We segregate our loan portfolio into segments, by legal entity, based on the borrower member class, which consists of CFC distribution, CFC power supply, CFC statewide and associate, NCSC and RTFC. We offer both long-term and line of credit loans to our borrowers. Under our long-term loan facilities, a borrower may select a fixed interest rate or a variable interest rate at the time of each loan advance. Line of credit loans are revolving loan facilities and generally have a variable interest rate.

We offer loans under secured long-term facilities with terms generally up to 35 years and line of credit loans. Under secured long-term facilities, borrowers have the option of selecting a fixed or variable rate for a period of one to 35 years for each long-term loan advance. When a selected fixed interest rate term expires, the borrower may select another fixed-rate term or a variable rate. Line of credit loans are revolving loan facilities that typically have a variable interest rate and are generally unsecured. Collateral and security requirements for advances on loan commitments are identical to those required at the time of the initial loan approval.

Loans to members consist of loans held for investment and loans held for sale. The outstanding amount of loans held for investment is recorded based on the unpaid principal balance, net of discounts, net charge-offs and recoveries, of loans and deferred loan origination costs. The outstanding amount of loans held for sale is recorded based on the lower of cost or fair value. The following table presents loans to members by legal entity, member class and loan type, as of May 31, 2023 and 2022.


	May 31,
	2023				2022
(Dollars in thousands)	Amount		% of Total		Amount		% of Total
Member class:
CFC:
Distribution	$	25,437,077	78	%	$	23,844,242	79	%
Power supply	5,437,242		17		4,901,770		17
Statewide and associate	200,368		1		126,863		—
Total CFC	31,074,687		96		28,872,875		96
NCSC	956,874		3		710,878		2
RTFC	487,788		1		467,601		2
Total loans outstanding(1)	32,519,349		100		30,051,354		100
Deferred loan origination costs—CFC(2)	12,737		—		12,032		—
Loans to members	$	32,532,086	100	%	$	30,063,386	100	%

Loan type:
Long-term loans:
Fixed rate	$	28,371,358	87	%	$	26,952,372	90	%
Variable rate	1,024,653		3		820,201		2
Total long-term loans	29,396,011		90		27,772,573		92

Lines of credit	3,123,338		10		2,278,781		8
Total loans outstanding(1)	32,519,349		100		30,051,354		100
Deferred loan origination costs—CFC(2)	12,737		—		12,032		—
Loans to members	$	32,532,086	100	%	$	30,063,386	100	%

We may transfer whole loans and participating interests to third parties. These transfers are typically made concurrently or within a short period of time with the closing of the loan sale or participation agreement at par value and meet the accounting criteria required for sale accounting. Therefore, we remove the transferred loans or participating interests from our consolidated balance sheets when control has been surrendered and recognize a gain or loss on the sale, if any. We retain a servicing performance obligation on the transferred loans and recognize related servicing fees on an accrual basis over the period for which servicing is provided, as we believe the servicing fee represents adequate compensation. Other than the servicing performance obligation, we have not retained any interest in the loans sold to date. In addition, we have no obligation to repurchase loans that are sold, except in the case of breaches of representations and warranties.

We sold CFC and NCSC loans, at par for cash, totaling $257 million, $171 million and $126 million in fiscal years 2023, 2022 and 2021, respectively. We recorded immaterial losses on the sale of these loans attributable to the unamortized deferred loan origination costs associated with the transferred loans. We had no loans held for sale as of May 31, 2023. We had loans held for sale totaling $44 million as of May 31, 2022 which were sold at par for cash subsequent to year-end.

Concentrations of credit may exist when a lender has large credit exposures to single borrowers, large credit exposures to borrowers in the same industry sector or engaged in similar activities or large credit exposures to borrowers in a geographic region that would cause the borrowers to be similarly impacted by economic or other conditions in the region. As a tax-exempt, member-owned finance cooperative, CFC’s principal focus is to provide funding to its rural electric utility cooperative members to assist them in acquiring, constructing and operating electric distribution systems, power supply systems and related facilities.

Because we lend primarily to our rural electric utility cooperative members, we have had a loan portfolio subject to single-industry and single-obligor concentration risks since our inception in 1969. Loans outstanding to electric utility organizations of $32,032 million and $29,584 million as of May 31, 2023 and 2022, respectively, accounted for 99% and 98% of total loans outstanding as of each respective date. The remaining loans outstanding in our portfolio were to RTFC members, affiliates and associates in the telecommunications industry. Our credit exposure is partially mitigated by long-term loans guaranteed by the RUS, which totaled $123 million and $131 million as of May 31, 2023 and 2022, respectively.

The outstanding loan exposure for our 20 largest borrowers totaled $6,588 million and $6,220 million as of May 31, 2023 and 2022, respectively, representing 20% and 21% of total loans outstanding as of each respective date. Our 20 largest borrowers consisted of 10 distribution systems and 10 power supply systems as of May 31, 2023. In comparison, our 20 largest borrowers consisted of 12 distribution systems and eight power supply systems as of May 31, 2022. The largest total outstanding exposure to a single borrower or controlled group represented 1% of total loans outstanding as of both May 31, 2023 and 2022.

We entered into a long-term standby purchase commitment agreement with Farmer Mac during fiscal year 2016. Under this agreement, we may designate certain long-term loans to be covered under the commitment, subject to approval by Farmer Mac, and in the event any such loan later goes into payment default for at least 90 days, upon request by us, Farmer Mac must purchase such loan at par value. We are required to pay Farmer Mac a monthly fee based on the unpaid principal balance of loans covered under the purchase commitment. The aggregate unpaid principal balance of designated and Farmer Mac-approved loans was $436 million and $493 million as of May 31, 2023 and 2022, respectively. Loan exposure to our 20 largest borrowers covered under the Farmer Mac agreement totaled $267 million and $316 million as of May 31, 2023 and 2022, respectively, which reduced our exposure to the 20 largest borrowers to 19% and 20% as of each respective date. We have had no loan defaults for loans covered under this agreement; therefore, no loans have been put to Farmer Mac for purchase pursuant to the standby purchase agreement as of May 31, 2023.

Although our organizational structure and mission results in single-industry concentration, we serve a geographically diverse group of electric and telecommunications borrowers throughout the U.S. The consolidated number of borrowers with loans outstanding totaled 884 and 883 as of May 31, 2023 and 2022, respectively, located in 49 states and the District of Columbia. Of the 884 and 883 borrowers with loans outstanding as of May 31, 2023 and 2022, respectively, 52 and 49 were electric power supply borrowers as of each respective date. Electric power supply borrowers generally require significantly more capital than electric distribution and telecommunications borrowers.


	May 31, 2023					May 31, 2022
(Dollars in thousands)	Number of Borrowers	Amount		% of Total		Number of Borrowers	Amount		% of Total
Member class:
CFC:
Distribution	57	$	4,319,937	13	%	57	$	3,984,887	13	%
Power supply	8	1,128,941		4		8	1,089,896		4
Statewide and associate	1	51,504		—		1	29,335		—
Total CFC	66	5,500,382		17		66	5,104,118		17
NCSC	1	16,667		—		1	378		—
RTFC	2	11,755		—		1	5,853		—
Total loan exposure to Texas-based borrowers	69	5,528,804		17		68	5,110,349		17
Less: Loans covered under Farmer Mac standby purchase commitment		(155,409)		—			(163,369)		(1)
Net loan exposure to Texas-based borrowers		$	5,373,395	17	%		$	4,946,980	16	%

Assessing the overall credit quality of our loan portfolio and measuring our credit risk is an ongoing process that involves tracking payment status, TDRs, nonperforming loans, charge-offs, the internal risk ratings of our borrowers and other indicators of credit risk. We monitor and subject each borrower and loan facility in our loan portfolio to an individual risk assessment based on quantitative and qualitative factors. Payment status trends and internal risk ratings are indicators, among others, of the probability of borrower default and overall credit quality of our loan portfolio.

Loans are considered delinquent when contractual principal or interest amounts become past due 30 days or more following the scheduled payment due date. Loans are placed on nonaccrual status when payment of principal or interest is 90 days or more past due or management determines that the full collection of principal and interest is doubtful. The following table presents the payment status, by legal entity and member class, of loans outstanding as of May 31, 2023 and 2022.

Table 4.3: Payment Status of Loans Outstanding


	May 31, 2023
(Dollars in thousands)	Current			30-89 Days Past Due			> 90 Days Past Due			Total Past Due			Total Loans Outstanding			Nonaccrual Loans
Member class:
CFC:
Distribution	$	25,437,077		$	—		$	—		$	—		$	25,437,077		$	—
Power supply	5,432,895			—			4,347			4,347			5,437,242			112,209
Statewide and associate	200,368			—			—			—			200,368			—
CFC total	31,070,340			—			4,347			4,347			31,074,687			112,209
NCSC	920,159			36,715			—			36,715			956,874			—
RTFC	487,788			—			—			—			487,788			—
Total loans outstanding	$	32,478,287		$	36,715		$	4,347		$	41,062		$	32,519,349		$	112,209

Percentage of total loans	99.87		%	0.11		%	0.02		%	0.13		%	100.00		%	0.35		%


	May 31, 2022
(Dollars in thousands)	Current			30-89 Days Past Due			> 90 Days Past Due			Total Past Due			Total Loans Outstanding			Nonaccrual Loans
Member class:
CFC:
Distribution	$	23,844,242		$	—		$	—		$	—		$	23,844,242		$	—
Power supply	4,787,832			28,389			85,549			113,938			4,901,770			227,790
Statewide and associate	126,863			—			—			—			126,863			—
CFC total	28,758,937			28,389			85,549			113,938			28,872,875			227,790
NCSC	710,878			—			—			—			710,878			—
RTFC	467,601			—			—			—			467,601			—
Total loans outstanding	$	29,937,416		$	28,389		$	85,549		$	113,938		$	30,051,354		$	227,790

Percentage of total loans	99.62		%	0.09		%	0.29		%	0.38		%	100.00		%	0.76		%

We had one CFC electric power supply borrower, Brazos Sandy Creek Electric Cooperative Inc. (“Brazos Sandy Creek”), with a delinquent loan of $4 million and one NCSC borrower with a delinquent loan of $37 million as of May 31, 2023. In comparison, we had two CFC electric power supply borrowers, Brazos Electric Power Cooperative, Inc. (“Brazos”) and Brazos Sandy Creek with delinquent loans totaling $114 million as of May 31, 2022. The decrease in loans on nonaccrual status of $116 million to $112 million as of May 31, 2023, from $228 million was due to the partial charge-offs related to the Brazos and Brazos Sandy Creek loans, and the receipt of loan principal payments on the outstanding nonaccrual loans. See “Troubled Debt Restructurings,” “Nonperforming Loans” and “Net Charge-Offs” below for additional information.


	May 31,
	2023					2022
(Dollars in thousands)	Number of Borrowers	Outstanding Amount (1)		% of Total Loans Outstanding			Number of Borrowers	Outstanding Amount (1)		% of Total Loans Outstanding
TDR loans:





Member class:
CFC—Distribution	1	$	4,638	0.02	%		1	$	5,092	0.02	%
CFC—Power Supply	1	22,875		0.07			—	—		—
RTFC	1	3,592		0.01			1	4,092		0.01
Total TDR loans	3	$	31,105	0.10	%		2	$	9,184	0.03	%

Performance status of TDR loans:
Performing TDR loans	2	$	8,230	0.03	%		2	$	9,184	0.03	%
Nonperforming TDR loans	1	22,875		0.07			—	—		—
Total TDR loans	3	$	31,105	0.10	%		2	$	9,184	0.03	%

The performing TDR loans outstanding have been performing in accordance with the terms of their respective restructured loan agreements for an extended period of time and were on accrual status as of May 31, 2023 and 2022, respectively. The CFC distribution borrower with the performing TDR loan also had one line of credit as of both May 31, 2023 and 2022. The line of credit facility for $6 million as of both May 31, 2023 and 2022, is restricted for fuel purchases only. Outstanding loans under this facility totaled $2 million and $1 million as of May 31, 2023 and 2022, respectively.

We had nonperforming TDR loans outstanding to Brazos totaling $23 million as of May 31, 2023, which were on nonaccrual status as of May 31, 2023. Brazos, a CFC Texas-based electric power supply borrower, filed for bankruptcy in March 2021 due to its exposure to elevated wholesale electric power costs during the February 2021 polar vortex. On November 14, 2022, Brazos’ plan of reorganization was confirmed by the bankruptcy court and it became effective on December 15, 2022. Due to Brazos experiencing financial difficulty and the principal loan concession provided to Brazos by the bankruptcy court as part of its approval of Brazos’ plan of reorganization, which was effective on December 15, 2022, the remaining Brazos loans outstanding were moved from nonperforming loans and classified as nonperforming TDR loans during the third quarter of fiscal year 2023. We did not have any TDR loans classified as nonperforming as of May 31, 2022. Prior to the Brazos loan restructuring, we have not had any loan modifications that were required to be accounted for as TDRs since fiscal year 2016. In June 2023, we received the remaining payment of Brazos’ loans outstanding of $23 million in accordance with the provisions of Brazos’ plan of reorganization to repay its loans in full.

Table 4.5: Nonperforming Loans


	May 31,
	2023					2022
(Dollars in thousands)	Number of Borrowers	Outstanding Amount (1)		% of Total Loans Outstanding			Number of Borrowers	Outstanding Amount (1)		% of Total Loans Outstanding
Nonperforming loans:
Member class:
CFC—Power supply	2	$	89,334	0.27	%		3	$	227,790	0.76	%


Total nonperforming loans	2	$	89,334	0.27	%		3	$	227,790	0.76	%

_______________________

Nonperforming loans totaled $89 million as of May 31, 2023, a decrease of $139 million from May 31, 2022, due to the receipt of loan principal payments, the partial charge-offs related to the Brazos and Brazos Sandy Creek nonperforming loans, and the classification of Brazos’ nonperforming loans to TDR loans during the third quarter of fiscal year 2023, as discussed above. Brazos’ loans outstanding accounted for $86 million of our total nonperforming loans as of May 31, 2022 and were delinquent and on nonaccrual as of this date.

Brazos Sandy Creek, a wholly-owned subsidiary of Brazos and a CFC Texas-based electric power supply borrower, filed for bankruptcy in March 2022 following the filing of a motion by Brazos to reject its power purchase agreement with Brazos Sandy Creek as part of Brazos’ bankruptcy proceedings. Brazos Sandy Creek’s loan outstanding accounted for $4 million and $28 million of our total nonperforming loans as of May 31, 2023 and 2022, respectively, and was delinquent and on nonaccrual as of each date. The loan is secured by Brazos Sandy Creek’s 25% tenant-in-common (“TIC”) ownership interest in the Brazos Sandy Creek Energy Station (“the Plant”), and its rights under a power purchase agreement (“PPA”) with Brazos for the output of the Brazos Sandy Creek Energy Station attributable to the TIC interest. On December 20, 2022, Brazos Sandy Creek’s 25% TIC ownership interest in the Plant was sold for a credit bid of $105 million to Riesel HoldCo, LLC (“HoldCo,”) an entity formed by the Brazos Sandy Creek noteholders. CFC was allocated ownership shares in HoldCo based on its 7.41% share in the $105 million credit bid, which totaled $8 million that was recorded as an equity investment in HoldCo during the current year in the other assets line of our consolidated balance sheets and reduced the Brazos Sandy Creek loan balance by the same amount. HoldCo intends to manage its ownership interest in the Plant directly and potentially sell it at a future date; however, HoldCo has no current timeline for its disposition. In July 2023, we received the remaining payment of Brazos Sandy Creek’s loan outstanding of $4 million to repay its loans in full.

Charge-offs represent the amount of a loan that has been removed from our consolidated balance sheet when the loan is deemed uncollectible. Generally the amount of a charge-off is the recorded investment in excess of the discounted expected cash flows from the loan, or, if the loan is collateral dependent, the fair value of the underlying collateral securing the loan. We report charge-offs net of amounts recovered on previously charged-off loans. We experienced charge-offs totaling $15 million for the CFC electric power supply loan portfolio related to Brazos and Brazos Sandy Creek loans during fiscal year 2023, which resulted in a net charge-off rate of 0.05%. In comparison, we had no loan charge-offs during fiscal years ended May 31, 2022 and 2021. Prior to Brazos’ and Brazos Sandy Creek’s bankruptcy filings, we had not experienced any defaults or charge-offs in our electric utility and telecommunications loan portfolios since fiscal years 2013 and 2017, respectively.

As part of our management of credit risk, we maintain a credit risk-rating framework under which we employ a consistent process for assessing the credit quality of our loan portfolio. We evaluate each borrower and loan facility in our loan portfolio and assign internal borrower and loan facility risk ratings based on consideration of a number of quantitative and qualitative factors. Each risk rating is reassessed annually following the receipt of the borrower’s audited financial statements; however, interim risk-rating adjustments may occur as a result of updated information affecting a borrower’s ability to fulfill its obligations or other significant developments and trends. We categorize loans in our portfolio based on our internally assigned borrower risk ratings, which are intended to assess the general creditworthiness of the borrower and probability of default. Our borrower risk ratings align with the U.S. federal banking regulatory agencies’ credit risk definitions of pass and criticized categories, with the criticized category further segmented among special mention, substandard and doubtful. Pass ratings reflect relatively low probability of default, while criticized ratings have a higher probability of default.

Table 4.6 displays total loans outstanding, by borrower risk-rating category and by legal entity and member class, as of May 31, 2023 and 2022. The borrower risk-rating categories presented below correspond to the borrower risk-rating categories used in calculating our collective allowance for credit losses. If a parent company provides a guarantee of full repayment of loans of a subsidiary borrower, we include the loans outstanding in the borrower risk-rating category of the guarantor parent company rather than the risk-rating category of the subsidiary borrower for purposes of calculating the collective allowance.

We present term loans outstanding as of May 31, 2023, by fiscal year of origination for each year during the five-year annual reporting period beginning in fiscal year 2019, and in the aggregate for periods prior to fiscal year 2019. The origination period represents the date CFC advances funds to a borrower, rather than the execution date of a loan facility for a borrower. Revolving loans are presented separately due to the nature of revolving loans. The substantial majority of loans in our portfolio represent fixed-rate advances under secured long-term facilities with terms up to 35 years and as indicated in Table 4.6 below, term loan advances made to borrowers prior to fiscal year 2019 totaled $17,123 million, representing 52% of our total loans outstanding as of May 31, 2023. The average remaining maturity of our long-term loans, which accounted for 90% of total loans outstanding as of May 31, 2023, was 19 years.


	May 31, 2023
	Term Loans by Fiscal Year of Origination
(Dollars in thousands)	2023		2022		2021		2020		2019		Prior		Revolving Loans		Total		May 31, 2022
Pass
CFC:
Distribution	$	2,453,999	$	2,404,404	$	1,643,838	$	1,822,745	$	1,153,864	$	13,838,304	$	1,925,554	$	25,242,708	$	23,596,004
Power supply	465,638		348,333		547,897		179,150		375,738		2,687,787		720,490		5,325,033		4,673,980
Statewide and associate	61,671		23,538		1,938		14,732		2,863		16,418		66,150		187,310		112,610
CFC total	2,981,308		2,776,275		2,193,673		2,016,627		1,532,465		16,542,509		2,712,194		30,755,051		28,382,594
NCSC	268,157		24,066		5,678		193,267		3,741		274,826		187,139		956,874		710,878
RTFC	52,015		84,624		75,057		39,157		7,825		192,543		32,975		484,196		463,509
Total pass	$	3,301,480	$	2,884,965	$	2,274,408	$	2,249,051	$	1,544,031	$	17,009,878	$	2,932,308	$	32,196,121	$	29,556,981

Special mention
CFC:
Distribution	$	4,226	$	—	$	4,775	$	—	$	5,003	$	12,210	$	168,155	$	194,369	$	248,238
Power supply	—		—		—		—		—		—		—		—		—
Statewide and associate	—		—		—		—		4,755		8,303		—		13,058		14,253
CFC total	4,226		—		4,775		—		9,758		20,513		168,155		207,427		262,491
RTFC	—		—		—		—		—		3,592		—		3,592		4,092
Total special mention	$	4,226	$	—	$	4,775	$	—	$	9,758	$	24,105	$	168,155	$	211,019	$	266,583

Substandard
CFC:

Power supply	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—



Total substandard	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Doubtful
CFC:
Power supply	$	—	$	—	$	—	$	—	$	—	$	89,334	$	22,875	$	112,209	$	227,790
CFC total	—		—		—		—		—		89,334		22,875		112,209		227,790
RTFC	—		—		—		—		—		—		—		—		—
Total doubtful	$	—	$	—	$	—	$	—	$	—	$	89,334	$	22,875	$	112,209	$	227,790
Total criticized loans	$	4,226	$	—	$	4,775	$	—	$	9,758	$	113,439	$	191,030	$	323,228	$	494,373
Total loans outstanding	$	3,305,706	$	2,884,965	$	2,279,183	$	2,249,051	$	1,553,789	$	17,123,317	$	3,123,338	$	32,519,349	$	30,051,354

Criticized loans totaled $323 million and $494 million as of May 31, 2023 and 2022, respectively, and represented approximately 1% and 2% of total loans outstanding as of each respective date. The decrease of $171 million in criticized loans was due primarily to loan payments received from a CFC electric distribution borrower in the special mention category, and from a CFC electric power supply borrower, Brazos and Brazos Sandy Creek in the doubtful category, and the partial charge-offs related to Brazos and Brazos Sandy Creek loans during fiscal year 2023. Each of the borrowers with loans outstanding in the criticized category, with the exception of Brazos Sandy Creek, was current with regard to all principal and interest amounts due to us as of May 31, 2023. In contrast, each of the borrowers with loans outstanding in the criticized category, with the exception of Brazos and Brazos Sandy Creek, which filed for bankruptcy in March 2021 and

March 2022, respectively, was current with regard to all principal and interest amounts due to us as of May 31, 2022. As mentioned above, subsequent to the year ended May 31, 2023, we received the remaining loan payments of $23 million and $4 million from Brazos and Brazos Sandy Creek, respectively, to repay their loans in full. See “Troubled Debt Restructurings” and “Nonperforming Loans” above for additional information on Brazos and Brazos Sandy Creek, respectively.

One CFC electric distribution borrower with loans outstanding of $194 million and $248 million as of May 31, 2023 and 2022, respectively, accounted for the substantial majority of loans in the special mention loan category amount of $211 million and $267 million as of each respective date. This borrower experienced an adverse financial impact from restoration costs incurred to repair damage caused by two successive hurricanes. We expect that the borrower will continue to receive grant funds from the Federal Emergency Management Agency and the state where it is located for the full reimbursement of the hurricane damage-related restoration costs.

Loans outstanding classified as doubtful totaled $112 million and $228 million as of May 31, 2023 and 2022, respectively, consisting of total loans outstanding to Brazos and Brazos Sandy Creek totaling $27 million and $114 million as of each respective date and loans outstanding to a CFC electric power supply borrower of $85 million and $114 million as of each respective date. See “Troubled Debt Restructurings” and “Nonperforming Loans” above for additional information on these loans.


	May 31,
(Dollars in thousands)	2023		2022
Member class:
CFC:
Distribution	$	9,673,712	$	9,230,197
Power supply	3,995,128		3,835,535
Statewide and associate	175,150		183,845
Total CFC	13,843,990		13,249,577
NCSC	604,436		551,901
RTFC	340,135		309,724
Total unadvanced commitments	$	14,788,561	$	14,111,202



Loan type:(1)
Long-term loans:
Fixed rate	$	—	$	—
Variable rate	5,669,634		5,357,205

Total long-term loans	5,669,634		5,357,205
Lines of credit	9,118,927		8,753,997
Total unadvanced commitments	$	14,788,561	$	14,111,202


	Available Balance		Notional Maturities of Unadvanced Loan Commitments
(Dollars in thousands)			2024		2025		2026		2027		2028		Thereafter
Line of credit loans	$	9,118,927	$	5,055,192	$	1,238,285	$	788,561	$	1,238,399	$	662,086	$	136,404
Long-term loans	5,669,634		1,019,262		704,667		794,595		1,339,212		1,595,844		216,054
Total	$	14,788,561	$	6,074,454	$	1,942,952	$	1,583,156	$	2,577,611	$	2,257,930	$	352,458

Unadvanced line of credit commitments accounted for 62% of total unadvanced loan commitments as of May 31, 2023, while unadvanced long-term loan commitments accounted for 38% of total unadvanced loan commitments. Unadvanced line of credit commitments are typically revolving facilities for periods not to exceed five years and generally serve as supplemental back-up liquidity to our borrowers. Historically, borrowers have not drawn the full commitment amount for line of credit facilities, and we have experienced a very low utilization rate on line of credit loan facilities regardless of whether or not we are obligated to fund the facility where a material adverse change exists.

The substantial majority of our line of credit commitments and all of our unadvanced long-term loan commitments include material adverse change clauses. Unadvanced loan commitments subject to material adverse change clauses totaled $11,617 million and $10,908 million as of May 31, 2023 and 2022, respectively. Prior to making an advance on these facilities, we confirm that there has been no material adverse change in the business or condition, financial or otherwise, of the borrower since the time the loan was approved and confirm that the borrower is currently in compliance with loan terms and conditions. In some cases, the borrower’s access to the full amount of the facility is further constrained by the designated purpose, imposition of borrower-specific restrictions or by additional conditions that must be met prior to advancing funds.

Unadvanced loan commitments not subject to material adverse change clauses at the time of each advance consisted of unadvanced committed lines of credit totaling $3,172 million and $3,203 million as of May 31, 2023 and 2022, respectively. As such, we are required to advance amounts on these committed facilities as long as the borrower is in compliance with the terms and conditions of the facility. The following table summarizes the available balance under unconditional committed lines of credit and the related maturity amounts in each of the five fiscal years subsequent to May 31, 2023 and thereafter.

We are required to pledge eligible mortgage notes or other collateral in an amount at least equal to the outstanding balance of our secured debt. Table 4.10 displays the borrowing amount under each of our secured borrowing agreements and the corresponding loans outstanding pledged as collateral as of May 31, 2023 and 2022. See “Note 6—Short-Term Borrowings” and “Note 7—Long-Term Debt” for information on our secured borrowings and other borrowings.


	May 31,
(Dollars in thousands)	2023		2022
Collateral trust bonds:
2007 indenture:
Collateral trust bonds outstanding	$	7,772,711	$	7,072,711
Pledged collateral:
Distribution system mortgage notes pledged	8,719,287		8,564,596
RUS-guaranteed loans qualifying as permitted investments	122,874		114,654
Total pledged collateral	8,842,161		8,679,250

1994 indenture:
Collateral trust bonds outstanding	$	20,000	$	25,000
Pledged collateral:
Distribution system mortgage notes pledged	22,900		29,616

Guaranteed Underwriter Program:
Notes payable outstanding	$	6,720,643	$	6,105,473
Pledged collateral:
Distribution and power supply system mortgage notes pledged	7,877,558		6,904,591

Farmer Mac:
Notes payable outstanding	$	3,149,898	$	3,094,679
Pledged collateral:
Distribution and power supply system mortgage notes pledged	4,294,282		3,445,358

Clean Renewable Energy Bonds Series 2009A:
Notes payable outstanding	$	1,098	$	2,755
Pledged collateral:
Distribution and power supply system mortgage notes pledged	1,029		3,138
Cash	391		392
Total pledged collateral	1,420		3,530