{"data":{"id":"us/7-cfr-1744.21","jurisdiction":"us","citation":"7 CFR 1744.21","heading":"Definitions.","body":"The following definitions apply to this subpart:\nAdministrator means the Administrator of RUS.\nAdvance means transferring funds from RUS or a lender guaranteed by RUS to the borrower's construction fund.\nAfter-acquired property means property which is to be acquired by the borrower and which would be subject to the lien of the Government mortgage when acquired.\nAmortization expense means the sum of the balances of the following accounts of the borrower:\nAccount names Number\n(1) Amortization expense 6560.2\n(2) Amortization expense—tangible 6563\n(3) Amortization expense—intangible 6564\n(4) Amortization expense—other 6565\nNote:\nAll references to account numbers are to the Uniform System of Accounts (7 CFR part 1770, subpart B).\nAsset means a future economic benefit obtained or controlled by the borrower as a result of past transactions or events.\nAutomatic lien accommodation means the approval, by RUS, of a request to share the Government's lien on a pari passu or pro-rata basis with a private lender in accordance with the provisions of § 1744.30.\nBorrower means any organization that has an outstanding telecommunications loan made or guaranteed by RUS, or that is seeking such financing. See 7 CFR part 1735.\nConstruction Fund means the RUS Construction Fund Account into which all advances of loan funds are deposited pursuant to the provisions of the loan documents.\nDebt Service Coverage (DSC) ratio means the ratio of the sum of the borrower's net income, depreciation and amortization expense, and interest expense, all divided by the sum of all payments of principal and interest required to be paid by the borrower during the year on all its debt from any source with a maturity greater than 1 year and capital lease obligations.\nDefault means any event or occurrence which, unless corrected, will, with the passage of time and the giving of proper notices, give rise to remedies under one or more of the loan documents.\nDepreciation expense means the sum of the balances of the following accounts of the borrower:\nAccount names Number\n(1) Depreciation expense 6560.1\n(2) Depreciation expense—telecommunications plant in service 6561\n(3) Depreciation expense—property held for future telecommunications use 6562\nNote:\nAll references to account numbers are to the Uniform System of Accounts (7 CFR part 1770, subpart B).\nDisbursement means a transfer of money by the borrower out of the construction fund in accordance with the provisions of the fund.\nEquity percentage means the total equity or net worth of the borrower expressed as a percentage of the borrower's total assets.\nFFB means the Federal Financing Bank.\nFinancial Requirement Statement (FRS) means RUS Form 481 (OMB—No. 0572—0023). (This RUS Form is available from RUS, Program Development and Regulatory Analysis, Washington, DC 20250-1522).\nGovernment mortgage means any instrument to which the Government, acting through the Administrator, is a party and which creates a lien or security interest in the borrower's property in connection with a loan made or guaranteed by RUS whether the Government is the sole mortgagee or is a co-mortgagee with a private lender.\nHardship loan means a loan made by RUS under section 305(d)(1) of the RE Act.\nInterim construction means the purchase of equipment or the conduct of construction under an RUS-approved plan of interim financing. See 7 CFR part 1737.\nInterest expense means the sum of the balances of the following accounts of the borrower:\nAccount names Number\n(1) Interest and related items 7500\n(2) Interest on funded debt 7510\n(3) Interest expense—capital leases 7520\n(4) Amortization of debt issuance expense 7530\n(5) Less Allowance for funds used during construction 7340/7300.4\n(6) Other interest deductions 7540\nNote:\nAll references to account numbers are to the Uniform System of Accounts (7 CFR part 1770, subpart B).\nInterim financing means funding for a project which RUS has acknowledged may be included in a loan, should said loan be approved, but for which RUS loan funds have not yet been made available.\nLien accommodation means sharing the Government's lien on a pari passu or pro-rata basis with a private lender.\nLoan means any loan made or guaranteed by RUS.\nLoan documents means the loan contract, note and mortgage between the borrower and RUS and any associated document pertinent to a loan.\nLoan funds means the proceeds of a loan made or guaranteed by RUS.\nMaterial and supplies means any of the items properly recordable in the following account of the borrower:\nAccount names Number\n(1) Material and Supplies 1220.1\nNote:\nAll references to account numbers are to the Uniform System of Accounts (7 CFR part 1770, subpart B).\nNet income/Net margins means the sum of the balances of the following accounts of the borrower:\nAccount names Number\n(1) Local Network Services Revenues 5000 through 5069\n(2) Network Access Services Revenues 5080 through 5084\n(3) Long Distance Network Services Revenues 5100 through 5169\n(4) Miscellaneous Revenues 5200 through 5270\n(5) Nonregulated Revenues 5280\n(6) Less Uncollectible Revenues 5200 through 5302\n(7) Less Plant Specific Operations Expense 6110 through 6441\n(8) Less Plant Nonspecific Operations Expense 6510 through 6565\n(9) Less Customer Operations Expense 6610 through 6623\n(10) Less Corporate Operations Expense 6710 through 6790\n(11) Other Operating Income and Expense 7100 through 7160\n(12) Less Operating Taxes 7200 through 7250/7200.5\n(13) Nonoperating Income and Expense 7300 through 7370\n(14) Less Nonoperating Taxes 7400 through 7450/7400.5\n(15) Less Interest and Related Items 7500 through 7540\n(16) Extraordinary Items 7600 through 7640/7600.4\n(17) Jurisdictional Differences and Nonregulated Income Items 7910 through 7990\nNote:\nAll references to account numbers are to the Uniform System of Accounts (7 CFR part 1770, subpart B).\nNet plant means the sum of the balances of the following accounts of the borrower:\nAccount names Number\n(1) Property, Plant and Equipment 2001 through 2007\n(2) Less Depreciation and Amortization 3100 through 3600\nNote:\nAll references to account numbers are to the Uniform System of Accounts (7 CFR part 1770, subpart B).\nNotes means evidence of indebtedness secured by or to be secured by the Government mortgage.\nPari Passu means equably; ratably; without preference or precedence.\nPlant means any of the items properly recordable in the following accounts of the borrower:\nAccount names Number\n(1) Property, Plant and Equipment 2001 through 2007\nNote:\nAll references to account numbers are to the Uniform System of Accounts (7 CFR part 1770, subpart B).\nPrivate lender means any lender other than the RUS or the lender of a loan guaranteed by RUS.\nPrivate lender notes means the notes evidencing a private loan.\nPrivate loan means any loan made by a private lender.\nRE Act (Act) means the Rural Electrification Act of 1936 (7 U.S.C. 901 et. seq.).\nRUS means the Rural Utilities Service, and includes its predecessor, the Rural Electrification Administration.\nRUS cost-of-money loan means a loan made under section 305(d)(2) of the RE Act.\nSubordination means allowing a private lender to have a lien on specific property which will have priority over the Government's lien on such property.\nTangible plant means any of the items properly recordable in the following accounts of the borrower:\nAccount names Number\n(1) Telecommunications Plant in Service—General Support Assets 2110 through 2124\n(2) Telecommunications Plant in Service—Central Office Assets 2210 through 2232\n(3) Telecommunications Plant in Service—Information Origination/Termination Assets 2310 through 2362\n(4) Telecommunications Plant in Service—Cable and Wire Facilities Assets 2410 through 2441\n(5) Amortizable Tangible Assets 2680 through 2682\n(6) Nonoperating Plant 2006\nNote:\nAll references to account numbers are to the Uniform System of Accounts (7 CFR part 1770, subpart B).\nTelecommunication services means any service for the transmission, emission, or reception of signals, sounds, information, images, or intelligence of any nature by optical waveguide, wire, radio, or other electromagnetic systems and shall include all facilities used in providing such service as well as the development, manufacture, sale, and distribution of such facilities.\nTimes interest earned ratio (TIER) means the ratio of the borrower's net income or net margins plus interest expense, divided by said interest expense.\nTotal assets means the sum of the balances of the following accounts of the borrower:\nAccount names Number\n(1) Current Assets 1100s through 1300s\n(2) Noncurrent Assets 1400s through 1500s\n(3) Total telecommunications plant 2001 through 2007\n(4) Less accumulated depreciation 3100 through 3300s\n(5) Less accumulated amortization 3400 through 3600s\nNote:\nAll references to account numbers are to the Uniform System of Accounts (7 CFR part 1770, subpart B).\nTotal equity or net worth means the excess of a borrower's total assets over its total liabilities.\nTotal liabilities means the sum of the balances of the following accounts of the borrower:\nAccount names Number\n(1) Current Liabilities 4010 through 4130.2\n(2) Long-Term Debt 4210 through 4270.3\n(3) Other Liabilities and Deferred Credits 4310 through 4370\nNote:\nAll references to account numbers are to the Uniform System of Accounts (7 CFR part 1770, subpart B).\nTotal long-term debt means the sum of the balances of the following accounts of the borrower:\nAccount names Number\n(1) Long-Term Debt 4210 through 4270.3\nNote:\nAll references to account numbers are to the Uniform System of Accounts (7 CFR part 1770, subpart B).\nWeighted-average life of the loans or notes means the average life of the loans or notes based on the proportion of original loan principal paid during each year of the loans or notes. It shall be determined by calculating the sum of all loan or note principal payments expressed as a fraction of the original loan or note principal amount, times the number of years and fractions of years elapsed at the time of each payment since issuance of the loan or note. For example, given a $5 million loan, with a maturity of 5 years and equal principal payments of $1 million due on the anniversary date of the loan, the weighted-average life would be: (.2)(1 year) + (.2)(2 years) + (.2)(3 years) + (.2)(4 years) + (.2)(5 years) = .2 years + .4 years + .6 years + .8 years + 1.0 years = 3.0 years. If instead the loan had a balloon payment of $5 million at the end of 5 years, the weighted-average life would be: ($5 million/$5 million)(5 years) = 5 years.\nWeighted-average remaining life of the loans or notes means the remaining average life of the loans or notes based on the proportion of remaining loan or note principal expressed in years remaining to maturity of the loans or notes. It shall be determined by calculating the sum of the remaining principal payments of each loan or note expressed as a fraction of the total remaining loan or note amounts times the number of years and fraction of years remaining until maturity of the loan or note.\nWeighted-average remaining useful life of the assets means the estimated original average life of the assets to be acquired with the proceeds of the private lender notes expressed in years based on depreciation rates less the number of years those assets have been in service (or have been depreciated). It shall be determined by calculating the sum of each asset's remaining value expressed as a fraction of the total remaining value of the assets, times the estimated number of years and fraction of years remaining until the assets are fully depreciated.\nWholly-owned subsidiary means a corporation owned 100 percent by the borrower.","path":["Title 7—Agriculture","Subtitle B—Regulations of the Department of Agriculture","CHAPTER XVII—RURAL UTILITIES SERVICE, DEPARTMENT OF AGRICULTURE","PART 1744—POST-LOAN POLICIES AND PROCEDURES COMMON TO GUARANTEED AND INSURED TELEPHONE LOANS","Subpart B—Lien Accommodations and Subordination Policy"],"source_url":"https://www.ecfr.gov/api/versioner/v1/full/2026-08-25/title-7.xml","current_through":"2026-08-25","vintage":"","retrieved_at":"2026-08-27T02:24:01Z","sha256":"74ac90bf3292577cfd1b4d513242518e0c13c60357bbcbd1910f2a47ec2dab48","source_id":"us-cfr","stale":true,"prev":"us/7-cfr-1744.20","next":"us/7-cfr-1744.22-1744.29"},"notice":"GroundRules: Original legal text. Not legal advice."}