Justia Regulation Tracker

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[Federal Register: November 30, 2006 (Volume 71, Number 230)]
[Notices]               
[Page 69200-69201]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr30no06-17]                         

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DEPARTMENT OF AGRICULTURE

Rural Telephone Bank

 
Determination of the 2006 Fiscal Year Interest Rate on Rural 
Telephone Bank Loans

AGENCY: Rural Telephone Bank, USDA.

ACTION: Notice of 2006 fiscal year interest rate determination.

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SUMMARY: In accordance with 7 CFR 1610.10, the Rural Telephone Bank 
(Bank) cost of money rate has been established as 5.49% for all 
advances made during fiscal year 2006 (the period beginning October 1, 
2005 and ending September 30, 2006). All advances made during fiscal 
year 2006 were under Bank loans approved on or after October 1, 1992. 
These loans are sometimes referred to as financing account loans.
    The calculation of the Bank's cost of money rate for fiscal year 
2006 is provided in Table 1. Since the calculated rate is greater than 
or equal to the minimum rate (5.00%) allowed under 7 U.S.C. 
948(b)(3)(A), the cost of money rate is set at 5.49%. 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 
Governor, Rural Telephone Bank, STOP 1590--Room 5151, 1400 Independence 
Avenue, SW., Washington, DC 20250-1590. Telephone: (202) 720-9556.

SUPPLEMENTARY INFORMATION: The cost of money rate methodology develops 
a weighted average rate for the Bank's cost of money considering total 
fiscal year loan advances, debentures and other obligations, and the 
costs to the Bank of obtaining funds from these sources.

Dissolution of the Bank

    At its quarterly meeting on August 4, 2005, the Board of Directors 
(the ``Board'') approved a resolution to dissolve the Bank. On November 
10, 2005, the liquidation and dissolution process was initiated with 
the signing by President Bush of the 2006 Agriculture Appropriations 
bill, which contained a provision lifting the restriction on the 
retirement of more than 5 percent of the Class A stock held by the 
Government.
    In accordance with the Board's resolution and the terms of the Loan 
Transfer Agreement between the Bank and the Government, dated August 4, 
2005, the Bank's liquidating account loan portfolio (the portfolio of 
Bank loans approved before October 1, 1992) was transferred to the 
Government on October 1, 2005. As a result of that transfer, there are 
no more advances of liquidating account loan funds.
    The dissolution of the Bank will not affect future advances of 
financing account loan funds. Requests for financing account advances 
will continue to be processed by employees of USDA Rural Development's 
Telecommunications Program, just as they were while the Bank remained 
in operation. The terms and conditions of the financing account loans 
will not change, nor will the method for determining the interest 
rates, including the determination of the cost of money rates after the 
end of each fiscal year. The only significant change to the financing 
account advances is that beginning October 1, 2005, Class B stock in 
the Bank is no longer being

[[Page 69201]]

purchased with financing account loan advances.

Sources and Costs of Funds

    Due to the ongoing dissolution of the Bank, no stock of any kind 
was issued during fiscal year 2006. Issuance of debentures or any other 
obligations related to advances from the financing account during the 
fiscal year were $66,496,919 at an interest rate of 5.494%. The Bank's 
cost of money rate for advances from the financing account is provided 
in Table 1.

Curtis M. Anderson,
Deputy Governor, Rural Telephone Bank.
BILLING CODE 3410-15-P
[GRAPHIC] [TIFF OMITTED] TN30NO06.021

[FR Doc. E6-20255 Filed 11-29-06; 8:45 am]

BILLING CODE 3410-15-C