CFC s Financial Webinar Series Investment Strategies For Cooperatives. How to Submit Your Question. Financial Webinar Series. Financial Webinar Series

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1 CFC s Investment Strategies For Cooperatives How to Submit Your Question Step 1: Type in your question here. Step 2: Click on the Send button.

2 CFC s Investment Strategies For Cooperatives Today s speakers include: John Suter, CFC Vu Ly, CFC Leena Kapila, CFC Brian Walker, InCapital The issuer has filed a registration statement (including a prospectus) with the SEC for the offering to which this communication relates. Before you invest, you should read the prospectus and other documents CFC has filed with the SEC for more complete information about the issuer and this offering. You can get a free copy of documents by visiting or at You ll be able to: List the investment products CFC offers to members. Describe how CFC AutoPay can be used to pay vendors from maturing CFC investments. Differentiate CFC InterNotes from standard CFC investment product offerings.

3 Which of the following actors was not in the remake or the sequel of his original science fiction film? Kevin McCarthy James Arness Raymond Burr Charlton Heston Gene Barry Polling Question What Investment Options Does CFC Offer? Member Benefits for Investing with CFC Investment grade ratings from S&P s and Moody s. Competitive rates posted daily with no transaction costs. CP program is backed 100% by CFC s bank lines. Daily Fund is highly flexible, money market type account. Friendly and helpful staff at the Member Center to answer any questions never a recorded voice or an automated menu. Paying Agent Service or E-Pay services. Investment in electric cooperative community.

4 RETAIL INSTITUTIONAL Sold to broker/dealer to small investors (like you and me): CFC Products: Subordinated Quarterly Income Capital Securities Retail Bonds (CFC InterNotes) CFC Debt Products for Members Commercial Paper Medium-term Notes Daily Fund Member Capital Securities (MCS) Types of Investors Money Market & Bond Funds Insurance Companies Pension Fund Hedge Funds Investment Program Member Investment Products Purchase Option Rate Postings Rate Dependency Minimum Investment Term Credit Ratings Daily Liquidity Fund Direct Daily Short-term $50,000 Overnight A-1/P-1 Commercial Paper Direct Daily Short-term $5, Days A-1/P-1 Medium Term Notes Direct Daily Treasuries $100, Months A/A2 Member Capital Securities Direct Annual Treasuries $25, Years A/A2 CFC InterNotes Indirect Weekly Treasuries $1, Years A/A2 1 Day 270 Days 10 Mo. 24 Mo. 35 Years/NFM Commercial Paper Medium Term Notes* Daily Liquidity Fund Member Capital Securities *MTN investments beyond 24 months are available upon request.

5 Daily Liquidity Fund (DLF) Optimize earning on excess cash with a flexible investment account No fixed maturity date Funds are available for same-day withdrawal prior to 11am ET Minimum initial and subsequent investment amount is $50,000 in $1,000 increments Investment balance of $50,000 must be maintained in the account Interest accrued daily, calculated on 365 day basis and paid monthly directly to the account Flexibility in placing/withdrawing your investment Rate subject to change daily based on market conditions Commercial Paper (CP) Investment with fixed maturity from days Minimum investment of $5,000 and increments of $1,000 Interest rates set daily, with premium rate for investments placed prior to 2pm ET Flexibility in placing your investment Options for maturing proceeds to be redirected to other accounts, investments, or third parties Optionality for same day settlement At maturity, CFC wire transfers proceeds directly to member s bank account. One-day notice required to reinvest into a new Commercial Paper Note. Backstopped 100% by CFC s bank lines CFC Bank Group # Bank 5-Year 3/16/2012 Maturity 3-Year 3/8/2013 Maturity 3-Year 3/21/2014 Maturity Total Commitment 1 The Royal Bank of Scotland PLC 155,125,000 $ 140,000,000 $ 121,000,000 $ $ 416,125,000 $ 351,562,500 2 The Bank of Nova Scotia 80,562,500 $ 150,000,000 $ 121,000,000 $ 3 JPMorgan Chase Bank, N.A. 80,562,500 $ 100,000,000 $ 119,000,000 $ $ 299,562,500 4 The Bank of Tokyo-Mitsubishi UFJ, Ltd. 73,375,000 $ 125,000,000 $ 100,000,000 $ $ 298,375,000 5 Mizuho Corporate Bank, Ltd. 62,500,000 $ 125,000,000 $ 100,000,000 $ $ 287,500,000 $ 260,375,000 6 Bank of America/ Merrill Lynch 75,375,000 $ 125,000,000 $ 60,000,000 $ 7 Deutsche Bank AG 78,500,000 $ 100,000,000 $ 75,000,000 $ $ 253,500,000 8 Royal Bank of Canada - $ 200,000,000 $ 50,000,000 $ $ 250,000,000 9 KeyBank N.A. 47,875,000 $ 100,000,000 $ 100,000,000 $ $ 247,875,000 $ 242,500, U.S. Bank 42,500,000 $ 125,000,000 $ 75,000,000 $ 11 PNC Bank, N.A. 19,750,000 $ 55,000,000 $ 50,000,000 $ $ 124,750, UBS Loan Finance 78,500,000 $ $ 78,500, HSBC Bank USA, N.A. 77,500,000 $ $ 77,500,000 $ 40,000, RBC Bank (USA) - $ 40,000,000 $ 15 Rabobank International 40,000,000 $ $ 40,000,000

6 CFC Bank Group 5-Year 3-Year 3-Year # Bank Total Commitment 3/16/2012 Maturity 3/8/2013 Maturity 3/21/2014 Maturity 16 Banco Bilbao Vizcaya Argentaria S.A. 37,500,000 $ $ 37,500,000 $ 37,500, Bayerische Landesbank 37,500,000 $ $ 37,500, SunTrust Bank 37,500,000 $ $ 25,000, The Bank of East Asia, Limited, New York Branch - $ 25,000,000 $ $ 24,375, Comerica Bank 24,375,000 $ $ 20,000, First Commercial Bank, Los Angeles Branch - $ 10,000,000 $ 10,000,000 $ $ 20,000, Bank of Communications - $ 20,000,000 $ $ 20,000, Bank of Taiwan, Los Angeles Branch - $ 20,000,000 $ $ 15,000, Chang Hwa Commercial Bank, Ltd., New York Branch - $ 5,000,000 $ 10,000,000 $ $ 10,000, Mega Bank International, Silicon Valley Branch - $ 10,000,000 $ $ 10,000, Mega Bank International, NY Branch - $ 10,000,000 $ $ 10,000, Korean Development Bank - $ 10,000,000 $ $ 10,000, Land Bank of Taiwan - $ 10,000,000 $ $ 10,000, Taiwan Business Bank - $ 10,000,000 $ $ 4,000, Hua Nan Bank - $ 4,000,000 $ Total $ 1,049,000,000 $ 1,385,000,000 $ 1,125,000,000 $ 3,559,000,000 Paying Agent Service (PAS) Allows your co-op to direct CFC to pay third-parties (such as power suppliers and other vendors) on your behalf directly from: Maturing CP Daily Fund CFC Line of Credit Cuts down on transaction time and cost by eliminating the need to make the payment yourself (eliminate wire fees) Requires board resolution No cost for CFC Members Maximize your investment earnings by leaving funds invested until you need them Paying Agent Service can be done online Member Medium-Term Notes (MTNs) Flexible issuance terms: typically months, but can offer investments out through 30 years Minimum investment $100,000 and increments of $1,000 Interest is paid semi-annually in January and July Investments are placed via phone or online Hold to maturity, SEC registered securities Rate effective on trade date

7 Member Capital Securities (MCS) All CFC voting members including RUS borrowers are eligible to purchase the securities Term is 35-yrs, callable after 5-yrs and thereafter The minimum denomination is $25,000, with increments of $5,000 Interest is paid semi-annually in April and October The current interest rate is 5% This investment counts as equity in your cooperative s debt-toequity ratio with CFC Rate effective on trade date In the mid-seventeenth century, all futures trading was halted on this unique product. English Oak Spanish Gold Ottoman Cedar Dutch Tulips Italian Olive Oil Polling Question CFC InterNotes Unsecured senior debt obligations offered to individual investors on a weekly basis Maturities and coupons offered change each week Contain a survivors option which allows the estate to put the bonds back to the issuer in case of death Bonds are sold at par, through regional broker/dealers in $1,000 increments to the average investor (you & me) CFC does not sell these securities directly Must be purchased through a retail broker. Offerings to date have been bullet maturities (1 year to 16 years) Offerings and further information can be found on

8 Brian Walker Managing Director Debt Capital Markets Incapital LLC About Incapital An investment banking firm founded in 1999 with offices in Chicago & Boca Raton. A dedicated team of more than 115 professionals active in underwriting, secondary trading and distribution. Leading underwriter and distributor of fixed income and structured products through a diverse network of more than 600 brokerdealers, banks and institutions in the U.S. About Incapital A diverse range of new issue and secondary market offerings, specializing in: Corporate Notes U.S. Agency Securities Certificates of Deposit (CDs) Collateralized Mortgage Obligations Municipal Bonds Structured Notes

9 What are InterNotes? Original issue corporate bonds. Issued by investment grade companies. Designed for simplicity. Marketed to individual investors. Benefits from Issuing InterNotes Cost effective way to diversify funding needs. Range of Maturities from 9 months to 30 years. Expand investor base nationally. Proprietary issuer-friendly online interface supports the issuance process. Issuers on Incapital s Retail Note Platform Include:

10 Retail Note Market Since the market s inception in 1996, 50 Corporate and 3 Agency names have issued Retail Notes : A total of $247 billion has been issued as of May 5 th 2011 $71 billion currently outstanding National Rural CFC InterNotes The National Rural InterNotes program launched in November of Total issuance has exceeded $1.35 billion. Selling Group Member participation has increased each year to more than 275. An estimated 50,000 individuals have invested in National Rural InterNotes. National Rural CFC InterNotes Number of notes and amount sold by year:

11 National Rural CFC InterNotes Prior to 2011, 90% of National Rural CFC InterNotes sold had a final maturity of 4 yrs or less In 2011, NRUC decided to use the InterNotes program to help fund their longer term needs Weighted average maturity for notes issued in 2011 is almost 9 yrs - nearly 3 x s the historical NRUC InterNote average Backbone: Member Investment = $4.7b

12 Now let s turn it over to our audience! How to Submit Your Question Step 1: Type in your question here. Step 2: Click on the Send button. Please take a minute to complete the NRECA survey. Your responses will help us improve the broadcast quality of these Web conferences!

13 Events & Training Tab Look for the replay of this program early next week For information on CFC investments call: CFC Member Center at Daily Fund, CP, Paying Agent, Banking Information Updates Capital Markets Funding at ext MTN, MCS The issuer has filed a registration statement (including a prospectus) with the SEC for the offering to which this communication relates. Before you invest, you should read the prospectus and other documents CFC has filed with the SEC for more complete information about the issuer and this offering. You can get a free copy of documents by visiting or at Mark Your Calendar For Our Next Event: June 8, 2011, 1 p.m. Eastern Time Internet Security: Simple steps to keep your personal and business computer safe.

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