Farmer Mac has priced a preferred stock offering which will raise $60 million in Tier 1 capital for the government-sponsored enterprise. The noncumulative perpetual preferred stock will have an interest rate of 5.875%.
It will use the proceeds from the sale of the new preferred stock to redeem and retire all $57.6 million of Farmer Mac's currently issued and outstanding shares of Series C cumulative preferred stock.
The new offering’s interest rate remains fixed for the life of the stock, unlike the Series C stock.
“Investor appetite for preferred stock recently has been robust, and we thought the time was right to lock in an attractive cost of Tier 1 equity for the future and to broaden Farmer Mac's investor base by tapping the retail market for this transaction.”
This offering does not have a maturity date but Farmer Mac can redeem it anytime after Jan. 17, 2018.
Bank of America Merrill Lynch served as sole bookrunning manager for this transaction, and Compass Point Research & Trading LLC and Incapital LLC served as co-managers.









