§940f Extension of Period of Existing Guarantee

Summary

A borrower with a Federal Financing Bank loan guaranteed under this chapter can ask to extend the final maturity date of the unpaid principal or any loan advance. The Secretary and the Federal Financing Bank must approve the extension. Before approval, the Secretary must certify that after the extension the loan’s security is reasonably adequate and the loans will be repaid in the agreed time. The borrower must submit either official written proof from a federal or state agency that the useful life of the pledged generating plant or transmission line covers the new maturity date, or a certificate from an independent licensed engineer after a thorough analysis saying the same. The amount extended cannot exceed the appraised value of that plant or line. The new maturity cannot go beyond 55 years from the original disbursement or past the plant’s useful life. Each loan advance can be extended only once. The borrower must pay a fee at the time of extension equal to the modification cost calculated under section 502 of the Federal Credit Reform Act of 1990 (2 U.S.C. 661a). The fee is credited to the Rural Electrification and Telecommunications Loans Program account and remains available without fiscal year limit to pay modification costs.