[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: 7CFR1786.98]

[Page 1103]
 
                          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 E--Discounted Prepayments on RUS Notes in the Event of a Merger 
                    of Certain RUS Electric Borrowers
 
Sec. 1786.98  Discounted present value.

    (a) The Discounted Present Value shall be calculated by RUS before 
prepayment is made by summing the present values of all remaining 
payments on all outstanding notes according to the following formula to 
compute the discounted present value of each note and adjusting as here 
and after provided for tax exempt financing.
[GRAPHIC] [TIFF OMITTED] TC16SE91.027

Where:

Pk=Total payment, including interest, due on the 
kth payment date following the prepayment date. n=Total 
number of remaining payment dates. I=The discount rate applied to each 
transaction will be ascertained by using data specified in the ``Federal 
Reserve Statistical Release'' which is published each Monday. (See 
appendix B to subpart E of this part.) The specific discount rate will 
be the discount rate(s) specified in the ``Treasury Constant 
Maturities'' section of this publication eight working days prior to the 
closing. In applying the discount rate, the 1-year Treasury rate will be 
used for all notes with a remaining term of less than 2 years; the 2-
year Treasury rate for notes with maturities between 2 and 3 years; the 
3-year Treasury rate for all notes with maturities between 3 and 5 
years; the 5-year Treasury rate for all notes with maturities between 5 
and 7 years; the 7-year Treasury rate for all notes with maturities 
between 7 and 10 years; the 10-year Treasury rate for all notes with 
maturities between 10 and 30 years; and the 30-year Treasury rate for 
all notes with maturities longer than 30 years.
D1i=Number of days in the ith payment period that 
are in a non-leap year (365 day year).
D2i=Number of days in the ith payment period that 
are in a leap year (366 day year).

    (b) Notwithstanding paragraph (a) of this section, in the event that 
the borrower shall elect to prepay using tax exempt financing, the 
calculation of the Discounted Present Value shall be adjusted to make 
the discount the equivalent of fully taxable financing.