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National Rural Utilities, Va., buys $57 million of tax-exempt bonds
By Cristal Cody
Tupelo, Miss., Oct. 14 - The National Rural Utilities Cooperative Finance Corp. in Virginia purchased $57 million of tax-exempt bonds in September and October due to its obligation as the liquidity provider, according to a quarterly earnings report filed with the Securities and Exchange Commission.
The company now is required to hold the bonds until the securities are placed with third-party investors.
Until then, National Rural receives a default interest rate on a majority of the bonds that is higher than the rate investors usually receive on similar tax-exempt bonds.
The company also plans to redeem $8 million of the bonds on Wednesday because of a mandatory sinking fund payment.
National Rural makes loans to rural utility system members to acquire, construct and operate electric distribution, generation and transmission facilities.
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