The Federal Agricultural (NYSE:AGM) Mortgage Corporation, commonly known as Farmer Mac, has amended its credit facility with the National Rural Utilities Cooperative Finance Corporation (CFC), according to a filing on Monday with the U.S. Securities and Exchange Commission. The agreement, effective today, increases the maximum purchase amount from $6 billion to $6.5 billion and extends the borrowing period until January 14, 2030, with options for yearly renewals.
Farmer Mac, a federally chartered instrumentality of the U.S., and its wholly-owned subsidiary, Farmer Mac Mortgage Securities Corporation (FMMSC), entered into the Fifth Amended and Restated First Supplemental Note Purchase Agreement with CFC. This amends the prior agreement from June 15, 2022, and continues under the terms of the Master Note Purchase Agreement dated March 24, 2011.
Concurrently, a revised Pledge Agreement was also established with U.S. Bank National Association as the collateral agent. This agreement mandates CFC to pledge eligible rural utilities loans to its members as security for its obligations under the notes issued to FMMSC and guaranteed by Farmer Mac.
The updated credit facility terms include a secured pledge worth at least 100% of the outstanding principal amount of notes sold by CFC under the Master Note Purchase Agreement. These financial arrangements were conducted at arm's length and are consistent with deals offered to other business partners without related-party ties to Farmer Mac.
CFC, a significant stakeholder in Farmer Mac, is the second-largest owner of Farmer Mac’s Class A voting common stock. Despite this related-party relationship, the agreements were made in the ordinary course of business, reflecting standard market conditions.
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