Senior Preferred Shares Help Farmer Mac
The corporation raised $65 million in capital.
Arlan Suderman
Published: Oct 1, 2008
The Federal Agricultural Mortgage Corporation, better known as Farmer Mac, announced Wednesday that it raised $65 million in capital in the form of non-voting Senior Cumulative Perpetual Preferred Stock, Series B-1 and Series B-2. Farmer Mac reports that capital investors in this move are AgFirst Farm Credit Bank; AgriBank, FCB; CoBank, ACB; Farm Credit Bank of Texas; U.S. AgBank, FCB and Zions Bancorporation.
Lowell Junkins, Acting Chairman of the Board of Farmer Mac states, "This capital infusion, made by investors who know us well with the full support of our regulator, meets our commitment to satisfy regulatory requirements and support our plans to further our congressional mission for the benefit of farmers, ranchers and rural residents. We appreciate the confidence these investors have shown in the strength of our core business."
The announcement was well received, both by investors on Wall Street and in the country, who saw it as a positive sign when those who have the best inside insight into the organization are willing to invest more money into it. The investors pumping capital into Farmer Mac are well positioned to assess its long-term health and viability.
Farmer Mac notes that it has now satisfied its previously announced intent to implement strategies to restore its capital position and to meet regulatory requirements. This additional capital was necessary due in part to impairment charges on Farmer Mac's investments in Fannie Mae preferred stock and Lehman Brothers Holdings Inc. senior debt securities, as previously disclosed.
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