

NOTE 7—LONG-TERM DEBT

The following table displays long-term debt outstanding, by debt type, as of November 30, 2019 and May 31, 2019.



(Dollars in thousands)	November 30, 2019			May 31, 2019
Secured long-term debt:
Collateral trust bonds	$	7,357,711		$	7,662,711
Unamortized discount	(239,551		)	(244,643		)
Debt issuance costs	(31,575		)	(34,336		)
Total collateral trust bonds	7,086,585			7,383,732
Guaranteed Underwriter Program notes payable	5,363,798			5,410,507
Farmer Mac notes payable	2,944,954			3,054,914
Other secured notes payable	9,225			9,225
Debt issuance costs	(146		)	(178		)
Total other secured notes payable	9,079			9,047
Total secured notes payable	8,317,831			8,474,468
Total secured long-term debt	15,404,416			15,858,200
Unsecured long-term debt:
Medium-term notes sold through dealers	2,617,353			2,962,375
Medium-term notes sold to members	423,539			397,080
Subtotal medium-term notes	3,040,892			3,359,455
Unamortized discount	(764		)	(931		)
Debt issuance costs	(17,617		)	(19,399		)
Total unsecured medium-term notes	3,022,511			3,339,125
Unsecured notes payable	7,701			13,701
Unamortized discount	(142		)	(187		)
Debt issuance costs	(35		)	(46		)
Total unsecured notes payable	7,524			13,468
Total unsecured long-term debt	3,030,035			3,352,593
Total long-term debt	$	18,434,451		$	19,210,793

Collateral Trust Bonds

Collateral trust bonds represent secured obligations sold to investors in the capital markets. Collateral trust bonds are secured by the pledge of mortgage notes or eligible securities in an amount at least equal to the principal balance of the bonds outstanding.

On October 15, 2019, we redeemed the $300 million outstanding principal amount of our 2.30% collateral trust bonds due November 15, 2019 at par.

On November 27, 2019, we provided notice to investors of our intent to redeem all $400 million outstanding principal amount of our 2.00% collateral trust bonds due January 27, 2020 on December 27, 2019. We redeemed these outstanding collateral trust bonds at par on December 27, 2019.

Secured Notes Payable

We had outstanding secured notes payable totaling $5,364 million and $5,411 million as of November 30, 2019 and May 31, 2019, respectively, under bond purchase agreements with the Federal Financing Bank and a bond guarantee agreement with RUS issued under the Guaranteed Underwriter Program, which provides guarantees to the Federal Financing Bank. We pay RUS a fee of 30 basis points per year on the total amount outstanding. We had up to $1,350 million available for access under the Guaranteed Underwriter Program as of November 30, 2019. On September 25, 2019, we received a commitment letter for the guarantee by RUS of a $500 million loan facility from the Federal Financing Bank under the Guaranteed Underwriter Program.

The notes outstanding under the Guaranteed Underwriter Program contain a provision that if during any portion of the fiscal year, our senior secured credit ratings do not have at least two of the following ratings: (i) A3 or higher from Moody’s, (ii) A- or higher from S&P, (iii) A- or higher from Fitch, or (iv) an equivalent rating from a successor rating agency to any of the above rating agencies, we may not make cash patronage capital distributions in excess of 5% of total patronage capital. We are required to pledge eligible distribution system or power supply system loans as collateral in an amount at least equal to the total principal amount of notes outstanding under the Guaranteed Underwriter Program. See “Note 4—Loans” for additional information on the collateral pledged to secure notes payable under this program.

We had two revolving note purchase agreements with Farmer Mac as of November 30, 2019, which together allowed us to borrow up to $5,500 million from Farmer Mac. Under the first revolving note purchase agreement, dated March 24, 2011, as amended, we can borrow up to $5,200 million as of November 30, 2019, at any time, subject to market conditions, through January 11, 2022. This date automatically extends on each anniversary date of the closing for an additional year, unless prior to any such anniversary date, Farmer Mac provides us with a notice that the draw period will not be extended beyond the remaining term. Pursuant to this revolving note purchase agreement, we can borrow, repay and re-borrow funds at any time through maturity, as market conditions permit, provided that the outstanding principal amount at any time does not exceed the total available under the agreement. We had outstanding secured notes payable totaling $2,945 million and $3,055 million as of November 30, 2019 and May 31, 2019, respectively, under this Farmer Mac revolving note purchase agreement. The available borrowing amount totaled $2,255 million as of November 30, 2019.

Under our second revolving note purchase agreement with Farmer Mac, dated July 31, 2015, as amended, we could borrow up to $300 million at any time through December 20, 2023 at a fixed spread over London Interbank Offered Rate (“LIBOR”). This agreement also allowed us to borrow, repay and re-borrow funds at any time through maturity, provided that the outstanding principal amount at any time does not exceed the total available under the agreement. Under this revolving note purchase agreement, we had outstanding secured notes payable totaling $150 million and an available borrowing amount of $150 million as of November 30, 2019. We had no notes payable outstanding under this agreement as of May 31, 2019. On November 14, 2019, we provided notice to Farmer Mac of termination of the $300 million revolving note purchase agreement, effective December 20, 2019. We repaid the outstanding secured notes payable of $150 million on December 4, 2019, prior to termination of the agreement.

Under the terms of the first Farmer Mac revolving note purchase agreement of $5,200 million discussed above, the commitment amount increases by $300 million in the event of termination of the second revolving note purchase agreement of $300 million. As a result of the termination of the second revolving note purchase agreement, the commitment amount under the $5,200 million revolving note purchase agreement increased to $5,500 million, effective December 20, 2019.

Pursuant to both Farmer Mac revolving note purchase agreements, we are required to pledge eligible distribution system or power supply system loans as collateral in an amount at least equal to the total principal amount of notes outstanding. See “Note 4—Loans” for additional information on pledged collateral.

Unsecured Notes Payable

On November 15, 2019, we redeemed the $6 million outstanding principal amount of our 9.07% notes payable due May 15, 2022, at a premium of less than $1 million.

We were in compliance with all covenants and conditions under our senior debt indentures as of November 30, 2019 and May 31, 2019.