Farmer Mac is warning that its regulator wants the government-sponsored enterprise to get a credit rating, which it says could "diminish" the company's standby commitment business.The Farm Credit Administration is expected to publish a proposed rule in a few days that would establish new capital requirements on Farm Credit Banks that have standby commitments, or swaps, with Farmer Mac, the company disclosed in its second-quarter earnings release. Under a worst-case scenario, $2.8 billion in swaps would likely be terminated if Farmer Mac does not qualify for a triple-A or a double-A rating. Henry Edelman, Farmer Mac's president and chief executive, said that outcome is unlikely if "FCA listens to reason and puts out a more reasonable regulation." He contends that the credit rating requirement is unnecessary because of the company's GSE status and its financial strength. He also said he expects the Farm Credit Banks to oppose the regulation. Farmer Mac's common stock fell $4.16, to $18.59, on Thursday's report. Farmer Mac also reported that its core earnings rose 6%, to $6.2 million, in the second quarter from those of a year earlier. However, earnings fell 76%, to $2 million, under generally accepted accounting principles.

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