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Rural Electrification Loans Can Be Renegotiated For Rates

December 13, 1993

WASHINGTON (AP) _ The Rural Electrification Administration and the Federal Financing Bank have agreed to expand a program that allows loans guaranteed by REA and held by FFB to be repriced.

REA Administrator Wally Beyer said the repricing permits a borrower to obtain a current interest rate on an advance of funds against an existing note rather than continuing to pay the rate set at the time the advance was made.

However, Beyer said before the debt of an REA-financed rural utility qualifies for repricing it must meet certain criteria.

For example, the note must have been executed prior to Jan. 28, 1983 and the advances being repriced must have a long-term maturity and have been advanced for 12 years or more.

Also, payment of the premium due on the advance must be made in cash to the FFB when it is repriced. The premium would equal about one year’s interest.

Between $3 billion and $4 billion in debt could be repriced in fiscal 1994, the REA estimates, if eligible borrowers decide to take advantage of the program.

The majority of borrowers who could participate in repricing are suppliers of electric power to distribution cooperatives.

Under repricing next year, the average annual interest rate on a guaranteed loan fund advance is expected to drop from 9 percent to 6 percent or less.

If borrowers repriced $3 billion to $4 billion in debt, Beyer estimates they would save at least $60 million to $80 million in the first year.

″The potential savings will be very beneficial to rural America’s communities and families,″ Beyer said.

During fiscal 1993, REA borrowers repriced more than $1.9 billion in FFB debt. It represented several hundred advances against notes of 24 borrowers. The revised interest rates ranged from 5.4 percent to 7.1 percent from a high of 13.6 percent before repricing.

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WASHINGTON (AP) - U.S. farm-raised catfish processed during October totaled 39.5 million pounds, up 1 percent from October 1992.

The average price paid to producers was 73 cents per pound for the month, 12 cents above a year ago.

Net pounds of processed fish sold during October totaled 19.4 million pounds, a decrease of 1 percent from the comparable month in 1992.

Sales of fresh fish, at 7.44 million pounds, represented 38 percent of total sales and were down 12 percent from October 1992.

Frozen fish sales, at 11.9 million pounds, accounted for the remaining 62 percent of total sales and were up 7 percent from the same month a year ago.

Freshwater catfish imports during September totaled 426,000 pounds, compared with 307,000 pounds imported the previous year.

Roughly 96 percent of the imports were from Brazil and the rest from Canada.

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