National Rural to price tap of 7.125% subordinated notes due 2053

By William Gullotti

Buffalo, N.Y., Feb. 1 – National Rural Utilities Cooperative Finance Corp. is preparing to offer additional 7.125% fixed-to-fixed reset rate subordinated notes due Sept. 15, 2053 (Cusip: 637432PB5), according to a 424B5 filing with the Securities and Exchange Commission.

The tap offering will be issued under the same indenture and Cusip number as the initial $300 million issued May 26, 2023.

Interest is 7.125% initially and will reset on Sept. 15, 2028 and every five years thereafter at Treasuries plus 353.3 basis points.

Interest may be deferred for up to 20 consecutive semiannual interest periods, provided that no event of default has occurred or is ongoing. National Rural will be subject to certain restrictions during any such optional deferral.

National Rural may exercise a par call option, in whole or in part, during the three-month period prior to an interest reset date until the date itself. The notes may also be called at par due to a tax event or at 102 due to a rating agency event.

Mizuho Securities USA LLC is the sole returning bookrunning manager from the initial issue.

U.S. Bank Trust Co., NA is the trustee.

Hogan Lovells US LLP is counsel to the issuer. Hunton Andrews Kurth LLP is counsel to the underwriters.

Proceeds will be used for general corporate purposes.

The market lender for electric cooperatives is based in Dulles, Va.

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