Farmland Partners Inc. has expanded its secured note line of credit with Farmer Mac to $150 million, from $75 million, the company announced on Tuesday.
Taking advantage of the increased credit available to it, Farmland will issue a three-year, interest-only, 2.56% fixed-rate bond of $30.9 million. This will bring Farmland's borrowings under this facility to a total principal amount of $81.1 million.
The bond will be secured by mortgage loans on agricultural real estate that Farmland owns. The mortgages have an effective loan-to-value ratio of up to 60%, according to Farmland.
Farmland also will acquire seven row-crop farms in South Carolina for $27.5 million and a 1,300-acre farm in Arkansas for $3.3 million. Those purchases bring Farmland's total amount of acquisitions to 39,000 acres for $128 million since an initial public offering in April.
"The expansion of the secured purchase note facility with Farmer Mac is indicative of our strong relationship with a leading credit provider to the U.S. agricultural industry while giving us increased acquisition capacity heading into next year," Luca Fabbri, Farmland's chief financial officer, said in a press release.
"As previously discussed, we intend to maintain overall leverage of approximately 40% to 50%, based on current estimated values."
