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Debt Securities Overview |
(See the Bonds and Discount Notes Offering Circular for a full description.)
The Farm Credit System's debt issuance programs provide the System Banks
with a variety of funding tools designed to effectively fund their loans
to farmers, ranchers and agricultural cooperatives. In addition, the programs
are designed to meet the demands of the market. The System Banks rely
on selling groups of dealers comprised of select dealers, acting as principal,
to distribute the Farm Credit Debt Securities.
Discount Notes - are generally issued
each Business Day with maturities ranging from one to 365 days. Discount
Notes are issued at a discount to their par amount, similar to U.S. Treasury bills.
Bonds - are offered in a variety of
maturities and structures.
- Designated Bonds - liquid, non-callable and callable securities that generally have maturities of two to ten years. New issues of non-callable Designated Bonds are $1 billion or larger. New issues of callable Designated Bonds are $500 million or larger. Re-opens of existing Designated Bond issues are generally a minimum of $100 million. Designated Bonds are offered through a syndicate of two to six dealers.
Bonds - are issued throughout the month in varying amounts, maturities, and structures. Maturities may range from three months to 30 years, but typically range from one year to five years. A variety of structures are offered including callable, fixed-rate and floating-rate bonds. Bonds are issued through a negotiated or competitive bid process through one or more
Bond Dealers. Federal Farm Credit Banks Consolidated Systemwide Medium-Term Notes and Unscheduled Bonds were previously issued with similar characteristics.
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Master Notes - are individually negotiated
agreements that provide money managers with a high quality investment with cash
management flexibility. Interest rates on Master Notes are indexed to a
specified money market rate, such as a Farm Credit Discount Note rate
or LIBOR, and typically reset on a weekly or monthly basis. Generally, Master Notes
have a maturity of one year and pay interest on a monthly basis. Master
Notes offer a unique daily put/call feature that provides investors with the
ability to adjust the principal amount outstanding on the Master Note to any
amount within 25% of the base principal amount.
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