#None #Farmer Mac #AMBS #Agricultural Loans

Farmer Mac's Securitization Milestone

In a significant move to enhance the accessibility of agricultural financing, the Federal Agricultural Mortgage Corporation, commonly known as Farmer Mac, has recently finalized a monumental securitization deal valued at $313.5 million. This transaction marks the organization's seventh issuance of agricultural mortgage-backed securities (AMBS), underscoring its unwavering commitment to provide vital liquidity and support to America’s agricultural and rural infrastructure sectors.

Context and Importance of the Deal

The successful completion of this securitization is a critical aspect of Farmer Mac’s operational strategy. CEO Brad Nordholm stated, "This successful completion reflects our dedication to expanding our securitization platform and promoting a robust AMBS market, which is essential for improving credit access in rural America." The securitization plays a pivotal role in ensuring that farmers and rural communities have reliable access to the financing they need to thrive amidst economic challenges.

The mortgage pool, designated as FARM Series 2025-2, consists of 343 agricultural mortgage loans, collectively amounting to approximately $313.5 million in outstanding principal. Each loan within the pool has been carefully underwritten to meet Farmer Mac's industry-leading standards, ensuring their reliability and quality.

Structure of the Securitization

The transaction is structured into two main tranches: a $290.0 million senior tranche guaranteed by Farmer Mac, and a $23.5 million unguaranteed subordinate tranche. The senior tranche is further divided into three classes, labeled A, A-1, and A-2, each of which is backed by Farmer Mac. This innovative structure provides various principal repayment cash flows, consequently catering to diverse investor preferences and leading to an increase in demand for the securities.

President and COO Zack Carpenter expressed confidence in the program, sharing that the organization is eager to explore further opportunities in credit risk transfer. "We are excited about the tremendous support we've garnered for this program and are looking forward to potential new products that cater to the strong investor demand for agricultural assets,” he noted.

Outlook for Future Growth

Farmer Mac aims to continue its mission by searching for additional ways to expand its portfolio. The organization is expected to launch a new financial product next year, which will align with its core mission while accommodating the growing market demand. The emphasis on innovation and responsiveness to market conditions is critical for sustaining Farmer Mac's impact on rural financing.

Key Players in the Transaction

The completion of this transaction involved several key financial institutions that acted in various capacities. BofA Securities, Inc. and J.P. Morgan Securities LLC served as joint bookrunners. Additionally, Raymond James Associates, CastleOak Securities, and Seaport Global Securities were involved as selling group members. Legal advice was provided by Dechert LLP for Farmer Mac, and Morgan, Lewis & Bockius LLP offered legal assistance to the other financial institutions involved.

Conclusion

This recent securitization showcases Farmer Mac’s proactive stance in addressing the financing needs of American agriculture amidst a fluctuating economic landscape. Through its innovative approach and dedication to supporting rural communities, Farmer Mac continues to play a significant role in ensuring that farmers and agribusinesses have access to essential funding and resources. With a clear path forward, Farmer Mac is poised to remain a leader in the agricultural mortgage market, enhancing the liquidity and stability of rural financing in the years to come.