112 STAT. 474 PUBLIC LAW 105-178-^JUNE 9, 1998 shall the aggregate of appropriations of budget authority and credit risk premiums described in this paragraph with respect to a direct loan or loan guarantee be less than the cost of that direct loan or loan guarantee. "(2) CREDIT RISK PREMIUM AMOUNT.—The Secretary shall determine the amount required for credit risk premiums under this subsection on the basis of— "(A) the circumstances of the applicant, including the amount of collateral offered; "(B) the proposed schedule of loan disbursements; "(C) historical data on the repayment history of similar borrowers; "(D) consultation with the Congressional Budget Office; and "(E) any other factors the Secretary considers relevant. "(3) PAYMENT OF PREMIUMS.— Credit risk premiums under this subsection shall be paid to the Secretary before the disbursement of loan amounts. "(4) COHORTS OF LOANS.— In order to maintain sufficient balances of credit risk premiums to adequately protect the Federal Government from risk of default, while minimizing the length of time the Government retains possession of those balances, the Secretary shall establish cohorts of loans. When all obligations attached to a cohort of loans have been satisffed, credit risk premiums paid for the cohort, and interest accrued thereon, which were not used to mitigate losses shall be returned to the original source on a pro rata basis. "(g) PREREQUISITES FOR AssiSTANCE.The Secretary shall not make a direct loan or loan guarantee under this section unless the Secretary has made a finding in writing that— "(1) repayment of the obligation is required to be made within a term of not more than 25 years from the date of its execution; "(2) the direct loan or loan guarantee is justified by the present and probable future demand for rail services or intermodal facilities; "(3) the applicant has given reasonable assurances that the facilities or equipment to be acquired, rehabilitated, improved, developed, or established with the proceeds of the obligation will be economically and efficiently utilized; "(4) the obligation can reasonably be repsiid, using an appropriate combination of credit risk premiums and collateral offered by the applicant to protect the Federal Government; and "(5) the purposes of the direct loan or loan guarantee are consistent with subsection (b). " (h) CONDITIONS OF ASSISTANCE.— The Secretary shall, before greinting assistance under this section, require the applicant to agree to such terms and conditions as are sufficient, in the judgment of the Secretary, to ensure that, as long as any principal or interest is due and payable on such obligation, the applicant, and any railroad or railroad partner for whose benefit the assistance is intended— "(1) will not use any funds or assets from railroad or intermodal operations for purposes not related to such operations, if such use would impair the ability of the applicant.
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