Page:United States Statutes at Large Volume 107 Part 1.djvu/354

 107 STAT. 328 PUBLIC LAW 103-66 —AUG. 10, 1993 7 USC 936c "SEC. 306C. REFINANCING AND PREPAYMENT OF FFB LOANS. "(a) IN GENERAL.—^A borrower of a loan made by the Federal Financing Bank and guaranteed under section 306 may, at the option of the borrower, refinance or prepay the loan or an advance on the loan, or any portion of the loan or advance. "(b) PENALTY. — "(1) DETERMINATION OF PENALTY.— A penalty shall be assessed against a borrower that refinances or prepays a loan or loan advance, or any portion of a loan or advance, under this section. Except as provided in paragraph (2), the penalty shall be equal to the lesser of— "(A) the difference between the outstanding principal balance of the loan being refinanced and the present value of the loan discounted at a rate equal to the then ciirrent cost of funds to the Department of the Treasury for obligations of comparable maturity to the loan being refinanced or prepaid; "(B) 100 percent of the amount of interest for 1 year on the outstanding principal balance of the loan or loan advance, or any portion of the loan or advance, being refinanced, multiplied by the ratio that— "(i) the number of quarterly payment dates between the date of the refinancing or prepayment and the maturity date for the loan advance; bears to "(ii) the number of quarterly payment dates between the first quarterly payment date that occurs 12 years after the end of the year in which the amoiint being refinanced was advanced and the maturity date of the loan advance; and "(C)(i) the present value of 100 percent of the amount of interest for 1 year on the outstanding principal balance of the loan or loan advance, or any portion of the loan or advance, being refinanced or prepaid; plus "(ii) for the interval between the date of the refinancing or prepayment and the first quarterly payment date that occurs 12 years after the end of the year in which the amount being refinanced or prepaid was advanced, the present value of the difference between— "(I) each payment scheduled for the interval on the loan amount being refinanced or prepaid; and "(II) the payment amounts that would be required during the interval on the amounts being refinanced or prepaid if the interest rate on the loan were equal to the then current cost of funds to the Department of the Treasury for obligations of comparable maturity to the loan being refinanced or prepaid. "(2) LIMITATION.— "(A) IN GENERAL.—Except as provided in subparagraph (B), the penalty provided by paragraph (I)(A) shall be required for refinancing or prepayment under this section. "(B) EXCEPTION.—In the case of a loan advanced under an agreement that permits the refinancing or prepayment of the loan advance based on the payment of 1 year of interest on the outstanding principal balance of the loan advance, a borrower may, in lieu of the penalty required by paragraph (1)(A), pay a penalty as provided by—

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