[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: 7CFR1786.54]

[Page 1100-1101]
 
                          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 C--Special Discounted Prepayments on RUS Direct/Insured Loans
 
Sec. 1786.54  Eligibility criteria.

    To be eligible to prepay RUS Notes at the Discounted Present Value a 
borrower must comply with the following criteria:
    (a) The borrower must be current on all payments due on its 
outstanding RUS Notes and all other payment obligations owed to RUS and 
the Rural Telephone Bank.
    (b) The borrower must agree to prepay all of its outstanding RUS 
Notes.
    (c) The borrower must identify the source of private financing that 
will be used to refinance its outstanding RUS Notes, which financing may 
not include obligations the income of which is exempt from taxation 
under the Internal Revenue Code of 1986.
    (d) The borrower must have expended all funds advanced on account of 
the RUS Notes for the purposes for which such funds were advanced.
    (e) The borrower must agree to a rescission of the unadvanced 
balance of the RUS Notes.
    (f) The borrower must agree that the borrower, its successors or 
assigns, shall pay to the Government, as a condition of receiving 
additional loans or loan guarantees pursuant to Titles I, II and III of 
the Act, an amount equal to

[[Page 1101]]

the aggregate of the difference with respect to each of the RUS Notes 
between the amount outstanding on the RUS Note and the Discounted 
Present Value of the RUS Note upon prepayment with interest accruing 
quarterly; the interest rates shall be the rates provided in the 
respective RUS Notes.
    (g) If the borrower is a party to a wholesale power contract with a 
power supplier financed pursuant to the Act, the borrower must provide 
the Administrator with such assurances as the Administrator may request 
that it will meet its obligations to the power supplier.