[Code of Federal Regulations]
[Title 7, Volume 11]
[Revised as of January 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 7CFR1786.158]

[Page 1111-1112]
 
                          TITLE 7--AGRICULTURE
 
    CHAPTER XVII--RURAL UTILITIES SERVICE, DEPARTMENT OF AGRICULTURE
 
PART 1786--PREPAYMENT OF RUS GUARANTEED AND INSURED LOANS TO ELECTRIC AND TELEPHONE BORROWERS--Table of Contents
 
         Subpart F--Discounted Prepayments on RUS Electric Loans
 
Sec. 1786.158  Terms and conditions of prepayment agreement.

    Upon receipt of a satisfactory application, RUS shall provide to the 
borrower for its execution a prepayment agreement, in form and substance 
satisfactory to RUS, which may include the following:
    (a) Provide for the prepayment of one or more Qualified Notes from 
time to time, but no more than two closings may be scheduled in any 
calendar year unless a third closing is for the prepayment of all 
outstanding electric loans of the borrower;
    (b) Set forth procedures and forms through which the borrower will 
notify the Government of each election it makes to prepay certain 
Qualified Notes upon a requested closing date and the Government will 
notify the borrower of the established closing date and prepayment 
amount for the Qualified Notes for each closing;
    (c) Reserve to the Administrator the right to reschedule closing 
dates to meet administrative considerations;
    (d) Set forth closing requirements identifying the location and 
manner of payment, and all documentation and information to be delivered 
prior to or at closing, including opinions of counsel and certificates 
from the borrower;
    (e) Provide for notice by either telephone or facsimile to be given 
by RUS to the borrower not more than 8 nor less than 3 business days 
before a scheduled closing date of the amount

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to be paid at closing which shall include all accrued interest and the 
discounted present value of the Qualified Notes to be prepaid;
    (f) Provide for notice of the 120 month period during which the 
borrower's eligibility for direct or insured loans will be restricted;
    (g) Set forth representations and warranties;
    (h) Require the borrower to prepay each Qualified Note specified in 
full;
    (i) Require the borrower to identify the source of the financing 
that will be used directly or indirectly to refinance the Qualified 
Notes. If the source is other than internally generated funds, the 
borrower must certify in writing whether such financing will be tax 
exempt, and if tax exempt financing will be used, furnish all 
information on the terms and conditions of the financing as RUS may 
require;
    (j) Require the borrower to rescind the unadvanced balance of all 
outstanding electric loans as of the date of initial closing;
    (k) Require the borrower, if it is a party to a wholesale power 
contract with a power supply borrower, to provide the Administrator with 
such assurances as the Administrator may require that it is in 
compliance with and will continue to comply with its obligation to such 
power supply borrower;
    (l) Provide RUS, if the Administrator determines it necessary, with 
security for all outstanding rural development loans and amendments to 
any outstanding rural development loan agreements in form and substance, 
and on terms and conditions, satisfactory to RUS;
    (m) Prescribe remedies for violating the terms and conditions of the 
prepayment agreement;
    (n) Provide for termination by RUS of the right for the borrower to 
prepay thereunder;
    (o) Provide evidence that any approvals required from any 
supplemental lender have been obtained; and
    (p) Set forth such other terms and conditions as the Administrator 
shall deem appropriate.