[Federal Register Volume 67, Number 13 (Friday, January 18, 2002)]
[Notices]
[Pages 2628-2630]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-1362]



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DEPARTMENT OF AGRICULTURE

Rural Telephone Bank


Determination of the 2001 Fiscal Year Interest Rates on Rural 
Telephone Bank Loans

AGENCY: Rural Telephone Bank, USDA.

ACTION: Notice of 2001 fiscal year interest rates determination.

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SUMMARY: In accordance with 7 CFR 1610.10, the Rural Telephone Bank 
(Bank) fiscal year 2001 cost of money rates have been established as 
follows: 5.95% and 5.17% 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 2001 under 
Bank loans approved in fiscal years 1988 through 1991 shall bear 
interest at the rate of 5.95% (the liquidating account rate). All loan 
advances made during fiscal year 2001 under Bank loans approved during 
or after fiscal year 1992 shall bear interest at the rate of 5.17% (the 
financing account rate).
    The calculation of the Bank's cost of money rates for fiscal year 
2001 for the liquidating account and the financing account are provided 
in Tables 1 and 2. Since the calculated rates are greater than the 
minimum rate (5.00%) allowed under 7 U.S.C. 948(b)(3)(A), the cost of 
money rates for the liquidating account and financing account are set 
at 5.95% and 5.17%, respectively. The methodology required to calculate 
the cost of money rates is established in 7 CFR 1610.10(c).

FOR FURTHER INFORMATION CONTACT: Jonathan P. Claffey, Deputy Assistant 
Administrator, Telecommunications Program, Rural Utilities Service, 
1400 Independence Ave., SW., STOP 1590, South Building, 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 2001 on loans 
approved prior to fiscal year 1992) and (2) the cost of money rate for 
advances made during fiscal year 2001 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.
    During fiscal year 2001, 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 
(RE 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 5.45%.

Sources and Costs of Funds--Liquidating Account

    In accordance with Section 406(a) of the RE Act, the Bank did not 
issue Class A stock in fiscal year 2001. Advances for the purchase of 
Class B stock and cash purchases for Class B stock were $256,497. 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 $256,497. The amount received by the Bank in fiscal 
year 2001 from the issuance of Class C stock was $3,368.
    The Bank did not issue debentures or any other obligations related 
to the liquidating account in fiscal year 2001. 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 2001 loan advances from the liquidating 
account over amounts received from issuance of stocks, debentures, and 
other obligations amounted to $6,378,242. 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 also provided in 
Table 1. 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 Public Law 100-203, and are listed in 7 CFR 1610.10(c) and 
Table 1 herein.

Sources and Costs of Funds--Financing Account

    In accordance with Section 406(a) of the RE Act, the Bank did not 
issue Class A stock in fiscal year 2001. Advances for the purchase of 
Class B stock and cash purchases for Class B stock were $2,638,376. 
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 $2,638,376. The Bank did not receive 
any amounts in fiscal year 2001 from the issuance of Class C stock.
    During fiscal year 2001, issuance of debentures or any other 
obligations related to the financing account were $63,500,000 at an 
interest rate of 5.426%. However, only $52,767,520 is attributable to 
advances made with borrowed funds. Advances totaling $2,638,376 were 
made through collections associated with Class B stock purchases and 
$8,094,104 will be carried forward and used for loan transactions in 
fiscal year 2002. Therefore, there is no excess of funds for fiscal 
year 2001.
    Since there was no excess of fiscal year 2001 loan advances from 
the financing account over amounts received from issuance of stocks, 
debentures, and other obligations, no cost was incurred related to 
advances from the financing account. However, the Bank's cost of money 
rate for advances from the financing account is provided in Table 2. 
The methodology required to perform this calculation is described in 7 
CFR 1610.10(c).

    Dated: December 21, 2001.
Hilda Gay Legg,
Governor, Rural Telephone Bank.
BILLING CODE 3410-15-P

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[FR Doc. 02-1362 Filed 1-17-02; 8:45 am]
BILLING CODE 3410-15-C