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CFC Sells $300 Million of Collateral Trust Bonds


February 22, 2011 - HERNDON, VA

The National Rural Utilities Cooperative Finance Corporation (CFC) (NYSE: NRU) (NYSE: NRC) has closed its previously announced underwritten public offering of $300 million in collateral trust bonds (CTBs). The 3.05-percent CTBs are due March 1, 2016.

"Collateral trust bond sales are a core component of our overall strategy to bridge electric cooperatives to the capital markets," CFC CEO Sheldon C. Petersen said. "This sale, which follows $650 million of CTBs previously sold by CFC in November, further demonstrates the continued strong investor demand for CFC securities and the stability of the electric cooperative network we serve," he said.

The five-year bonds priced at a spread of 75 basis points over the yield on the five-year benchmark U.S. Treasury. These bonds are rated A1 by Moody's Investors Service and A+ by Standard & Poor's Corporation.

The net proceeds from the offering will be used for general corporate purposes, including the repayment of short-term debt, primarily commercial paper.

Deutsche Bank Securities Inc., J.P. Morgan Securities LLC, RBS Securities Inc., Scotia Capital (USA) Inc. and U.S. Bancorp Investments Inc. acted as joint book-running managers. The senior co-managers were KeyBanc Capital Markets Inc., Mitsubishi UFJ Securities (USA) Inc. and RBC Capital Markets, LLC. PNC Capital Markets LLC acted as a co-manager.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.

About CFC
National Rural Utilities Cooperative Finance Corporation (CFC) is a nonprofit cooperative that provides capital and industry-leading financial products to the nation's rural utility systems. With more than $20 billion in assets, CFC is committed to providing unparalleled industry expertise, flexibility and responsiveness to serve the needs of its member-owners. CFC can be found online at www.nrucfc.coop.

Contacts:
Brad Captain
Corporate Communications
Email Contact
703-709-6725

Ling Wang
Banking & Investor Relations
Email Contact
703-709-2053

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