§940f Extension of Period of Existing Guarantee

Summary

A borrower with a Federal Financing Bank loan that is guaranteed under this law can ask to extend the loan’s final maturity. If the Secretary and the Federal Financing Bank agree, the guarantee is extended too. Before approving, the Secretary must officially find that the loan’s collateral is still reasonably adequate and that all loans will be repaid on the new schedule. The borrower must give either an official Federal or State agency determination or a licensed engineer’s certificate showing the useful life of the pledged generating plant or transmission line goes to or past the new maturity. An extension cannot raise the principal past the appraised value, cannot make the final maturity more than 55 years from original disbursement or past the plant’s useful life, and can be done only once per loan advance. The borrower must pay a fee equal to the modification cost, calculated under section 502 of the Federal Credit Reform Act of 1990 (2 U.S.C. 661a). That fee goes to the Rural Electrification and Telecommunications Loans Program account and is paid when the guarantee is extended.