Monday, April 13, 2009

NRUC: The Plot Thickens Yet Again

I thought the financial cooperative had managed to sweep its troubles under the rug (at least temporarily) after NRUC announced its results last week with no major surprises... Maybe I was early... And this is despite the company's rushed attempt to complete the credit bid for ICC.

Another website, which seems to have found some validity in Zero's fundamental valuation argument (with which we have no affiliation at all, mind you), has been recently spotted.

The first thing that came to my attention is that someone has a lot more free time to dedicate to unmasking the various layers of National Rural Utilities.

The financial analysis section of the exposing website has some very shocking sections, among which are the following:
  • CFC is technically bankrupt
  • CFC's response: derivatives
  • Electric loan portfolio has not contributed to profits since May 31, 2003
  • CFC misappropriation of funds belonging to rural telephone members of RFTC
  • The government is involved in a bailout of CFC that exceeds the Chrysler bailout
At first blush, the math behind the assorted allegations is rather interesting and we suggest Zero Hedge readers familiarize themselves with it.

The website has also compiled the financial documentation in a easy to read pdf, which I present below.

nruc zerohedge
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Anonymous said...

“The blogger repeats the same old allegations made a few years ago, which are every bit as flawed today as they were then,” said Mike O’Brien, CFC vice president of Corporate Communications. “We do not believe the blogger’s report reflects an understanding of our financial condition or our results of operations, cashflow, ability to service our debt obligations or the strength of our loan portfolio.”

Older article about Tyler posted on ClusterStock (as good now as it was then)

Keep ruffling feathers TD :-)

alannis lives! said...

quite ironic that it's happening to a bunch of scummonkeys skimming $ off the TVA (a new deal creation),

ain't it?

can't wait for those carbon default swaps!
mistress blythe, get a move on darlin
your slaves are waiting

Anonymous said...

I would appreciate it if someone could please place Maria Bartiromo in a bag with an angry racoon and throw the bag in the Hudson.

No rush. Thanks in advance.

Anonymous said...

Also, please tie Dennis Kneale to the bag before tossing.

Thanks again.

Anonymous said...

The debt market is pricing NRUCFC bonds and Internotes at a premium indicating that they are essentially in good health. Contrast this to several financial companies that have their debt priced at steep discounts to par. As 'they' say, the debt markets usually have it right, the equity markets, not so much.

Anonymous said...

Many companies debt held up when their stock was falling. Egan Jones has rated the debt as junk for 2 years now. NRUC's own aduits show the fair value of the notes rec. are overstated by over 1 B. CO-SERV and ICC are carried at values on NRUC financials at 650 M overstated. Recall that NRUC's lawyer in ICC's bankruptcy 2 years ago turned down an overall offer of 620 M financed by Silver Point. NRUC's lawyer on the record said he didn't care how much his client lost. It was their choice. On April 6, 2009 in Bankruptcy Court in Pittsburg NRUC credit bid for 250 M plus the internal debt of 200 M. The highest bid received was 200 M gross. This bid required NRUC to provide financing of the deal. CERBERUS it is said bid at a gross number of 165 M. ICC's loan is a complete writoff but NRUC put in a bid in hopes of not writing the entire loan off. Has anyone asked if there are formal or informal investigations of NRUC going on by any Federal departments. Doesn't this begin to sound like Freddie and Fannie.