[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: 7CFR1786.32]

[Page 1097-1098]
 
                          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 B--Prepayment of RUS Guaranteed Federal Financing Bank Loans 
                Pursuant to Section 306(A) of the RE Act
 
Sec. 1786.32  Settlement procedure.

    (a) General. Settlements in connection with prepaying FFB loans 
pursuant to this subpart shall be conducted in accordance with the 
provisions of this section.
    (b) Settlement Date. The prepayment will be settled and if a private 
loan is utilized, the guarantee will be delivered, on a settlement date 
agreed upon by the borrower and RUS. Prior to scheduling a settlement 
date for a borrower's prepayment pursuant to this subpart, RUS shall 
have received the material specified in Sec. 1786.31(b).
    (c) Place of Settlement. All settlements will take place in 
Washington, DC, at a location of the borrower's choosing; provided 
however, if more than one settlement is proposed for the same settlement 
date, RUS reserves the right to coordinate the date and location of the 
settlements with borrowers involved.
    (d) Repayment of FFB. Prior to 1:00 p.m. prevailing local time in 
New York, New York, on the settlement date, the borrower shall wire 
immediately available funds to RUS through the Department of the 
Treasury account at the Federal Reserve Bank of New York or shall 
provide for payment to RUS in another manner acceptable to RUS and FFB, 
in an amount sufficient to pay the outstanding principal of the FFB loan 
being prepaid plus accrued interest from the last payment date to and 
including the settlement date.
    (e) Documentation. The borrower shall deliver, or cause to be 
delivered to RUS and FFB, not less than 3 business days prior to the 
settlement date, written notice of the settlement date and a complete 
listing of each FFB loan advance to be prepaid or partially prepaid, in 
the format required by Sec. 1786.31(a)(2). In the event that a private 
loan is used in connection with the prepayment, the following executed 
documents, opinions and material shall be delivered at the settlement:
    (1) The guaranteed note evidencing the private loan.
    (2) The guarantee.
    (3) The loan guarantee agreement.
    (4) Copy of the private loan agreement between the lender and the 
borrower.

[[Page 1098]]

    (5) Evidence that the borrower has received all approvals which are 
required under Federal or state law, loan agreements, security 
agreements, existing financing arrangements, or any other agreement to 
which the borrower is a party.
    (6) An amendment in recordable form revising the description of the 
obligations secured by the mortgage including the obligation of the 
borrower to reimburse RUS for any amounts that RUS may pay under the 
guarantee.
    (7) An approving opinion of the borrower's legal counsel to the 
effect that the guaranteed note evidencing the private loan is a valid 
and legally binding obligation of the borrower which is secured under 
the mortgage, and the priority of the mortgage, as amended pursuant to 
paragraph (e)(6) of this section, remains undisturbed.
    (8) An approving opinion of the lender's legal counsel to the effect 
that the loan guarantee agreement is a valid and legally binding 
obligation of the lender.
    (9) Such other opinions of counsel as may be required by the 
Administrator.
    (10) Copies of any other documentation required by the lender.
    (11) Copies of any other documentation required by RUS to ensure 
that the obligations of the borrower to reimburse RUS for any amounts 
that RUS pays under the guarantee or may advance in connection with the 
private loan are adequately secured under the mortgage.

(Approved by the Office of Management and Budget under control number 
0572-0088)