The Federal Agricultural Mortgage Corp. (Farmer Mac) and Morgan Keegan & Co., a regional investment firm in Memphis, Tenn., have entered into an agreement under which Morgan Keegan will begin marketing Farmer Mac programs designed specifically for Morgan Keegan's commercial banking clients that hold agricultural mortgage loans in their portfolios.
The primary program, to be offered through Morgan Keegan's Fixed Income Capital Markets division, will be Farmer Mac's Long-Term Standby Purchase Commitment (LTSPC), which allows banks to improve their capital position by shifting the credit risk on pools of agricultural real estate loans from the bank to Farmer Mac, the agency says. Loans placed in the LTSPC program are expected to receive favorable capital treatment, thereby freeing up the bank's capital for other purposes.Â
‘Farmer Mac's LTSPC program is designed to give agricultural banks a reasonably priced option to improve a major indicator of their financial health and to help restore their ability to continue to grow their balance sheets,’ says Michael A. Gerber, president and CEO of Farmer Mac.
SOURCE: Farmer Mac