Terms

Series

8% Cumulative Redeemable Preferred Stock

Liquidation Preference

$25.00

Coupon Rate

8%

Rate Type

Fixed

Annual Dividend

$2.00

Payment Frequency

Quarterly

Cumulative

Yes

Perpetual

Yes

Convertible

No

Callable

Yes

First Call Date

February 1, 2008

First Call Price

$25.00

Capital Stack Ranking

Junior To: All Indebtedness Of The Company; Pari Passu With: Existing 8% Preferred Stock, Other Parity Preferred Series; Senior To: Common Stock, Patronage Refund Certificates, Junior-Designated Equity Classes

Regulatory (Basel III) Call

No

Tax Classification

Other

Qualifies for QDI

No

Qualifies for DRD

No

Shares Offered

3,000,000

Prospectus Summary

Cenex Harvest States Cooperatives (CHS), one of the nation's largest agricultural cooperatives, is offering 3,000,000 shares of its 8% Cumulative Redeemable Preferred Stock at $25.00 per share, listed on the Nasdaq National Market under 'CHSCP.' The fixed annual dividend is $2.00 per share ($0.50 quarterly), payable on March 31, June 30, September 30, and December 31, beginning March 31, 2003. The stock is not a depositary share — each share represents a direct preferred interest. Dividends are cumulative, meaning that any unpaid dividends accumulate and must be paid in full before distributions can be made on junior securities, though the board is not obligated to declare payment at any given time. This preferred stock ranks senior to all patronage refunds, common equity, and any board-designated junior equity classes, but pari passu with CHS's existing 8% Preferred Stock and any other parity series. It is structurally junior to all of CHS's outstanding indebtedness (including a $550 million revolving credit facility), which must be fully repaid before preferred holders receive any liquidation proceeds. CHS is a cooperative, not a bank holding company, so there is no Tier 1 regulatory capital call provision in this offering. Holders may require repurchase at $25.00 plus accrued dividends within 90 days of a board-approved change of control. At the $25.00 offering price, the preferred yields exactly 8.00% annually. Because CHS is a Minnesota agricultural cooperative rather than a traditional corporation, dividends may not qualify for the standard 15%/20% qualified dividend income (QDI) rate available to individual investors or the dividends-received deduction (DRD) for corporate holders — investors should consult their tax advisors. Dividends are payable quarterly on the last day of March, June, September, and December. No explicit record-date rule is stated in the prospectus. Payments are not guaranteed: the board can indefinitely defer payment for any reason, including debt covenants or liquidity needs, though accumulated arrears must be cleared before any junior equity distributions are made.

Summarized from the SEC prospectus filing.

Distribution History

Ranking vs. Other Preferreds

Dividend Stopper Provisions

Dividend Stopper Description

If dividends on the preferred stock are not declared and paid, the board may not pay patronage refunds or distributions on junior equity securities until all accumulated and unpaid preferred dividends have been satisfied.

Div Score Breakdown

Reinvesty's multi-factor safety analysis for this preferred, composite score: 56 (Average)