[Federal Register Volume 67, Number 244 (Thursday, December 19, 2002)]
[Notices]
[Pages 77740-77742]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-31942]


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 Notices
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 ________________________________________________________________________
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 This section of the FEDERAL REGISTER contains documents other than rules 
 or proposed rules that are applicable to the public. Notices of hearings 
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 delegations of authority, filing of petitions and applications and agency 
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  Federal Register / Vol. 67, No. 244 / Thursday, December 19, 2002 / 
Notices  

[[Page 77740]]



DEPARTMENT OF AGRICULTURE

Rural Telephone Bank


Determination of the 2002 Fiscal Year Interest Rates on Rural 
Telephone Bank Loans

AGENCY: Rural Telephone Bank, USDA.

ACTION: Notice of 2002 fiscal year interest rates determination.

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

SUMMARY: In accordance with 7 CFR 1610.10, the Rural Telephone Bank 
(Bank) fiscal year 2002 cost of money rates have been established as 
follows: 6.51% and 6.05% 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 2002 under 
Bank loans approved in fiscal years 1988 through 1991 shall bear 
interest at the rate of 6.51% (the liquidating account rate). All loan 
advances made during fiscal year 2002 under Bank loans approved during 
or after fiscal year 1992 shall bear interest at the rate of 6.05% (the 
financing account rate).
    The calculation of the Bank's cost of money rates for fiscal year 
2002 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 6.51% and 6.05%, 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 2002 on loans 
approved prior to fiscal year 1992) and (2) the cost of money rate for 
advances made during fiscal year 2002 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 2002, 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 4.20%.

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 2002. Advances for the purchase of 
Class B stock and cash purchases for Class B stock were $88,786. There 
were rescissions of loan funds advanced for Class B stock in the amount 
of $189,102, therefore, the amount received by the Bank from the 
issuance of Class B stock, per 7 CFR 1610.10(c), was ($100,316). The 
amount received by the Bank in fiscal year 2002 from the issuance of 
Class C stock was $9,759.
    The Bank did not issue debentures or any other obligations related 
to the liquidating account in fiscal year 2002. 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 2002 loan advances from the liquidating 
account over amounts received from issuance of stocks, debentures, and 
other obligations amounted to $1,955,057. 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 2002. Advances for the purchase of 
Class B stock and cash purchases for Class B stock were $2,868,237. 
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 $2,868,237. The Bank did not receive 
any amounts in fiscal year 2002 from the issuance of Class C stock.
    During fiscal year 2002, issuance of debentures or any other 
obligations related to the financing account were $61,400,000 at an 
interest rate of 6.352%. This was in excess of total fiscal year 2002 
advances; the remaining funds will be carried forward and used for loan 
transactions in FY2002.
    Since there was no excess of fiscal year 2002 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: November 22, 2002.
Hilda Gay Legg,
Governor, Rural Telephone Bank.

[[Page 77741]]



                     Table 1.--Rural Telephone Bank Cost of Money Rate--Liquidating Account
----------------------------------------------------------------------------------------------------------------
                                                                 (b)  Cost                         (c)/Advances
       FY 2002 Source of Bank Funds           (a)  Amount        (percent)       (c)  (a) x (b)     (percent)
----------------------------------------------------------------------------------------------------------------
Issuance of Class A Stock.................                $               2.00                $           0.0000
Issuance of Class B Stock.................        (100,316)               0.00  ...............           0.0000
Issuance of Class C Stock.................            9,759               4.20              410           0.0220
Issuance of Debentures and Other            ...............               0.00  ...............           0.0000
 Obligations..............................
Excess of Total Advances Over Issuances...        1,955,057               6.19          121,018           6.4906
                                           ------------------
    Total FY 2002 Advances................        1,864,500    Calculated Cost of Money Rate =              6.51
                                           ------------------
                                            ...............        Minimum Rate Allowable =                 5.00
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
                                                                                                    (c)/Total
                Fiscal year                   (a)  Cost of     (b)  Advances     (c)  (a) x (b)      Advances
                                                 money                                              (percent)
----------------------------------------------------------------------------------------------------------------
FY 1974...................................             5.01       $111,022,574       $5,562,231            0.232
FY 1975...................................             5.85        130,663,197        7,643,797            0.318
FY 1976...................................             5.33         99,915,066        5,325,473            0.222
FY 1977...................................             5.00         80,907,425        4,045,371            0.168
FY 1978...................................             5.87        142,297,190        8,352,845            0.348
FY 1979...................................             5.93        130,540,067        7,741,026            0.322
FY 1980...................................             8.10        199,944,235       16,195,483            0.674
FY 1981...................................             9.46        148,599,372       14,057,501            0.585
FY 1982...................................             8.39        112,232,127        9,416,275            0.392
FY 1983...................................             6.99         93,402,836        6,528,858            0.272
FY 1984...................................             6.55         90,450,549        5,924,511            0.247
FY 1985...................................             5.00         72,583,394        3,629,170            0.151
FY 1986...................................             5.00         71,582,383        3,579,119            0.149
FY 1987...................................             5.00         51,974,938        2,598,747            0.108
FY 1988...................................             5.00        119,488,367        5,974,418            0.249
FY 1989...................................             5.00         97,046,947        4,852,347            0.202
FY 1990...................................             5.00        107,694,991        5,384,750            0.224
FY 1991...................................             5.43        163,143,075        8,858,669            0.369
FY 1992...................................             6.14         84,940,822        5,215,366            0.217
FY 1993...................................             6.05         84,605,366        5,118,625            0.213
FY 1994...................................             6.15         54,530,897        3,353,650            0.140
FY 1995...................................             6.04         35,967,133        2,172,415            0.090
FY 1996...................................             6.05         30,965,187        1,873,394            0.078
FY 1997...................................             5.98         32,602,587        1,949,635            0.081
FY 1998...................................             5.96         20,673,798        1,232,158            0.051
FY 1999...................................             6.01         17,796,518        1,069,571            0.045
FY 2000...................................             6.01         10,436,622          627,241            0.026
FY 2001...................................             5.95          6,638,107          394,967            0.016
                                                            --------------------
----------------------------------------------------------------------------------------------------------------


                      Table 2.--Rural Telephone Bank Cost of Money Rate--Financing Account
----------------------------------------------------------------------------------------------------------------
                                                                 (b)  Cost                         (c)/Advances
       FY 2002 source of bank funds           (a)  Amount        (percent)       (c)  (a) x (b)     (percent)
----------------------------------------------------------------------------------------------------------------
Issuance of Class A Stock.................                $              2.000                $           0.0000
Issuance of Class B Stock.................        2,868,237              0.000  ...............           0.0000
Issuance of Class C Stock.................  ...............              4.200  ...............           0.0000
Issuance of Debentures and Other                 57,364,682              6.352        3,643,805           6.0495
 Obligations*.............................
Excess of Total Advances Over Issuances...  ...............              6.100  ...............           0.0000
                                           ------------------
    Total FY 2002 Advances................       60,232,919    Calculated Cost of Money Rate =              6.05
                                           ------------------
                                            ...............        Minimum Rate Allowable =                 5.00
----------------------------------------------------------------------------------------------------------------
* RTB borrowed $61,400,000 from the financing account in FY2002, the remaining funds will be used for loan
  transactions in FY2002.


                      Rural Telephone Bank Historical Cost of Money Rate--Financing Account
----------------------------------------------------------------------------------------------------------------
                                              (a)  Cost of                                          (c)/Total
                Fiscal year                      money         (b)  Advances     (c)  (a) x (b)      advances
                                               (percent)                                            (percent)
----------------------------------------------------------------------------------------------------------------
FY 1992...................................             7.38          4,056,250          299,351            0.083

[[Page 77742]]

 
FY 1993...................................             6.35         23,839,200        1,513,789            0.420
FY 1994...................................             6.40         56,838,902        3,637,690            1.008
FY 1995...................................             6.88         37,161,517        2,556,712            0.709
FY 1996...................................             6.42         44,536,621        2,859,251            0.793
FY 1997...................................             6.54         34,368,726        2,247,715            0.623
FY 1998...................................             5.71         34,446,458        1,966,893            0.545
FY 1999...................................             5.54         38,685,732        2,143,190            0.594
FY 2000...................................             6.05         31,401,867        1,899,813            0.527
FY 2001...................................             5.17         55,405,896        2,864,485            0.794
                                                            -------------------                 ----------------
    Total Advances........................  ...............        360,741,169    Cost of Money             6.10
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[FR Doc. 02-31942 Filed 12-18-02; 8:45 am]
BILLING CODE 3410-15-P