News Releases

Publications

Media Center

For Immediate Release
July 17, 2008

Editor’s Note: In August, Moody’s upgraded the Farm Credit Bank of Texas’ issuer rating to Aa2, citing a higher degree of support from the U.S. government than was previously assumed with the Aa3 rating. With the upgrade, Moody’s reaffirmed the bank’s strong position in agricultural lending, strong credit culture and solid capital levels.

AUSTIN, Texas –The $13.7-billion Farm Credit Bank of Texas (FCBT) has received an Aa3 issuer rating and an A2 preferred stock rating with a stable outlook from Moody’s Investors Service. Moody’s, a leading global rating agency, announced the rating July 16.

Headquartered in Austin, the Farm Credit Bank of Texas provides funds and services to 20 rural lending cooperatives in Alabama, Louisiana, Mississippi, New Mexico and Texas, and to five Other Financing Institutions. The bank is also active in the capital markets arena, participating in large loan opportunities in the food, agribusiness, rural communications and energy sectors. At March 31, 2008, the bank had assets of $13.7 billion and capital of $700 million.

“We are extremely pleased with this rating from Moody’s, which comes on the heels of an equally strong rating from Fitch Ratings last month,” said Larry Doyle, FCBT chief executive officer. “This latest rating reinforces the stability and strength that Farm Credit Bank of Texas offers to investors.”

The stable outlook reflects the strong market conditions for agricultural lending, as well as Moody’s expectation that the bank’s consistent performance and strong capital levels will continue. The rating report also noted that the bank enjoys substantial benefits as a part of the Farm Credit System.

“In arriving at the Aa3 rating for the Farm Credit Bank of Texas, Moody’s incorporated its views on the likelihood of support from other Farm Credit Banks,” said Brian Harris, senior vice president at Moody’s. “This support comes in a number of forms including the Farm Credit Insurance Fund, inter-bank agreements such as the Market Access Agreement and the Contractual Inter-bank Performance Agreement, as well as joint and several liability of Systemwide debt issuances.”

Farm Credit Bank of Texas is one of five wholesale banks in the Farm Credit System, which is the nation’s oldest and largest source of financing for agriculture, agribusiness and rural real estate. A government-sponsored enterprise, the System was created by Congress in 1916 to provide a reliable source of credit and liquidity to the U.S. agricultural community.

The five banks jointly own the Federal Farm Credit Banks Funding Corporation, which acts as their agent in the issuance of Federal Farm Credit Banks’ consolidated Systemwide debt. Neither the System nor the Farm Credit Bank of Texas is guaranteed by the U.S. government.