National Rural Utilities sold $350 million notes for April maturities

By Devika Patel

Knoxville, Tenn., April 10 – National Rural Utilities Cooperative Finance Corp. management said that the company’s recent $350 million sale of notes was timed “purposefully” to coincide with its current April maturities in order to fund the $1.07 billion April maturities as well as other maturities coming due in the next 12 months, for a total of $5.7 billion of maturities that need to be paid.

“During the third quarter, we issued $350 million of secured notes under our revolving note purchase agreement with Federal Agricultural Mortgage Corp., also known as Farmer Mac,” senior vice president and chief financial officer Andrew Don said on the company’s third quarter earnings conference call on Monday.

“We did this as a precaution because we do have significant maturities in the month of April.

“We have a $570 million maturity today [Monday] and then we have a $500 million maturity later in the month so we did it as a precaution and we will look to use some of that to potentially pay down some of the maturities and we have some other maturities [due in the next 12 months].

“We had timed these purposefully to mature in the month of April to have as another source in case there were some issues in the capital markets,” he said.

Don noted that the company is well capitalized.

“CFC maintains a more than adequate liquidity reserve from a variety of sources to meet our members’ borrowing needs as well as service all of our debt obligations.”

He said the company has $8.2 billion of liquidity from these sources available to meet its debt maturities in the next 12 months of $5.7 billion, and the company is reporting 1.4x liquidity coverage.

At Feb. 28, 2017, the company’s total debt outstanding increased by $1.2 billion, or 5%, from nine months earlier on May 31, 2016.

In addition to the third quarter activities, on April 6, National Rural Utilities sold $350 million of two-year medium-term senior floating-rate notes at par to yield Libor plus 20 basis points.

The series D notes (A2/A/A) are non-callable.

RBC Capital Markets, LLC was the bookrunner.

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

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