National Rural ends quarter with $1.9 billion debt due within 12 months

By Lisa Kerner

Charlotte, N.C., Oct. 19 – National Rural Utilities Cooperative Finance Corp. ended its fiscal 2016 first quarter on Aug. 31 with $1.93 billion of long-term debt scheduled to mature over the next 12 months, according to a 10-Q filed with the Securities and Exchange Commission.

The company said it believes it has “sufficient liquidity from the combination of existing cash and time deposits, member loan repayments, committed loan facilities and our ability to issue debt in the capital markets, to our members and in private placements, to meet the demand for member loan advances and satisfy our obligations to repay long-term debt maturing over the next 12 months.”

Cash and time deposits totaled $751 million.

National Rural had up to $500 million available under its committed loan facilities from the Federal Financing Bank, $3.42 billion available under committed revolving lines of credit with a syndicate of banks, up to $300 million available under a new note purchase agreement with Farmer Mac and, subject to market conditions, up to $2.42 billion available under the existing revolving note purchase agreement with Farmer Mac.

On Sept. 28, the company received a commitment from Rural Utilities Service to guarantee a loan of $250 million from the Federal Financing Bank of the U.S. Department of Agriculture pursuant to the guaranteed underwriter program. Upon closing of the commitment, National Rural will have an additional $250 million available under the program with a 20-year maturity repayment period during the three-year period following the date of closing.

Additionally, the company has the ability to issue collateral trust bonds and medium-term notes in the capital markets and medium-term notes to members.

The company believes it can continue to roll over the member outstanding short-term debt of about $2.29 billion based on expectation that members will continue to reinvest their excess cash in the company’s commercial paper, daily liquidity fund and select notes.

National Rural also believes it can continue to roll over its outstanding dealer commercial paper of $915 million, according to the filing.

The company intends to manage its short-term wholesale funding risk by maintaining its dealer commercial paper within an approximate range between $1 billion and $1.25 billion for the foreseeable future.

National Rural’s goal is to maintain its adjusted debt-to-equity ratio at or below 6 to 1, but it is expected to be higher than that in the near term.

The company is a market lender for electric cooperatives based in Herndon, Va.

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