National Rural Utilities accepts $209.4 million 8% notes for exchange

By Angela McDaniels

Tacoma, Wash., May 19 - National Rural Utilities Cooperative Finance Corp. received tenders for $209,401,000 principal amount of its $660,275,000 of outstanding 8% medium-term notes, series C, due 2032 and accepted all of the notes for exchange, according to a company news release.

An exchange offer for the notes began April 21 and ended at midnight ET on May 16. The early participation date was 5 p.m. ET on May 2.

The offer was made to some eligible holders of $209,401,000 principal amount of the notes, so the amount of notes tendered equals all of the notes eligible for the offer.

Holders will receive 4.023% collateral trust bonds due Nov. 1, 2032 and cash in exchange for their 8% notes.

For each $1,000 principal amount of old notes, holders will receive a total exchange consideration of $1,445.00, which is payable 70% in new bonds and 30% in cash, plus accrued interest on the old notes less accrued interest on the new bonds at the time of their issuance on May 23. This payment includes an early participation amount of $30.00 for each note tendered by the early participation date.

The total exchange value was set at $1,445.00 through a modified Dutch auction using bid prices of between $1,415.00 and $1,445.00 for each $1,000 principal amount and a new bonds price of $969.92.

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.

In the aggregate, eligible holders whose old notes were accepted for exchange will receive $218,330,000 principal amount of 4.023% notes, $90,775,334 in cash and an additional $3,278,065 in cash for accrued interest.

The old notes that have been accepted in the exchange offer will be exchanged, retired and canceled.

The information agent was 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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