National Rural Utilities makes change to exchange offer for 8% notes

By Angela McDaniels

Tacoma, Wash., April 30 - National Rural Utilities Cooperative Finance Corp. amended the exchange offer for up to $175 million principal amount of its $660,275,000 outstanding 8% medium-term notes, series C, due 2032, according to a company news release.

Pricing for the exchange offer will be set using a modified Dutch auction using bid prices of between $1,415 and $1,445 for each $1,000 principal amount.

As amended, if the total exchange consideration is determined to be $1,430 per $1,000 principal amount or less, all notes tendered by the early participation date, 5 p.m. ET on May 2, with a bid price equal to the total exchange consideration will be accepted for exchange without proration. In addition, all notes tendered after the early participation date and by the expiration date, midnight ET on May 16, will be accepted for exchange without proration and entitled to receive the exchange consideration but not the early participation amount, which is $30 per $1,000 principal amount of notes.

If the total exchange consideration is determined to be more than $1,430 per $1,000 principal amount, holders that tender notes with a bid price equal to the total exchange consideration and holders that tender notes after the early participation date and by the expiration date, may be subject to proration.

As previously reported, the company is offering to issue 4.023% collateral trust bonds due Nov. 1, 2032 and cash to eligible holders in exchange for their 8% notes. The total exchange value will be 70% new notes and 30% cash.

The new bonds will comprise part of the same series as, and are expected to be fungible for U.S. federal income tax purposes with, the $379,372,000 principal amount of 4.023% collateral trust bonds due Nov. 1, 2032 issued on Oct. 16, 2012.

Holders who exchange will receive accrued interest for the old notes less an amount equal to accrued interest on the new bonds at settlement.

The exchange offer began April 21. Withdrawal rights will expire at 5 p.m. ET on May 2.

The information agent is D.F. King & Co., Inc. (212 269-5550 for banks and brokerage firms, 800 967-4604 for all others or by email at NRUCFC@dfking.com).

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

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