Subsequent Events

9 Months Ended

Feb. 28, 2022

Subsequent Events [Abstract]

Subsequent Events

NOTE 15—SUBSEQUENT EVENTS

On March 18, 2022, Brazos Sandy Creek, a wholly-owned subsidiary of Brazos and a CFC Texas-based electric power supply borrower, filed for bankruptcy following the filing of a motion by Brazos to reject its power purchase agreement with Brazos Sandy Creek as part of Brazos’ bankruptcy proceedings. A Chapter 7 Trustee has been appointed, and the Chapter 7 Trustee has requested approval from the bankruptcy court to operate Brazos Sandy Creek as a going concern. CFC had a secured loan outstanding to Brazos Sandy Creek totaling $28 million as of February 28, 2022, which, upon notification of the bankruptcy filing by Brazos Sandy Creek, we classified as nonperforming during the fiscal quarter ended May 31, 2022.

While we have been actively monitoring developments related to the bankruptcy filing by Brazos Sandy Creek, the bankruptcy proceedings are at an early stage and therefore we have limited information available. There are numerous factors and uncertainties that are likely to affect the estimated impact of this event on our expected credit losses. As a result, this estimate has not been finalized.