Rural Electric Cooperative Grantor Trust Soyland 1993 B1 10-K 2003 FY Annual report

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2003

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 333-79328

RURAL ELECTRIC COOPERATIVE GRANTOR TRUST (SOYLAND) 1993-B1

(Exact name of registrant as specified in its charter)

NEW YORK

(State or other jurisdiction of incorporation or organization)

36-7051619

(I.R.S. Employer Identification Number)

2201 Cooperative Way, Herndon, VA 20171-3025

(Address of principal executive offices)

(Registrant's telephone number, including area code, is 703-709-6700)

Securities Registered pursuant to Section 12(b) of the Act: None.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes X No __

The Registrant is not an accelerated filer.

The Registrant has no common or voting stock.

DOCUMENTS INCORPORATED BY REFERENCE:

None.

Part I

Item 3. Legal Proceedings

None.

Item 4. Submission of Matters to a Vote of Security Holders

None.

Part II

Item 5.	Market for the Registrant's Common Equity and Related Stockholder Matters
	a)	There is no established trading market for the certificates representing ownership of the beneficial interest in the Rural Electric Cooperative Grantor Trust (Soyland) 1993-B1 ("Trust").
	b)	As of December 31, 2003 there was one record holder of certificates representing ownership of the beneficial interest in the Trust.

Item 8. Financial Statements and Supplementary Data

See attached audited financial statements.

Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
		On April 22, 2002, National Rural Utilities Cooperative Finance Corporation ("CFC") as servicer for the Trust rescinded an earlier decision to retain Arthur Andersen LLP as independent public accountants for the audit of its fiscal year ending December 31, 2002. On April 16, 2002, CFC engaged Ernst & Young LLP as its independent public auditors for the year ended December 31, 2002. CFC's Board of Directors approved the dismissal of Arthur Andersen LLP.
		Arthur Andersen LLP's report on CFC's financial statements for fiscal year ended December 31, 2001 did not contain an adverse opinion or disclaimer of opinion, nor was it qualified or modified as to uncertainty, audit scope or accounting principles.
		During the fiscal year ended December 31, 2001 there were no disagreements with Arthur Andersen LLP on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure which, if not resolved to Arthur Andersen LLP's satisfaction, would have caused them to make reference to the subject matter of the disagreement in connection with their report on the Trust's financial statements for such year. During such period there also were no "reportable events" (as defined in Item 304(a)(1)(v) of Regulation S-K promulgated by the SEC), and the Trust did not (nor did anyone on its behalf) consult with Ernst & Young LLP with respect to the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Trust's financial statements, or any other matters or events set forth in item 304(a)(2)(i) or (ii) of Regulation S-K.
		The Trust provided Arthur Andersen LLP with a copy of the above disclosures. In a letter dated April 26, 2002, Arthur Andersen LLP confirmed its agreement with such statements.
Part III
Item 13.	Certain Relationships and Related Transactions
		None.

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Part IV
Item 15.	Exhibits and Financial Statement Schedules and Reports on Form 8-K
	The following documents are filed as part of this report:
	1.	Financial Statements
		Report of Independent Auditors
		Report of Independent Public Accountants
		Statements of Assets and Liabilities as of December 31, 2003 and 2002
		Statements of Income and Expenses for the Years Ended December 31, 2003, 2002 and 2001
		Statements of Cash Flows for the Years Ended December 31, 2003, 2002 and 2001
		Notes to Financial Statements
	2.	Financial Statement Schedules are omitted because they are inapplicable.
	3.	Exhibits

Exhibit
Number	Description of Exhibit
4.1	Form of Trust Agreement, including the form of Rural Electric Cooperative Grantor Trust Certificate (incorporated by reference to Exhibit 4.1 to Registration Statement on form S-1 [No. 33-79328].)
4.2	Loan Agreement (incorporated by reference to Exhibit 10.1 to Registration Statement on Form S-1 [No. 33-79328].)
10.2	Loan Guarantee and Servicing Agreement (incorporated by reference to Exhibit 10.2 to Registration Statement on Form S-1 [No. 33-79328].)
12	Computations of ratio of margin to fixed charges.
31.1	Certification of the Chief Executive Officer required by Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of the Chief Financial Officer required by Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of the Chief Executive Officer required by Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of the Chief Financial Officer required by Section 906 of the Sarbanes-Oxley Act of 2002.

	b)	Forms 8-K dated March 19, 2003 and September 17, 2003.
		Semi-annual Reports to Certificateholders dated September 17, 2003 and March 19, 2003.
Supplemental information to be furnished with reports filed pursuant to Section 15(d) of the Act by Registrants which have not registered securities pursuant to Section 12 of the Act.
No annual report, proxy statement, form of proxy or other proxy soliciting material has been sent to Certificateholders, and the Registrant does not presently contemplate sending any such material subsequent to the filing of this report.
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Pursuant to the requirements of Section 13 or 15(d) of the Securities Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the County of Fairfax, Commonwealth of Virginia on the 29th day of March, 2004.

RURAL ELECTRIC COOPERATIVE GRANTOR TRUST (SOYLAND) 1993-B1
By:	NATIONAL RURAL UTILITIES COOPERATIVE
	FINANCE CORPORATION as Servicer
	By:	/s/ Sheldon C. Petersen
		Sheldon C. Petersen, Governor and
		Chief Executive Officer

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Report of Independent Auditors

To the Trustee of

   Rural Electric Cooperative Grantor Trust

      (SOYLAND) 1993-B1, and

To the Board of Directors of

   National Rural Utilities Cooperative

       Finance Corporation

We have audited the accompanying statements of assets and liabilities of Rural Electric Cooperative Grantor Trust (SOYLAND) 1993-B1 (the "Trust") as of December 31, 2003 and 2002 and the related statements of income and expenses and cash flows for the years then ended. These financial statements are the responsibility of the Trust's management. Our responsibility is to express an opinion on these financial statements based on our audits. The statements of income and expenses, changes in deficit and cash flows for the year ended December 31, 2001, were audited by other auditors who have ceased operations and whose report dated March 27, 2002 expressed an unqualified opinion on these statements.

We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Rural Electric Cooperative Grantor Trust (SOYLAND) 1993-B1 at December 31, 2003 and 2002 and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States.

Ernst & Young LLP

McLean, Virginia

March 19, 2004

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This is a copy of the audit report previously issued by Arthur Andersen LLP in connection with the grantor trust's filing on Form 10-K for the year ended December 31, 2001. This audit report has not been reissued by Arthur Andersen LLP in connection with this filing on Form 10-K.

Report of Independent Public Accountants

To the Trustee of

   Rural Electric Cooperative Grantor Trust

        (SOYLAND) 1993-B1, and

To the Board of Directors of

   National Rural Utilities Cooperative

       Finance Corporation

We have audited the accompanying statements of assets and liabilities of Rural Electric Cooperative Grantor Trust (SOYLAND) 1993-B1 (the "Trust") as of December 31, 2001 and 2000, and the related statements of income and expenses and cash flows for each of the three years in the period ended December 31, 2001. These financial statements are the responsibility of the Trust's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Rural Electric Cooperative Grantor Trust (SOYLAND) 1993-B1 as of December 31, 2001 and 2000, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2001, in conformity with accounting principles generally accepted in the United States.

Arthur Andersen LLP

Vienna, Virginia

March 27, 2002

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RURAL ELECTRIC COOPERATIVE GRANTOR TRUST (SOYLAND) 1993-B1

STATEMENTS OF ASSETS AND LIABILITIES

DECEMBER 31, 2003 AND 2002

ASSETS		2003		2002
Interest receivable	$	1,433,895	$	1,433,895
Note receivable		49,675,000		49,675,000
Total Assets	$	51,108,895	$	51,108,895
LIABILITIES
Interest payable-Grantor Trust Certificates	$	1,399,717	$	1,399,717
Conversion and servicer fees payable		34,178		34,178
Rural Electric Cooperative Grantor Trust Certificates		49,675,000		49,675,000
Total Liabilities	$	51,108,895	$	51,108,895

See accompanying notes.

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RURAL ELECTRIC COOPERATIVE GRANTOR TRUST (SOYLAND) 1993-B1

STATEMENTS OF INCOME AND EXPENSES

YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001

		2003		2002		2001
INCOME
Interest on note receivable	$	4,411,985	$	4,411,985	$	4,411,985
EXPENSES
Interest to certificateholders		4,306,823		4,306,823		4,306,823
Conversion and servicer fees		105,162		105,162		105,162
Total Expenses		4,411,985		4,411,985		4,411,985
Net Income	$	-	$	-	$	-

See accompanying notes.

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RURAL ELECTRIC COOPERATIVE GRANTOR TRUST (SOYLAND) 1993-B1

STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001

		2003			2002			2001
CASH FLOWS FROM OPERATING ACTIVITIES:
Interest received on note receivable	$	4,411,985		$	4,411,985		$	4,411,985
Interest paid to certificateholders		(4,306,823	)		(4,306,823	)		(4,306,823	)
Fees paid to servicer		(105,162	)		(105,162	)		(105,162	)
Net cash provided by operating activities		-			-			-
NET CHANGE IN CASH:
CASH, beginning of year		-			-			-
CASH, end of year	$	-		$	-		$	-
ACCRUAL TO CASH BASIS RECONCILIATION:
Accrual basis income	$	-		$	-		$	-
Change in accrual accounts:
Increase in interest receivable		-			-			-
Increase in interest payable		-			-			-
Increase in servicer fees payable		-			-			-
Total change in accrual accounts		-			-			-
Net cash provided by operating activities	$	-		$	-		$	-

See accompanying notes.

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RURAL ELECTRIC COOPERATIVE GRANTOR TRUST (SOYLAND) 1993-B1

NOTES TO FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2003 AND 2002

1.	ORGANIZATION AND OPERATIONS
	Rural Electric Cooperative Grantor Trust (Soyland) 1993-B1 (the "Trust") was formed under a Trust Agreement dated October 1, 1993 among National Rural Utilities Cooperative Finance Corporation ("CFC"), Soyland Power Cooperative, Inc. (the "Cooperative") and Bank One, formerly The First National Bank of Chicago (the "Trustee"). On that date, CFC made a loan to the Cooperative which issued a note (the "Note"), evidencing the borrowing, to the Trust. The Trust issued to CFC, Rural Electric Cooperative Grantor Trust (Soyland) 8.67% Certificates, due 2018 (the "Certificates") in the amount of $49,675,000. The Certificates are solely the obligations of the Trust and are not insured or guaranteed by CFC, the Cooperative, the Trustee, the Rural Utilities Service ("RUS") of the United States Department of Agriculture ("USDA") nor any other governmental agency. Each Certificate represents an undivided fractional interest in the Trust. CFC is the depositor of the Trust and acts as servicer of the Note. CFC filed, on behalf of the Trust, a Registration Statement on Form S-1 (Registration No. 33-79328) which became effective on May 24, 1994, and resold the Certificates thereunder. The offering of the certificates occurred on October 6, 1994.
	The assets of the Trust consist primarily of the Note, bearing interest at 8.75% and maturing 2018, which is guaranteed (the "Guarantee") as to timely payment of principal and interest by the United States of America, acting through the Administrator of RUS. The amounts of principal and interest payments on the Note held by the Trust are sufficient to cover the scheduled principal and interest payments on the Certificates issued by the Trust and the scheduled servicer fees. The General Counsel of the USDA has issued an opinion that the Guarantee is supported by the full faith and credit of the United States of America. The Cooperative has defaulted under its agreement. RUS makes the principal and interest payments on the Note under its Guarantee.
	The Trust also receives a conversion fee of .1317% from the Cooperative. This fee was derived when the Note from the Cooperative was converted from a variable to a fixed interest rate. The fee is paid over the term of the Note as a yield adjustment. The conversion fee is passed through to the servicer.
	Debt service and servicer fee payments on the Note are made to the Trustee semi-annually (March 4 and September 4) by RUS, as guarantor. The Trustee deposits all such receipts in the Trust account. The Trustee is authorized by the Trust Agreement to invest all funds in the Trust account at the direction of CFC in certain eligible investments that mature no later than the business day preceding the day (March 15 and September 15) such amounts are to be distributed to the certificate holders and the servicer. The interest earned on the investments is distributed to the Cooperative. Any funds that are not so invested must be held by the Trustee in the Trust account. The Trustee may not reinvest any returns of principal or investment earnings on eligible investments and the Trustee may not sell any eligible investment prior to its maturity except, at the direction of CFC, to preserve the value of the corpus of the Trust.
	On or before five business days after each date on which payments are made on the Certificates, the Trustee is obligated to supply the holders of such Certificates a report provided by the servicer, which includes certain pertinent information as to how the payment is to be allocated to principal, interest, servicer fees and premium, if any, as well as the principal balance outstanding after such payment.
	The fiscal year of the Trust is the calendar year. Within the prescribed period of time for tax reporting purposes, after the end of each calendar year during the term of the Trust Agreement, the Trustee is obligated to prepare and mail to each certificate holder of record for the Trust, at any time during such year, a report setting forth the information as is reasonably necessary for the preparation of such certificate holder's Federal income tax return.
	Principal payments on the Certificates are scheduled to be repaid over a period of nine years, beginning in 2010. The principal payment in 2010 is scheduled to be $6,600,000. The Certificates were not subject to redemption prior to September 15, 2003. Hereafter, such Certificates are subject to optional redemption, in whole and without premium, upon redemption or purchase of the related Note. The Trust Agreement will terminate after payment in full has been made on the Certificates issued thereunder.

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2.	TAX STATUS OF THE TRUST
	Milbank, Tweed, Hadley & McCloy, Counsel to CFC, has advised CFC with respect to the Trust that, in its opinion, (i) the Trust will not be classified as an association taxable as a corporation, but will be classified as a grantor trust and (ii) each Certificate holder will be treated for Federal income tax purposes as the owner of an undivided fractional interest in each of the assets held by the Trust.
	It is expected that the Trust will not have any liability for Federal or state income taxes for the current or future years.
3.	NOTE RECEIVABLE, INTEREST, CONVERSION AND SERVICER FEE ACCOUNTING
	The Trust accounts for its note receivable at cost. No allowance for loan losses has been recorded due to the guarantee provided by the United States of America. The Trust records interest income as it is earned and accrues interest expense, conversion fees and servicer fees as they are incurred. Servicer fees represent .08% of the outstanding principal balance of the Note and conversion fees represent .1317% of the outstanding principal balance of the Note.
4.	FAIR VALUE OF FINANCIAL INSTRUMENTS
	Use of Estimates
	The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. The estimates involve judgments with respect to, among other things, various future factors which are difficult to predict and are beyond the control of the Trust. With regards to the fair values below, actual amounts could differ from these estimates.
	The following disclosure of the estimated fair value of financial instruments is made in accordance with Statement of Financial Accounting Standards No. 107, "Disclosure about Fair Value of Financial Instruments." Whenever possible, the estimated fair value amounts have been determined using quoted market information as of December 31, 2003 and 2002, along with other valuation methodologies. Below is a summary of significant methodologies used in estimating fair value amounts and a schedule of fair values at December 31, 2003 and 2002.
	The carrying amounts reported for interest receivable, interest payable, and conversion and servicer fees payable approximate fair values due to the short-term maturity of these instruments.
	Note Receivable
	Fair value is estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities.
	Rural Electric Cooperative Grantor Trust Certificates
	The fair value of the Certificates is estimated using quoted treasury yields, plus an appropriate credit spread for similar notes carrying the same credit ratings over the same remaining maturities.

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The carrying and estimated fair values of the Trust's financial instruments as of December 31, 2003 and 2002 are as follows:  

	2003				2002
	Carrying		Fair		Carrying		Fair
	Value		Value		Value		Value
Assets:
Interest receivable	$	1,433,895	$	1,433,895	$	1,433,895	$	1,433,895
Note receivable		49,675,000		64,627,435		49,675,000		66,047,275
Liabilities:
Interest payable - Grantor		1,399,717		1,399,717		1,399,717		1,399,717
Trust Certificates
Conversion and servicer
fees payable		34,178		34,178		34,178		34,178
Rural Electric Cooperative
Grantor Trust Certificates		49,675,000		64,708,587		49,675,000		66,173,392

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RURAL ELECTRIC COOPERATIVE GRANTOR TRUST (SOYLAND) 1993-B1

Exhibit Index

Exhibit
Number	Description of Exhibit
12	Computations of ratio of income to fixed charges.
31.1	Certification of the Chief Executive Officer required by Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of the Chief Financial Officer required by Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of the Chief Executive Officer required by Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of the Chief Financial Officer required by Section 906 of the Sarbanes-Oxley Act of 2002.

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