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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1995
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 33-14490
_________________
RURAL ELECTRIC COOPERATIVE GRANTOR TRUST (SOYLAND) 1987-A6
(Exact name of registrant as specified in its charter)
NEW YORK
(State or other jurisdiction of incorporation or organization)
36-6854526
(I.R.S. Employer Identification Number)
2201 Cooperative Way, Herndon, VA 22071-3025
(Address of principal executive offices)
(Registrant's telephone number, including area code, is 703-709-6700)
___________________
Securities Registered pursuant to Section 12(b) of the Act: None.
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
The Registrant has no common or voting stock.
DOCUMENTS INCORPORATED BY REFERENCE:
1. Form of Trust Agreement
2. Loan Agreement
3. Loan Guarantee and Servicing Agreement
Exhibit Index located on page 13.
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Part I
Item 3. Legal Proceedings
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
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Part II
Item 5. Market for the Registrant's Common Equity and Related Stockholder
Matters
a) There is no established trading market for the certificates
representing ownership of the beneficial interest in the Trust.
b) As of March 29, 1996 there were three holders of certificates
representing ownership of the beneficial interest in the Trust.
Item 8. Financial Statements and Supplementary Data
See attached audited financial statements.
Item 9. Disagreements on Accounting and Financial Disclosure
None.
Part III
Item 13. Certain Relationships and Related Transactions
None.
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Part IV
Item 14. Exhibits, Financial Statement Schedules and Reports
on Form 8-K
a) The following documents are filed as part of this report:
1. Financial Statements
Report of Independent Public Accountants
Statements of Assets and Liabilities as of
December 31, 1995 and 1994
Statements of Income and Expenses, for the Years Ended
December 31, 1995, 1994 and 1993
Statements of Cash Flows, for the Years Ended
December 31, 1995, 1994 and 1993
Notes to Financial Statements
2. Financial Statement Schedules are omitted because they are
inapplicable.
3. Exhibits
Exhibit
Number Description of Exhibit
4.1 Form of Trust Agreement, including the
form of Rural Electric Cooperative
Grantor Trust Certificate (incorporated
by reference to Form 10-K for the
fiscal year ended December 31, 1987).
10.1 Loan Agreement (incorporated by
reference to Exhibit 10.1 to
Registration Statement on Form S-1 [No.
33-14490]).
10.2 Loan Guarantee and Servicing Agreement
(incorporated by reference to Exhibit
10.2 to Registration Statement on Form
S-1 [No. 33-14490]).
b) Form 8-K dated October 2, 1995.
Semi-annual Report to Certificateholders dated September 30, 1995.
Supplemental information to be furnished with reports filed pursuant to Section
15(d) of the Act by Registrants which have not registered securities pursuant
to Section 12 of the Act.
No annual report, proxy statement, form of proxy or other proxy soliciting
material has been sent to Certificateholders, and the Registrant does not
presently contemplate sending any such material subsequent to the filing of
this report.
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Pursuant to the requirements of Section 13 or 15(d) of the Securities Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized, in the County of Fairfax,
Commonwealth of Virginia on the 29 day of March, 1996.
RURAL ELECTRIC COOPERATIVE GRANTOR TRUST (SOYLAND) 1987 A-6
By: NATIONAL RURAL UTILITIES COOPERATIVE
FINANCE CORPORATION as Servicer
By: /s/ Sheldon C. Petersen
Sheldon C. Petersen, Governor and
Chief Executive Officer
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RURAL ELECTRIC COOPERATIVE GRANTOR
TRUST (SOYLAND) 1987-A6
FINANCIAL STATEMENTS AS OF DECEMBER 31, 1995, 1994 AND 1993
TOGETHER WITH AUDITORS' REPORT
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Report of Independent Public Accountants
To the Trustee of
Rural Electric Cooperative Grantor Trust
(Soyland) 1987-A6, and
To the Board of Directors of
National Rural Utilities Cooperative
Finance Corporation
We have audited the accompanying statements of assets and liabilities of Rural
Electric Cooperative Grantor Trust (Soyland) 1987-A6 as of December 31, 1995
and 1994, and the related statements of income and expenses and cash flows for
each of the three years in the period ended December 31, 1995. These financial
statements are the responsibility of the Trust's management. Our responsi-
bility is to express an opinion on these financial statements based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform an audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Rural Electric Cooperative
Grantor Trust (Soyland) 1987-A6 as of December 31, 1995 and 1994, and the
result of its operations and its cash flows for the years ended December 31,
1995, 1994 and 1993, in conformity with generally accepted accounting
principles.
March 11, 1996 /s/ Arthur Andersen LLP
Washington, D. C.
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RURAL ELECTRIC COOPERATIVE GRANTOR TRUST (SOYLAND) 1987-A6
STATEMENTS OF ASSETS AND LIABILITIES
AS OF DECEMBER 31, 1995 AND 1994
1995 1994
A S S E T S
Interest Receivable $ 2,826,420 $ 2,826,420
Note Receivable 102,000,000 102,000,000
Total Assets $104,826,420 $104,826,420
L I A B I L I T I E S
Interest Payable - Grantor Trust $ 2,803,300 $ 2,803,300
Certificates
Servicer Fees Payable 23,120 23,120
Rural Electric Cooperative
Grantor Trust Certificates 102,000,000 102,000,000
Total Liabilities $104,826,420 $104,826,420
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RURAL ELECTRIC COOPERATIVE GRANTOR TRUST (SOYLAND) 1987-A6
STATEMENTS OF INCOME AND EXPENSES
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
1995 1994 1993
INCOME:
Interest on note receivable $9,975,600 $9,975,600 $9,996,000
EXPENSES:
Interest on grantor trust certificates 9,894,000 9,894,000 9,894,000
Servicer fees 81,600 81,600 102,000
Total expenses 9,975,600 9,975,600 9,996,000
Net Income $ - $ - $ -
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<TABLE>
<CAPTION>
RURAL ELECTRIC COOPERATIVE GRANTOR TRUST (SOYLAND) 1987 - A6
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
1995 1994 1993
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Interest received on note receivable $9,975,600 $9,975,600 9,996,000
Interest paid to Certificateholders (9,894,000) (9,894,000) (9,894,000)
Fees paid to Servicer (81,600) (81,600) (102,000)
Net cash provided by operating activities - - -
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from principal payment on note - - -
Net cash provided by investing activities - - -
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payment to Certificateholders - - -
Net cash used in financing activities - - -
NET CHANGE IN CASH - - -
CASH, beginning of year - - -
CASH, end of year $ - $ - $ -
ACCRUAL TO CASH BASIS RECONCILIATION:
Accrual basis income $ - $ - $ -
Change in accrual accounts:
Decrease in interest receivable - 5,780 -
Decrease in servicer fees payable - (5,780) -
Total change in accrual accounts - - -
Net cash provided by operating activities $ - $ - $ -
</TABLE>
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RURAL ELECTRIC COOPERATIVE GRANTOR TRUST (SOYLAND) 1987-A6
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995, 1994 AND 1993
1. ORGANIZATION AND OPERATIONS
Rural Electric Cooperative Grantor Trust (Soyland) 1987-A6 (the "Trust")
was formed under a Trust Agreement dated March 19, 1987 among National
Rural Utilities Cooperative Finance Corporation ("CFC"), Soyland Power
Cooperative, Inc. (the "Cooperative") and The First National Bank of
Chicago (the "Trustee"). On that date, CFC made a loan to the Cooper-
ative which issued a note (the "Note"), evidencing the borrowing, to the
Trust. The Trust issued to CFC Rural Electric Cooperative Grantor Trust
(Soyland) 9.70% Certificates Due 2017 (the "Certificates") in the amount
of $102,000,000. The Certificates are solely the obligations of the Trust
and are not insured or guaranteed by CFC, the Cooperative, the Trustee, the
Rural Utilities Service ("RUS") of the United States Department of Agri-
culture ("USDA") nor any other governmental gency. Each Certificate
represents an undivided fractional interest in the Trust. CFC is the
depositor of the Trust and acts as Servicer of the Note. CFC filed, on
behalf of the Trust, a Registration Statement on Form S-1 (Registration No.
33-14490) which became effective on July 15, 1987, and CFC resold the
Certificates thereunder.
The assets of the Trust consist primarily of the Note which is guaranteed
(the "Guarantee") as to timely payment of principal and interest by the
United States of America, acting through the Administrator of RUS. The
amounts of principal and interest payments on the Note held by the Trust
are sufficient to cover the scheduled principal and interest payments on
the Certificates issued by the Trust and the scheduled amounts of servicer
fees. The General Counsel of the USDA has issued an opinion that the
Guarantee is supported by the full faith and credit of the United States
of America.
Debt service and servicer fee payments on the Note are made to the Trustee
semi-annually (March 19 and September 19) by the Cooperative. The Trustee
deposits all such receipts in the Trust account. The Trustee is authorized
by the Trust Agreement to invest all funds in the Trust account at the
direction of CFC in certain eligible investments that mature no later than
the business day next preceding the day (March 30 and September 30) such
amounts are to be distributed to the Certificateholders and the Servicer.
The interest earned on the investments is distributed to the Cooperative.
Any funds that are not so invested must be held by the Trustee in the Trust
account. The Trustee may not reinvest any returns of principal or invest-
ment earnings on eligible investments and the Trustee may not sell any
eligible investment prior to its maturity except, at the direction of CFC,
to preserve the value of the corpus of the Trust.
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On or before five business days after each date on which payments are made
on the Certificates, the Trustee is obligated to supply the holders of such
Certificates a report provided by the Servicer, which includes certain
pertinent information as to how the payment is to be allocated to
principal, interest, servicer fees and premium, if any, as well as the
principal balance outstanding after such payment.
The fiscal year of the Trust is the calendar year. Within the prescribed
period of time for tax reporting purposes, after the end of each calendar
year during the term of the Trust Agreement, the Trustee is obligated to
prepare and mail to each Certificateholder of record for the Trust, at any
time during such year, a report setting forth the information as is
reasonably necessary for the preparation of such Certificateholder's
Federal income tax return.
Payments of principal on the Certificates are scheduled to be repaid over
a period of six years, beginning in 2012. The principal payment in 2012 is
scheduled to be $22,000,000. The Certificates are not subject to re-
demption prior to March 20, 1997. Thereafter, such Certificates are
subject to optional redemption, in whole and without premium, upon re-
demption or purchase of the related Note. The Trust Agreement will
terminate after payment in full has been made on the Certificates issued
thereunder.
2. TAX STATUS OF THE TRUST
Milbank, Tweed, Hadley & McCloy, counsel to CFC, has advised CFC with
respect to the Trust that, in its opinion, (i) the Trust will not be
classified as an association taxable as a corporation, but will be
classified as a grantor trust and (ii) each Certificateholder will be
treated for Federal income tax purposes as the owner of an undivided
fractional interest in each of the assets held by the Trust.
It is expected that the Trust will not have any liability for Federal or
state income taxes for the current or future years.
3. INTEREST AND SERVICER FEE ACCOUNTING
The Trust records interest income as it is earned and accrues interest
expense and servicer fees as they are incurred. Servicer fees represent
eight basis points of the outstanding principal balance of the Certificates
and the Note.
4. FAIR VALUE OF FINANCIAL INSTRUMENTS
The following disclosure of the estimated fair value of financial instru-
ments is made in accordance with FASB Statement No. 107, "Disclosure about
Fair Value of Financial Instruments." Whenever possible, the estimated
fair value amounts have been determined using quoted market information as
of December 31, 1995, along with other valuation methodologies which are
summarized below. Below is a summary of significant methodologies used in
estimating fair value amounts and a schedule of fair values at December 31,
1995.
The carrying amounts reported for Interest Receivable, Interest Payable
- Grantor Trust Certificates, and Servicer Fees Payable approximate fair
values due to the short term maturity of these instruments.
Note Receivable
Fair value is estimated by discounting the future cash flows using the current
rates at which similar loans would be made to borrowers with similar credit
ratings and for the same remaining maturities.
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Rural Electric Cooperative Grantor Trust Certificates
The fair value of the Certificate is estimated using quoted market prices for
similar notes over the same remaining maturities.
The carrying and estimated fair values of the Trust's financial instruments as
of December 31, 1995, are as follows:
1995
Carrying Fair
Value Value
Assets:
Interest Receivable 2,826,420 2,826,420
Note Receivable 102,000,000 198,514,306
Liabilities:
Interest Payable - Grantor Trust
Certificates 2,803,300 2,803,300
Servicer Fees Payable 23,120 23,120
Rural Electric Cooperative
Grantor Trust Certificates 102,000,000 198,612,205
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RURAL ELECTRIC COOPERATIVE GRANTOR TRUST (SOYLAND) 1987 A-6
Exhibit Index
Exhibit
Number Description of Exhibit
4.1 Form of Trust Agreement, including the form of Rural Electric
Cooperative Grantor Trust Certificate (incorporated by reference
to Form 10-K for the fiscal year ended December 31, 1987).
10.1 Loan Agreement (incorporated by reference to Exhibit 10.1 to
Registration Statement on Form S-1 [No. 33-14490]).
10.2 Loan Guarantee and Servicing Agreement (incorporated by reference
to Exhibit 10.2 to Registration Statement on Form S-1 [No. 33-
14490]).