Note 5. Loans Receivable and Related Foreclosed Property, Net
Note 5 is broken down into the following sections:
The Department operates the following direct loan and loan guarantee programs:
Direct Loan Programs
Bureau |
Direct Loan Program |
EDA |
Drought Loan Portfolio |
EDA |
Economic Development Revolving Fund |
NOAA |
Alaska Purse Seine Fishery Buyback Loans
1 |
NOAA |
Bering Sea and Aleutian Islands Non-Pollock Buyback Loans
1
|
NOAA |
Bering Sea Pollock Fishery Buyback |
NOAA |
Coastal Energy Impact Program (CEIP) |
NOAA |
Crab Buyback Loans |
NOAA |
Federal Gulf of Mexico Reef Fish Buyback Loans
1
|
NOAA |
Fisheries Finance Individual Fishing Quota (IFQ) Loans |
NOAA |
Fisheries Finance Traditional Loans |
NOAA |
Fisheries Finance Tuna Fleet Loans |
NOAA |
Fisheries Loan Fund |
NOAA |
New England Groundfish Buyback Loans
1
|
NOAA |
New England Lobster Buyback Loans
1
|
NOAA |
Pacific Groundfish Buyback Loans |
|
Loan Guarantee Programs
Bureau |
Loan Guarantee Program |
EDA |
Economic Development Revolving Fund |
ELGP-Oil/Gas |
Emergency Oil and Gas Loan Guarantee Program |
ELGP-Steel |
Emergency Steel Loan Guarantee Program |
NOAA |
Fishing Vessel Obligation Guarantee Program (FVOG Program) |
(back to top)
The net assets for the Department’s loan programs consist of:
Net Assets for Department Loan Programs
(In Thousands)
|
FY 2005 |
FY 2004 |
Direct Loans Obligated Prior to FY 1992 |
$ 44,619 |
$ 52,913 |
Direct Loans Obligated After FY 1991 |
345,218 |
227,758 |
Defaulted Guaranteed Loans from Pre-FY 1992 Guarantees |
23 |
3,295 |
Defaulted Guaranteed Loans from Post-FY 1991 Guarantees |
27,649
|
33,172
|
Total |
$417,509
|
$317,138
|
(back to top)
Direct Loans Obligated Prior to FY 1992 consist of:
Direct Loans Obligated Prior to FY 1992
FY 2005
(In Thousands)
Direct
Loan Program |
Loans
Receivable,
Gross |
Interest
Receivable |
Allowance for
Loan Losses |
Value of Assets
Related to
Direct Loans, Net |
CEIP |
$22,145 |
$7,686 |
$(24,093) |
$ 5,738 |
Drought Loan Portfolio |
26,504 |
453 |
(270) |
26,687 |
Economic Development Revolving Fund |
12,204 |
113 |
(123) |
12,194 |
Fisheries Loan Fund |
912
|
91
|
(1,003)
|
-
|
Total |
$61,765
|
$8,343
|
$(25,489)
|
$44,619
|
Direct Loans Obligated Prior to FY 1992
FY 2004
(In Thousands)
Direct
Loan Program |
Loans
Receivable,
Gross |
Interest
Receivable |
Allowance for
Loan Losses |
Value of Assets
Related to
Direct Loans, Net |
CEIP |
$22,392 |
$7,748 |
$(20,268) |
$ 9,872 |
Drought Loan Portfolio |
28,655 |
463 |
(291) |
28,827 |
Economic Development Revolving Fund |
14,305 |
153 |
(244) |
14,214 |
Fisheries Loan Fund |
1,881
|
138
|
(2,019)
|
-
|
Total |
$67,233
|
$8,502
|
$(22,822)
|
$52,913
|
(back to top)
Direct Loans Obligated After FY 1991 consist of:
Direct Loans Obligated After FY 1991
FY 2005
(In Thousands)
Direct Loan Program |
Loans
Receivable,
Gross |
Interest
Receivable |
Allowance for
Subsidy Cost
(Present Value) |
Value of Assets
Related to
Direct Loans, Net |
Bering Sea Pollock Fishery Buyback |
$ 61,980 |
$ 48 |
$ 6,336 |
$ 68,364 |
Crab Buyback Loans |
97,399 |
3,578 |
18,064 |
119,041 |
Fisheries Finance IFQ Loans |
15,891 |
172 |
2,577 |
18,640 |
Fisheries Finance Traditional Loans |
76,928 |
737 |
9,056 |
86,721 |
Fisheries Finance Tuna Fleet Loans |
13,889 |
118 |
1,617 |
15,624 |
Pacific Groundfish Buyback Loans |
35,663
|
1,226
|
(61)
|
36,828
|
Total |
$301,750
|
$5,879
|
$37,589
|
$345,218
|
Direct Loans Obligated After FY 1991
FY 2004
(In Thousands)
Direct Loan Program |
Loans
Receivable,
Gross |
Interest
Receivable |
Allowance for
Subsidy Cost
(Present Value) |
Value of Assets
Related to
Direct Loans, Net |
Bering Sea Pollock Fishery Buyback |
$ 66,137 |
$ 56 |
$ 7,915 |
$ 74,108 |
Fisheries Finance IFQ Loans |
15,679 |
155 |
2,420 |
18,254 |
Fisheries Finance Traditional Loans |
64,535 |
589 |
8,288 |
73,412 |
Fisheries Finance Tuna Fleet Loans |
23,833 |
191 |
3,507 |
27,531 |
Pacific Groundfish Buyback Loans |
35,663
|
1,252
|
(2,462)
|
34,453
|
Total |
$205,847
|
$2,243
|
$19,668
|
$227,758
|
(back to top)
New Disbursements of Direct Loans (Post-FY 1991):
New Disbursements of Direct Loans (Post-FY 1991)
(In Thousands)
Direct Loan Program |
FY 2005 |
FY 2004 |
Crab Buyback Loans |
$ 97,399 |
$ - |
Fisheries Finance IFQ Loans |
3,058 |
3,290 |
Fisheries Finance Traditional Loans |
31,176 |
21,150 |
Fisheries Finance Tuna Fleet Loans |
- |
38,301 |
Pacific Groundfish Buyback Loans |
-
|
35,663
|
Total |
$131,633
|
$98,404
|
(back to top)
Subsidy Expense for Direct Loans by Program and Component:
Subsidy Expense for New Disbursements of Direct Loans:
Subsidy Expense for New Disbursements of Direct Loans
FY 2005
(In Thousands)
Direct Loan Program |
Interest
Rate
Differential |
Defaults |
Fees and
Other
Collections |
Other |
Total |
Crab Buyback Loans |
$(22,665) |
$18,185 |
$ - |
$ - |
$(4,480) |
Fisheries Finance IFQ Loans |
(696) |
54 |
(21) |
157 |
(506) |
Fisheries Finance Traditional Loans |
(4,605)
|
384
|
(216)
|
1,974
|
(2,463)
|
Total |
$(27,966)
|
$18,623
|
$(237)
|
$2,131
|
$(7,449)
|
Subsidy Expense for New Disbursements of Direct Loans
FY 2004
(In Thousands)
Direct Loan Program |
Interest
Rate
Differential |
Defaults |
Fees and
Other
Collections |
Other |
Total |
Fisheries Finance IFQ Loans |
$ (588) |
$ 92 |
$ (31) |
$ 110 |
$ (417) |
Fisheries Finance Traditional Loans |
(3,115) |
309 |
(71) |
581 |
(2,296) |
Fisheries Finance Tuna Fleet Loans |
(5,266) |
202 |
(27) |
537 |
(4,554) |
Pacific Groundfish Buyback Loans |
(11,373)
|
11,758
|
-
|
-
|
385
|
Total |
$(20,342)
|
$12,361
|
$(129)
|
$1,228
|
$(6,882)
|
Modifications and Reestimates:
Modifications and Reestimates
FY 2005
(In Thousands)
Direct Loan Program |
Total
Modifications |
Interest Rate
Reestimates |
Technical
Reestimates |
Total
Reestimates |
Bering Sea Pollock Fishery Buyback |
$ - |
$ - |
$ 1,396 |
$ 1,396 |
Fisheries Finance IFQ Loans |
- |
(144) |
333 |
189 |
Fisheries Finance Traditional Loans |
- |
(24) |
252 |
228 |
Fisheries Finance Tuna Fleet Loans |
- |
- |
1,677 |
1,677 |
Pacific Groundfish Buyback Loans |
- |
- |
(616) |
(616) |
Crab Buyback Loans |
-
|
(7,110)
|
(7,275)
|
(14,385)
|
Total |
$ -
|
$(7,278)
|
$(4,233)
|
$(11,511)
|
Modifications and Reestimates
FY 2004
(In Thousands)
Direct Loan Program |
Total
Modifications |
Interest Rate
Reestimates |
Technical
Reestimates |
Total
Reestimates |
Bering Sea Pollock Fishery Buyback |
$ - |
$ - |
$ 954 |
$ 954 |
Fisheries Finance IFQ Loans |
- |
(93) |
267 |
174 |
Fisheries Finance Traditional Loans |
- |
(984) |
(682) |
(1,666) |
Fisheries Finance Tuna Fleet Loans |
- |
(2,386) |
2,172 |
(214) |
Pacific Groundfish Buyback Loans |
-
|
(2,578)
|
4,395
|
1,817
|
Total |
$ -
|
$(6,041)
|
$7,106
|
$1,065
|
Total Direct Loan Subsidy Expense:
Total Direct Loan Subsidy Expense
(In Thousands)
Direct Loan Program |
FY 2005 |
FY 2004 |
Bering Sea Pollock Fishery Buyback |
$ 1,396 |
$ 954 |
Crab Buyback Loans |
(18,865) |
- |
Fisheries Finance IFQ Loans |
(317) |
(243) |
Fisheries Finance Traditional Loans |
(2,235) |
(3,962) |
Fisheries Finance Tuna Fleet Loans |
1,677 |
(4,768) |
Pacific Groundfish Buyback Loans |
(616)
|
2,202
|
Total |
$(18,960)
|
$(5,817)
|
(back to top)
Subsidy Rates for Direct Loans by Program and Component:
Budget Subsidy Rates for Direct Loans for the Current Fiscal-year's Cohorts:
Budget Subsidy Rates for Direct Loans
FY 2005
Direct Loan Program |
Interest Rate
Differential |
Defaults |
Fees and
Other
Collections |
Other |
Total |
Fisheries Finance IFQ Loans |
(24.91)% |
0.48% |
(0.73)% |
6.71% |
(18.45)% |
Fisheries Finance Traditional Loans |
(15.26)% |
0.30% |
(0.65)% |
1.90% |
(13.71)% |
Federal Gulf of Mexico Reef Fish Buyback Loans |
(29.89)% |
31.17% |
- % |
-% |
1.28 % |
Budget Subsidy Rates for Direct Loans
FY 2004
Direct Loan Program |
Interest Rate
Differential |
Defaults |
Fees and
Other
Collections |
Other |
Total |
Fisheries Finance IFQ Loans |
(20.10)% |
1.52% |
(0.67)% |
3.31% |
(15.94)% |
Fisheries Finance Traditional Loans |
(14.57)% |
1.62% |
(0.71)% |
8.17% |
(5.49)% |
The budget subsidy rates disclosed pertain only to the reporting period’s cohorts. These rates cannot be applied to the new disbursements of direct loans during the reporting period to yield the subsidy expense. The subsidy expense for new disbursements of direct loans for the reporting period could result from disbursements of loans from both the reporting period’s cohorts and prior fiscal-year(s) cohorts. The subsidy expense for the reporting period may also include modifications and reestimates.
(back to top)
Schedule for Reconciling Allowance for Subsidy Cost (Post-FY 1991 Direct Loans):
Schedule for Reconciling Allowance for Subsidy Cost (Post-FY 1991 Direct Loans)
(In Thousands)
|
FY 2005 |
FY 2004 |
Beginning Balance of the Allowance for Subsidy Cost |
$ 19,668 |
$ 20,110 |
Add Subsidy Expense for Direct Loans Disbursed During the
Reporting Years by Component: |
|
|
Interest Rate Differential Costs |
27,966 |
20,342 |
Default Costs (Net of Recoveries) |
(18,623) |
(12,361) |
Fees and Other Collections |
237 |
129 |
Other Subsidy Costs |
(2,131)
|
(1,228)
|
Total of the above Subsidy Expense Components |
7,449 |
6,882 |
Adjustments: |
|
|
Fees Received |
(256) |
(330) |
Subsidy Allowance Amortization |
(783) |
(3,750) |
Other |
-
|
(2,179)
|
Ending Balance of the Allowance for Subsidy Cost Before Reestimates |
26,078 |
20,733 |
Add or Subtract Subsidy Reestimates by Component: |
|
|
Interest Rate Reestimates |
7,278 |
6,041 |
Technical/Default Reestimates |
4,233
|
(7,106)
|
Total of the above Reestimate Components |
11,511
|
(1,065)
|
Ending Balance of the Allowance for Subsidy Cost |
$ 37,589
|
$ 19,668
|
(back to top)
Defaulted Guaranteed Loans from Pre-FY 1992 Guarantees:
Defaulted Guaranteed Loans from Pre-FY 1992 Guarantees
FY 2005
(In Thousands)
Loan Guarantee
Program |
Defaulted
Guaranteed Loans
Receivable, Gross |
Interest
Receivable |
Foreclosed
Property |
Allowance for
Loan Losses |
Value of Assets
Related to Defaulted
Guaranteed Loans
Receivable, Net |
FVOG Program |
$17,211
|
$ 14
|
$ 14
|
$(17,216)
|
$ 23
|
Defaulted Guaranteed Loans from Pre-FY 1992 Guarantees
FY 2004
(In Thousands)
Loan Guarantee
Program |
Defaulted
Guaranteed Loans
Receivable, Gross |
Interest
Receivable |
Foreclosed
Property |
Allowance for
Loan Losses |
Value of Assets
Related to Defaulted
Guaranteed Loans
Receivable, Net |
FVOG Program |
$19,650
|
$ -
|
$376
|
$(16,731)
|
$3,295
|
(back to top)
Defaulted Guaranteed Loans from Post-FY 1991 Guarantees:
Defaulted Guaranteed Loans from Post-FY 1991 Guarantees
FY 2005
(In Thousands)
Loan Guarantee
Program |
Defaulted
Guaranteed Loans
Receivable, Gross |
Interest
Receivable |
Foreclosed
Property |
Allowance for
Subsidy Cost
(Present Value) |
Value of Assets
Related to Defaulted
Guaranteed Loans
Receivable, Net |
Emergency Steel Loan Guarantee Program |
$18,896 |
$ 547 |
$ - |
$ 1,339 |
$20,782 |
FVOG Program |
11,599
|
1,254
|
2,970
|
(8,956)
|
6,867
|
Total |
$30,495
|
$1,801
|
$2,970
|
$(7,617)
|
$27,649
|
Defaulted Guaranteed Loans from Post-FY 1991 Guarantees
FY 2004
(In Thousands)
Loan Guarantee
Program |
Defaulted
Guaranteed Loans
Receivable, Gross |
Interest
Receivable |
Foreclosed
Property |
Allowance for
Subsidy Cost
(Present Value) |
Value of Assets
Related to Defaulted
Guaranteed Loans
Receivable, Net |
Emergency Steel Loan Guarantee Program |
$ 92,097 |
$ - |
$ - |
$(67,017) |
$25,080 |
FVOG Program |
12,608
|
1,262
|
2,949
|
(8,727)
|
8,092
|
Total |
$104,705
|
$1,262
|
$2,949
|
$(75,744)
|
$33,172
|
The Emergency Steel Loan Guarantee Program amounts reported above for both FY 2005 and FY 2004 represent one defaulted guaranteed loan receivable. In June 2005, the borrower repaid $73.2 million of principal against this loan receivable, and the borrower also paid $17.9 million of accrued interest. These collections were made possible by a liquidation, under bankruptcy, of the borrower’s assets. These actual collections exceeded the cash flow expectations reflected in the Allowance for Subsidy Cost of $(67.0) million as of September 30, 2004. The Department furthermore anticipates that the government will fully collect in
FY 2006 the remaining principal balance of $18.9 million, plus accrued interest. This should be made possible by the expected further liquidation of assets by the borrower. The better-than-expected actual and anticipated cash flows discussed above contributed to the downward subsidy reestimate of $(85.3) million, as of September 30, 2005, for this defaulted guaranteed loan receivable.
(back to top)
Loan Guarantees:
Guaranteed Loans Outstanding:
Outstanding non-acquired guaranteed disbursed loans as of September 30, 2005 and 2004, which are not reflected in the financial statements, are as follows:
Outstanding Non-acquired Guaranteed Disbursed Loans Not Reflected in the Financial Statements
As of September 30, 2005 and 2004
(In Thousands)
Loan Guarantee
Program |
FY 2005 |
FY 2004 |
Outstanding
Principal of
Guaranteed Loans
Disbursed, Face Value |
Amount of
Outstanding
Principal
Guaranteed |
Outstanding
Principal of
Guaranteed Loans
Disbursed, Face Value |
Amount of
Outstanding
Principal
Guaranteed |
Emergency Oil and Gas
Loan Guarantee Program |
$ - |
$ - |
$ 1,248 |
$ 1,061 |
Emergency Steel Loan
Guarantee Program |
242,435 |
212,817 |
246,074 |
215,927 |
FVOG Program |
32,366
|
32,366
|
45,202
|
45,202
|
Total |
$274,801
|
$245,183
|
$292,524
|
$262,190
|
New Disbursements of Loan Guarantees, by year:
New Disbursements of Loan Guarantees
(In Thousands)
Loan Guarantee
Program |
FY 2005 |
FY 2004 |
Outstanding
Principal of
Guaranteed Loans
Disbursed, Face Value |
Amount of
Outstanding
Principal
Guaranteed |
Outstanding
Principal of
Guaranteed Loans
Disbursed, Face Value |
Amount of
Outstanding
Principal
Guaranteed |
Emergency Steel Loan Guarantee Program |
$24,536
|
$21,591
|
$80,964
|
$71,248
|
Loan Guarantee Liabilities:
Loan Guarantee Liabilities
(In Thousands)
Loan Guarantee
Program |
FY 2005 |
FY 2004 |
Loan Guarantee
Liabilities for Post-
FY 1991 Guarantees
Disbursed, Present Value |
Loan Guarantee
Liabilities for Post-
FY 1991 Guarantees
Disbursed, Present Value |
Emergency Oil and Gas Loan Guarantee Program |
$ 294 |
$ 605 |
Emergency Steel Loan Guarantee Program |
78,347 |
70,069 |
FVOG Program |
3,171
|
2,971
|
Total |
$81,812
|
$73,645
|
(back to top)
Subsidy Expense for Loan Guarantees by Program and Component:
Subsidy Expense for New Disbursements of Loan Guarantees:
Subsidy Expense for New Disbursements of Loan Guarantees
FY 2005
(In Thousands)
Loan Guarantee
Program |
Interest
Supplements |
Defaults |
Fees and Other
Collections |
Total |
Emergency Steel Loan Guarantee Program |
$ -
|
$ 7,368
|
$(123)
|
$ 7,245
|
Subsidy Expense for New Disbursements of Loan Guarantees
FY 2004
(In Thousands)
Loan Guarantee
Program |
Interest
Supplements |
Defaults |
Fees and Other
Collections |
Total |
Emergency Steel Loan Guarantee Program |
$ -
|
$22,824
|
$(405)
|
$22,419
|
Modifications and Reestimates:
Modifications and Reestimates
FY 2005
(In Thousands)
Loan Guarantee
Program |
Total
Modifications |
Interest Rate
Reestimates |
Technical
Reestimates |
Total
Reestimates |
Emergency Oil and Gas
Loan Guarantee Program |
$ - |
$ - |
$ (814) |
$ (814) |
Emergency Steel Loan
Guarantee Program |
1,348 |
- |
(87,264) |
(87,264) |
FVOG Program |
-
|
-
|
523
|
523
|
Total |
$1,348
|
$ -
|
$(87,555)
1
|
$(87,555)
|
|
Modifications and Reestimates
FY 2004
(In Thousands)
Loan Guarantee
Program |
Total
Modifications |
Interest Rate
Reestimates |
Technical
Reestimates |
Total
Reestimates |
Emergency Oil and Gas
Loan Guarantee Program |
$ - |
$ - |
$ (724) |
$ (724) |
Emergency Steel Loan
Guarantee Program |
-
|
676
|
1,069
|
1,745
|
Total |
$ -
|
$ 676
|
$ 345
|
$1,021
|
(back to top)
Total Loan Guarantee Subsidy Expense:
Total Loan Guarantee Subsidy Expense
(In Thousands)
Loan Guarantee Program |
FY 2005 |
FY 2004 |
Emergency Oil and Gas Loan Guarantee Program |
$ (814) |
$ (724) |
Emergency Steel Loan Guarantee Program |
(78,671) |
24,164 |
FVOG Program |
523
|
-
|
Total |
$(78,962)
|
$23,440
|
(back to top)
Subsidy Rates for Loan Guarantees by Program and Component:
Budget Subsidy Rates for Loan Guarantees for the Current Fiscal-year’s Cohorts:
There were no new cohorts of guaranteed loans during FY 2005 and FY 2004.
(back to top)
Schedule for Reconciling Loan Guarantee Liabilities (Post-FY 1991 Loan Guarantees):
Schedule for Reconciling Loan Guarantee Liabilities (Post-FY 1991 Loan Guarantees)
(In Thousands)
|
FY 2005 |
FY 2004 |
Beginning Balance of Loan Guarantee Liabilities |
$73,645 |
$51,068 |
Add Subsidy Expense for Guaranteed Loans Disbursed During
the Reporting Years by Component: |
|
|
Default Costs (Net of Recoveries) |
7,368 |
22,824 |
Fees and Other Collections |
(123)
|
(405)
|
Total of the above Subsidy Expense Components |
7,245 |
22,419 |
Adjustments: |
|
|
Loan Guarantee Modifications |
1,348 |
- |
Fees Received |
198 |
220 |
Interest Accumulation
on the Liabilities Balance |
1,004 |
(28) |
Other |
1,127
|
(1,055)
|
Ending Balance of Loan Guarantee Liabilities Before Reestimates |
84,567 |
72,624 |
Add or Subtract Subsidy Reestimates by Component: |
|
|
Interest Rate Reestimates |
- |
676 |
Technical/Default Reestimates |
(2,755)
|
345
|
Total of the above Reestimate Components |
(2,755)
|
1,021
|
Ending Balance of Loan Guarantee Liabilities |
$81,812
|
$73,645
|
(back to top)
Administrative Expenses:
Administrative expenses in support of the Department’s direct loan and loan guarantee programs consist of:
Direct Loan Program Administrative Expenses
(In Thousands)
Direct Loan Program |
FY 2005 |
FY 2004 |
Drought Loan Portfolio and
Economic Development Revolving Fund |
$ 892 |
$1,708 |
NOAA Direct Loan Programs |
2,863
|
3,251
|
Total |
$3,755
|
$4,959
|
Loan Guarantee Program Administrative Expenses
(In Thousands)
Loan Guarantee Program |
FY 2005 |
FY 2004 |
Emergency Oil and Gas Loan Guarantee Program |
$ 23 |
$ 15 |
Emergency Steel Loan Guarantee Program |
253 |
598 |
FVOG Program |
318
|
462
|
Total |
$594
|
$1,075
|
(back to top)
|