Agriculture. Part1717:Post-loan policies and procedures common to insured and guaranteed electric loans. SubpartR:Lien accommodations and subordinations for 100 percent private financing. Section1717.858:Lien subordination for rural development investment
(a) Policy. RUS encourages borrowers to consider investing in financially sound projects that are likely to have a positive effect on economic development and employment in rural areas. In addition to the guidance set forth in §1717.651, RUS recommends that such investments be made through a subsidiary of the borrower in order to clearly separate the financial risks and the revenues and costs of the rural development enterprise from those of the borrower’s electric utility business. This should reduce credit risks to the borrower’s primary business, and minimize the possibility of undisclosed cross subsidization of the rural development enterprise by electric rate payers.