Rural Telephone Bank: Review of Fiscal Year 1994 Interest Rates on Rural
Telephone Bank Loans (Letter Report, 11/18/94, GAO/AIMD-95-29).

GAO is required to review each year the interest rate charged to
borrowers, referred to as the cost of money rate, as set by the Rural
Telephone Bank for the preceding fiscal year.  The Rural Telephone Bank
now calculates the following two rates: (1) the interest rate used for
advances made during fiscal year 1994 on loans approved before fiscal
year 1992 (referred to as loans from the liquidating account) and (2)
the interest rate used for advances made during fiscal year 1994 on
loans approved during or after fiscal year 1992 (referred to as loans
from the financing account).  The Rural Telephone Bank's fiscal year
1994 cost of money rates were pegged at 6.15 percent and 6.40 percent
for advances from the liquidating account and financing account,
respectively.  GAO found these rate determinations to be in accordance
with the law.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  AIMD-95-29
     TITLE:  Rural Telephone Bank: Review of Fiscal Year 1994 Interest 
             Rates on Rural Telephone Bank Loans
      DATE:  11/18/94
   SUBJECT:  Financial management
             Loan interest rates
             Government guaranteed loans
             Electric utilities
             Telephone communications operations
             Direct loans
             Advance funding

             
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