BOARD02436

• Board Meeting Date: 9/25/2000
• Description: CF Section - Financial Matters
• Board Meetings - Doc Type: Memo

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2. The Agricultural Rate will be identical to the Municipal Low
Income Rate.
3. The Commercial Rate will be calculated as 120 percent of the
Municipal Standard Income Rate rounded to the nearest one-
quarter of one percent.
4. The 30-year lending rate may be reduced for each lending
category by one-quarter of one percent for all loans with
maturities of 20 years or less but more than 10 years and by
one-half of one percent for all loans with maturities of 10 years
or less.
5. For specific projects that involve matters of statewide concern,
such as interstate compacts, the Board may establish a lending
rate somewhat lower than the adopted rate for the particular
class of borrower.
6. For projects that include more than one purpose, a weighted
average lending rate will be established based on the percent of
water supplied or on the percent ownership for each particular
purpose of the proj ect.

PURPOSE:

To establish an annual lending rate structure for Construction Fund
and Severance Tax Trust Fund Perpetual Base Account loans.

APPLICABILITY: This policy and procedure apply to all applications for loans from
the CWCB Construction Fund and Severance Tax Trust Fund
Perpetual Base Account.

PROCEDURE:

The CWCB staff will compile the closing weekly yields for the 30-
year "A" municipal bond for the twelve months preceding the last
Board meeting of the calendar year and estimate the bond's
average annual yield. A lending rate structure will then be
developed as outlined above and will be presented to the CWCB at
the last Board meeting of the calendar year for adoption as the
interest rates to be used for Construction Fund and Severance Tax
Trust Fund Perpetual Base Account loan applications for the
upcommg year.

* Standard and Poor's definition of an "A" bond rating is: "A debt rated 'A' has a strong
capacity to pay interest and repay principal although it is somewhat more susceptible to
the adverse effects of changes in circumstances and economic conditions than debt in
higher rated categories."

Approved by the CWCB
January 27, 1999 Board Meeting