Funding Conditions 

for the 

Farm Credit System 
Recent High Finance Headlines

“Banks in Germany Tell 

Customers to Take Deposits 

Elsewhere”

– More customers are having to pay 

negative rates as savings have surged 

amid the pandemic.

2
Recent High Finance Headlines

“Saudi Arabia Borrows at 

Negative Rates for First Time as 

Oil Recovers”

3
Recent High Finance Headlines

“U.S. Treasury Yields Rise After 

Positive Jobs Data ” 

– Move extends a recent climb in 

government bond yields.

4
Recent High Finance Headlines

“Yield on 30-year Treasury Hits 

2% for First Time Since 

Pandemic”

– Widening spreads between short- and 

long-term yields bode well for economy 

and banks but poorly for Treasury 

holders.

5
Recent High Finance Headlines

“Regional Bank Stocks Rise as 

Bond Yields Climb”

– Banks’ performance is reversal from 

dismal 2020 when they set aside billions 

to prepare for soured loans.

6
Recent High Finance Headlines

“How the Oil Market Bounced 

Back From a Year of Crisis”

– A fall in stockpiles, restraint among U.S. 

producers and the speedy recovery in 

Asian demand have driven the rally

7
Recent High Finance Headlines

“Agriculture Industry Bets on 

Carbon as a New Cash Crop”

– Big companies and startups jockey to 

pay farmers for capturing greenhouse 

gases in fields; environmental groups 

question impact.

8
Recent High Finance Headlines

“Why Milk’s Best Sales in a 

Decade Won’t Save Struggling 

Dairy Farmers”

– Consumer stockpiling amid coronavirus 

won’t offset declines in demand from 

restaurants and foreign buyers; ‘I’m 

ready to be done,’ says farmer.

9
 Global Market 

 Agency Debt Market 

 Funding Corporation Activity

 Yields & Spreads on FCS Debt 

 FCS Liquidity

 LIBOR/SOFR

 COVID-19

10

Funding Update Topics 
 Federal Reserve

 E.C.B., Bank of England, Bank of Japan 

 U.S. Treasury

 China

11

Global Market 
Credit Rating Agencies -

Outlook for the United States

 Standard & Poors – AA+ 

Outlook – Stable

 Moody’s – Aaa

Outlook – Stable

 Fitch – AAA 

Outlook – Negative

12
 Assets – $ 400.7 billion (+ 9.7%)

 Loans – $ 315.5 billion (+ 9.9%)

 A.L.L. – $ 1.8 billion ( N.C.)

 Cash & Invts. – $ 74.2 billion (+ 8.7%)

 Capital – $ 65.5 billion (+ 6.2%)

 Net Income – $ 6.0 billion (+10.2%)

13

System High Level Financials 
Agency Debt Outstanding

Source: Agency Websites

14

Billions of Dollars 2016 2017 2018 2019 2020

F.H.L.B. $ 989 $ 1,034 $1,044 $ 1,005 $ 737 

FCS 258 265 280 292 322

Freddie Mac 356 317 274 254 284 

Fannie Mae 329 278 204 158 275

Farmer Mac 15 16 16 19 22 

Tenn. V.A. 25 25 23 22 21 

Total $1,972 $1,935 $1,841 $1,750 $1,661 
Agency Debt Issuance

Source: Agency Websites

15

Billions of Dollars 2016 2017 2018 2019 2020

F.H.L.B. $4,389 $6,797 $7,855 $7,201 $4,599 

FCS 334 278 308 364 421 

Freddie Mac 597 480 413 515 408 

Fannie Mae 665 710 556 509 327 

Total $5,975 $8,265 $9,132 $8,589 $5,755 
Source: FFCBFC Website

16

Funding Activity by FCS

($ millions) Discount Notes Designated 

Bonds

Fixed Rate Bonds Floating Rate Bonds Retail 

Bonds

Other1 Total

Callable NonCallableLIBOR SOFR Prime, 

FF, 91-

day, 

2/28/2021 23,557 5,100 82,082 91,409 31,962 62,760 29,032 30 142 326,072

12/31/2020 23,524 3,100 78,971 90,084 39,437 56,595 29,712 42 148 322,464

12/31/2019 17,459 0 77,903 79,068 80,613 7,957 28,657 122 159 291,938

12/31/2015 32,330 5,000 58,789 60,424 71,355 0 14,900 382 24 243,204

12/31/2010 19,209 28,575 45,822 40,869 36,460 0 16,455 0 114 187,504

1 Includes Linked Deposits
Dealer Group 

• 38 Dealer Group Members

• 8 Members added in October

– Leveraging Equality and Diversity (LEAD)

– 10 Overall LEAD Dealer Members 

17
18

Return of Designated Bonds

• Benchmark Issue

• Large in size > $1 Billion

• Non-Callable 2 -10 Yrs., Fixed Rate

• Generally included in the 

Barclays Aggregate Bond Index

• Merit Dealer Performance 
19

Return of Designated Bonds
FCS Debt Yields Split Story

20
Reduced Risk Premiums

21
 Calls in ‘20 – $ 115 billion

 Calls in ‘19 – $ 54 billion

 Calls in ‘18 – $ 29 million

 Calls in ‘17 – $ 5 billion

 Calls in ‘16 – $ 58 billion

 Net Interest Spreads

 2.26% for ‘20, 2.04 % for ‘19, 2.12% for ‘18, 2.25% for ‘17, 

2.31% for ‘16. 

 Net Interest Margins

 2.46% for ‘20, 2.42 % for ‘19, 2.46% for ‘18, 2.48% for ‘17, 

2.49% for ‘16. 

22

Record Call Activity
 Weighted average maturity of FCS Debt

 Dec./2020 – 2.85 years

 Dec./2019 – 2.82 years

 Dec./2018 – 2.86 years

 Dec./2017 – 2.88 years

 Dec./2016 – 2.72 years

23

Debt Maturity 
 Percentage of FCS debt maturing within 1 year.

 Dec./2020 – 38.8 percent

 Dec./2019 – 38.9 percent

 Dec./2018 – 38.8 percent

 Dec./2017 – 39.1 percent

 Dec./2016 – 40.3 percent

24

Debt Maturity 
 As of 12/31/20 System = 171(158) days:

• AgFirst = 196(189) days, AgriBank = 167(136) 

days, FCB of TX = 182(173) days, CoBank = 

174(174)days 

 As of 12/31/19 System = 177 (166) days:

• AgFirst = 222(197) days, AgriBank = 166(135) 

days, FCB of TX = 211(196) days, CoBank = 

176(168) days 

25

Days of Liquidity 
 Secured Overnight Financing Rate still growing slowly 

despite only 9 mos. until LIBOR’s official R.I.P. date.

 Global U.S. LIBOR referenced instruments still dominate.

 System’s J & S LIBOR directly based debt down to $31 

billion. $11 billion was issued in 2020. Synthetic derivative 

exposure notional amount $46 billion.

 Funding Corp. issued just over $51 billion in SOFR 

indexed bonds in 2020.

26

LIBOR/SOFR TRANSITION
Persisting Global Issue 

Major Economic Shock 

Recovery Underway but 

Uneven 

27

COVID-19
 Strong Demand for FCS Debt

 FCS Debt Yields Moving Higher for Longer Maturities 

 Risk Premiums Historically Favorable

 Interest Rate Spreads Increasing 

 Bottom Line Benefitting

 Substantial Liquidity 

 SOFR’s Progress

 COVID-19 28

Summary