Debt Market Conditions Update 

and System Funding Status

May 14, 2020
Recent High Finance Headlines

“U.S. Coronavirus Cases 

Surpass 1.2 Million”

2
Recent High Finance Headlines

“Law Firms Gear Up for 

Expected Jump in 

Bankruptcies Triggered by 

Coronavirus”

3
Recent High Finance Headlines

“As the meat-supply crunch 

hits grocery stores, expect 

higher prices for burgers and 

steaks, purchase limits and 

smaller selection” 

4
Recent High Finance Headlines

“Treasury is expected to 

boost size of debt auctions 

to meet funding needs”

5
Recent High Finance Headlines

“Coronavirus Projected to 

Send Eurozone Into Steep 

Recession”

6
Recent High Finance Headlines

“ECB Offers to Pay Banks to 

Keep Credit Flowing, but 

Lenders Say ‘No’ ”

7
Recent High Finance Headlines

“The Glut Drowning the Oil 

Market”

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 Global Market 

 Agency Debt Market 

 Yields & Spreads on FCS Debt 

 Funding Corporation Activity

 FCS Liquidity

 LIBOR/SOFR

 Coronavirus

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Funding Update Topics 
 Federal Reserve

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

 U.S. Treasury

 China

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Global Market 
Credit Rating Agencies -

Outlook for the United States

 Standard & Poors – AA+ 

Outlook – Stable

 Moody’s – Aaa 

Outlook – Stable

 Fitch – AAA 

Outlook – Stable

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 Assets – $ 387.3 billion (+ 6.0%)

 Loans – $ 292.6 billion (+ 2.0%)

 A.L.L. – $ 1.8 billion (+ 2.3%)

 Cash & Invts. – $ 84.0 billion (+ 23.0%)

 Capital – $ 63.4 billion (+ 2.6%)

 Net Income – $ 1.4 billion (+ 11.2%)

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System High Level Financials 
Agency Debt Outstanding

Source: Agency Websites

* 3/31/2020

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Billions of Dollars 2016 2017 2018 2019 4/2020

F.H.L.B. $ 989 $1,034 $ 1,032 $ 1,026 $1,118 

FCS 258 265 282 294 314

Freddie Mac 356 317 255 283 286 

Fannie Mae 329 278 233 182 229*

Tenn. V.A. 25 25 23 22 22* 

Farmer Mac 15 16 16 19 21* 

Total $1,972 $1,935 $1,841 $1,826 $1,990 
Source: FFCBFC Website

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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, 

4/30/2020 35,083 1,100 72,982 83,167 70,893 23,457 27,937 58 149 313,298

12/31/2019 19,098 0 77,903 79,068 80,613 7,957 28,657 122 159 293,577

12/31/2018 22,774 0 78,971 71,099 82,216 0 26,401 201 119 281,780

12/31/2017 25,632 1,000 72,228 67,144 79,425 0 19,775 210 19 265,434

12/31/2016 29,603 4,500 59,964 68,003 81,324 0 14,520 252 22 257,918

1 Includes Linked Deposits
FCS Debt Yields Pushed Lower

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Risk Premiums Stabilize

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 Calls in ‘20 – $53 billion and counting

 Calls in ‘19 – $ 54 billion

 Calls in ‘18 – $ 29 million

 Calls in ‘17 – $ 5 billion

 Calls in ‘16 – $ 58 billion

 Net Interest Spreads

 2.16% for ‘20, 2.04% for ‘19, 2.12% for ‘18, 2.25% for ‘17, 

2.31% for ‘16. 

 Net Interest Margins

 2.47% for ‘20, 2.42% for ‘19, 2.46% for ‘18, 2.48% for ‘17, 

2.49% for ’16.

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Heavy Call Activity
 Weighted average maturity of FCS Debt

 Mar./2020 – 2.73 years 

 Dec./2019 – 2.82 years

 Dec./2018 – 2.86 years

 Dec./2017 – 2.88 years

 Dec./2016 – 2.72 years

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

 Mar./2020 – 41.9 percent

 Dec./2019 – 38.8 percent

 Dec./2018 – 38.8 percent

 Dec./2017 – 39.1 percent

 Dec./2016 – 40.3 percent

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Debt Maturity 
 As of 3/31/20 System = 197(188) days:

• AgFirst = 208(190) days, AgriBank = 163(145) 

days, FCB of TX = 240(225) days, CoBank = 

215(209) 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 

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Days of Liquidity 
 Secured Overnight Financing Rate use growing.

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

 System’s J & S LIBOR directly based debt totals $70.9 

billion.

 Funding Corp. has $23.5 billion in SOFR indexed bonds.

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SOFR
Ongoing Global Issue

Major Economic Shock 

Still Evolving

Expanded Debt Issuance

Credit Leg

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Coronavirus
 Solid Demand for FCS Debt

 FCS Debt Yields Falling

 Risk Premiums Stabilize

 Interest Rate Spreads Widen

 Bottom Line Benefitted More

 Substantial Liquidity 

 SOFR’s Increased Acceptance

 Coronavirus Wildcard 23

Summary