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Farmer Mac Announces Completion Of $250 Million Securities Offering

WASHINGTON, Jan. 25 /PRNewswire-FirstCall/ -- The Federal Agricultural Mortgage Corporation (Farmer Mac, NYSE: AGM and AGM.A) announced today the completion of a private offering of securities consisting of $250 million aggregate face amount of Farm Asset Linked Capital Securities (the "FALConS") issued by FALConS Trust I, a newly formed Delaware statutory trust (the "Trust"). The FALConS represent undivided beneficial ownership interests in 250,000 shares of NonCumulative Perpetual Preferred Stock (the "Company Preferred Stock") of Farmer Mac's subsidiary, Farmer Mac II LLC, a newly formed Delaware limited liability company (the "Company").  The Company Preferred Stock has a liquidation preference of $1,000 per share.

The $250 million of proceeds from the offering of the FALConS were used by the Trust to purchase the Company Preferred Stock from Farmer Mac.  The Company issued its Company Preferred Stock and its common equity interest to Farmer Mac as consideration for the contribution by Farmer Mac to the Company of substantially all of the assets, in excess of $1.1 billion, comprising the Farmer Mac II Program business.  Farmer Mac began operating the Farmer Mac II Program after the U.S. Congress amended its statutory charter in 1990 to permit Farmer Mac to buy and sell guaranteed portions of certain newly originated and seasoned agricultural, rural development, business and industry and community facilities loans guaranteed by the United States Department of Agriculture pursuant to the Consolidated Farm and Rural Development Act.  Going forward, the Farmer Mac II Program business will be operated by the Company.  Farmer Mac will use the proceeds from the sale of the Company Preferred Stock to the Trust to repurchase and retire its outstanding Series B-1 Senior Cumulative Perpetual Preferred Stock, Series B-2 Senior Cumulative Perpetual Preferred Stock and Series B-3 Senior Cumulative Perpetual Preferred Stock having an aggregate liquidation preference of $150 million, and for general corporate purposes.  
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