Chris Haberlin's questions to NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORP /DC/ (NRUC) leadership • Q3 2023
Question
Chris Haberlin of Agincourt Capital Management questioned the elevated 6.6x debt-to-equity ratio, asking about the medium-term strategy to return to the 6x target and feedback from rating agencies. He also requested a detailed update on the remaining Brazos and Brazos Sandy Creek loan exposures, including their classification and repayment outlook.
Answer
CEO Andrew Don explained that managing the debt-to-equity ratio is a high priority, noting that temporary line of credit growth was a key driver and that CFC is exploring options like sub-debt and faster equity accumulation. SVP & CFO Ling Wang added that adjusting for temporary loans would lower the ratio to 6.35x. Regarding Brazos, Wang clarified the exposure consists of $23 million in troubled debt restructuring and $4 million in nonperforming loans, with repayment expected from asset sales within 12 months.