SOURCE: National Rural Utilities Cooperative Finance Corporation (NRUCFC)

National Rural Utilities Cooperative Finance Corporation (NRUCFC)

March 11, 2010 13:43 ET

National Rural Utilities Cooperative Finance Corporation (CFC) Signs Three-Year, $1.3 Billion Credit Agreement With 14 Banks

HERNDON, VA--(Marketwire - March 11, 2010) - National Rural Utilities Cooperative Finance Corporation (CFC) (NYSE: NRU) (NYSE: NRN) (NYSE: NRC) announced today that each of 14 banks acknowledged performing an independent credit analysis of CFC and committed to provide $1.3 billion of available revolving credit to CFC for commercial paper backup and general corporate purposes.

This new credit agreement is for three years and will expire on March 8, 2013. The 14-bank syndicate includes the Bank of Nova Scotia, N.A., as administrative agent. The March 10, 2010, agreement replaces the March 13, 2009, 364-day facility and represents an increase of $300 million in commitments compared with the 364-day facility.

"CFC was able to attract four new banks to the syndication and obtain $300 million in additional commitments when we went to renew this credit facility," said Andrew Don, CFC Vice President, Capital Market Relations. "It is a reflection on CFC's financial strength and health as well as that of America's electric cooperatives."

In addition, CFC has five-year credit agreements totaling $967.313 million dated March 22, 2006, and $1,049 million dated March 16, 2007, that are still in effect and expire on March 22, 2011, and March 16, 2012, respectively. Together with the March 10, 2010, agreement CFC has credit agreements in place totaling $3,316.313 million.

The credit facilities will be used primarily to support CFC's commercial paper programs, to provide standby liquidity for outstanding variable-rate demand bond obligations where CFC acts as standby purchaser, and to guarantee the commercial paper program of the National Cooperative Services Corporation (NCSC), a CFC affiliate.

At March 10, 2010, CFC had approximately $1,131 million of outstanding commercial paper notes issued to members, approximately $371 million of daily liquidity fund sold to members, and approximately $362 million outstanding in the CFC and NCSC dealer commercial paper programs. The three credit facilities provide a 100-percent backstop for CFC and NCSC's commercial paper programs and CFC's daily liquidity fund, with a substantial cushion for growth.

The credit agreement requires CFC to comply with maximum leverage and minimum times-interest-earned-ratio covenants as defined in the agreement; the agreement does not contain a material adverse change provision. If CFC were to borrow funds under the agreement, it would be required to repay the amount borrowed plus interest at variable rates that are specified in the agreement.

At March 10, 2010, CFC's senior secured collateral trust bonds are rated A1/A+/A, and its short-term commercial paper is rated P-1/A-1/F-2 by Moody's Investors Service, Standard & Poor's and Fitch Ratings, respectively.

About CFC

National Rural Utilities Cooperative Finance Corporation (CFC) is a cooperative that serves the nation's rural utility systems. With more than $20 billion in assets, CFC provides its member-owners with an assured source of market-priced capital and financial products and services. CFC can be found online at nrucfc.org.

About NCSC

National Cooperative Services Corporation (NCSC) is a member-owned cooperative, affiliated with CFC. It provides financing to the for-profit and not-for-profit entities that are owned, operated or controlled by the members of CFC.

Contact Information

  • Contact:
    Andrew Don
    V.P., Capital Markets Relations
    Email Contact
    703-709-6869

    Mike O'Brien
    V.P., Corporate Communications
    Email Contact
    703-709-6709