Federal Agricultural Mortgage (Farmer Mac) to Sell New Preferred–Ticker Update

UPDATE–the OTC Grey market ticker will be FAMCP with the permanent ticker AGM-E

Agricultural lender, Federal Agricultural Mortgage (AGM) has announced a new offering of preferred stock.

The issue will have a fixed rate coupon of 5.75%, will be non-cumulative and will have the typical optional redemption available to the company beginning 7/2025. They will sell 3 million shares and there will be an additional 450,000 available for over allotment.

The issue is unrated.

AGM currently has 3 other issues outstanding which can be seen here.

The company press release can be read here.

I will post further information once the filing hits–the company is exempt from filing of the typical prospectuses and final pricing documents.

10 thoughts on “Federal Agricultural Mortgage (Farmer Mac) to Sell New Preferred–Ticker Update”

  1. Wow, Vanguard actually had the symbol up (and tradable) before the market open today. Maybe the half dozen letters I wrote to the head of Vanguard retail got read after all.

    1. TD Ameritrade had it up and going on 5/14 (Thursday), and I bought a little. It is frustrating when a new issue doesn’t appear quickly enough — when some folks can get it and you can’t. TD Am has been pretty good in that area, from what I can tell.

      FAMCP is interesting, nearly identical to AGM-D, so it would seem it should trade a bit over $25 in the coming weeks.

  2. I like and hold the common. Before covid, the company posted strong trends. This is also one of the few financials that isn’t subject to the risk of consumer delinquencies. For me, the key risk is the government possibly screwing this company up like they did Fannie and Freddie.

    Maybe just for me, there isn’t enough premium in Farmer Mac’s preferred to take the long term risk of a fixed rate. Right now the common dividend yield is almost 5.6 percent. The common is a sock drawer issue for me. In the last couple of weeks though, the price of the common fluctuates like a regional bank.

  3. Hmmmmm. With their AGM+D being a 5.70% coupon and not callable until 7/24 AND trading at $24.50 not sure what to do here??? Here’s what always concerns me on these types of issues. WHY is there no rating on it??? If you look up their other issues it seems they are on a “issue new debt now mission”. Its just getting harder and harder for me to “chase” stuff that I don’t know anything about. When they use the word FEDERAL in their name is it an actual federal agency or is it like the reit called Federal Realty which has nothing to do with the government???? Kinda like Federal Ammo Corp. if you know what I mean. On a side note there are 4 new issues for bonds today too. All high quality names and very low coupons on their 30 year paper. Most around 3% or so.

    1. FarmerMac is not backed by the Government but they are a GSE and their senior debt is rated AA+.

      1. Their market cap is $599 Million. Not Billion. Pretty small company. There’s a rather negative story over on Yahoo Finance. I think I’ll pass. They missed their estimates last quarter by 61%. Farmers in general are having lots of problems and issues according to news stories I have seen lately. Many of their crops can’t get to market so they are just disposing of them. Not good times.

        1. Yeah that’s how I felt about them too. It reminded me of fnm/fre in 2008. The benevolence to gov agency credits just a bridge too far for me.

          1. “The benevolence to gov agency credits just a bridge too far for me.”

            What do you guys think about TVC and TVE in this context?

            1. Probably one of the safest things you can buy IMO.

              But the return is so low I am not sure it matters.

            2. David – As you probably know, both TVC and TVE have reset because of formula that have them reset when the 30 yr Treas goes lower (but not higher), so TVC = 2.134% (with last payment at 3.55% still to be paid on 6/1) due 5/1/28 and TVE – 2.216% due 5/1/29. When compared to TVA bonds of like maturities, they both look cheap because TVA zero coupon due 6/15/28, Cusip 88059EU44 has offered side of 1.27% ytm and TVA zero due 5/1/29, Cusip 88059ESN5, has offered side @ 1.45% ytm… But then again, they’ve always traded cheaply when compared to 1k TVA bonds. Having said that, TVC, but not TVE, is still in the throes of a PUT situation where a share holder can put the bonds back to TVA on 6/1 and receive 25.00 PLUS the .22188 quarterly interest payment… That’s the equivalent situation of having the bonds called on 6/1/20 but with you having the option to not let it happen if you want to hold them. From that point of view, @ 25.11 TVC is extraordinarily cheap right now because on a stripped price basis, you can earn a 9.98% yield to call [put] for the 2 week holding period if you can buy them tomorrow at $25.11. However, keep in mind, to be able to put, you have to notify your broker by 5/22 or probably earlier depending on your broker… TDA gives you until 5/20, 5 PM to PUT. It’s a picking up pennies kind of score, but if you’ve got money sitting around in a money market fund doing nothing, it’s a great risk free alternative for 2 weeks…. BTW, on a stripped basis, I think both TVC and TVE yield about 2.13% YTM with TVE’s last trade at 25.20 so TVC with its shorter maturity and the PUT possibility still in play is the FAR better buy of the two.

              BTW, by way of comparison for a called bond situation, the only one I can think of that’s open right now = DXB which is called for 5/26 at $25 + .40938 coupon, and it’s trading at 25.39 or 2 cents discount…. TVC is trading at an 11 cent discount to the put payment 6 days later.

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