ib = [(1 - qn)(1 + if)n / (1 - pn)]1/n - 1,
where:
n = the term of the loan;
ib = the benchmark interest rate for uncreditworthy companies;
if = the long-term interest rate that would be paid by a creditworthy company;
pn = the probability of default by an uncreditworthy company within n years; and
qn = the probability of default by a creditworthy company within n years.
"Default" means any missed or delayed payment of interest and/or principal, bankruptcy, receivership, or distressed exchange. For values of pn, the Secretary will normally rely on the average cumulative default rates reported for the Caa to C-rated category of companies in Moody's study of historical default rates of corporate bond issuers. For values of qn, the Secretary will normally rely on the average cumulative default rates reported for the Aaa to Baa-rated categories of companies in Moody's study of historical default rates of corporate bond issuers.
Ak = the amount countervailed in year k,
y = the present value of the benefit (see paragraph (c)(3)(i) of this section),
n = the number of years in the life of the loan,
d = the interest rate on the comparison loan selected under paragraph (a) of this section, and
k = the year of allocation, where the year that repayment would begin on the comparable commercial loan = 1.
19 C.F.R. §351.505