What are the concerns regarding the ICC loan?
Uncertainty surrounding the ICC loan could lead to adjustments in the reserve over time. As of Aug. 31, 2004, CFC’s loan-loss allowance totaled $574 million, of which $325 million is for high-risk loans and the general loan portfolio. As of Aug. 31, 2004, CFC, through RTFC, had about $550 million in loans outstanding to ICC. RTFC’s collateral for the loans to ICC includes: • A series of mortgages, security agreements, financing statements, pledges, and guarantees creating liens in favor of RTFC on substantially all of the assets and voting stock of ICC; • A direct pledge of 100% of the voting stock of ICC’s U.S. Virgin Islands (USVI) local exchange carrier subsidiary; • Secured guarantees, mortgages and direct and indirect stock pledges encumbering the assets and ownership interests in substantially all of ICC’s other operating subsidiaries; and • Personal guarantee of the loans from ICC’s indirect majority shareholder and chairman. In June and July 2004, RTFC filed lawsuits against IC
