SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1996
Commission File Number 33-20110-02
____________
COOPERATIVE UTILITY TRUST
(BIG RIVERS SERIES)
1988-A3
(Issuer of the Certificates)
CoBANK, ACB
(Exact name of registrant as specified in its charter)
UNITED STATES 84-1102254
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5500 South Quebec Street, Englewood, Colorado 80111
(Address of principal executive offices) (Zip Code)
(303) 740-4000
(Registrant's telephone number, including area code)
__________
Securities registered pursuant to Section 12(b) or 12(g) 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 and 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 __
State the aggregate market value of the voting stock held by
non-affiliates of the registrant: not applicable.
Indicate the number of shares outstanding of each of the
registrant's classes of common stock as of the latest
practicable date: not applicable.
__________
DOCUMENTS INCORPORATED BY REFERENCE
None
PART I
Item 1. Business.
Item 1 information has not been included in accordance
with the No Action letter issued
to Louisville Bank for Cooperatives (now merged into CoBank,
ACB) (pub. avail. March 22,
1988) (the "No Action Letter").
Item 2. Properties.
Item 2 information has not been included in accordance
with the No Action Letter.
Item 3. Legal Proceedings.
There are no material pending legal proceedings with
respect to Cooperative Utility Trust
(Big Rivers Series) 1988-A3 (the "Trust").
Item 4. Submission of Matters to a Vote of Security
Holders.
There are no matters for which the vote or consent of
holders of the 9-1/2 percent
Cooperative Utility Trust Certificates due 2017 (the
"Certificates") issued by the Trust was
solicited during the reporting fiscal year.
PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters.
As of the end of the reporting year, there are 298
registered holders of the Certificates
issued by the Trust, including The Depository Trust Company
("DTC"). DTC has advised the
Trust that as of December 31, 1995, there are 75
institutional holders of the Certificates issued by
the Trust. There is no established public trading market
for the Certificates.
Item 6. Selected Financial Data.
Item 6 information has not been included in accordance
with the No Action Letter.
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of
Operations.
Item 7 information has not been included in accordance
with the No Action Letter.
Item 8. Financial Statements and Supplementary Data.
Audited Financial Statements of the Trust as listed
under Item 14(a) (1) together with the
related accountants' report are filed with this report.
Item 9. Changes in and Disagreements with Accountants on
Accounting and
Financial Disclosure.
Not applicable.
Part III
Item 10. Directors and Executive Officers of the
Registrant.
Item 10 information has not been included in accordance
with the No Action Letter.
Item 11. Executive Compensation.
Item 11 information has not been included in accordance
with the No Action Letter.
Item 12. Security Ownership of Certain Beneficial Owners
and Management.
Item 12 information has not been included in accordance
with the No Action Letter.
Item 13. Certain Relationships and Related Transactions.
There were no transactions to which the Trust was a
party during the reporting financial
year which are required to be disclosed by this item.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and
Reports on Form 8-K.
(a) Documents filed as part of this report.
1. Financial Statements.
Independent Accountants' Report on the Financial Statements
of the Trust
dated February 21, 1997.
Statements of Assets and Trust Corpus Arising from Cash
Transactions as
of December 31, 1996 and 1995.
Statements of Revenue Collected, Expenses Paid and Changes
in Trust
Corpus for the years ended December 31, 1996, 1995 and 1994.
Notes to Financial Statements.
2. Financial Statement Schedules.
No financial statement schedules have been included in
accordance with
the No Action Letter.
3. Exhibits.
(4) Instruments defining the rights of security
holders, including indentures.
4.1 Form of Trust Agreement, dated as of February 1,
1988, among
Louisville Bank for Cooperatives, Big Rivers Electric
Corporation
and Wells Fargo Bank, N.A., formerly First Interstate Bank
of
Arizona, N.A., as trustee (incorporated by reference to
Exhibit 4.1
of the registration statement file no. 33-20110).
(10) Material contracts.
10.1 Loan Agreement, dated as of February 1, 1988,
between Louisville
Bank for Cooperatives and Big Rivers Electric Corporation
(incorporated by reference to Exhibit 10.1 of the
registration
statement file no. 33-20110).
10.2 Loan Guarantee and Servicing Agreement, dated as
of February 1,
1988, among the United States of America, acting through the
Administrator of the Rural Electrification Administration,
Big
Rivers Electric Corporation, Louisville Bank for
Cooperatives, and
Wells Fargo Bank, N.A., formerly First Interstate Bank of
Arizona,
N.A., as trustee (incorporated by reference to Exhibit 10.2
of the
registration statement file no. 33-20110).
b. Reports on Form 8-K.
During the reported financial year, the registrant
filed no reports on Form 8-K.
SIGNATURES
Pursuant to the requirements of Section 15(d) of the
Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto
duly authorized.
CoBANK, ACB
Date March 11, 1997
By
/S/ JOSEPH J SAVAGE
Joseph J. Savage
Executive Vice President
Pursuant to the requirements of the Securities Exchange
Act of 1934, this report has been
signed below by the following persons on behalf of the
registrant in the capacities and on the
dates indicated.
Signature Title Date
/S/ DOUGLAS D. SIMS
Douglas D. Sims Chief Executive Officer
March 11, 1997
/S/ WILLIAM D. SNIDER
William D. Snider Chief Financial Officer March
11, 1997
/S/ DON E. BENSCHNEIDER
Don E. Benschneider Director March 11,
1997
/S/ STEPHEN M. CARUSO
Stephen M. Caruso Director March 11,
1997
/S/ J. ROGER BARBER
J. Roger Barber Director March
11, 1997
/S/ RANDY J. ETHRIDGE
Randy J. Ethridge Director March 11,
1997
/S/ JANE R. BROWN
Jane R. Brown Director March 11,
1997
/S/ R. NELSON STADER
R. Nelson Stader Director March
11, 1997
/S/ ARTHUR P. CHRISTIANSEN
Arthur P. Christiansen Director March
11, 1997
/S/ MICHAEL A. STIMPERT
Michael A. Stimpert Director March 11,
1997
/S/ JOHN S. DEAN, SR.
John S. Dean, Sr. Director March
11, 1997
/S/ JOHN E. FISHER
John E. Fisher Director March 11,
1997
/S/ PHILIP J. HEIN
Philip J. Hein Director March 11,
1997
/S/ GORDON L. LAMB
Gordon L. Lamb Director March 11,
1997
/S/ GUIDO LOMBARDI
Guido Lombardi Director March 11,
1997
/S/ W. WAYNE MARTIN
W. Wayne Martin Director March 11,
1997
/S/ OTIS H. MOLZ
Otis H. Molz Director March 11,
1997
/S/ J. ROY ORTON
J. Roy Orton Director March 11,
1997
/S/ JACK PARKS
Jack Parks Director March 11,
1997
/S/ TRAVIS W. POTTER
Travis W. Potter Director March
11, 1997
/S/ RICHARD F. PRICE
Richard F. Price Director March
11, 1997
/S/ HAROLD D. PRINTZ
Harold D. Printz Director March
11, 1997
/S/ T. S. SHULER
T. S. Shuler Director March 11,
1997
/S/ O. GLENN WEBB
O. Glenn Webb Director March 11,
1997
COOPERATIVE UTILITY TRUST
(BIG RIVERS SERIES) 1988--A3
FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
REPORT OF INDEPENDENT ACCOUNTANTS
February 21, 1996
To: Wells Fargo,
Trustee and to
the Holders
of Certificates of Beneficial Interest in
Cooperative
Utility Trust (Big Rivers Series) 1988-A3
We have audited the accompanying statements of assets
and trust corpus arising from cash transactions of
Cooperative Utility Trust (Big Rivers Series) 1988-A3
as of December 31, 1996 and 1995, and the related
statements of revenue collected, expenses paid and
changes in trust corpus for each of the three years in
the period ended December 31, 1996. These financial
statements are the responsibility of the Trust's
management. Our responsibility 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 the 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.
As described in Note 2, these financial statements were
prepared on the basis of cash receipts and
disbursements, which is a comprehensive basis of
accounting other than generally accepted accounting
principles.
In our opinion, the financial statements audited by us
present fairly, in all material respects, the assets
and trust corpus arising from cash transactions of
Cooperative Utility Trust (Big Rivers Series) 1988--A3
as of December 31, 1996 and 1995, and its revenue
collected, expenses paid and changes in trust corpus
for each of the three years in the period ended
December 31, 1996, on the basis of accounting described
in Note 2.
Denver, Colorado
COOPERATIVE UTILITY TRUST (BIG RIVERS SERIES) 1988--A3
STATEMENTS OF ASSETS AND TRUST CORPUS
ARISING FROM CASH TRANSACTIONS
December 31,
1996 1995
Assets
Note
receivable
$280,031,000 $280,031,000
Trust Corpus
Certificates
of beneficial interest$280,031,000 $280,031,000
STATEMENTS OF REVENUE COLLECTED, EXPENSES PAID
AND CHANGES IN TRUST CORPUS
For the year ended December 31,
1996 1995
1994
Interest revenue
$26,894,788 $26,820,229
$26,820,344
Servicing fee expense
217,946 217,284
217,399
Excess of revenue over expenses 26,676,842
26,602,945 26,602,945
Trust corpus, beg of period 280,031,000
280,031,000 280,031,000
Distribution to Certificate
holders for interest
26,676,842 26,602,945
26,602,945
Trust corpus, end of period $280,031,000
$280,031,000 $280,031,000
The accompanying notes are an integral part of these
financial statements.
COOPERATIVE UTILITY TRUST (BIG RIVERS SERIES) 1988--A3
NOTES TO FINANCIAL STATEMENTS
NOTE 1--FORMATION OF THE TRUST
On February 25, 1988, Louisville Bank for Cooperatives
(LBC), a Farm Credit System institution which merged
into National Bank for Cooperatives effective January
1, 1989, now operating as CoBank, ACB (CoBank), created
the Cooperative Utility Trust (Big Rivers Series) 1988-
A3 (the A3 Trust) to enable Big Rivers Electric
Corporation (the Cooperative) to refinance Federal
Financing Bank (FFB) debt guaranteed by the U. S.
Government. On February 25, 1988, CoBank, as successor
in interest to LBC, entered into a loan agreement with
and advanced $319,426,095 to the Cooperative,
permitting it to repay a portion of its FFB debt. The
loan agreement required the Cooperative to issue four
notes (in an aggregate amount equal to the loan) to
four separate trusts. The A3 Trust holds one of these
notes in the original principal amount of $280,031,000.
Pursuant to a trust agreement among CoBank, the
Cooperative, and Wells Fargo, (formerly First
Interstate Bank of Arizona, N.A.), as trustee, CoBank
received certificates of beneficial interest (the
Certificates) representing 100 percent of the interest
in the A3 Trust. On March 3, 1988, CoBank sold the
Certificates to the public subject to terms and
conditions set forth in a registration statement
ordered effective February 22, 1988. The Certificates
entitle the holders to principal and interest payments
as more fully described in Notes 2 and 4. The A3 Trust
is passive and Wells Fargo, as trustee, has only such
powers as specified in the trust agreement.
NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting
policies followed in the preparation of the financial
statements of the A3 Trust.
Basis of Accounting
The A3 Trust's policy is to prepare its financial
statements on the basis of cash receipts and
disbursements; consequently, revenue and the related
assets are recognized when received rather than when
earned, and expenses are recognized when paid rather
than when the obligation is incurred. Accordingly, the
financial statements are not intended to be a
presentation in conformity with generally accepted
accounting principles.
Note Receivable
The note receivable from the Cooperative is carried at
the principal amount outstanding. No allowance for
loss on collection of the note is necessary because
principal and interest payments are guaranteed by the
U. S. Government through the Rural Utilities Service
(RUS).
Certificates of Beneficial Interest
The Certificates represent an undivided fractional
interest in the A3 Trust and are designed to pass
through to Certificate holders that portion of
principal and interest payments, net of servicing fees
paid, on the note receivable paid to the trustee.
Servicing Fee
CoBank, as successor in interest to LBC and as servicer
of the note, receives a fee semiannually of .0775
percent per annum based upon the days outstanding of
the outstanding principal amount of the note
receivable. From this fee, CoBank pays for ordinary
administrative expenses such as trustee, legal and
accounting fees, and expenses.
Federal Income Taxes
The A3 Trust is classified as a grantor trust under the
Internal Revenue Code and, accordingly, is exempt from
federal income taxes. Ultimately, each Certificate
holder will be treated for federal income tax purposes
as the tax owner of a pro rata, undivided fractional
interest in the assets held by the A3 Trust.
NOTE 3--NOTE RECEIVABLE
The note receivable represents an obligation of the
Cooperative to pay to the A3 Trust the principal amount
outstanding as specified in the A3 Trust's Loan
Agreement. In the event of default, the note
receivable is guaranteed by the RUS. Future principal
payments on the note receivable are due in nineteen
annual installments beginning on February 4, 1999, as
follows:
February 4,
1999 $ 6,576,000
2000 7,294,000
2001 8,101,000
2002 8,991,000
2003 9,980,000
2004 11,073,000
2005 12,295,000
2006 13,647,000
2007 15,148,000
2008 16,810,000
2009 18,662,000
2010 20,714,000
2011 22,993,000
2012 25,465,000
2013 25,081,000
2014 18,900,000
2015 20,175,000
2016 9,505,000
2017 8,621,000
$280,031,000
However, the note receivable may be redeemed in whole,
but not in part, on or after March 3, 1998, at the
following redemption prices (expressed as a percentage
of principal amount), together with accrued interest:
Twelve month
period beginning
March 3,
Redemption Price
1998
104.750%
1999
104.275
2000
103.800
2001
103.325
2002
102.850
2003
102.375
2004
101.900
2005
101.425
2006
100.950
2007
100.475
and thereafter at the principal amount thereof,
together with accrued interest.
Interest on the note receivable is based on a 9.5775
percent per annum fixed rate utilizing a 360-day year
convention with each month having 30 days. Payments
are due in semiannual payments on February 4 and August
4, or the following business day if any such date is
not a business day, and are computed over the period of
time ending on, but not including, the date on which
payment is due.
The Cooperative did not make any of its scheduled
interest payments when due to the A3 Trust.
Accordingly, under the terms of the Loan Guarantee and
Servicing Agreement, interest payments aggregating
$26,894,788, $26,820,229, and $26,820,344, were made by
the RUS in 1996, 1995, and 1994, respectively.
NOTE 4--CERTIFICATES OF BENEFICIAL INTEREST
Principal and interest on the Certificates will be paid
with the proceeds of the note receivable payments made
by the Cooperative or the RUS to the A3 Trust.
Principal on the Certificates is due on February 15 of
each year, beginning in 1999, or the following business
day if any such date is not a business day, in the
amounts shown in Note 3. Interest on the Certificates
is based on a 9.50 percent per annum fixed rate and is
due in semiannual installments on February 15 and
August 15, or the following business day if any such
date is not a business day.
The Certificates may be redeemed in whole, but not in
part, following the optional redemption by the
Cooperative of the note receivable on or after March 3,
1998, at the redemption prices set forth in Note 3.
