Fitch: MetLife Downgrade Forces Downgrade of Farmer Mac Issuances

Fitch Ratings, New York, has downgraded two Farmer Mac Guaranteed Notes Trust transactions as a result of its downgrade earlier this week of the insurer financial strength rating of Metropolitan Life Insurance Co., New York. Fitch said the ratings of the two transactions, Series 2006-2 and Series 2007-1, are based on MetLife's ability to fulfill its obligations under its guaranty. The ratings on both transactions are solely linked to MetLife's IFS rating, which was cut one notch from "A+" down to "A". Both Farmer Mac transactions were downgraded from "AA" to "AA-". A pool of agricultural mortgages secures them, but the notes are general obligations of MetLife. "If MetLife is no longer able to support the transaction, support would then fall to Farmer Mac. If Farmer Mac should then fail to make payments on the notes, the noteholders have ultimate recourse to the collateral," Fitch said.