How Farm Credit Works
The Farm Credit System is a network of financial cooperatives, owned and operated by the very same farmers, ranchers and rural customers it serves. This unique structure keeps the Farm Credit System involved in the industries we finance and the local communities we serve.
The Farm Credit Administration, an agency of the federal government created in 1933, provides regulatory oversight for the System. The Farm Credit System Insurance Corporation was established by the Agricultural Credit Act of 1987, and its purpose is to ensure the timely payment of principal and interest on insured notes, bonds, and other obligations issued on behalf of Farm Credit System banks.
The Federal Farm Credit Banks Funding Corporation is the fiscal agent for the Farm Credit System Banks. Because System institutions do not accept deposits, they rely on the Funding Corporation to raise money for loans and leases through the sale of Farm Credit Systemwide debt securities in the U.S. and international money markets. The Funding Corporation also manages the System’s Investor Relations Program, meeting with current and
potential investors to educate them on the System’s mission, current financials, debt issuance patterns and overall agricultural and credit market conditions.
The Funding Corporation is responsible for the disclosure and release of public information concerning the financial condition and performance of the System. It also assists System banks in the management of interest-rate risk.
The Funding Corporation operates on a cooperative basis for the mutual benefit of the Farm Credit System Banks. As part of the Farm Credit System, the Funding Corporation is regulated and examined by the Farm Credit Administration, the System’s safety and soundness regulator.
Located in Jersey City, NJ, the Funding Corporation utilizes a selling group comprised of approximately 30 investment and dealer banks that provide distribution, trading and underwriting capabilities for the Farm Credit Systemwide debt securities. For a current list of SGMs (Selling Group Members), visit the Federal Farm Credit Banks Funding Corp.
Farm Credit Systemwide notes and bonds are distributed to investors around the world and may be offered each day in a variety of maturities and structures through the selling group.Source: www.myaglender.com