<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 5, 2000
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE CORPORATION
(Exact name of registrant as specified in charter)
<TABLE>
<S> <C>
DISTRICT OF COLUMBIA 52-089-1669
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
</TABLE>
2201 COOPERATIVE WAY
HERNDON, VIRGINIA 20171-3025
(703) 709-6700
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
JOHN JAY LIST, GENERAL COUNSEL
NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION
2201 COOPERATIVE WAY
HERNDON, VIRGINIA 20171-3025
(703) 709-6700
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
COPIES TO:
<TABLE>
<S> <C>
MARK L. WEISSLER, ESQ. THOMAS R. BROME, ESQ.
MILBANK, TWEED, HADLEY & MCCLOY LLP CRAVATH, SWAINE & MOORE
1 CHASE MANHATTAN PLAZA 825 EIGHTH AVENUE
NEW YORK, NEW YORK 10005 NEW YORK, NEW YORK 10019
(212) 530-5446 (212) 474-1000
</TABLE>
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: From time to
time after the effective date of this registration statement as determined by
market conditions.
IF THE ONLY SECURITIES BEING REGISTERED ON THIS FORM ARE BEING OFFERED PURSUANT
TO DIVIDEND OR INTEREST REINVESTMENT PLANS, PLEASE CHECK THE FOLLOWING BOX. [ ]
IF ANY OF THE SECURITIES BEING REGISTERED ON THIS FORM ARE TO BE OFFERED ON A
DELAYED OR CONTINUOUS BASIS PURSUANT TO RULE 415 UNDER THE SECURITIES ACT OF
1933, OTHER THAN SECURITIES OFFERED ONLY IN CONNECTION WITH DIVIDEND OR INTEREST
REINVESTMENT PLANS, PLEASE CHECK THE FOLLOWING BOX. [X]
IF THIS FORM IS FILED TO REGISTER ADDITIONAL SECURITIES FOR AN OFFERING PURSUANT
TO RULE 462(b) UNDER THE SECURITIES ACT, PLEASE CHECK THE FOLLOWING BOX AND LIST
THE SECURITIES ACT REGISTRATION STATEMENT NUMBER OF THE EARLIER EFFECTIVE
REGISTRATION STATEMENT FOR THE SAME OFFERING. [ ]
IF THIS FORM IS A POST-EFFECTIVE AMENDMENT FILED PURSUANT TO RULE 462(c) UNDER
THE SECURITIES ACT, CHECK THE FOLLOWING BOX AND LIST THE SECURITIES ACT
REGISTRATION STATEMENT NUMBER OF THE EARLIER EFFECTIVE REGISTRATION STATEMENT
FOR THE SAME OFFERING. [ ]
IF DELIVERY OF THE PROSPECTUS IS EXPECTED TO BE MADE PURSUANT TO RULE 434,
PLEASE CHECK THE FOLLOWING BOX. [ ]
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
TITLE OF EACH PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
CLASS OF SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE REGISTRATION
TO BE REGISTERED REGISTERED(1) PER UNIT(2) OFFERING PRICE(2) FEE(3)
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt securities.............. $2,000,000,000 100% $2,000,000,000 $528,000
</TABLE>
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(1) Expressed as the principal amount of securities, or in the case of original
issue discount securities, the offering price thereof.
(2) Estimated solely for purposes of calculating the registration fee.
(3) This registration statement includes an additional $823,676,000 of debt
securities previously registered on Form S-3 (registration number
333-87793). A filing fee of $217,451 associated with these securities was
previously paid upon filing of such registration statement.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
PURSUANT TO RULE 429 OF THE COMMISSION UNDER THE SECURITIES ACT OF 1933, THE
WITHIN PROSPECTUS RELATES TO DEBT SECURITIES REGISTERED HEREBY AND TO DEBT
SECURITIES PREVIOUSLY REGISTERED BY REGISTRATION STATEMENT NUMBER 333-87793.
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<PAGE> 2
The information in this prospectus is not complete and may be changed.
We may not sell these securities until the registration statement filed
with the Securities and Exchange Commission is effective. This
prospectus is not an offer to sell these securities and we are not
soliciting an offer to buy these securities in any State where the offer
or sale is not permitted.
PROSPECTUS
SUBJECT TO COMPLETION, DECEMBER 5, 2000
[COOPERATIVE FINANCE CORPORATION LOGO]
National Rural Utilities
Cooperative Finance Corporation
$2,823,676,000
Debt Securities
------------------------
We plan to issue from time to time up to $2,823,676,000 of debt securities. We
will provide the specific terms of these debt securities in supplements to this
prospectus. You should read this prospectus and any supplements carefully.
------------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these debt securities, or determined if
this prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
------------------------
This prospectus may not be used to consummate the sale of debt securities unless
accompanied by a prospectus supplement.
------------------------
THE DATE OF THIS PROSPECTUS IS DECEMBER , 2000
<PAGE> 3
WHERE YOU CAN FIND MORE INFORMATION ABOUT
NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION
National Rural Utilities Cooperative Finance Corporation ("CFC") files
annual, quarterly and current reports and other information with the SEC. You
may read and copy any document CFC files at the SEC's public reference rooms in
Washington, D.C., New York, New York and Chicago, Illinois. Please call the SEC
at 1-800-SEC-0330 for further information on the public reference rooms. CFC's
SEC filings are also available to the public at the SEC's web site at
http://www.sec.gov.
The SEC allows the incorporation by reference of information filed in other
documents into this prospectus, which means that CFC can disclose information
important to you by referring you to those documents. The information
incorporated by reference is considered to be a part of this prospectus, and
later information filed with the SEC will update and supersede this information.
CFC incorporates by reference the documents listed below and any future filings
made with the SEC under Section 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934 until this offering is completed:
- Annual Report on Form 10-K for the year ended May 31, 2000, and
- Quarterly Report on Form 10-Q for the quarter ended August 31, 2000.
You may request a copy of these filings, at no cost, by writing to or
telephoning us at the following address:
Steven L. Lilly
Senior Vice President and Chief Financial Officer
National Rural Utilities Cooperative Finance Corporation
Woodland Park, 2201 Cooperative Way
Herndon, Virginia 20171-3025
(703) 709-6700
---------------------
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT. WE HAVE AUTHORIZED NO
ONE TO PROVIDE YOU WITH DIFFERENT INFORMATION. YOU SHOULD NOT ASSUME THAT THE
INFORMATION CONTAINED IN THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT IS
ACCURATE AS OF ANY DATE OTHER THAN THE DATE ON THE FRONT COVER OF THE DOCUMENT.
WE ARE NOT MAKING AN OFFER OF THESE DEBT SECURITIES IN ANY STATE WHERE THE OFFER
IS NOT PERMITTED.
2
<PAGE> 4
CFC
CFC was incorporated as a private, not-for-profit cooperative association
under the laws of the District of Columbia in 1969. CFC's principal purpose is
to provide its members with a source of financing to supplement the loan program
of the Rural Utilities Service ("RUS") (formerly the Rural Electrification
Administration) of the United States Department of Agriculture. CFC makes loans
primarily to its rural utility system members to enable them to acquire,
construct and operate electric distribution, generation, transmission and
related facilities. CFC also makes loans to service organization members to
finance office buildings, equipment, related facilities and services provided by
them to the rural utility systems. CFC has also provided guarantees for
tax-exempt financing of pollution control facilities and other properties
constructed or acquired by its members. Through Rural Telephone Finance
Cooperative ("RTFC"), a controlled affiliate of CFC established in 1987, CFC
provides financing to rural telephone and telecommunications companies and their
affiliates. Also, through Guaranty Funding Cooperative ("GFC"), a controlled
affiliate of CFC established in 1991, CFC provides financing for rural electric
systems to refinance RUS guaranteed debt previously held by the Federal
Financing Bank of the United States Treasury. CFC's offices are located at
Woodland Park, 2201 Cooperative Way, Herndon, Virginia 20171-3025 and its
telephone number is (703) 709-6700.
CFC's 1,050 members as of August 31, 2000 included 904 rural electric
utility members, virtually all of which are consumer-owned cooperatives, 73
service organization members and 73 associate members. The utility member
systems included 833 distribution systems and 71 generation and transmission
systems operating in 49 states and two U.S. territories.
CFC's long-term loans to utility members generally have 35-year maturities.
CFC makes loans directly to members or in conjunction with concurrent RUS loans.
Loans made to members that do not also have RUS loans are generally secured by a
mortgage or substantially all the utility member's property (including
revenues). Loans made to members that also have RUS loans are generally secured
ratably with RUS's loans by a common mortgage on substantially all the utility
member's property including revenues CFC makes. Interest rates on these loans
are either fixed or variable. Fixed rates are offered daily based on the overall
cost of long-term funds and may be obtained for any period from one to 35 years.
Variable rates are adjusted monthly in line with changes in the cost of
short-term funds.
CFC makes short-term line-of-credit loans and intermediate-term loans with
up to five-year maturities. CFC makes these loans on either a secured or an
unsecured basis. CFC has the right to adjust the rates on these loans
semi-monthly in line with changes in the short-term cost of funds. The
intermediate-term loans are generally made to power supply systems in connection
with the planning and construction of new generating plants and transmission
facilities.
CFC also makes loans to telecommunication systems through RTFC. These loans
are long-term fixed or variable rate loans generally with maturities not
exceeding 15 years and short-term loans. In many cases, the customers of the
electric cooperatives are also the customers of the RTFC telecommunication
systems, as both the cooperatives and the RTFC systems serve the rural areas of
the United States.
At August 31, 2000, CFC had a total of $18,642 million of loans outstanding
and $1,990 million of guarantees outstanding.
CFC's guarantees are senior obligations ranking on a par with its other
senior debt. Even if the system defaults in payment of the guaranteed
obligations, the debt cannot be accelerated as long as CFC pays the debt service
under its guarantee as due. The system is generally required to reimburse CFC on
demand for amounts paid on the guarantee, and this obligation is usually secured
by a mortgage, often joint with RUS, on the system's property or, in the case of
a lease transaction, on the leased property. Holders of $915 million of the
guaranteed pollution control debt at August 31, 2000 had the right at certain
times to tender their bonds for remarketing, and, if they cannot otherwise be
remarketed, CFC has committed to purchase bonds so tendered.
By policy, CFC maintains an allowance for loan losses at a level believed
to be adequate in relation to the quality and size of its loans and guarantees
outstanding. At August 31, 2000, the allowance was $239 million. At August 31,
2000, CFC's largest ten borrowers had outstanding loans totaling $4,428 million,
which
3
<PAGE> 5
represented 24% of CFC's total loans outstanding. As of August 31, 2000,
outstanding guarantees for these same ten largest borrowers totaled $517
million, which represented 24% of CFC's guarantees outstanding. On that date, no
borrower had loans and guarantees outstanding in excess of 4% of the aggregate
amount of CFC's outstanding loans and guarantees.
CFC's fixed charge coverage ratio was as follows for the periods indicated:
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
AUGUST 31, YEAR ENDED MAY 31,
------------- --------------------------------
2000 1999 2000 1999 1998 1997 1996
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
1.16 1.12 1.13 1.12 1.12 1.12 1.12
</TABLE>
Margins used to compute the fixed charge coverage ratio represent net
margins before extraordinary loss resulting from redemption premiums on bonds
plus fixed charges. The fixed charges used in the computation of the fixed
charge coverage ratio consist of interest and amortization of bond discount and
bond issuance expenses.
USE OF PROCEEDS
Unless otherwise specified in a prospectus supplement, CFC will add the net
proceeds from the sale of the debt securities to the general funds, which will
be used to make loans to members, repay short-term borrowings, refinance
existing long-term debt and for other corporate purposes. CFC expects to incur
additional indebtedness from time to time, the amount and terms of which will
depend upon the volume of its business, general market conditions and other
factors.
SUMMARY FINANCIAL INFORMATION
The following is a summary of selected financial data for each of the five
years ended May 31, 2000.
<TABLE>
<CAPTION>
2000 1999 1998 1997 1996
---- ---- ---- ---- ----
(DOLLAR AMOUNTS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
For the year ended May 31:
Operating income................ $ 1,020,998 $ 792,052 $ 639,948 $ 567,065 $ 508,090
=========== =========== =========== ========== ==========
Operating margin................ $ 116,497 $ 76,439 $ 57,022 $ 54,736 $ 50,621
Gain on sale of land............ -- -- 5,194 -- --
Extraordinary loss(A)........... (1,164) -- -- -- (1,580)
----------- ----------- ----------- ---------- ----------
Net margins..................... $ 115,333 $ 76,439 $ 62,216 $ 54,736 $ 49,041
=========== =========== =========== ========== ==========
Fixed charge coverage
ratio(A)...................... 1.13 1.12 1.12 1.12 1.12
=========== =========== =========== ========== ==========
As of May 31:
Assets.......................... $17,083,440 $13,925,252 $10,682,888 $9,057,495 $8,054,089
=========== =========== =========== ========== ==========
Long-term debt(B)............... $10,595,596 $ 6,891,122 $ 5,024,621 $3,596,231 $3,682,421
=========== =========== =========== ========== ==========
Quarterly income capital
securities.................... $ 400,000 $ 400,000 $ 200,000 $ 125,000 $ --
=========== =========== =========== ========== ==========
Members' subordinated
certificates.................. $ 1,340,417 $ 1,239,816 $ 1,229,166 $1,212,486 $1,207,684
=========== =========== =========== ========== ==========
Members' equity................. $ 341,217 $ 296,481 $ 279,278 $ 271,594 $ 269,641
=========== =========== =========== ========== ==========
Leverage ratio(C)............... 8.12 7.11 6.39 5.87 5.70
=========== =========== =========== ========== ==========
Debt to equity ratio(D)......... 6.46 5.52 4.51 3.97 3.63
=========== =========== =========== ========== ==========
</TABLE>
---------------
(A) Extraordinary losses for the years ended May 31, 1996 and 2000 represent
premiums in connection with the prepayment of collateral trust bonds. Margin
used to compute the fixed charge coverage ratios represent net margin before
extraordinary losses plus fixed charges. The fixed charges used in the
computation of the fixed charge coverage ratios consist of interest and
amortization of bond discounts and bond issuance expenses.
4
<PAGE> 6
(B) Includes commercial paper reclassified as long-term debt and excludes $3,040
million, $983 million, $327 million, $269 million and $352 million in
long-term debt that comes due, matures and/or will be redeemed early during
fiscal years 2000, 1999, 1998, 1997 and 1996, respectively.
(C) In accordance with CFC's revolving credit agreements, the leverage ratio is
calculated by dividing debt and guarantees outstanding, excluding quarterly
income capital securities ("QUICS") and debt used to fund loans guaranteed
by the RUS, by the total of QUICS, members' subordinated certificates and
members' equity.
(D) The debt to equity ratio is calculated by dividing debt outstanding,
excluding QUICS and debt used to fund loans guaranteed by the RUS, by the
total of QUICS, members' subordinated certificates, members' equity and the
loan loss allowance.
CFC has had outstanding guarantees for its members' indebtedness in each of
the fiscal years shown above. Members' interest expense on such indebtedness was
approximately $40 million for the year ended May 31, 2000.
CFC does not have outstanding any common stock and does not pay dividends.
Annually, CFC allocates its net margin to its members in the form of patronage
capital certificates. Under current policies, CFC retires patronage capital 70%
during the next fiscal year and holds the remaining 30% for 15 years. All
retirements of patronage capital are subject to approval by the Board of
Directors, if permitted by CFC's contractual obligations and to the extent that
the Board of Directors in its discretion may determine from time to time that
the financial condition of CFC will not be impaired as a result.
CAPITALIZATION
The following table shows the capitalization of CFC as of August 31, 2000.
<TABLE>
<CAPTION>
(DOLLARS IN THOUSANDS)
<S> <C>
Senior debt:
Short-term debt(A)........................................ $4,540,559
Long-term debt(A)......................................... 12,089,955
----------
Total senior debt(B).............................. 16,630,514
----------
Subordinated debt and members' equity:
Deferrable subordinated debt(C)........................... 400,000
Members' subordinated certificates(D)..................... 1,479,773
Members' equity(E)........................................ 308,886
----------
Total capitalization.............................. $18,819,173
==========
</TABLE>
------------
(A) At August 31, 2000, CFC short-term indebtedness is used to fund CFC's
short-, intermediate- and long-term variable rate loans, as well as its
long-term fixed rate loans on a temporary basis. It generally consists of
commercial paper with maturities of up to nine months. To support its own
commercial paper and its obligations with respect to tax-exempt debt issued
on behalf of members, CFC had at August 31, 2000, bank revolving credit
agreements providing for borrowings aggregating up to $7,040 million. CFC
may borrow under the revolving credit agreements only if it continues to
meet conditions, including maintenance of members' equity and members'
subordinated certificates of at least $1,418 million increased each fiscal
year by 90% of net margins not distributed to members and an average fixed
charge coverage ratio over the six most recent fiscal quarters of at least
1.025. The revolving credit agreements also require a fixed charge coverage
ratio of 1.05 for the preceding fiscal year as a condition to the retirement
of patronage capital and prohibit CFC from pledging collateral in excess of
150% of the principal amount of collateral trust bonds outstanding.
Commercial paper in the amount of $7,040 million is shown as long-term debt
based on CFC's ability to borrow under each of the facilities. Long-term
debt also includes CFC's outstanding collateral trust bonds and medium-term
notes.
(B) At August 31, 2000 CFC had outstanding guarantees of tax-exempt securities
issued on behalf of members in the aggregate amount of $1,018 million.
Guaranteed tax-exempt securities include
5
<PAGE> 7
$915 million of long-term adjustable or floating/fixed rate pollution
control bonds which are required to be remarketed at the option of the
holders. CFC has agreed to purchase any such bonds that cannot be
remarketed. At August 31, 2000, CFC had guaranteed its members' obligations
in connection with certain lease transactions and other debt in the amount
of $972 million.
(C) As of August 31, 2000, CFC had a total of $400 million of deferrable
subordinated debt outstanding in the form of QUICS. QUICS are subordinate
and junior in right of payment to senior indebtedness. CFC has the right at
any time and from time to time during the term of the QUICS to defer the
payment of interest for up to 20 consecutive quarters.
(D) Subordinated certificates are subordinated obligations purchased by members
as a condition of membership and in connection with CFC's extension of
long-term credit to them. Those issued as a condition of membership, $642
million at August 31, 2000, generally mature 100 years from issuance and
bear interest at 5% per annum. The others either mature 46 to 50 years from
issuance, or mature at the same time as, or amortize proportionately with,
the credit extended, and either are non-interest bearing or bear interest at
varying rates.
(E) CFC allocates its net margin among its members (in proportion to interest
earned from the members) a members' capital reserve and the cooperative
education fund. The net margin required to earn a fixed charge coverage
ratio of 1.12 is allocated to the members. The net margin earned in excess
of the amount required to earn a fixed charge coverage ratio of 1.12 is
allocated primarily to the members' capital reserve, and a small portion is
allocated to the cooperative education fund. The cooperative education fund
is distributed annually to the cooperatives to assist in the teaching of
cooperative principles. The current policy of CFC is to return the amounts
so allocated to its members 70% in the following year and to return the
remaining 30% after 15 years with due regard for CFC's financial condition.
The unretired allocations for fiscal years 1991-1993 are being retired over
the 9-year period from 2000 through 2008. The current policy of RTFC is to
retire 70% of current year's margins within 8 1/2 months of the end of the
fiscal year with the remainder to be retired at the discretion of RTFC's
Board of Directors. The current policy of GFC is to retire 100% of current
year's margin shortly after the end of the fiscal year.
DESCRIPTION OF DEBT SECURITIES
The following description summarizes the general terms and provisions that
may apply to the debt securities. Each prospectus supplement will state the
particular terms of the debt securities and the extent, if any, to which the
general provisions may apply to the debt securities included in the supplement.
The debt securities will be issued under an indenture dated as of December
15, 1987, as supplemented by a First Supplemental Indenture dated as of October
1, 1990 between CFC and The Bank of New York, as successor trustee (as so
supplemented, the "indenture"). The indenture does not limit the aggregate
principal amount of securities which may be issued thereunder. Additionally, CFC
may, without the consent of the holders of the debt securities of any series,
re-open a previous series of debt securities and issue additional debt
securities of the same series.
The statements in this prospectus concerning the indenture, one or more
supplemental indentures, board resolutions or officer's certificates
establishing the securities and the securities are merely an outline and do not
purport to be complete.
GENERAL
The debt securities will be issued in fully registered form without coupons
unless the applicable prospectus supplement provides for an issuance to be in a
form registered as to principal only with or without coupons or in bearer form
with or without coupons or any combination thereof. Debt securities may also be
issued in temporary or definitive global bearer form. Unless specified otherwise
in the prospectus supplement all debt securities will be denominated in U.S.
dollars, registered debt securities will be issued in denominations of $1,000 or
multiples of $1,000 and bearer securities will be issued in denominations of
$5,000 or multiples of $5,000.
The debt securities will be direct, unsecured obligations of CFC.
6
<PAGE> 8
If any of the debt securities are offered in a foreign currency or currency
unit or if principal of, any premium or any interest on any of the debt
securities is payable in any foreign currency or currency unit, the applicable
prospectus supplement will describe the restrictions, elections, tax
consequences, specific terms and other information relative to those debt
securities.
CFC may issue securities in one or more series with the same or various
maturities at or above par or with an original issue discount. Original issue
discount securities bearing no interest or interest at a rate which at the time
of issuance is below market rates will be sold at a discount (which may be
substantial) below their stated principal amount. See "United States
Taxation--Tax consequences to U.S. Holders--Interest" for a discussion of
certain Federal income tax considerations with respect to any original issue
discount securities.
The prospectus supplement relating to the particular series of debt
securities being offered will specify the amounts, prices and terms of those
securities. These terms may include:
- the title and the limit on the aggregate principal amount of debt
securities;
- the percentage of their principal amount at which the debt securities
will be sold;
- the date or dates on which the debt securities will mature;
- the annual rate or rates (which may be fixed or variable) or the method
of determining any rate or rates at which the debt securities will bear
interest;
- the date or dates from which such interest shall accrue and the date or
dates at which interest will be payable;
- the place where payments may be made on the debt securities;
- any redemption or sinking fund terms;
- the principal amount of original issue discount debt securities payable
upon acceleration;
- the means of satisfaction and discharge of the indenture with respect to
the debt securities;
- any changes to the events of default or covenants described in this
prospectus;
- the currency, currencies or currency unit or units for which the debt
securities may be purchased and the currency, currencies or currency unit
or units in which the payment of principal of (and premium) and interest
on such securities will be made;
- if either CFC or the holders of debt securities may elect payment in a
currency, currencies or currency unit or units other than that in which
the debt securities are stated to be payable, then the period or periods
within which, and the terms upon which, the election may be made and, if
the amount of those payments may be determined with reference to an index
based on a currency, currencies or currency unit or units, other than
that in which the debt securities are stated to be payable, then the
manner in which such amounts shall be determined;
- whether the debt securities will be issued as registered securities, in a
form registered as to principal only with or without coupons, or as
bearer securities including temporary and definitive global form, or any
combination thereof and applicable exchange provisions;
- whether CFC will pay additional amounts to any holder of debt securities
who is not a United States person (as defined under "United States
Taxation") in respect of any tax, assessment or governmental charge
required to be withheld or deducted and whether CFC will have the option
to redeem the applicable debt securities rather than pay additional
amounts;
- the applicability to the series of the indenture defeasance provisions;
7
<PAGE> 9
- whether the covenants described below under "Restriction on Indebtedness"
will apply to the debt securities; and
- any other terms of the debt securities not inconsistent with the
indenture. (Section 301)
EXCHANGE, REGISTRATION AND TRANSFER
Unless otherwise specified in the applicable prospectus supplement,
registered debt securities of any series that are not global debt securities
will be exchangeable for other registered debt securities of the same series and
of a like aggregate principal amount and tenor of different authorized
denominations. In addition, if debt securities of any series are issuable as
both registered debt securities and bearer debt securities, the holder may
choose, upon written request and subject to the terms of the indenture, to
exchange bearer debt securities and the appropriate related coupons of that
series into registered debt securities of the same series of any authorized
denominations and of a like aggregate principal amount and tenor. Bearer debt
securities with attached coupons surrendered in exchange for registered debt
securities between a regular record date or a special record date and the
relevant date for payment of interest must be surrendered without the coupon
relating to the interest payment date. Interest will not be payable in respect
of the registered debt security issued in exchange for that bearer debt
security. The interest will be payable only to the holder of that coupon when
due in accordance with the terms of the indenture. Bearer debt securities will
not be issued in exchange for registered debt securities. No service charge will
be made for any registration of transfer or exchange of the debt securities, but
CFC may require payment of a sum sufficient to cover any applicable tax.
(Section 305)
You may present debt securities for exchange as provided above. In
addition, you may present registered debt securities for registration of
transfer together with the duly executed form of transfer at the office of the
security registrar or at the office of any transfer agent designated by CFC for
that purpose with respect to any series of debt securities referred to in an
applicable prospectus supplement. The security registrar or the transfer agent
will effect the transfer or exchange upon being satisfied with the documents of
title and identity of the person making the request. CFC has appointed The Bank
of New York as security registrar. (Section 305) If a prospectus supplement
refers to any transfer agents (in addition to the security registrar) initially
designated by CFC with respect to any series of debt securities, CFC may at any
time rescind the designation of any such transfer agent or approve a change in
the location through which any such transfer agent acts. However, if debt
securities of a series are issuable solely as registered securities, CFC will be
required to maintain a transfer agent in each place of payment for such series
and, if securities of a series are issuable as bearer securities, CFC will be
required to maintain (in addition to the security registrar) a transfer agent in
a place of payment for such series. CFC may at any time designate additional
transfer agents with respect to any series of debt securities. (Section 1002)
In the event of any redemption in part, CFC will not be required to:
- issue, register the transfer of or exchange debt securities of any series
during a period beginning at the opening of business 15 days before any
selection of debt securities of that series to be redeemed and ending at
the close of business on:
- if debt securities of the series are issuable only as registered debt
securities, the day of mailing of the relevant notice of redemption;
- if debt securities of the series are issuable only as bearer debt
securities, the day of the first publication of the relevant notice of
redemption; or
- if debt securities of the series are issuable as registered debt
securities and bearer securities and there is no publication of the
relevant notice of redemption, the day of mailing of the relevant
notice of redemption;
- register the transfer of or exchange any registered debt security, or
portion thereof, called for redemption, except the unredeemed portion of
any registered debt security being redeemed in part; or
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- exchange any bearer debt security called for redemption, except to
exchange such bearer debt security for a registered debt security of that
series and like tenor which is simultaneously surrendered for redemption.
(Section 305)
PAYMENT AND PAYING AGENTS
Unless otherwise specified in an applicable prospectus supplement, payment
of principal and any premium and any interest on registered debt securities will
be made at the office of the paying agent or paying agents that CFC may
designate at various times. However, CFC may also make interest payments by
check mailed to the address, as it appears in the security register, of the
person entitled to the payments. (Section 301) Unless otherwise specified in an
applicable prospectus supplement, CFC will make payment of any installment of
interest on registered debt securities to the person in whose name that
registered debt security is registered at the close of business on the regular
record date for such interest. (Section 307)
Unless otherwise specified in an applicable prospectus supplement, the
office of The Bank of New York in the Borough of Manhattan, The City of New York
will be designated as sole paying agent for payments with respect to securities
that are issuable solely as registered debt securities and as CFC's paying agent
in the Borough of Manhattan, The City of New York, for payments with respect to
debt securities. Any paying agents outside the United States and any other
paying agents in the United States initially designated by CFC for the
securities will be named in an applicable prospectus supplement. CFC may at any
time designate additional paying agents or rescind the designation of any paying
agent or approve a change in the office through which any paying agent acts.
However, unless otherwise specified in an applicable prospectus supplement, if
debt securities of a series are issuable solely as registered debt securities,
CFC will be required to maintain a paying agent in each place of payment for
such series. If debt securities of a series are issuable as bearer debt
securities, CFC will be required to maintain:
- a paying agent in the Borough of Manhattan, The City of New York, for
payments with respect to any registered debt securities of the series and
for payments with respect to bearer debt securities of the series in
certain circumstances and
- a paying agent in a place of payment located outside the United States
where bearer debt securities of such series and any coupons may be
presented and surrendered for payment. (Section 1002)
All moneys paid by CFC to a paying agent for the payment of principal,
premium, or interest on any debt security or coupon that remains unclaimed at
the end of two years after becoming due and payable will be repaid to CFC. After
that time, the holder of the debt security or coupon will, as an unsecured
general creditor, look only to CFC for payment out of those repaid amounts.
(Section 1003)
RESTRICTION ON INDEBTEDNESS
CFC may not incur any indebtedness ranking senior to the debt securities or
make any optional prepayment on any capital term certificate if, as a result,
the principal amount of senior indebtedness outstanding, less the principal
amount of government or government insured obligations held by CFC, on any
future date would exceed 20 times the sum of the members' equity in CFC at the
time of determination plus the principal amount of capital term certificates
outstanding at the time of determination or at the given future date. The
principal amounts of senior indebtedness and capital term certificates to be
outstanding on any future given date will be computed after giving effect to
maturities and sinking fund requirements. (Section 1007) Senior indebtedness
means all indebtedness of CFC (including all guarantees by CFC of indebtedness
of others) except capital term certificates. A "capital term certificate" is
defined as a note of CFC substantially in the form of the capital term
certificates of CFC outstanding on the date of the indenture and any other
indebtedness having substantially similar provisions as to subordination. As of
August 31, 2000, CFC had $18,693 million outstanding of senior indebtedness.
Within the restrictions of the indenture, CFC was permitted to have outstanding
an additional $25,080 million of senior indebtedness.
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CONSOLIDATION, MERGER AND SALE OF ASSETS
CFC may not consolidate with or merge into any other corporation or
transfer its assets substantially as an entirety to any person unless:
- the successor is a corporation organized under the laws of any domestic
jurisdiction;
- the successor corporation assumes CFC's obligations under the indenture
and the debt securities issued under the indenture;
- immediately after giving effect to the transaction, no event of default
and no event that, after notice or lapse of time, or both, would become
an event of default, has occurred and is continuing; and
- certain other conditions are met. (Section 801)
MODIFICATION OF THE INDENTURE
Any actions that CFC or the trustee may take toward adding to CFC's
covenants, adding additional events of default, establishing the form or terms
of debt securities of any series, changing or eliminating any restriction on the
manner or place of payment of principal of or interest on bearer debt securities
will not require the approval of any holder of debt securities. In addition, CFC
or the trustee may cure ambiguities or inconsistencies in the indenture or make
other provisions as long as no holders' interests are materially and adversely
affected. (Section 901)
Under the indenture, CFC's rights and obligations and the rights of the
holders may be modified with the consent of the holders of at least a majority
in principal amount of the then outstanding debt securities of all affected
series. None of the following modifications, however, is effective against any
holders without the consent of the holders of all the affected outstanding debt
securities:
- changing the maturity, installment or interest rate of any of the debt
securities;
- reducing the principal amount, any premium or the interest rate of any of
the debt securities;
- reducing the amount of the principal of original issue discount debt
securities payable on any acceleration of maturity;
- changing the currency, currencies or currency unit or units in which any
principal, premium or interest of any of the debt securities is payable;
- changing any of CFC's obligations to maintain an office or agency in the
places and for the purposes required by the Indenture;
- impairing any right to take legal action for an overdue payment;
- reducing the percentage required for modifications to or waivers of
compliance with the indenture; or
- with certain exceptions, modifying the provisions for the waivers of
certain covenants and defaults and any of the foregoing provisions.
(Section 902)
WAIVER OF CERTAIN COVENANTS
Under the indenture, CFC will not be required to comply with certain
restrictive covenants (including that described above under "Restriction on
Indebtedness") if the holders of at least a majority in principal amount of all
series of outstanding debt securities affected waive compliance with the
restrictive covenants. (Section 1009)
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EVENTS OF DEFAULT, NOTICE AND WAIVER
Each of the following will constitute an event of default under the
indenture with respect to the securities of any series:
- failure to pay interest on any debt security for 30 days after the
interest becomes due;
- failure to pay the principal or any premium on any of the debt securities
when due;
- failure to deposit any sinking fund payment when the payment becomes due;
- failure to perform or breach of the covenant described above under
"Restrictions on Indebtedness" that continues for 60 days after the
default becomes known to an officer of CFC;
- failure to perform or breach of any other covenants or warranties in the
Indenture that continues for 60 days after notice from the trustee or the
holders of at least 25% in principal amount of the outstanding debt
securities of the series;
- certain events of bankruptcy, insolvency or reorganization of CFC; and
- such other events as may be specified for each series. (Section 501)
The indenture provides that if an event of default has happened and is
continuing, either the trustee or the holders of at least 25% in principal
amount of the outstanding debt securities of such series may declare the
principal (or, if the debt securities are original issue discount debt
securities, such portion of the principal amount as may be specified by the
terms of such debt securities) of all of the outstanding debt securities of that
series to be immediately due and payable. (Section 502)
The indenture provides that the holders of at least a majority in principal
amount of the outstanding debt securities of any series may direct the time,
method and place of conducting any proceeding for any remedy available to the
trustee, or exercising any trust or power conferred on the trustee, with respect
to the debt securities of that series. The trustee may act in any way that is
consistent with these directions and may decline to act if any such direction is
contrary to law or to the indenture or would involve the trustee in personal
liability. (Section 507)
The indenture provides that the holders of at least a majority in principal
amount of the outstanding debt securities of any series may on behalf of the
holders of all of the outstanding debt securities of the series waive any past
default with respect to such series and its consequences, except a default:
- in the payment of the principal of or any premium or any interest on any
of the debt securities of the series or;
- in respect of a covenant or provision which, under the terms of the
indenture, cannot be modified or amended without the consent of the
holders of all of the outstanding debt securities of the series affected.
(Section 508)
The indenture contains provisions entitling the trustee, subject to the
duty during an event of default in respect of any series of debt securities to
act with the required standard of care, to be indemnified by the holders of the
debt securities of the relevant series before proceeding to exercise any right
or power at the request of those holders. (Sections 601 and 603)
The indenture provides that the trustee will, within 90 days after the
occurrence of a default in respect of any series of debt securities, give to the
holders of the debt securities of that series notice of all uncured and unwaived
defaults known to it. However, except in the case of a default in the payment of
the principal of or any premium or any interest on, or any sinking fund or
purchase fund installment with respect to, any of the debt securities of that
series, the trustee will be protected in withholding this notice if it in good
faith determines that the withholding of such notice is in the interest of those
holders. The above notice shall not be given until at least 60 days after the
occurrence of an event of default regarding the performance or breach of any
covenant or warranty other than for the payment of the principal of or premium
or any interest on, or any sinking fund installment with respect to, any of the
debt securities of such series. The term default for
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the purpose of this provision only means any event that is, or after notice or
lapse of time, or both, would become, an event of default with respect to the
debt securities of that series. (Section 602)
The indenture requires CFC to file annually with the trustee a certificate,
executed by two officers of CFC, indicating whether CFC is in default under the
indenture. (Section 1008)
MEETINGS
The indenture contains provisions for convening meetings of the holders of
debt securities of a series if debt securities of that series are issuable as
bearer debt securities. (Section 1201) A meeting may be called at any time by
the trustee, and also, upon request, by CFC or the holders of at least 10% in
principal amount of the outstanding securities of such series, upon notice given
in accordance with "Notices" below. (Section 1202) Persons entitled to vote a
majority in principal amount of the outstanding securities of a series shall
constitute a quorum at a meeting of holders of debt securities of the series.
However, that in the absence of a quorum, a meeting, called by CFC or the
trustee shall be adjourned for a period of at least 10 days, and in the absence
of a quorum at the adjourned meeting, the meeting shall be further adjourned for
a period of at least 10 days, at which further adjourned meeting persons
entitled to vote 25% in aggregate principal amount of the outstanding securities
of that series shall constitute a quorum. Except for any consent which must be
given by the holder of each outstanding security affected thereby, as described
above under "Modification of the Indenture", and subject to the provisions
described in the last sentence under this subheading, any resolution presented
at a meeting or adjourned meeting duly reconvened at which a quorum is present
may be adopted by the affirmative vote of the lesser of:
- the holders of a majority in principal amount of the outstanding debt
securities of that series and
- 66 2/3% in aggregate principal amount of outstanding debt securities of
such series represented and voting at the meeting.
However, any resolution with respect to any request, demand, authorization,
direction, notice, consent, waiver or other action which may be made, given or
taken by the holders of a specified percentage, which is less than a majority,
in principal amount of outstanding debt securities of a series may be adopted at
a meeting or adjourned meeting duly reconvened at which a quorum is present by
the affirmative vote of the lesser of:
- the holders of such specified percentage in principal amount of the
outstanding debt securities of that series and
- a majority in principal amount of outstanding debt securities of such
series represented and voting at the meeting.
Any resolution passed or decision taken at any meeting of holders of debt
securities of any series duly held in accordance with the Indenture will be
binding on all holders of debt securities of that series and the related
coupons. With respect to any consent, waiver or other action which the indenture
expressly provides may be given by the holders of a specified percentage of
outstanding debt securities of all series affected (acting as one class), only
the principal amount of outstanding debt securities of any series represented at
a meeting or adjourned meeting duly reconvened at which a quorum is present as
described above and voting in favor of such action shall be counted for purposes
of calculating the aggregate principal amount of outstanding debt securities of
all series affected favoring such action. (Section 1204)
NOTICES
Except as otherwise provided in the indenture, notices to holders of bearer
debt securities will be given by publication at least once in a daily newspaper
in The City of New York and London and in such other city or cities as may be
specified in the bearer debt securities and will be mailed to the persons whose
names and addresses were previously filed with the trustee, within the time
prescribed for the giving of such notice. Notices to holders of registered debt
securities will be given by mail to the address of those holders as they appear
in the security register. (Section 106)
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TITLE
Title to any bearer debt security (including any bearer debt security in
temporary or definitive global bearer form) and any coupons will pass by
delivery. CFC, the trustee and any agent of CFC or the trustee may treat the
bearer of any bearer debt security and the bearer of any coupon and the
registered owner of any registered debt security as the absolute owner thereof
(whether or not such debt security or coupon is overdue and notwithstanding any
notice to the contrary) for the purpose of making payment and for all other
purposes. (Section 308)
REPLACEMENT OF DEBT SECURITIES AND COUPONS
CFC will replace any mutilated debt security and any debt security with a
mutilated coupon at the expense of the holder upon surrender of such mutilated
debt security or debt security with a mutilated coupon to the trustee. CFC will
replace debt securities or coupons that become destroyed, stolen or lost at the
expense of the holder upon delivery to the trustee of evidence of the
destruction, loss or theft thereof satisfactory to CFC and the trustee. In the
case of any coupon which becomes destroyed, stolen or lost, that coupon will be
replaced upon surrender to the trustee of the debt security with all related
coupons not destroyed, stolen or lost by issuance of a new debt security in
exchange for the debt security to which such coupon relates. In the case of a
destroyed, lost or stolen debt security or coupon an indemnity satisfactory to
the trustee and CFC may be required at the expense of the holder of such debt
security or coupon before a replacement debt security will be issued. (Section
306)
SATISFACTION AND DISCHARGE; DEFEASANCE
At CFC's request, the indenture will cease to be in effect as to CFC
(except for certain obligations to register the transfer or exchange of debt
securities and hold moneys for payment in trust) with respect to the debt
securities when:
- all the debt securities have been cancelled by the trustee, or;
- in the case of debt securities and coupons not delivered to the trustee
for cancellation; the debt securities or coupons have become due and
payable, will become due and payable at their stated maturity within one
year, or are to be called for redemption within one year, and, in each
case, CFC has deposited with the trustee, in trust, money, and, in the
case of debt securities and coupons denominated in U.S. dollars, U.S.
government obligations or, in the case of debt securities and coupons
denominated in a foreign currency, foreign government debt securities,
which through the payment of interest and principal in accordance with
their terms will provide money in an amount sufficient to pay in the
currency, currencies or currency units or units in which the offered debt
securities are payable all the principal of, and interest on, the offered
debt securities on the dates such payments are due in accordance with the
terms of the offered debt securities, or;
- the debt securities or coupons are deemed paid and discharged in the
manner described in the next paragraph. (Section 401)
Unless the prospectus supplement relating to the offered debt securities
provides otherwise, CFC at its option:
- will be discharged from any and all obligations in respect of the offered
debt securities (except for certain obligations to register the transfer
or exchange of debt securities, replace stolen, lost or mutilated debt
securities and coupons, maintain paying agencies and hold moneys for
payment in trust) or;
- need not comply with certain restrictive covenants of the indenture
(including those described above under "Restriction on Indebtedness"), in
each case after CFC deposits with the trustee, in trust, money, and, in
the case of debt securities and coupons denominated in U.S. dollars, U.S.
government obligations or, in the case of debt securities and coupons
denominated in a foreign currency, foreign government debt securities,
which through the payment of interest and principal in accordance with
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their terms will provide money in an amount sufficient to pay in the
currency, currencies or currency unit or units in which the offered debt
securities are payable all the principal of, and interest on, the offered
debt securities on the dates such payments are due in accordance with the
terms of the offered debt securities.
Among the conditions to CFC's exercising any such option, CFC is required
to deliver to the trustee an opinion of counsel to the effect that the deposit
and related defeasance would not cause the holders of the offered debt
securities to recognize income, gain or loss for United States federal income
tax purposes and that the holders will be subject to United States federal
income tax in the same amounts, in the same manner and at the same times as
would have been the case if the deposit and related defeasance has not occurred.
(Section 403)
At CFC's request, the trustee will deliver or pay to CFC any U.S.
government obligations, foreign government securities or money deposited, for
the purposes described in the preceding two paragraphs, with the trustee by CFC
and which, in the opinion of a nationally-recognized firm of independent public
accountants, are in excess of the amount which would then have been required to
be deposited for such purposes. In addition, the trustee, in exchange for,
simultaneously, other U.S. government obligations, foreign government securities
or money, will deliver or pay to CFC, at CFC's request, U.S. government
obligations, foreign government securities or money deposited with the trustee
for the purposes described in the preceding two paragraphs, if, in the opinion
of a nationally-recognized firm of independent public accountants, immediately
after such exchange the obligations, securities or money then held by the
trustee will be in the amount then required to be deposited with the trustee for
such purposes. (Section 403)
GOVERNING LAW
The indenture, the debt securities and the coupons will be governed by, and
construed in accordance with, the laws of the State of New York. (Section 113)
THE TRUSTEE
The Bank of New York, New York, New York is the trustee under the
indenture.
LIMITATIONS ON ISSUANCE OF BEARER SECURITIES
Under U.S. federal tax laws, certain limitations on offers, sales and
delivery apply to bearer debt securities. CFC will set forth these limitations,
as well as additional information regarding the U.S. federal income tax
consequences in respect of a bearer debt security, in any prospectus supplement
providing for the issuance of bearer debt securities.
UNITED STATES TAXATION
GENERAL
This section summarizes the material U.S. tax consequences to holders of
securities. However, the discussion is limited in the following ways:
- The discussion only covers you if you buy your securities in the initial
offering of a particular issuance of securities.
- The discussion only covers you if you hold your securities as a capital
asset (that is, for investment purposes), and if you do not have a
special tax status.
- The discussion does not cover tax consequences that depend upon your
particular tax situation in addition to your ownership of securities. We
suggest that you consult your tax advisor about the consequences of
holding securities in your particular situation.
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- The discussion is based on current law. Changes in the law may change the
tax treatment of the securities.
- The discussion does not cover state, local or foreign law.
- The discussion does not cover every type of security that we might issue.
If we intend to issue a security of a type not described in this summary,
additional tax information will be provided in the prospectus supplement
for the security.
- We have not requested a ruling from the IRS on the tax consequences of
owning the securities. As a result, the IRS could disagree with portions
of this discussion.
IF YOU ARE CONSIDERING BUYING SECURITIES, WE SUGGEST THAT YOU CONSULT YOUR
TAX ADVISORS ABOUT THE TAX CONSEQUENCES OF HOLDING THE SECURITIES IN YOUR
PARTICULAR SITUATION.
TAX CONSEQUENCES TO U.S. HOLDERS
This section applies to you if you are a "U.S. holder". A "U.S. holder" is:
- an individual U.S. citizen or resident alien;
- a corporation or partnership, or entity taxable as a corporation or
partnership, that was created under U.S. law (federal or state);
- an estate whose world-wide income is subject to U.S. federal income tax;
or
- a trust if a court within the U.S. is able to exercise primary
supervision over the administration of the trust and one or more U.S.
persons have the authority to control all substantial decisions of the
trust.
If a partnership holds securities, the tax treatment of a partner will
generally depend upon the status of the partner and upon the activities of the
partnership. If you are a partner of a partnership holding securities, we
suggest that you consult your tax advisor.
Interest
The tax treatment of interest paid on the securities depends upon whether
the interest is "qualified stated interest." A security may have some interest
that is qualified stated interest and some that is not.
"Qualified stated interest" is any interest that meets all the following
conditions:
- It is payable at least once each year.
- It is payable over the entire term of the security.
- It is payable at a single fixed rate or at a specified variable rate.
- The security has a maturity of more than one year from its issue date.
IF ANY INTEREST ON A SECURITY IS QUALIFIED STATED INTEREST, THEN
- If you are a cash method taxpayer (including most individual holders),
you must report that interest in your income when you receive it.
- If you are an accrual method taxpayer, you must report that interest in
your income as it accrues.
If any interest on a security is not qualified stated interest, it is
subject to the rules for original issue discount ("OID") described below.
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Determining Amount of OID
Securities that have OID are subject to additional tax rules. The amount of
OID on a security is determined as follows:
- The amount of OID on a security is the "stated redemption price at
maturity" of the security minus the "issue price" of the security. If
this amount is zero or negative, there is no OID.
- The "stated redemption price at maturity" of a security is the total
amount of all principal and interest payments to be made on the security,
other than qualified stated interest. In a typical case where all
interest is qualified stated interest, the stated redemption price at
maturity is the same as the principal amount.
- The "issue price" of a security is the first price at which a substantial
amount of the securities are sold to the public.
- Under a special rule, if the OID determined under the general formula is
very small, it is disregarded and not treated as OID. This disregarded
OID is called "de minimis OID". If all the interest on a security is
qualified stated interest, this rule applies if the amount of OID is less
than the following items multiplied together: (a) .25% ( 1/4 of 1%), (b)
the number of full years from the issue date to the maturity date of the
security, and (c) the principal amount.
Accrual of OID Into Income
If a security has OID, the following consequences arise:
- You must include the total amount of OID as ordinary income over the life
of the security.
- You must include OID in income as the OID accrues on the securities, even
if you are on the cash method of accounting. This means that you are
required to report OID income, and in some cases pay tax on that income,
before you receive the cash that corresponds to that income.
- OID accrues on a security on a "constant yield" method. This method takes
into account the compounding of interest. Under this method, the accrual
of OID on a security, combined with the inclusion into income of any
qualified stated interest on the security, will result in you being
taxable at approximately a constant percentage of your unrecovered
investment in the security.
- The accruals of OID on a security will generally be less in the early
years and more in the later years.
- If any of the interest paid on the security is not qualified stated
interest, that interest is taxed solely as OID. It is not separately
taxed when it is paid to you.
- Your tax basis in the security is initially your cost. It increases by
any OID (not including qualified stated interest) you report as income.
It decreases by any principal payments you receive on the security, and
by any interest payments you receive that are not qualified stated
interest.
Securities Subject to Additional Tax Rules
Additional or different tax rules apply to several types of Securities that
we may issue.
Short-term securities: We may issue securities with a maturity of one year
or less. These are referred to as "short-term securities."
- No interest on these securities is qualified stated interest. Otherwise,
the amount of OID is calculated in the same manner as described above.
- You may make certain elections concerning the method of accrual of OID on
short-term securities over the life of the securities.
- If you are an accrual method taxpayer, a bank, a securities dealer, or in
certain other categories, you must include OID in income as it accrues.
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- If you are a cash method taxpayer not subject to the accrual rule
described above, you do not include OID in income until you actually
receive payments on the security. Alternatively, you can elect to include
OID in income as it accrues.
- Two special rules apply if you are a cash method taxpayer and you do not
include OID in income as it accrues. First, if you sell the security or
it is paid at maturity, and you have a taxable gain, then the gain is
ordinary income to the extent of the accrued OID on the security at the
time of the sale that you have not yet taken into income. Second, if you
borrow money (or do not repay outstanding debt) to acquire or hold the
security, then while you hold the security you cannot deduct any interest
on the borrowing that corresponds to accrued OID on the security until
you include the OID in your income.
Floating rate securities: Floating rate securities are subject to special
OID rules.
- If the interest rate is based on a single fixed formula based on the cost
of newly borrowed funds or other objective financial information (which
may include a fixed interest rate for the initial period), all the
interest will be qualified stated interest. The amount of OID (if any),
and the method of accrual of OID, will then be calculated by converting
the security's initial floating rate into a fixed rate and by applying
the general OID rules described above.
- If the security has more than one formula for interest rates, it is
possible that the combination of interest rates might create OID. We
suggest that you consult your tax advisor concerning the OID accruals on
any floating rate security.
Foreign currency securities: A "foreign currency security" is a security
denominated in a currency other than U.S. dollars. Special tax rules apply to
these securities:
- If you are a cash method taxpayer, you will be taxed on the U.S. dollar
value of any foreign currency you receive as interest. The dollar value
will be determined as of the date when you receive the payments.
- If you are an accrual method taxpayer, you must report interest income as
it accrues. You can use the average foreign currency exchange rate during
the relevant interest accrual period (or, if that period spans two
taxable years, during the portion of the interest accrual period in the
relevant taxable year). In this case, you will make an adjustment upon
receipt of the foreign currency to reflect actual exchange rates at that
time. Certain alternative elections may also be available.
- Any OID on foreign currency securities will be determined in the relevant
foreign currency. You must accrue OID in the same manner that an accrual
basis holder accrues interest income.
- Your initial tax basis in a foreign currency security is the amount of
U.S. dollars you pay for the security (or, if you pay in foreign
currency, the value of that foreign currency on the purchase date).
Adjustments are made to reflect OID and other items as described above.
- If you collect foreign currency upon the maturity of the security, or if
you sell the security for foreign currency, your gain or loss will be
based on the U.S. dollar value of the foreign currency you receive. For a
publicly traded foreign currency security, this value is determined for
cash basis taxpayers on the settlement date for the sale of the security,
and for accrual basis taxpayers on the trade date for the sale (although
such taxpayers can also elect the settlement date). You will then have a
tax basis in the foreign currency equal to the value reported on the
sale.
- Any gain or loss on the sale or retirement of a security will be ordinary
income or loss to the extent it arises from currency fluctuations between
your purchase date and sale date. Any gain or loss on the sale of foreign
currency will also be ordinary income or loss.
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Other categories of securities: Additional rules may apply to certain
other categories of securities. The prospectus supplement for these securities
may describe these rules. In addition, we suggest that you consult your tax
advisor in these situations. These categories of securities include:
- securities with contingent payments;
- securities that you can put to the Company before their maturity;
- securities that are callable by the Company before their maturity, other
than typical calls at a premium;
- indexed securities with an index tied to currencies; and
- Securities that are extendable at your option or at the option of the
Company.
Premium and Discount
Additional special rules apply in the following situations involving
discount or premium:
- If you buy a security in the initial offering for more than its stated
redemption price at maturity, the excess amount you pay will be "security
premium". You can use security premium to reduce your taxable interest
income over the life of your security.
- Similarly, if a security has OID and you buy it in the initial offering
for more than the issue price, the excess (up to the total amount of OID)
is called "acquisition premium". The amount of OID you are required to
include in income will be reduced by this amount over the life of the
security.
- If you buy a security in the initial offering for less than the initial
offering price to the public, special rules concerning "market discount"
may apply.
Appropriate adjustments to tax basis are made in these situations. We
suggest that you consult your tax advisor if you are in one of these situations.
Accrual Election
You can elect to be taxed on the income from the security in a different
manner than described above. Under the election:
- No interest is qualified stated interest.
- You include amounts in income as it economically accrues to you. The
accrual of income is in accordance with the constant yield method, based
on the compounding of interest. The accrual of income takes into account
stated interest, OID (including de minimis OID), market discount, and
premium.
- Your tax basis is increased by all accruals of income and decreased by
all payments you receive on the security.
Sale or Retirement of Securities
On your sale or retirement of your security:
- You will have taxable gain or loss equal to the difference between the
amount received by you and your tax basis in the security. Your tax basis
in the security is your cost, subject to certain adjustments.
- Your gain or loss will generally be capital gain or loss, and will be
long term capital gain or loss if you held the security for more than one
year. For an individual, the maximum tax rate on long term capital gains
is 20% (or 18% if the security is acquired on or after January 1, 2001
and held for more than five years).
18
<PAGE> 20
- If (a) you purchased the security with de minimis OID, (b) you did not
make the election to accrue all OID into income, and (c) you receive the
principal amount of the security upon the sale or retirement, then you
will generally have capital gain equal to the amount of the de minimis
OID.
- If you sell the security between interest payment dates, a portion of the
amount you receive reflects interest that has accrued on the security but
has not yet been paid by the sale date. That amount is treated as
ordinary interest income and not as sale proceeds.
- All or part of your gain may be ordinary income rather than capital gain
in certain cases. These cases include sales of short-term securities,
securities with market discount, securities with contingent payments, or
foreign currency securities.
Information Reporting and Backup Withholding
Under the tax rules concerning information reporting to the IRS:
- Assuming you hold your securities through a broker or other securities
intermediary, the intermediary must provide information to the IRS
concerning interest, OID and retirement proceeds on your securities,
unless an exemption applies.
- Similarly, unless an exemption applies, you must provide the intermediary
with your taxpayer identification number for its use in reporting
information to the IRS. If you are an individual, this is your social
security number. You are also required to comply with other IRS
requirements concerning information reporting.
- If you are subject to these requirements but do not comply, the
intermediary must withhold 31% of all amounts payable to you on the
securities (including principal payments). If the intermediary withholds
payments, you may use the withheld amount as a credit against your
federal income tax liability.
- All individuals are subject to these requirements. Some holders,
including all corporations, tax-exempt organizations and individual
retirement accounts, are exempt from these requirements.
TAX CONSEQUENCES TO NON-U.S. HOLDERS
This section applies to you if you are a "Non-U.S. holder." A "Non-U.S.
holder" is:
- an individual that is a nonresident alien;
- a corporation or partnership organized or created under non-U.S. law;
- an estate that is not taxable in the U.S. on its worldwide income; or
- a trust with respect to which neither any court within the U.S. is able
to exercise primary supervision over the administration of the trust nor
one or more U.S. persons have the authority to control all substantial
decisions of the trust.
Withholding Taxes
Generally, payments of principal and interest on the securities will not be
subject to U.S. withholding taxes.
However, for the exemption from withholding taxes to apply to you, you must
meet one of the following requirements. These requirements have been changed for
interest paid on or after January 1, 2001.
- You provide a completed Form W-8BEN (or substitute form) to the bank,
broker or other intermediary through which you hold your securities. The
Form W-8BEN contains your name, address and a statement that you are the
beneficial owner of the securities and that you are not a U.S. holder.
- You hold your securities directly through a "qualified intermediary", and
the qualified intermediary has sufficient information in its files
indicating that you are not a U.S. holder. A qualified intermediary is a
bank, broker or other intermediary that (1) is either a U.S. or non-U.S.
entity, (2) is acting out of a
19
<PAGE> 21
non-U.S. branch or office and (3) has signed an agreement with the IRS
providing that it will administer all or part of the U.S. tax withholding
rules under specified procedures.
- You are entitled to an exemption from withholding tax on interest under a
tax treaty between the U.S. and your country of residence. To claim this
exemption, you must generally complete Form W-8BEN and claim this
exemption on the form. In some cases, you may instead be permitted to
provide documentary evidence of your claim to the intermediary, or a
qualified intermediary may already have some or all of the necessary
evidence in its files.
- The interest income on the securities is effectively connected with the
conduct of your trade or business in the U.S., and is not exempt from
U.S. tax under a tax treaty. To claim this exemption, you must complete
Form W-8ECI.
Even if you meet one of the above requirements, interest paid to you will
be subject to withholding tax under any of the following circumstances:
- The withholding agent or an intermediary knows or has reason to know that
you are not entitled to an exemption from withholding tax. Specific rules
apply for this test.
- The IRS notifies the withholding agent that information that you or an
intermediary provided concerning your status is false.
- An intermediary through which you hold the securities fails to comply
with the procedures necessary to avoid withholding taxes on the
securities. In particular, an intermediary is generally required to
forward a copy of your Form W-8BEN (or other documentary information
concerning your status) to the withholding agent for the securities.
However, if you hold your securities through a qualified intermediary--or
if there is a qualified intermediary in the chain of title between
yourself and the withholding agent for the securities--the qualified
intermediary will not generally forward this information to the
withholding agent.
- The amount of interest payable on a security is based on the earnings of
the Company or certain other contingencies. If this exception applies,
additional information will be provided in the prospectus supplement.
- You own 10% or more of the voting stock of the Company, are a "controlled
foreign corporation" with respect to the Company, or are a bank making a
loan in the ordinary course of its business. In these cases, you will be
exempt from withholding taxes only if you are eligible for a treaty
exemption or if the interest income is effectively connected with your
conduct of a trade or business in the U.S., as discussed above.
Interest payments made to you will generally be reported to the IRS and to
you on Form 1042-S. However, this reporting does not apply to you if one of the
following conditions applies:
- You hold your securities directly through a qualified intermediary and
the applicable procedures are complied with.
- You file Form W-8ECI.
- The securities have an original maturity of 183 days or less from their
issue date.
The rules regarding withholding are complex and vary depending on your
individual situation. They are also subject to change. In addition, special
rules apply to certain types of non-U.S. holders of securities, including
partnerships, trusts, and other entities treated as pass-through entities for
U.S. federal income tax purposes. We suggest that you consult with your tax
advisor regarding the specific methods for satisfying these requirements.
20
<PAGE> 22
Sale or Retirement of Securities
If you sell a security or it is redeemed, you will not be subject to
federal income tax on any gain unless one of the following applies:
- The gain is connected with a trade or business that you conduct in the
U.S.
- You are an individual, you are present in the U.S. for at least 183 days
during the year in which you dispose of the security, and certain other
conditions are satisfied.
- The gain represents accrued interest or OID, in which case the rules for
interest would apply.
U.S. Trade or Business
If you hold your security in connection with a trade or business that you
are conducting in the U.S.:
- Any interest on the security, and any gain from disposing of the
security, generally will be subject to income tax as if you were a U.S.
holder.
- If you are a corporation, you may be subject to the "branch profits tax"
on your earnings that are connected with your U.S. trade or business,
including earnings from the security. This tax is 30%, but may be reduced
or eliminated by an applicable income tax treaty.
Estate Taxes
If you are an individual, your securities will not be subject to U.S.
estate tax when you die. However, this rule only applies if, at your death,
payments on the securities were not connected to a trade or business that you
were conducting in the U.S.
Information Reporting and Backup Withholding
U.S. rules concerning information reporting and backup withholding are
described above. These rules apply to Non-U.S. holders as follows:
- Principal and interest payments you receive will be automatically exempt
from the usual rules if you are a Non-U.S. holder exempt from withholding
tax on interest, as described above. The exemption does not apply if the
withholding agent or an intermediary knows or has reason to know that you
should be subject to the usual information reporting or backup
withholding rules. In addition, as described above, interest payments
made to you may be reported to the IRS on Form 1042-S.
- Sale proceeds you receive on a sale of your securities through a broker
may be subject to information reporting and/or backup withholding if you
are not eligible for an exemption. In particular, information reporting
and backup withholding may apply if you use the U.S. office of a broker,
and information reporting (but not backup withholding) may apply if you
use the foreign office of a broker that has certain connections to the
U.S. We suggest that you consult your tax advisor concerning information
reporting and backup withholding on a sale.
Possible European Union Requirements
The European Union is considering new procedures that would apply to you if
you are a tax resident of a member state and you receive interest on securities
from a paying agent located in another member state. Under these procedures, the
paying agent's member state would adopt one of the following rules:
- the paying agent would be required to withhold tax on interest paid to
you on the securities, unless you follow specified procedures to show
that you have reported the interest to the tax authorities in your state
of residence; or
- the interest paid to you would be reported to the tax authorities in your
state of residence by the paying agent's member state.
21
<PAGE> 23
No decision has been made whether to adopt these requirements. Even if they
are adopted, it is not clear what their effective date will be. We advise you to
consult your tax advisor about the possible implications of these requirements.
PLAN OF DISTRIBUTION
CFC may sell the debt securities being offered hereby:
- directly to purchasers,
- through agents or
- through underwriters or dealers which may include Lehman Brothers Inc.,
Banc of America Securities LLC, Goldman, Sachs & Co., Merrill Lynch &
Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated and J.P. Morgan
Securities Inc.
CFC may sell debt securities directly or through agents designated by CFC
from time to time. Unless otherwise indicated in the prospectus supplement, any
such agent will be acting on a reasonable best-efforts basis for the period of
its appointment.
If underwriters are utilized in the sale, CFC will enter into an
underwriting agreement with those underwriters and the names of the underwriters
and the terms of the transaction will be set forth in the supplement, which will
be used by the underwriters to make resales of the debt securities or warrants
in respect of which this prospectus is delivered to the public.
If a dealer is utilized in the sale of any of the debt securities, CFC will
sell those debt securities to the dealer, as principal. The dealer may then
resell the debt securities to the public at varying prices to be determined by
the dealer at the time of resale.
The agents and underwriters may be deemed to be underwriters and any
discounts, commissions or concessions received by them from CFC or any profit on
the resale of offered debt securities or warrants by them may be deemed to be
underwriting discounts and commissions under the Securities Act of 1933. Any
such person who may be deemed to be an underwriter and any such compensation
received from CFC will be described in the prospectus supplement.
Under agreements entered into with CFC, agents and underwriters who
participate in the distribution of offered debt securities may be entitled to
indemnification by CFC against certain civil liabilities, including liabilities
under the Securities Act of 1933, or to contribution with respect to payments
which the agents or underwriters may be required to make.
If indicated in the prospectus supplement, CFC will authorize agents and
underwriters to solicit offers by certain institutions to purchase offered debt
securities from CFC at the public offering price set forth in the prospectus
supplement pursuant to delayed delivery contracts providing for payment and
delivery on the date stated in the prospectus supplement. Each contract will be
for an amount not less than, and unless CFC otherwise agrees the aggregate
principal amount of offered securities sold pursuant to contracts will be not
less nor more than, the respective amounts stated in the prospectus supplement.
Institutions with whom contracts, when authorized, may be made include
commercial and savings banks, insurance companies, pension funds, investment
companies, educational and charitable institutions, and other institutions, but
will in all cases be subject to CFC's approval. Contracts will not be subject to
any conditions except that the purchase by an institution of the offered debt
securities covered by its contract shall not at the time of delivery be
prohibited under the laws of any jurisdiction in the United States to which such
institution is subject. A commission indicated in the prospectus supplement will
be granted to agents and underwriters soliciting purchases of offered debt
securities pursuant to contract accepted by CFC. Agents and underwriters will
have no responsibility in respect of the delivery or performance of contracts.
The place and time of delivery for the offered debt securities in respect
of which this prospectus is delivered are set forth in the supplement.
22
<PAGE> 24
Each underwriter, dealer and agent participating in the distribution of any
offered debt securities which are issuable in bearer form will agree that it
will not offer, sell or deliver, directly or indirectly, offered debt securities
in bearer form in the United States or its possessions or to United States
persons (other than qualifying financial institutions) in connection with the
original issuance of the offered debt securities. See "Limitations on Issuance
of Bearer Debt Securities".
All offered debt securities will be a new issue of debt securities with no
established trading market. Any underwriters to whom offered debt securities are
sold by CFC for public offering and sale may make a market in such offered debt
securities, but such underwriters will not be obligated to do so and may
discontinue any market making at any time without notice. No assurance can be
given as to the liquidity of the trading market for any offered debt securities.
Certain of the underwriters or agents and their associates may engage in
transactions with and perform services for CFC in the ordinary course of
business.
In connection with the offering made hereby, the agents may purchase and
sell the debt securities in the open market. These transactions may include
over-allotment and stabilizing transactions and purchases to cover short
positions created by the agents in connection with the offering. Stabilizing
transactions consist of certain bids or purchases for the purpose of preventing
or retarding a decline in the market price of the debt securities, and short
positions created by the agents involve the sale by the agents of a greater
aggregate principal amount of debt securities than they are required to purchase
from CFC. The agents also may impose a penalty bid, whereby selling concessions
allowed to broker-dealers in respect of the debt securities sold in the offering
may be reclaimed by the agents if such debt securities are repurchased by the
agents in stabilizing or covering transactions. These activities may stabilize,
maintain or otherwise affect the market price of the debt securities, which may
be higher than the price that might otherwise prevail in the open market. These
activities, if commenced, may be discontinued at any time. These transactions
may be effected in the over-the-counter market or otherwise.
LEGAL OPINIONS
The validity of the securities offered hereby will be passed upon for CFC
by Milbank, Tweed, Hadley & McCloy LLP, 1 Chase Manhattan Plaza, New York, New
York, and for the agents or underwriters, if any, by Cravath, Swaine & Moore,
Worldwide Plaza, 825 Eighth Avenue, New York, New York. Certain tax matters
relating to the securities will be passed upon for CFC by Hunton & Williams, 200
Park Avenue, New York, New York, special tax counsel to CFC.
EXPERTS
The financial statements included in CFC's Annual Report on Form 10-K for
the year ended May 31, 2000 incorporated by reference in this prospectus have
been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their reports with respect thereto, and are incorporated herein in
reliance upon the authority of said firm as experts in giving said reports.
23
<PAGE> 25
PART II
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses in connection with the issuance and distribution of the
securities covered hereby, other than underwriting commissions, are, subject to
further contingencies, estimated to be as follows:
<TABLE>
<S> <C>
Registration statement filing fee........................... $528,000
Printing.................................................... 50,000
Legal fees and expenses..................................... 100,000
Blue sky fees and expenses.................................. 15,000
Accounting fees............................................. 13,000
Fees of trustee............................................. 45,000
Fees of rating agencies..................................... 100,000
Miscellaneous............................................... 10,000
--------
Total............................................. $861,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 29-1104(9) of the District of Columbia Cooperative Association Act
provides that an association such as the Registrant shall have the capacity "to
exercise . . . any power granted to ordinary business corporations, save those
powers inconsistent with this chapter." Section 29-304(16) of the District of
Columbia Business Corporation Act permits any corporation:
"To indemnify any and all of its directors or officers or former
directors or officers or any person who may have served at its request as a
director or officer of another corporation in which it owns shares of
capital stock or of which it is a creditor against expenses actually and
necessarily incurred by them in connection with the defense of any action,
suit, or proceeding in which they, or any of them, are made parties, or a
party, by reason of being or having been directors or officers or a
director or officer of the corporation, or of such other corporation,
except in relation to matters as to which any such director or officer or
former director or officer or person shall be adjudged in such action,
suit, or proceeding to be liable for negligence or misconduct in the
performance of duty. Such indemnification shall not be deemed exclusive of
any other rights to which those indemnified may be entitled, under any
bylaw, agreement, vote of stockholders, or otherwise."
The Board of Directors of CFC has resolved to indemnify all CFC directors,
officers and employees in accordance with the terms of the first sentence of the
above Section. The Bylaws of CFC also provide for indemnification of all CFC
directors, officers and employees as set forth above.
II-1
<PAGE> 26
ITEM 16. LIST OF EXHIBITS
<TABLE>
<C> <S> <C>
1.1 -- Securities Underwriting Agreement Basic Provisions has been
filed as exhibit 1.1 to Post-Effective Amendment No. 1 to
Registration No. 33-2194 filed December 18, 1987 and is
incorporated herein by reference. An Underwriting Agreement
with respect to each particular offering of securities
registered hereunder will be filed as an exhibit to a
current report on Form 8-K and incorporated herein by
reference.
1.2 -- Agency Agreement dated June 8, 1999 between CFC and the
agents named therein, relating to distribution of CFC's
Medium-Term Notes, Series C, within the United States.
Incorporated by reference to Exhibit 1.1 to the current
report on Form 8-K filed by CFC on June 10, 1999.
1.3 -- A form of Placement Agency Agreement between CFC and the
agents named therein relating to the distribution, if any,
of CFC's Medium-Term Notes outside the United States will be
filed as an exhibit to a current report on Form 8-K and
incorporated herein by reference prior to the use of such
agreement.
4.1 -- Indenture between CFC and Chemical Bank, as Trustee.
Incorporated by reference to Exhibit 4.1 to Amendment No. 1
to Registration Statement on Form S-3 filed on October 12,
1990 (Registration No. 33-34927).
4.2 -- First Supplemental Indenture between CFC and Chemical Bank,
as Trustee. Incorporated by reference to Exhibit 4.2 to
Registration Statement on Form S-3 filed on April 5, 1995
(Registration No. 33-58445).
4.3 -- Instrument of Resignation, Appointment and Acceptance among
CFC, Chemical Bank and The Bank of New York dated as of
October 1, 1993. Incorporated by reference to Exhibit 4.3 to
Registration Statement on Form S-3 filed on October 1, 1993
(Registration No. 33-50463).
4.4 -- A form of Fixed Rate Medium-Term Note (for offerings within
the United States) has been filed as Exhibit 4.4 to
Registration Statement No. 33-58445 filed on April 5, 1995
and is incorporated herein by reference.
4.5 -- A form of Floating Rate Medium-Term Note (for offerings
within the United States) has been filed as Exhibit 4.5 to
Registration Statement No. 33-58445 filed on April 5, 1995
and is incorporated herein by reference.
4.6 -- A form of Fixed or Floating Rate Registered Medium-Term Note
(for offerings outside the United States) will be filed as
an exhibit to a current report on Form 8-K and incorporated
herein by reference prior to the issuance of any such Note.
4.7 -- A form of Fixed or Floating Rate Bearer Medium-Term Note
(for offerings outside the United States) will be filed as
an exhibit to a current report on Form 8-K and incorporated
herein by reference prior to the issuance of any such Note.
4.8 -- A form of Temporary Global Bearer Fixed or Floating Rate
Medium-Term Note (for offerings outside the United States)
will be filed as an exhibit to a current report on Form 8-K
and incorporated herein by reference prior to the issuance
of any such Note.
4.9 -- A form of Definitive Global Bearer Fixed or Floating Rate
Medium-Term Note (for offerings outside the United States)
will be filed as an exhibit to a current report on Form 8-K
and incorporated herein by reference prior to the issuance
of any such Note.
5 -- Opinion and consent of Milbank, Tweed, Hadley & McCloy LLP.
8 -- Opinion and consent of Hunton & Williams.
12 -- Schedule of computation of ratio of margins to fixed
charges.
23.1 -- Consent of Arthur Andersen LLP.
23.2 -- Consent of Milbank, Tweed, Hadley & McCloy LLP. Included as
part of Exhibit 5.
23.3 -- Consent of Hunton & Williams. Included as part of Exhibit 8.
24 -- Power of Attorney (included on signature pages).
25 -- Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939 of The Bank of New York, as Trustee has been
filed as Exhibit 25 to Registration Statement No. 33-58445
filed on April 5, 1995 and is incorporated herein by
reference.
</TABLE>
II-2
<PAGE> 27
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement (other than
as provided in the proviso and instructions to Item 512(a) of Regulation
S-K):
(a) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(b) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement; and
(c) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the debt securities offered
therein, and the offering of such debt securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the debt securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant's annual report
pursuant to section 13(a) or section 15(d) of the Securities Exchange Act
of 1934 that is incorporated by reference in the registration statement
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such debt securities at
that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described under Item 15 above or
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in such Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the debt securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
II-3
<PAGE> 28
THE REGISTRANT AND EACH PERSON WHOSE SIGNATURE APPEARS BELOW HEREBY
AUTHORIZES EACH OF SHELDON C. PETERSEN, STEVEN L. LILLY AND JOHN J. LIST (THE
"AGENTS") TO FILE ONE OR MORE AMENDMENTS (INCLUDING POST-EFFECTIVE AMENDMENTS)
TO THE REGISTRATION STATEMENT WHICH AMENDMENTS MAY MAKE SUCH CHANGES IN THE
REGISTRATION STATEMENT AS SUCH AGENT DEEMS APPROPRIATE AND THE REGISTRANT AND
EACH SUCH PERSON HEREBY APPOINTS EACH SUCH AGENT AS ATTORNEY-IN-FACT TO EXECUTE
IN THE NAME AND ON BEHALF OF THE REGISTRANT AND EACH SUCH PERSON, INDIVIDUALLY
AND IN EACH CAPACITY STATED BELOW, ANY SUCH AMENDMENTS TO THE REGISTRATION
STATEMENT.
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT OR AMENDMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO
DULY AUTHORIZED, IN THE COUNTY OF FAIRFAX, COMMONWEALTH OF VIRGINIA, ON THE 5TH
DAY OF DECEMBER, 2000.
National Rural Utilities
Cooperative Finance Corporation
By: /s/ SHELDON C. PETERSEN
------------------------------------
SHELDON C. PETERSEN
Governor and Chief Executive Officer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS REPORT HAS
BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATES
INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ SHELDON C. PETERSEN Governor and Chief
------------------------------------------------ Executive Officer
SHELDON C. PETERSEN
/s/ STEVEN L. LILLY Senior Vice President and
------------------------------------------------ Chief Financial Officer
STEVEN L. LILLY (Principal Financial Officer)
December 5, 2000
/s/ STEVEN L. SLEPIAN Controller (Principal
------------------------------------------------ Accounting Officer)
STEVEN L. SLEPIAN
/s/ BENSON HAM President and Director
------------------------------------------------
BENSON HAM
/s/ R.B. SLOAN, JR. Vice President and
------------------------------------------------ Director
R.B. SLOAN, JR.
/s/ WADE R. HENSEL Secretary-Treasurer and Director
------------------------------------------------
WADE R. HENSEL
</TABLE>
II-4
<PAGE> 29
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ JAMES M. ANDREW Director
------------------------------------------------
JAMES M. ANDREW
Director
------------------------------------------------
ROBERT A. CAUDLE
/s/ JAMES P. DUNCAN Director
------------------------------------------------
JAMES P. DUNCAN
Director
------------------------------------------------
GLENN ENGLISH
/s/ ALDEN J. FLAKOLL Director
------------------------------------------------
ALDEN J. FLAKOLL
/s/ JAMES A. HUDELSON Director
------------------------------------------------
JAMES A. HUDELSON
/s/ KENNETH KRUEGER Director
------------------------------------------------
KENNETH KRUEGER
/s/ STEPHEN R. LOUDER Director
------------------------------------------------
STEPHEN R. LOUDER
/s/ EUGENE MEIER Director
------------------------------------------------
EUGENE MEIER
December 5, 2000
/s/ R. LAYNE MORRILL Director
------------------------------------------------
R. LAYNE MORRILL
/s/ ROBERT J. OCCHI Director
------------------------------------------------
ROBERT J. OCCHI
/s/ CLIFTON M. PIGOTT Director
------------------------------------------------
CLIFTON M. PIGOTT
/s/ TIMOTHY REEVES Director
------------------------------------------------
TIMOTHY REEVES
/s/ BRIAN D. SCHLAGEL Director
------------------------------------------------
BRIAN D. SCHLAGEL
/s/ THOMAS W. STEVENSON Director
------------------------------------------------
THOMAS W. STEVENSON
/s/ CLIFFORD G. STEWART Director
------------------------------------------------
CLIFFORD G. STEWART
/s/ ROBERT STROUP Director
------------------------------------------------
ROBERT STROUP
Director
------------------------------------------------
ROBERT C. WADE
/s/ ELDWIN A. WIXSON Director
------------------------------------------------
ELDWIN A. WIXSON
</TABLE>
II-5
<PAGE> 30
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER EXHIBITS PAGE
------- -------- ------------
<C> <S> <C> <C>
1.1 -- Securities Underwriting Agreement Basic Provisions has been
filed as exhibit 1.1 to Post-Effective Amendment No. 1 to
Registration No. 33-2194 filed December 18, 1987 and is
incorporated herein by reference. An Underwriting Agreement
with respect to each particular offering of Securities
registered hereunder will be filed as an exhibit to a
current report on Form 8-K and incorporated herein by
reference. .................................................
1.2 -- Agency Agreement dated June 8, 1999 between CFC and the
agents named therein, relating to distribution of CFC's
Medium-Term Notes, Series C, within the United States.
Incorporated by reference to Exhibit 1.1 to the current
report on Form 8-K filed by CFC on June 10, 1999. ..........
1.3 -- A form of Placement Agency Agreement between CFC and the
agents named therein relating to the distribution, if any,
of CFC's Medium-Term Notes outside the United States will be
filed as an exhibit to a current report on Form 8-K and
incorporated herein by reference prior to the use of such
agreement. .................................................
4.1 -- Indenture between CFC and Chemical Bank, as Trustee.
Incorporated by reference to Exhibit 4.1 to Amendment No. 1
to Registration Statement on Form S-3 filed on October 12,
1990 (Registration No. 33-34927). ..........................
4.2 -- First Supplemental Indenture between CFC and Chemical Bank,
as Trustee. Incorporated by reference to Exhibit 4.2 to
Registration Statement on Form S-3 filed on April 5, 1995
(Registration No. 33-58445). ...............................
4.3 -- Instrument of Resignation, Appointment and Acceptance among
CFC, Chemical Bank, The Bank of New York dated as of October
1, 1993. Incorporated by reference to Exhibit 4.3 to
Registration Statement on Form S-3 filed on October 1, 1993
(Registration No. 33-50463). ...............................
4.4 -- A form of Fixed Rate Medium-Term Note (for offerings within
the United States) has been filed as Exhibit 4.4 to
Registration Statement No. 33-58445 filed on April 5, 1995
and is incorporated herein by reference. ...................
4.5 -- A form of Floating Rate Medium-Term Note (for offerings
within the United States) has been filed as Exhibit 4.5 to
Registration Statement No. 33-58445 filed on April 5, 1995
and is incorporated herein by reference. ...................
4.6 -- A form of Fixed or Floating Rate Registered Medium-Term Note
(for offerings outside the United States) will be filed as
an exhibit to a current report on Form 8-K and incorporated
herein by reference prior to the issuance of any such
Note. ......................................................
4.7 -- A form of Fixed or Floating Rate Bearer Medium-Term Note
(for offerings outside the United States) will be filed as
an exhibit to a current report on Form 8-K and incorporated
herein by reference prior to the issuance of any such
Note. ......................................................
4.8 -- A form of Temporary Global Bearer Fixed or Floating Rate
Medium-Term Note (for offerings outside the United States)
will be filed as an exhibit to a current report on Form 8-K
and incorporated herein by reference prior to the issuance
of any such Note. ..........................................
4.9 -- A form of Definitive Global Bearer Fixed or Floating Rate
Medium-Term Note (for offerings outside the United States)
will be filed as an exhibit to a current report on Form 8-K
and incorporated herein by reference prior to the issuance
of any such Note. ..........................................
5 -- Opinion and consent of Milbank, Tweed, Hadley & McCloy
LLP. .......................................................
8 -- Opinion and consent of Hunton & Williams. ..................
12 -- Schedule of computation of ratio of margins to fixed
charges. ...................................................
23.1 -- Consent of Arthur Andersen LLP. ............................
23.2 -- Consent of Milbank, Tweed, Hadley & McCloy LLP. Included as
part of Exhibit 5. .........................................
23.3 -- Consent of Hunton & Williams. Included as part of Exhibit 8.
24 -- Power of Attorney (included on signature pages). ...........
25 -- Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939 of The Bank of New York, as Trustee has been
filed as Exhibit 25 to Registration Statement No. 33-58445
filed on April 5, 1995 and is incorporated herein by
reference. .................................................
</TABLE>
