National Rural Utilities Cooperative Finance Corporation (CFC) Signs Three-Year, $1.3 Billion Credit Agreement With 14 Banks
March 11 2010 - 1:42PM
Marketwired
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: Andrew Don V.P., Capital Markets Relations Email
Contact 703-709-6869 Mike O'Brien V.P., Corporate Communications
Email Contact 703-709-6709
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