[Federal Register Volume 64, Number 222 (Thursday, November 18, 1999)]
[Notices]
[Pages 63008-63011]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-29865]
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DEPARTMENT OF AGRICULTURE
Rural Telephone Bank
Determination of the 1999 Fiscal Year Interest Rates on Rural
Telephone Bank Loans
AGENCY: Rural Telephone Bank, USDA.
ACTION: Notice of 1999 fiscal year interest rates determination.
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SUMMARY: In accordance with 7 CFR 1610.10, the Rural Telephone Bank
(Bank) fiscal year 1999 cost of money rates have been established as
follows: 6.01% and 5.54% 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 1999 under
Bank loans approved in fiscal years 1988 through 1991 shall bear
interest at the rate of 6.01% (the liquidating account rate). All loan
advances made during fiscal year 1999 under Bank loans approved during
or after fiscal year 1992 shall bear interest at the rate of 5.54% (the
financing account rate).
The calculation of the Bank's cost of money rates for fiscal year
1999 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. Sec. 948(b)(3)(A), the cost
of money rates for the liquidating account and financing account are
set at 6.01% and 5.54%, 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. 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 1999 on loans
approved prior to fiscal year 1992) and (2) the cost of money rate for
advances made during fiscal year 1999 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
[[Page 63009]]
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 1999, 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 5.50%.
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 1999. Advances for the purchase of
Class B stock and cash purchases for Class B stock were $843,911.
Rescissions of loan funds advanced for Class B stock amounted to
$316,910. Thus, the amount received by the Bank from the issuance of
Class B stock, per 7 CFR 1610.10(c), was $527,001 ($843,911-$316,910).
The amount received by the Bank in fiscal year 1999 from the issuance
of Class C stock was $18,309.
The Bank did not issue debentures or any other obligations related
to the liquidating account in fiscal year 1999. 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 1999 loan advances from the liquidating
account over amounts received from issuance of stocks, debentures, and
other obligations amounted to $17,251,208. 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 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 Pub. L. 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 1999. Advances for the purchase of
Class B stock and cash purchases for Class B stock were $1,822,270.
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 $1,822,270. The Bank did not receive
any amounts in fiscal year 1999 from the issuance of Class C stock.
During fiscal year 1999, issuance of debentures or any other
obligations related to the financing account were $36,336,255 at an
interest rate of 5.81%.
The excess of fiscal year 1999 loan advances from the financing
account over amounts received from issuance of stocks, debentures, and
other obligations amounted to $527,207. 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 also provided in
Table 2. The methodology required to perform this calculation is
described in 7 CFR 1610.10(c).
Dated: November 4, 1999.
Christopher A. McLean,
Acting Governor, Rural Telephone Bank.
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[FR Doc. 99-29865 Filed 11-17-99; 8:45 am]
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