National Rural holders tender $209.4 million 8% notes within bid price

By Susanna Moon

Chicago, May 5 - National Rural Utilities Cooperative Finance Corp. said investors had tendered $209,401,000 of 8% medium-term notes, series C, due 2032 with a bid price of $1,445 or less.

The total exchange value was set at $1,445 for each $1,000 principal amount of notes tendered by 5 p.m. ET on May 2, the early tender date, according to a company news release.

The principal amount of new bonds issued in the exchange offer will be calculated using an issue price for the new bonds of $969.92.

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.

The early participation amount is $30 per $1,000 principal amount of notes.

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 company said on April 30 that it amended the exchange offer for up to $175 million principal amount of the $660,275,000 outstanding notes.

Pricing for the exchange offer was 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 value was determined to be $1,430 per $1,000 principal amount or less, all notes tendered by the early tender date with a bid price equal to the total exchange value would have been accepted for exchange without proration. In addition, all notes tendered after the early date would have been accepted for exchange without proration.

Because the total exchange payment will be $1,445, notes tendered after the early deadline may be subject to proration, the company said.

The tender offer will continue until midnight ET on May 16. The exchange offer began April 21.

Tendered notes may no longer be withdrawn, as of the early deadline.

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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