[Federal Register Volume 59, Number 213 (Friday, November 4, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-27403]
[[Page Unknown]]
[Federal Register: November 4, 1994]
Rural Telephone Bank
Determination of the 1994 Fiscal Year Interest Rates on Rural
Telephone Bank Loans
AGENCY: Rural Telephone Bank, USDA.
ACTION: Notice of 1994 fiscal year interest rates determination.
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SUMMARY: In accordance with 7 CFR 1610.10, the Rural Telephone Bank
fiscal year 1994 cost of money rates have been established as follows:
6.15% and 6.40% 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 1994 under bank
loans approved prior to fiscal year 1992 shall bear interest at the
rate of 6.15% (the liquidating account rate). All loan advances made
during fiscal year 1994 under bank loans approved during or after
fiscal year 1992 shall bear interest at the rate of 6.40% (the
financing account rate).
The calculation of the Bank's cost of money rates for fiscal year
1994 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. 948(b)(3)(A), the cost of
money rates for the liquidating account and financing account are set
at 6.15% and 6.40%, respectively. The methodology required to calculate
the cost of money rates is established in 7 CFR 1610.10(c).
FOR FURTHER INFORMATION CONTACT: Matthew P. Link, Director, Rural
Telephone Bank Management Staff, Rural Electrification Administration,
room 2832, South Building, U.S. Department of Agriculture, Washington,
DC 20250, telephone number (202) 720-0530.
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 costs of
money rates: (1) The cost of money rate for advances made from the
liquidating account (advances made during fiscal year 1994 on loans
approved prior to fiscal year 1992) and (2) the cost of money rate for
advances made during fiscal year 1994 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
issuances 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 1994, 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 1994. Total advances for the
purchase of Class B stock and cash purchases for Class B stock were
$2,110,537. Rescissions of loan funds advanced for Class B stock
amounted to $1,679,067. Thus, the amount received by the Bank from the
issuance of Class B stock, per 7 CFR 1610.10(c), was $431,470
($2,110,537-1,679,067). The total amount received by the Bank in fiscal
year 1994 from the issuance of Class C stock was $16,590.
The Bank did not issue debentures or any other obligations related
to the liquidating account in fiscal year 1994. 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 1994 loan advances from the liquidating
account over amounts received from issuances of stocks, debentures, and
other obligations amounted to $54,082,837. 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 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 1994, 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;
on 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 1994. Total advances for the
purchase of Class B stock and cash purchases for Class B stock were
$2,714,191. 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 $2,714,191. No amounts were
received in fiscal year 1994 from the issuance of Class C stock
associated with the financing account.
During fiscal year 1994, issuances of debentures or any other
obligations related to the financing account were $17,346,446 at an
interest rate of 6.65% and $34,478,473 at an interest rate of 6.77%.
The excess of fiscal year 1994 loan advances from the financing
account over amounts received from issuances of stocks, debentures, and
other obligations amounted to $2,299,792. 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 financing account is provided in Table 2b.
The methodology required to perform this calculation is described in 7
CFR 1610.10(c).
Dated: October 31, 1994.
Wally B. Beyer,
Governor, Rural Telephone Bank.
Table 1a.--Liquidating Account Rural Telephone Bank Cost of Money Rate
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(Amount x
Source of bank funds Amount Cost rate Amount x rate)/advances
(percent) cost rate (percent)
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FY 1994 Issuance of Class A Stock............... $0 2.00 $0 0.0000
FY 1994 Issuance of Class B Stock............... 431,470 0.00 0 0.0000
FY 1994 Issuance of Class C Stock............... 16,590 7.50 1,244 0.0023
FY 1994 Issuance of Debentures and Other
Obligations.................................... 0 .............. 0 0.0000
Excess of Total Advances Over FY 1994 Issuance.. 54,082,837 6.20 3,353,136 6.1491
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Total FY 1994 Advances.................... 54,530,897 (\1\) (\1\) 6.15
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.............. (\2\) (\2\) 5.00
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\1\Calculated cost of money rate.
\2\Minimum cost rate allowable.
Table 1b.--Financing Account Rural Telephone Bank Cost of Money Rate
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(Amount x
Source of bank funds Amount Cost rate Amount x rate)/advances
(percent) cost rate (percent)
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FY 1994 Issuance of Class A Stock............... $0 2.00 $0 0.0000
FY 1994 Issuance of Class B Stock............... 2,714,191 0.00 0 0.0000
FY 1994 Issuance of Class C Stock............... 0 7.50 0 0.0000
FY 1994 Issuance of Debentures and Other
Obligations.................................... 17,346,446 6.65 1,153,539 2.0295
34,478,473 6.77 2,334,193 4.1067
Excess of Total Advances Over 1994 Issuances.... 2,299,792 6.50 149,486 0.2630
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Total FY 1994 Advances.................... 56,838,902 (\1\) (\1\) 6.40
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.............. (\2\) (\2\) 5.00
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\1\Calculated cost of money rate.
\2\Minimum cost rate allowable.
Table 2a.--Rural Telephone Bank Historical Cost of Money Liquidating Account
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(Advances x
Bank cost of Bank loan Advances x cost rate)/total
Fiscal year money (percent) advances cost rate advances
(percent)
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1974.................................... 5.01 $111,022,574 5,562,231 0.254
1975.................................... 5.85 130,663,197 7,643,797 0.349
1976.................................... 5.33 99,915,066 5,325,473 0.243
1977.................................... 5.00 80,907,425 4,045,371 0.184
1978.................................... 5.87 142,297,190 8,352,845 0.381
1979.................................... 5.93 130,540,067 7,741,026 0.353
1980.................................... 8.10 199,944,235 16,195,483 0.738
1981.................................... 9.46 148,599,372 14,057,501 0.641
1982.................................... 8.39 112,232,127 9,416,275 0.429
1983.................................... 6.99 93,402,836 6,528,858 0.298
1984.................................... 6.55 90,450,549 5,924,511 0.270
1985.................................... 5.00 72,583,394 3,629,170 0.165
1986.................................... 5.00 71,852,383 3,592,619 0.164
1987.................................... 5.00 51,974,938 2,598,747 0.118
1988.................................... 5.00 119,488,367 5,974,418 0.272
1989.................................... 5.00 97,046,947 4,852,347 0.221
1990.................................... 5.00 107,694,991 5,384,750 0.246
1991.................................... 5.43 163,143,075 8,858,669 0.404
1992.................................... 6.14 84,940,822 5,215,366 0.238
1993.................................... 6.05 84,605,366 5,118,625 0.233
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Total advances.................... ................ 2,193,304,921 (\1\) 6.20
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\1\Cost of money rate.
Table 2b.--Rural Telephone Bank Historical Cost of Money Financing Account
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(Advances x
Bank cost of Bank loan Advances x cost rate)/total
Fiscal year money (percent) advances cost rate advances
(percent)
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1992.................................... 7.38 $4,056,250 $299,351 1.073
1993.................................... 6.35 23,839,200 1,513,789 5.427
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Total advances.................... ................ 27,895,450 (\1\) 6.50
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\1\Cost of money rate.
[FR Doc. 94-27403 Filed 11-3-94; 8:45 am]
BILLING CODE 3410-15-M
