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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
August 26, 1998
NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION
(Exact name of registrant as specified in its charter)
District of Columbia l-7102 52-0891669
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(state or other juris- (Commission (I.R.S. Employer
diction of incorporation) File Number) Identification No.)
Woodland Park, 2201 Cooperative Way, Herndon, VA 20171
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (703)709-6700
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(Former name or former address, if changed since last report)
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Item 7. Financial Statements, Pro Forma Financial
Information and Exhibits.
(c) Exhibits
The following exhibits are filed herewith:
4.1 Form of Global Certificate for the 7.375% Quarterly Income Capital
Securities (Subordinated Deferrable Interest Debentures Due 2047).
8. Opinion and consent of Milbank, Tweed, Hadley & McCloy.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NATIONAL RURAL UTILITIES COOPERATIVE
FINANCE CORPORATION
/s/ Steven L. Lilly
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Steven L. Lilly
Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)
Dated: August 28, 1998
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
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<S> <C>
4.1 Form of Global Certificate for the 7.375% Quarterly Income
Capital Securities (Subordinated Deferrable Interest Debentures
Due 2047).
8. Opinion and consent of Milbank, Tweed, Hadley & McCloy.
</TABLE>
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Exhibit 4.1
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
No. 1
Cusip No. 637432402
8,000,000 Subordinated Deferrable Interest
Debentures (QUICS), $25 principal each
NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION
7.375% QUARTERLY INCOME CAPITAL SECURITIES
(SUBORDINATED DEFERRABLE INTEREST DEBENTURES DUE 2047)
NATIONAL RURAL UTILITIES COOPERATIVE FINANCE
CORPORATION, a cooperative association duly organized and existing under the
laws of the District of Columbia (herein referred to as the "Company", which
term includes any successor Person under the Indenture), for value received,
hereby promises to pay to CEDE & CO., or registered assigns, the principal sum
of $200,000,000 on September 15, 2047, to pay interest on said principal sum
from August 31, 1998 or from the most recent Interest Payment Date through which
interest has been paid or duly provided for, quarterly in arrears on March 15,
June 15, September 15 and December 15 of each year, commencing December 15,
1998, at the rate of 7.375% per annum to, but not including, the date on which
the principal hereof is paid or made available for payment. The amount of
interest payable on any Interest Payment Date shall be computed on the basis of
a 360-day year of twelve 30-day months. In the event that any date on which
interest is payable on the Securities is not a Business Day, then payment of the
interest payable on such date will be made on the next succeeding day which is a
Business Day (and without any interest or other payment in respect of any such
delay), except that, if such Business Day is in the next succeeding calendar
year, such payment will be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on such date. A "Business
Day" is any day other than a day on which banking institutions in New York City
are authorized or obligated by law to close. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in such Indenture, be paid to the Person in whose name this Security
(or one or more Predecessor Securities) is registered at the
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close of business on the Regular Record Date for such interest, which shall be
the Business Day next preceding such Interest Payment Date. Any such interest
not so punctually paid or duly provided for will forthwith cease to be payable
to the Holder on such Regular Record Date and may either be paid to the Person
in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest to be fixed by the Trustee, notice whereof shall be
given to Holders of Securities of this series not less than 10 days prior to
such Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Securities of this series may be listed, and upon such notice as may be required
by such exchange, all as more fully provided in the Indenture referred to on the
reverse hereof.
Payment of the principal of and interest on this Security will be made
at the office or agency of the Company maintained for that purpose in the
Borough of Manhattan, the City and State of New York, in such coin or currency
of the United States of America at the time of payment is legal tender for
payment of public and private debts.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE CORPORATION
By:
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ATTEST:
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CERTIFICATE OF AUTHENTICATION
Dated:
This is one of the Securities of the series designated herein referred
to in the within-mentioned Indenture.
HARRIS TRUST AND SAVINGS BANK
By:
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Authorized Signatory
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REVERSE OF QUICS
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of October 15, 1996, as amended (herein
called the "Indenture", which term shall have the meaning assigned to it in such
instrument), between the Company and Harris Trust and Savings Bank, as Trustee
(herein called the "Trustee", which term includes any successor trustee under
the Indenture), and reference is hereby made to the Indenture for a statement of
the respective rights, limitations of rights, duties and immunities thereunder
of the Company, the Trustee and the Holders of the Securities and of the terms
upon which the Securities are, and are to be, authenticated and delivered. This
Security is one of the series designated on the face hereof, limited in
aggregate principal amount to $200,000,000.
The Securities of this series are subject to redemption upon not less
than 30 nor more than 60 days' notice by mail, at any time on or after September
15, 2003 as a whole or in part, at the election of the Company, at a Redemption
Price equal to 100% of the principal amount, together in the case of any such
redemption with accrued interest to, but not including, the Redemption Date, but
interest installments whose Stated Maturity is on or prior to such Redemption
Date will be payable to the Holder of such Security, or one or more Predecessor
Securities, of record at the close of business on the related Regular Record
Date referred to on the face hereof, all as provided in the Indenture. If a
partial redemption would result in a delisting of the Securities from any
national securities exchange on which the Securities are then listed, the
Company may redeem such Securities only in whole.
In the event of redemption of this Security in part only, a new
Security or Securities of this series and of like tenor for the unredeemed
portion hereof will be issued in the name of the Holder hereof upon the
cancellation hereof.
The indebtedness evidenced by this Security is, to the extent provided
in the Indenture, subordinated and subject in right of payment to the prior
payment in full of all Senior Indebtedness, and this Security is issued subject
to the provisions of the Indenture with respect thereto. Each Holder of this
Security, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his behalf to take such
action as may be necessary or appropriate to acknowledge or effectuate the
subordination so provided and (c) appoints the Trustee his attorney-in-fact for
any and all such purposes. Each Holder hereof, by his acceptance hereof, hereby
waives all notice of the acceptance of the subordination provisions contained
herein and in the Indenture by each holder of Senior Indebtedness, whether now
outstanding or hereafter incurred, and waives reliance by each such Holder upon
said provisions.
The Indenture contains provisions for defeasance at any time of the
entire indebtedness of this Security upon compliance with certain conditions set
forth in the Indenture.
If an Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture.
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In addition to the events of default set forth in the Indenture, the
following will constitute an Event of Default under the Indenture with respect
to the Securities: the Company shall pay any dividend or interest on, or
principal of, or redeem, purchase, acquire or make a liquidation payment with
respect to, any Members' Subordinated Certificates, Members' Equity or patronage
capital, if such payment is made during an Extension Period, and either (i) such
Extension Period has not expired or been terminated or (ii) the Company had not
made all payments due on the Securities as a result of such expiration or
termination.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the Securities at
the time Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Securities of each series at the time Outstanding, on behalf of the
Holders of all Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the registration
of transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security.
As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than 33-1/3% in aggregate
principal amount of the Securities of this series at the time Outstanding shall
have made written request to the Trustee to institute proceedings in respect of
such Event of Default as Trustee and offered the Trustee reasonable indemnity,
and the Trustee shall not have received from the Holders of a majority in
aggregate principal amount of Securities of this series at the time Outstanding
a direction inconsistent with such request, and shall have failed to institute
any such proceeding, for 60 days after receipt of such notice, request and offer
of indemnity. The foregoing shall not apply to any suit instituted by the Holder
of this Security for the enforcement of any payment of principal hereof or
interest hereon on or after the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and interest on this
Security at the times, place and rate, and in the coin or currency, herein
prescribed.
The Company shall have the right at any time and from time to time
during the term of the Securities of this series to extend the interest payment
period to a period not exceeding 20 consecutive quarters (an "Extended Interest
Payment Period"), and at the end of such Extended Interest Payment Period or
upon the date of the termination of the Extended Interest Payment Period if
prior to the end, the Company shall pay all interest then accrued and unpaid
(together with interest thereon at the same rate as specified for the Securities
of this series
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to the extent permitted by applicable law) through the last day of such Extended
Interest Payment Period, provided that if any principal amount of this Security
is paid on such day, then not including interest for such day with respect to
such principal amount; provided, that during such Extended Interest Payment
Period the Company may not declare or pay any dividend on, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of its Members'
Subordinated Certificates, Members' Equity or patronage capital. Prior to the
termination of any such Extended Interest Payment Period, the Company may
further extend the interest payment period, provided that such Extended Interest
Payment Period, together with all such previous and further extensions thereof,
may not exceed 20 consecutive quarters or extend beyond the Stated Maturity of
the Securities of this series. Upon the termination of any such Extended
Interest Payment Period and the payment of all amounts then due, the Company may
select a new Extended Interest Payment Period, subject to the above
requirements. No interest during an Extended Interest Payment Period, except at
the end thereof, shall be due and payable. The Company shall give the Holder of
this Security notice of its selection of such Extended Interest Payment Period
as provided in the Indenture.
The Securities of this series are issuable only in registered form
without coupons in denominations of $25 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of this series and of like tenor and of authorized denominations,
as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
The Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the absolute
owner hereof for all purposes, whether or not this Security be overdue, and
neither the Company, the Trustee nor any such agent shall be affected by notice
to the contrary.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
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Exhibit 8
August 26, 1998
National Rural Utilities
Cooperative Finance Corporation
Woodland Park
2201 Cooperative Way
Herndon, VA 20171
Re: Federal Income Tax Considerations
Relating to the QUICS Offering
Dear Sirs:
We have acted as special counsel to National Rural Utilities
Cooperative Finance Corporation, a District of Columbia cooperative association
("CFC"), in connection with the proposed public offering of Quarterly Income
Capital Securities, as described in CFC's Registration Statement on Form S-3
(the "Registration Statement"), registration no. 333-53847, filed on May 28,
1998 with the Securities and Exchange Commission, and any amendments and
supplements thereto. We hereby consent to the incorporation by reference of this
opinion into the Registration Statement and to the reference to us under the
heading "U.S. Taxation" in the prospectus supplement contained in the
Registration Statement.
In rendering our opinion, we have examined and are familiar with
originals or copies, certified or otherwise identified to our satisfaction, of
such documents as we have deemed necessary or appropriate as a basis for the
opinion set forth below. In our examination, we have assumed the genuineness of
all signatures, the legal capacity of natural persons, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such copies. As to any facts material to this
opinion that we did not independently establish or verify, we have relied upon
statements and representations of officers and other representatives of CFC. We
note that we have rendered our opinion under present law which is subject to
change, and we disclaim any obligation to advise you should relevant law change.
Subject to the assumptions, qualifications and comments in this letter,
all statements of law and legal conclusions contained in the discussion in the
prospectus supplement contained in the Registration Statement with respect to
United States Federal income taxation under the heading "U.S. Taxation"
represent our opinion with respect to the matters set forth therein.
Very truly yours,
Milbank, Tweed, Hadley & McCloy
GM/MW
