Credit Risk Premium Law and Legal Definition

According to 49 CFR 260.3 [Title 49 – Transportation; Subtitle B Other Regulations Relating to Transportation; Chapter II Federal Railroad Administration, Department of Transportation; Part 260 Regulations Governing Loans and Loan Guarantees Under the Railroad Rehabilitation and Improvement Financing Program; Subpart A – Overview], credit risk premium means “that portion of the total subsidy cost to the Government of a direct loan or loan guarantee that is not covered by Federal appropriations and which must be paid by Applicant or its non-Federal infrastructure partner before that direct loan can be disbursed or loan guarantee can be issued.”