§22401 Definitions

Summary

Defines key words and explains how to figure the government's long-term cost for loans, loan guarantees, and any changes to them. "Cost" means the net present value (NPV) of expected cash flows for a direct loan or a loan guarantee, not counting administrative expenses or minor effects on other government money. For a direct loan the NPV is calculated when the loan is made and includes the loan payouts, repayments, interest, and adjustments for defaults, prepayments, fees, penalties, and recoveries, and it must reflect any borrower options in the loan terms. For a loan guarantee the NPV is calculated when the guaranteed loan is disbursed and includes government payments for defaults, interest subsidies, and other payments, minus fees and recoveries, and it must reflect lender or borrower options that change loan terms. A modification’s cost is the change in the NPV of remaining cash flows caused by the change. The discount rate used is the average interest rate on marketable Treasury securities with similar maturities, and when funds are obligated the cost estimate uses current assumptions for that fiscal year adjusted to the loan terms. Other short definitions: "Current" has the same meaning as in section 250(c)(9) of the Balanced Budget and Emergency Deficit Control Act of 1985; "Direct loan" is government money paid to a non‑Federal borrower that must be repaid (includes buying or joining other lenders’ loans and credit sales that defer payment more than 90 days); "Direct loan obligation" is a binding promise to make a direct loan when conditions are met; "Intermodal" relates to connections between rail and other transport modes and the places where they connect; "Investment-grade rating" means BBB minus, Baa 3, bbb minus, BBB(low), or higher; "Loan guarantee" is a pledge to cover all or part of a borrower’s debt to a non‑Federal lender (not deposit insurance); "Loan guarantee commitment" is a binding promise to provide a guarantee when conditions are met; "Master credit agreement" is an agreement to make one or more loans or guarantees later for related projects on acceptable terms; "Modification" is any government action that changes the estimated cost of outstanding loans or guarantees; "Project obligation" is a debt issued to finance a project other than the chapter’s direct loans or guarantees; "Railroad" includes entities defined in sections 20102 and 24102; "Rating agency" is a credit rater registered with the SEC as a nationally recognized statistical rating organization (see 15 U.S.C. 78c(a)); "Secretary" means the Secretary of Transportation; "Substantial completion" means opening the project to passenger or freight traffic or a similar event the Secretary specifies in the loan or guarantee terms.