CFC Closes on Government Guaranteed Funding Program that Benefits Rural Development.HERNDON Herndon, town (1990 pop. 16,139), Fairfax co., N Va., inc. 1874, rechartered 1938. A suburb of Washington, D.C., Herndon has a mix of light and high-tech industries. , Va. -- National Rural Utilities Cooperative Finance Corporation ("CFC CFC See: Controlled foreign corporation ") announced today that it closed on a $1 billion loan facility from the Federal Financing Bank Federal Financing Bank A federal institution that lends to a wide array of federal credit agencies funds it obtains by borrowing from the US Treasury. guaranteed by the U.S. Department of Agriculture ("USDA USDA, n.pr See United States Department of Agriculture. "). CFC will pay a semi-annual guarantee fee that has been designated to fund the USDA's Rural Economic Development Loan and Grant Program ("REDL&G"), which supports economic development projects in rural America America [for Amerigo Vespucci], the lands of the Western Hemisphere—North America, Central (or Middle) America, and South America. The world map published in 1507 by Martin Waldseemüller is the first known cartographic use of the name. . The closing was held at USDA headquarters in Washington, D.C. CFC Chief Executive Officer Sheldon C. Petersen said, "Today's closing is another example of the commitment of CFC, the National Rural Electric Cooperative Association and the Rural Utilities Service to work together for the benefit of rural America. The REDL&G program funds are used for economic development projects that provide job creation, needed community facilities and availability to medical resources for rural residents served by rural electric cooperatives and telephone systems. CFC looks forward to supporting this worthwhile initiative as an important component of CFC's mission to serve our member/owners and help them strengthen their communities". CFC was originally formed by U.S. electric cooperatives in 1969 to provide a private source of capital to supplement the lending programs of USDA's Rural Utilities Service. The Farm Security and Rural Investment Act of 2002 included a provision that allows a cooperative lender such as CFC to help provide funding support for rural economic development in connection with the guarantee of the U.S. government on specific new debt used for Rural Electrification rural electrification Project of the U.S. government in the 1930s. As part of the New Deal, the Rural Electrification Administration (REA) was established (1935) to bring electric power to farms, thereby raising the standard of rural living and slowing the migration of farm Act-eligible purposes. CFC views this new program as an additional source of capital for its members while also supporting the economic development needs of rural areas. CFC first applied for this funding following the publication of the regulations in the fall of 2004. As structured, CFC is able to borrow under the loan facility anytime between now and July 15, 2008 with each advance having a final maturity to be not longer than twenty years TWENTY YEARS. The lapse of twenty years raises a presumption of certain facts, and after such a time, the party against whom the presumption has been raised, will be required to prove a negative to establish his rights. 2. . It is anticipated that CFC will be able to borrow $1 billion or more per year up to a cap defined in the regulations, which was $2.7 billion as of CFC's year-end May 31, 2005. The borrowings will have a direct guarantee of the USDA for principal, interest payments and any appropriate premiums. In return for the guarantee, CFC will pay 30 basis points per annum Per annum Yearly. on the outstanding borrowings, which will be used to fund this USDA-administered economic development program in rural areas served by CFC's rural electric cooperative member/owners. CFC is a not-for-profit Not-for-profit An organization established for charitable, humanitarian, or educational purposes that is exempt from some taxes and in which no one in profits or losses. finance cooperative that serves the nation's rural utility systems, the majority of which are electric cooperatives and their subsidiaries. With approximately $20 billion in assets, CFC provides its member-owners with an assured source of low-cost capital and state-of-the-art financial products and services. |
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