CFC to Redeem Quarterly Income Capital Securities Issue.

HERNDON, Va. -- National Rural Utilities Cooperative Finance Corporation ("CFC") announced today that it will redeem its entire issue of National Rural Utilities Quarterly Income Capital Securities, Series NRY (QUICS) at par. The QUICS are identified by the ticker symbol NRY and CUSIP number 637432501. The redemption date is June 15, 2006, and the redemption agent will be DTC.

The redemption price per share is $25.00 plus accrued distributions of $0.4765625. The principal amount of the entire series is $150 million. The principal and accrued distributions to the redemption date will be paid from CFC's available cash.

CFC is a not-for-profit finance cooperative that serves the nation's rural utility systems, the majority of which are electric cooperatives and their subsidiaries. With more than $19 billion in assets, CFC provides its member-owners with an assured source of low-cost capital and state-of-the-art financial products and services.