
percent of the quarterly net earnings of each Bank, or such other
amount assessed in accordance with the Act and the regulations adopted
thereunder.
Benchmark quarterly payment means $75 million, or such amount that
may result from adjustments required by calculations made in accordance
with Secs. 997.2 and 997.3.
Current benchmark quarterly payment means the benchmark quarterly
payment that corresponds to the date of the actual quarterly payment.
Deficit quarterly payment means the amount by which the actual
quarterly payment falls short of the current benchmark quarterly
payment.
Estimated interest rate means the interest rate provided to the
Finance Board by the Department of the Treasury on a zero-coupon
Treasury bond, the maturity of which is the same as the date of the
benchmark quarterly payment that is being defeased, or if no bond
matures on that date, then is the date closest to the date of the
payment being defeased.
Excess quarterly payment means the amount by which the actual
quarterly payment exceeds the current benchmark quarterly payment.
Quarterly present-value determination means the quarterly
calculation that will determine the extent to which an excess quarterly
payment or deficit quarterly payment alters the term of the Banks'
obligation to the REFCORP. This determination will fulfill the
requirements of 12 U.S.C 1441b(f)(2)(C)(ii), as amended by Pub. L. 106-
102, sec. 607, 113 Stat.1456-57.
REFCORP means the Resolution Funding Corporation established in 12
U.S.C. 1441b.
Sec. 997.2 Reduction of the payment term.
(a) Generally. The Finance Board shall shorten the term of the
obligation of the Banks to make payments toward the interest owed on
bonds issued by the REFCORP for each quarter in which there is an
excess quarterly payment.
(b) Excess quarterly payment. Where there is an excess quarterly
payment, the quarterly present-value determination shall be as follows:
(1) The future value of the excess quarterly payment shall be
calculated using the estimated interest rate corresponding to the last
non-defeased benchmark quarterly payment.
(2) The future value calculated in paragraph (b)(1) of this section
shall be subtracted from the amount of the last non-defeased quarterly
benchmark payment.
(3) If the difference resulting from the calculation in paragraph
(b)(2) of this section is greater than zero, then the last non-defeased
quarterly benchmark payment is reduced by the future value of the
excess quarterly payment.
(4) If the difference resulting from the calculation in paragraph
(b)(2) of this section is less than zero, then the last non-defeased
quarterly benchmark payment shall be defeased and the payment term
shall be shortened.
(5) The amount of the excess quarterly payment that has not already
been applied to defeasing the payment under paragraph (b)(4) of this
section shall be applied toward defeasing the last non-defeased
quarterly benchmark payment using the applicable estimated interest
rate.
Sec. 997.3 Extension of the payment term.
(a) Generally. The Finance Board will extend the term of the
obligation of the Banks to make payments toward interest owed on bonds
issued by the REFCORP for each calendar quarter in which there is a
deficit quarterly payment.
(b) Deficit quarterly payment. Where there is a deficit quarterly
payment, the quarterly present-value determination shall be as follows:
(1) The future value of the deficit quarterly payment shall be
calculated using the estimated interest rate corresponding to the last
non-defeased benchmark quarterly payment, or to the first quarter
thereafter if the last non-defeased benchmark quarterly payment already
equals $75 million.
(2) The future value calculated in paragraph (b)(1) of this section
shall be added to the amount of the last non-defeased quarterly
benchmark payment if that sum is $75 million or less.
(3) If the sum calculated in paragraph (b)(2) of this section
exceeds $75 million, the last non-defeased quarterly benchmark payment
will become $75 million, and the quarterly benchmark payment term will
be extended.
(4) The extended payment will equal the future value of the amount
of the deficit quarterly payment that has not already been applied to
raising the quarterly benchmark payment to $75 million under paragraph
(b)(3) of this section, using the estimated interest rate corresponding
to the date of the extended benchmark quarterly payment.
(c) Term beyond maturity. The benchmark quarterly payment term may
be extended beyond April 15, 2030, if such extension is necessary to
ensure that the value of the aggregate amounts paid by the Banks
exactly equals the present value of an annuity of $300 million per year
that commences on the date on which the first obligation of the REFCORP
was issued and ends on April 15, 2030.
Sec. 997.4 Calculation of the quarterly present-value determination.
(a) Applicable interest rates. The Finance Board shall obtain from
the Department of the Treasury the applicable estimated interest rates
and provide those rates to the REFCORP so that the REFCORP can perform
the calculations required under Secs. 997.2 and 997.3.
(b) Calculation by the Finance Board. If Sec. 997.3 requires that
the term for the Banks' actual quarterly payments extend beyond April
15, 2030 or if, for any reason, the REFCORP is unable to perform the
calculations or to provide the Finance Board with the results of the
calculations, the Finance Board shall make all calculations required
under this part.
(c) Records. The Finance Board will maintain the official record of
the results of all quarterly present-value determinations made under
this part.
Sec. 997.5 Termination of the obligation.
(a) Generally. The Banks' obligation to the REFCORP, or to the
Department of the Treasury if the term of that obligation extends
beyond April 15, 2030, will terminate when the aggregate actual
quarterly payments made by the Banks exactly equal the present value of
an annuity that commences on the date on which the first obligation of
the REFCORP was issued and ends on April 15, 2030.
(b) Date of the final payment. The aggregate actual quarterly
payments made by the Banks exactly equal the present value of the
annuity described in paragraph (a) of this section when the value of
any remaining benchmark quarterly payment(s), after the benchmark
quarterly payments have been adjusted as required by Secs. 997.2 and
997.3, exactly equals the actual quarterly payment.
[[Page 17439]]
Dated: March 22, 2000.
By the Board of Directors of the Federal Housing Finance Board:
Bruce A. Morrison,
Chairman.
[FR Doc. 00-8116 Filed 3-31-00; 8:45 am]
BILLING CODE 6725-01-P