SOURCE: National Rural Utilities Cooperative Finance Corporation (NRUCFC)
DULLES, VA--(Marketwire - Oct 11, 2012) - The National Rural Utilities Cooperative Finance Corporation (CFC) (NYSE: NRU) (NYSE: NRC) has received a commitment from the U.S. Department of Agriculture's (USDA) Rural Utilities Service to guarantee a loan from the Federal Financing Bank (FFB) for $424 million of additional funding as part of the Guaranteed Underwriter Program. This new commitment allows CFC to borrow an additional $424 million from the FFB during the three-year period following the date of closing, with a 20-year maturity after the funding advance.
Through the USDA Guaranteed Underwriter Program, a cooperative lender like CFC can borrow from the FFB and use the proceeds to make loans to electric cooperatives. As part of the program, CFC also pays fees based on outstanding borrowings that support the USDA Rural Economic Development Loan and Grant (REDL&G) program.
"We're very pleased to expand our participation in the Guaranteed Underwriter Program," said CFC CEO Sheldon C. Petersen. "Through this program, CFC is able to further support investment in electric cooperative infrastructure and job creation. At the same time, the fees CFC pays through the program directly fund the REDL&G program, thereby supporting additional investment and creating thousands of jobs through new rural economic development projects."
Based on the current balance of loans outstanding, CFC pays $11 million per year in fees to help fund the REDL&G program, which provides zero-interest loans and grants to local utilities that pass through the funds to local businesses and community projects -- the ultimate recipients -- in order to create and retain employment in rural areas.
According to USDA, the REDL&G program has provided approximately $540 million to more than 1,600 projects, creating approximately 62,500 jobs across rural America since 1989. More than 400 electric cooperatives have participated in the program.
The National Rural Utilities Cooperative Finance Corporation (CFC) is a nonprofit finance cooperative created and owned by America's electric cooperative network. With approximately $20 billion in assets, CFC is committed to providing unparalleled industry expertise, flexibility and responsiveness to serve the needs of its member-owners. CFC can be found online at www.nrucfc.coop.