U.S. farm lender CoBank issues $200 million in preferred stock
CHICAGO, April 19
CHICAGO, April 19 (Reuters) - CoBank, a major nationwide lender to U.S. agriculture through its role in the Farm Credit System, said on Friday it issued $200 million in preferred stock to take advantage of the current market environment.
The stock was issued at a fixed dividend rate for life of 6.125 percent, callable after five years, the bank said.
Fitch Ratings assigned a 'BBB' rating to the $200 million non-cumulative perpetual preferred issuance.
Denver-based CoBank, with assets of $92 billion, is a cooperative bank like others in the Farm Credit System, the government-sponsored enterprise created by Congress in 1916 to provide a reliable source of credit to develop U.S. agriculture and rural areas. FCS raises its capital not by taking deposits, but by issuing securities to the world credit markets.
CoBank is the largest of the FCS regional banks and the only one which can originate loans in any area throughout the country. It provides loans, leases, export financing and other financial services to agribusinesses and rural power, water and communications providers.
CoBank earnings rose in the most recent quarter despite volatile market conditions and financial stresses from the worst drought to hit U.S. farmers, ranchers and agribusiness since the 1930s.
Livestock farmers and processors, dairies and ethanol producers have been among FCS customers that have wrestled with losses as the costs of major inputs - especially corn - soared with the drought. (Reporting by Christine Stebbins, editing by G Crosse)