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S&P revises outlook on National Rural Utilities Cooperative Finance

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S&P revises outlook on National Rural Utilities Cooperative Finance

Standard & Poor's Ratings Services on April 12 revised itsoutlook on National Rural UtilitiesCooperative Finance Corp. to stable from negative and affirmed the A/A-1issuer credit ratings on the company.

The outlook revision is based on the rating agency's revisedassessment of National Rural Utilities Cooperative's capital adequacy to eliminatethe impact from unrealized gains and losses associated with interest rate hedgesfrom the company's total adjusted capital. S&P expects the company to consistentlyreport a risk-adjusted capital ratio of at least 7.0%, which is indicative of adequatecapital for the rating.

S&P said the stable outlook reflects its expectation thatthe company will maintain its role as an important source of financing for the ruralelectric utility industry, a risk-adjusted capital ratio of 7.0% or greater andminimal credit losses.

The ratings reflect the company's market position in lendingto rural electric utility cooperatives, the low credit risk of its loan portfolio,and its funding from the Federal Financing Bank, the Federal Agricultural Mortgage,and its members, S&P said.

S&P Ratings and GlobalMarket Intelligence are owned by McGraw Hill Financial Inc.