#United States #Washington #Farmer Mac #Securitization #AMBS

Farmer Mac Completes $300.1 Million Securitization of Agricultural Mortgage-Backed Securities

In a noteworthy financial milestone, the Federal Agricultural Mortgage Corporation, commonly known as Farmer Mac, has successfully closed a securitization transaction amounting to $300.1 million. This strategic move aims to enhance the financial landscape for American agriculture, showcasing Farmer Mac's dedication to providing crucial liquidity and supporting rural infrastructure.

This transaction is part of the FARM series, indicating its sixth issuance since the series began in 2021. Brad Nordholm, Farmer Mac's President and CEO, emphasized that this milestone reaffirms their commitment to being a frequent issuer and fostering the development of a vibrant and liquid agricultural mortgage-backed securities (AMBS) market. He stated, "The successful completion of our latest securitization transaction underscores our commitment to our mission of improving credit accessibility in rural America."

Understanding the Securitization Details

The mortgage pool underpinning this securitization consists of 350 agricultural mortgage loans, all of which are designed with a principal balance of approximately $300.1 million. Each loan is assessed based on Farmer Mac's exemplary standards that prioritize repayment capacity and the ability to withstand market volatility.

This securitization includes a $277.6 million senior tranche, which is guaranteed by Farmer Mac, alongside a $22.5 million unguaranteed subordinate tranche. The senior tranche showcases an innovative structure, offering notes in three distinct classes—A, A1, and A2—each guaranteed by the corporation. This tiered approach not only diversifies the investment options available but also drives increased demand from new investors.

CFO Aparna Ramesh expressed optimism about the market's positive reception, stating, "We're extremely pleased with the strong execution and enthusiastic market response, especially amid recent market volatility. Our investor base's continuous support has fueled a sustained demand for agricultural mortgage loans, thus providing us the liquidity necessary to develop new products aligned with our mission."

Collaborators in the Deal

The launch and execution of this significant transaction were backed by reputable financial entities. BofA Securities, Inc. and Oppenheimer & Co. Inc. served as joint bookrunners, while CastleOak Securities, L.P. and Stifel, Nicolaus & Company, Incorporated joined the selling group members. Legal advisory was provided by Dechert LLP for Farmer Mac, alongside Morgan, Lewis & Bockius LLP assisting BofA Securities and others involved in this transaction.

About Farmer Mac

At the heart of Farmer Mac's operations is a mission to enhance the accessibility of financing for critical agricultural and rural infrastructure endeavours. As the nation’s key secondary market provider, Farmer Mac plays a vital role in injecting liquidity into agricultural and related businesses, thus enhancing the vitality of rural America.

Their comprehensive suite of financial solutions caters to various sectors, including agriculture, agribusiness, broadband infrastructures, utilities, and renewable energy. Farmer Mac is uniquely poised to facilitate competitive access to essential financing, thus fueling growth, innovation, and prosperity within America's rural communities. For further details on their offerings, visit their official website at www.farmermac.com.

Conclusion

This latest transaction highlights Farmer Mac's steadfast commitment to ensuring that rural financing remains robust and accessible. As the agricultural sector continues to evolve, the role of such financial mechanisms will be pivotal in driving sustainable development in rural America.