Farm Credit System Banks Purchase $60 Million of Farmer Mac Senior Cumulative Perpetual Preferred Stock.NEW YORK New York, state, United StatesNew York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- The Farm Credit System announced today that its five System Banks made a $60 million investment in the Federal Agricultural Mortgage Corporation Federal Agricultural Mortgage Corporation (Farmer Mac) A federal agency chartered in 1988 to provide a secondary market for farm mortgage loans. (Farmer Mac) (NYSE NYSE See: New York Stock Exchange : AGM AGM annual general meeting AGM n abbr (= annual general meeting) → AG f AGM n abbr (= annual general meeting) → JHV f and AGM.A). AgFirst FCB See DOS FCB. (operating system) FCB - file control block. ; AgriBank, FCB; CoBank, ACB ACB American Council of the Blind ACB Asia Commercial Bank ACB America's Community Bankers ACB Adjusted Cost Base ACB Alliance for the Chesapeake Bay ACB Amphibious Construction Battalion (US Navy) ACB Australian Cricket Board ; Farm Credit Bank of Texas Farm Credit Bank of Texas, based in Austin, Texas, is a wholesale financing institution that is part of the nationwide Farm Credit System. It provides funds and services to local Farm Credit financing cooperatives in Alabama, Louisiana, Mississippi, New Mexico and Texas, and and U.S. AgBank U.S. AgBank, Farm Credit Bank based in Wichita, Kansas, is a financial institution, part of the Farm Credit System lending to Farm Credit Services organizations serving Arizona, California, Colorado, Hawaii, eastern Idaho, Kansas, Nevada, New Mexico, Oklahoma, Utah, and western , FCB have purchased $60 million in aggregate of senior cumulative perpetual preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. of Farmer Mac, which provides a secondary market for agricultural real estate loans, rural home mortgages and rural utility loans. An additional $5 million of Farmer Mac senior cumulative perpetual preferred stock has been purchased by Zions Bancorporation Zions Bancorporation (NASDAQ: ZION) is a member of the S&P 500, a bank holding company headquartered Salt Lake City, Utah. Its star subsidiary is NSB Public Finance. of Salt Lake City. The $65 million in total financing will enable Farmer Mac to strengthen its capital position and comply with its minimum regulatory capital requirements Capital requirements Financing required for the operation of a business, composed of long-term and working capital plus fixed assets. . "Farmer Mac enhances the availability of agricultural mortgages, and more recently, rural utility loans, thereby assisting in the steady and dependable flow of capital to American farmers and ranchers and rural America," said Robert B. Engel, president and chief executive officer of CoBank, ACB, speaking on behalf of his fellow System Bank presidents. "In that regard, Farmer Mac has been a valued partner to the Farm Credit System, insurance companies, commercial banks and the National Rural Utilities Cooperative Finance Corporation. "Given the unprecedented turmoil in the broader financial services industry, at a time when so many institutions are struggling to maintain adequate levels of capital and liquidity, we're extremely pleased that the Farm Credit System is favorably positioned to support Farmer Mac through this new investment. Agriculture is a key economic driver in our economy, providing food, thousands of jobs and biofuels that help make our nation more energy-independent. The System's mission is to help ensure that U.S. agriculture has the capital it needs to continue to fulfill these essential roles, and we are proud that we are able to do so." Jamie B. Stewart Jr., president and chief executive officer of the Federal Farm Credit Banks Federal Farm Credit Bank An institution created by the government with the purpose of uniting the financing activities of the Federal Land Banks, the Federal Intermediate Credit Banks, and the banks for cooperatives. See: Federal Farm Credit System. Funding Corporation, noted that the Farm Credit System continues to experience strong overall financial performance. As previously announced, the System reported combined net income of over $1.5 billion in the first six months of 2008. At June 30, 2008, credit quality in its $162 billion loan portfolio remained generally favorable, and liquidity and capital levels were in excess of all regulatory minimums. At June 30, 2008, the System's combined assets totaled $208 billion. "As a group, the System's network of Banks and Associations remain focused on serving the credit and related financial services needs of America's farmers, ranchers, agricultural cooperatives and other rural borrowers, while maintaining our foundation of strength and stability on behalf of both our shareholders and the investors who buy our debt securities," Stewart said. The senior cumulative perpetual preferred stock purchased by the Banks can be redeemed by Farmer Mac in the future with cash or qualifying assets. It pays an initial 10 percent annual dividend in the first year. The dividend rate increases by 2 percent in each of the first three years and remains fixed thereafter. The preferred stock is callable Callable Applies mainly to convertible securities. Redeemable by the issuer before the scheduled maturity under specific conditions and at a stated price, which usually begins at a premium to par and declines annually. , at par value, after nine months, and on any quarterly dividend date thereafter. It is senior to all other Farmer Mac capital. Under the investment agreement, the System Banks are provided with certain protective rights and will nominate three observers to the Farmer Mac board of directors. The investment has been reviewed and approved by the System's regulator, the Farm Credit Administration Farm Credit Administration (FCA), an independent agency of the executive branch of the federal government that supervises and coordinates the Farm Credit System for American agriculture. . About the Farm Credit System The Farm Credit System is a federally chartered network of borrower-owned lending institutions and related service organizations. The System specializes in providing financing and related services to borrowers in the agricultural and rural sectors through the five System Banks and 93 affiliated Associations. Unlike commercial banks, the Banks are not authorized to take deposits and they principally obtain their funds through the issuance of Systemwide debt securities. About Farmer Mac Farmer Mac is a stockholder-owned instrumentality Instrumentality Notes issued by a federal agency whose obligations are guaranteed by the full-faith-and-credit of the government, even though the agency's responsibilities are not necessarily those of the US government. of the United States chartered by Congress to establish a secondary market for agricultural real estate and rural housing mortgage loans and rural utilities loans and to facilitate capital market funding for USDA-guaranteed farm program and rural development loans. Farmer Mac's Class C non-voting and Class A voting common stocks are listed on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. under the symbols AGM and AGM.A, respectively. Additional information about Farmer Mac is available on Farmer Mac's website at www.farmermac.com. Additional Information The Federal Farm Credit Banks Funding Corporation has posted questions and answers regarding the Farm Credit System and Farmer Mac on its website at www.farmcredit-ffcb.com in the Breaking News section. Copies of financial and other press releases, as well as other information regarding the System, including its annual and quarterly information statements, are available on the Funding Corporation's website. For further information and copies of annual and quarterly information statements, contact: Daniel M. Bienz, Vice President Financial Analysis and Disclosure Federal Farm Credit Banks Funding Corporation 10 Exchange Place, Suite 1401 Jersey City, NJ 07302 (201) 200-8070 E-mail - DBienz@farmcredit-ffcb.com or Kyle Henley Corporate Communications Manager CoBank, ACB P.O. Box 5110 Denver, CO 80217 303-694-5862 E-mail - khenley@cobank.com Forward-Looking Statements Any forward-looking statements in this press release are based on current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from expectations due to a number of risks and uncertainties. More information about these risks and uncertainties is contained in the System's annual and quarterly information statements. The System undertakes no duty to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. |
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