Farmer Mac Closes $300.1 Million Securitization of Agricultural Mortgage-Backed Securities (AMBS)

Rhea-AI Summary

Farmer Mac (NYSE: AGM) has successfully completed a $300.1 million securitization of agricultural mortgage loans through its FARM Series 2025-1. The transaction comprises 350 agricultural mortgage loans and represents the company's sixth FARM series transaction since 2021. The deal features a $277.6 million senior tranche guaranteed by Farmer Mac and a $22.5 million unguaranteed subordinate tranche. The senior tranche is structured into three guaranteed classes (A, A1, and A2) with different principal repayment cashflows to attract diverse investor interest. BofA Securities and Oppenheimer & Co. served as joint bookrunners, with CastleOak Securities and Stifel Nicolaus as selling group members.

Positive

• Successfully closed a significant $300.1 million agricultural mortgage securitization
• Strong market demand and execution despite market volatility
• Enhanced sophistication with three guaranteed classes offering different repayment options
• Demonstrates consistent issuance as sixth transaction in FARM series since 2021

Negative

• None.

Insights

Financial Markets Analyst

Farmer Mac's $300.1M securitization demonstrates strong market execution and expanded investor base despite volatility.

This $300.1 million agricultural mortgage securitization represents Farmer Mac's sixth transaction in their FARM series since 2021, showcasing consistent market access and execution capabilities. The sophisticated structure includes a $277.6 million senior tranche (guaranteed by Farmer Mac) and a $22.5 million unguaranteed subordinate tranche.

The transaction's enhanced structure deserves attention – the senior portion was divided into three classes (A, A1, and A2), each with different principal repayment profiles. This structural innovation successfully attracted new investors, demonstrating the company's ability to adapt their offerings to market demand.

The underlying asset pool consists of 350 agricultural mortgage loans underwritten to standards that stress-test repayment capacity, indicating prudent risk management. With approximately 7.5% of the transaction in a subordinate position, the structure incorporates meaningful credit enhancement.

Management's reference to successful execution "amid recent market volatility" signals Farmer Mac's resilience and continued market access during challenging conditions. The participation of multiple financial institutions (BofA Securities, Oppenheimer, CastleOak Securities, and Stifel Nicolaus) as distribution partners suggests broad market support.

This transaction aligns perfectly with Farmer Mac's core mission of providing liquidity to agricultural and rural markets. While the direct financial impact isn't quantified in the release, the successful execution of large securitizations supports their business model of recycling capital to expand credit availability in rural America.

WASHINGTON, June 11, 2025 /PRNewswire/ -- The Federal Agricultural Mortgage Corporation (Farmer Mac; NYSE: AGM and AGM.A), the nation's secondary market provider that increases the accessibility of financing for American agriculture and rural infrastructure, announced today that it has completed a $300.1 million securitization of agricultural mortgage loans. This is Farmer Mac's sixth transaction in the FARM series since 2021.

"The successful completion of our latest securitization transaction underscores our commitment to being a frequent issuer and developing a vibrant and liquid AMBS market," said President & Chief Executive Officer, Brad Nordholm. "Our FARM securitization program is central to our core mission to improve credit accessibility in rural America, and we aim to continue this momentum by identifying and delivering new opportunities for investors."

The mortgage pool for FARM Series 2025-1 consists of 350 agricultural mortgage loans with an aggregate outstanding principal balance of approximately $300.1 million. The loans in the pool were underwritten to Farmer Mac's industry-leading standards that focus on repayment capacity through stressed inputs. This deal included a $277.6 million senior tranche guaranteed by Farmer Mac and a $22.5 million unguaranteed subordinate tranche. The senior tranche reflects an enhanced sophistication of the securitization by offering notes in three classes, A, A1, and A2, each of which are guaranteed by Farmer Mac. These three guaranteed classes provide for differing principal repayment cashflows, which provided more investment options and drove new investor demand.

"We're extremely pleased with the strong execution and enthusiastic market response, especially amid recent market volatility," said Chief Financial Officer and Treasurer, Aparna Ramesh. "The continued support from our investor base and sustained demand for agricultural mortgage loans provide ample liquidity to introduce new products that align with our mission fulfillment."

BofA Securities, Inc. and Oppenheimer & Co. Inc. acted as joint bookrunners along with CastleOak Securities, L.P. and Stifel, Nicolaus & Company, Incorporated, as selling group members. Dechert LLP served as legal advisor to Farmer Mac. Morgan, Lewis & Bockius LLP served as legal advisor to BofA Securities, Inc., Oppenheimer & Co. Inc., CastleOak Securities, L.P., and Stifel, Nicolaus & Company, Incorporated.

About Farmer Mac

Farmer Mac is driven by its mission to increase the accessibility of financing to provide vital liquidity for American agriculture and rural infrastructure. Our secondary market provides liquidity to our nation's agricultural and infrastructure businesses, supporting a vibrant and strong rural America. We offer a wide range of solutions to help meet financial institutions' growth, liquidity, risk management, and capital relief needs across diverse markets, including agriculture, agribusiness, broadband infrastructure, power and utilities, and renewable energy. We are uniquely positioned to facilitate competitive access to financing that fuels growth, innovation, and prosperity in America's rural and agricultural communities. Additional information about Farmer Mac is available on our website at www.farmermac.com.

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SOURCE Farmer Mac

FAQ

What is the size of Farmer Mac's latest AMBS securitization in 2025?

Farmer Mac's latest securitization (FARM Series 2025-1) is $300.1 million, consisting of 350 agricultural mortgage loans.

How is the Farmer Mac (AGM) 2025-1 FARM series structured?

The securitization includes a $277.6 million senior tranche (divided into classes A, A1, and A2) guaranteed by Farmer Mac and a $22.5 million unguaranteed subordinate tranche.

Who were the bookrunners for Farmer Mac's 2025 AMBS securitization?

BofA Securities and Oppenheimer & Co. acted as joint bookrunners, with CastleOak Securities and Stifel Nicolaus as selling group members.

How many FARM series transactions has Farmer Mac completed since 2021?

This is Farmer Mac's sixth transaction in the FARM series since 2021.

What are the different classes in Farmer Mac's 2025-1 senior tranche?

The senior tranche offers three guaranteed classes - A, A1, and A2 - each providing different principal repayment cashflows.