Subordinated Deferrable Debt

12 Months Ended

May 31, 2026


NOTE 8—SUBORDINATED DEFERRABLE DEBT

Subordinated deferrable debt represents long-term debt that is subordinated to all debt other than subordinated certificates held by our members. The following table presents, by issuance, subordinated deferrable debt outstanding and the weighted-average interest rates as of May 31, 2026 and 2025.

Table 8.1: Subordinated Deferrable Debt Outstanding and Weighted-Average Interest Rates


	May 31,
	2026				2025				Maturity and Call Dates
(Dollars in thousands)	Outstanding Amount		Weighted Average Interest Rate		Outstanding Amount		Weighted Average Interest Rate		Term in Years	Maturity(2)	Call Date
Issuances of subordinated notes:
Variable rate issuance 2013	$	—	—	%	$	300,000	7.45	%	30	2043	April 30, 2023(1)
5.25% issuance 2016	—		—		350,000		5.25		30	2046	April 20, 2026(1)
5.50% issuance 2019	250,000		5.50		250,000		5.50		45	2064	May 15, 2024(1)
7.125% issuance 2023	300,000		7.13		300,000		7.13		30	2053	June 15, 2028
7.125% issuance 2024	100,000		7.13		100,000		7.13		29	2053	June 15, 2028
5.75% issuance 2026	150,000		5.75		—		—		30	2056	January 20, 2031(3)
5.95% issuance 2026	450,000		5.95		—		—		30	2056	January 21, 2036(3)
Subordinated notes	72,956		5.74		43,811		5.75		30	2054-2056	Various(4)
Total aggregate principal amount	1,322,956				1,343,811
Unamortized premiums	3,409				3,450
Debt issuance costs	(16,083)				(17,776)
Total subordinated deferrable debt	$	1,310,282	6.19		$	1,329,485	6.36

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(1)At any time on or after the call date, the subordinated deferrable debt is redeemable, in whole or in part, at par.

(2)Maturity is presented based on calendar year.

(3)The subordinated notes may be called, in whole or in part, at par on any day during the period commencing 90 days prior to, and including, the first interest rate reset date and then on each interest payment date thereafter. The first interest rate reset date is April 20, 2031 for the 5.75% Notes and April 20, 2036 for the 5.95% Notes.

(4)The subordinated notes may be called, in whole or in part, at par on or after five years from the date of the issuances.

During FY2026, we redeemed $650 million in aggregate principal amount of our subordinated deferrable debt, including $300 million of notes due 2043 (the “2043 Notes”) and $350 million of notes due 2046 (the “2046 Notes”). The notes were redeemed at par plus accrued interest. As a result, we recognized $6 million of losses on early extinguishment of debt related to unamortized debt issuance costs for these notes in our consolidated statements of operations for FY2026. Losses on early extinguishment of debt were included in other non-interest expense in our consolidated statements of operations.

Our 5.50% subordinated deferrable debt due 2064 pays interest quarterly, may be called at par five years after the issuance and allows us to defer interest payments for one or more consecutive interest periods, not to exceed 40 consecutive quarterly periods.

Our two issuances of 7.125% subordinated deferrable debt due 2053 pay interest semiannually, may be called at par every five years after the issuances, reset to a new fixed rate every five years based on the five-year U.S. Treasury rate plus a

spread of 3.533% and allow us to defer interest payments for one or more consecutive interest periods, not to exceed 20 consecutive semiannual periods.

During FY2026, we issued in a private placement $600 million of fixed-to-fixed reset rate subordinated notes due 2056, consisting of two tranches: $150 million notes at a fixed rate of 5.75% that are noncallable for five years (the “5.75% Notes”) and $450 million notes at a fixed rate of 5.95% that are noncallable for 10 years (the “5.95% Notes”.) The interest rate for the 5.75% Notes will be reset on April 20, 2031 and every five years thereafter based on the five-year U.S. Treasury Rate plus a spread of 2.000%, to be reset on each reset date, provided that the interest rate during any reset period will not reset below 5.75%. The interest rate for the 5.95% Notes will be reset on April 20, 2036 and every five years thereafter based on the five-year U.S. Treasury Rate plus a spread of 1.800%, to be reset on each reset date, provided that the interest rate during any reset period will not reset below 5.95%. Both notes pay interest semiannually and allow us to defer interest payments for one or more consecutive interest periods, not to exceed 20 consecutive semiannual periods. The notes may be called, in whole or in part, at par on any day during the period commencing 90 days prior to, and including, the first interest rate reset date and then on each interest payment date thereafter.

Under an agency agreement with InspereX LLC, Citigroup Global Markets Inc., RBC Capital Markets, LLC and Wells Fargo Clearing Services, LLC, as agents, we may offer and sell, from time to time, an unlimited aggregate principal amount of our subordinated deferrable interest notes (the “Subordinated Notes”). The Subordinated Notes may be called, in whole or in part, at par on or after five years from the date of the issuance and allow us to defer interest payments for one or more consecutive interest periods, not to exceed 20 consecutive semiannual periods or 40 consecutive quarterly periods. During FY2026, we issued the Subordinated Notes with an aggregate principal amount of $29 million, each with a maturity of 30 years.

To date, we have not exercised our right to defer interest payments on any of our subordinated deferrable debt.