Federal Farm Credit Banks redeemed $65.6 billion of debt last year

By Jennifer Chiou

New York, Feb. 18 - The Farm Credit System announced that Federal Farm Credit Banks Funding Corp. called $65.6 billion of debt overall during 2010.

According to a news release, the banks were able to lower their cost of funds relative to their assets, which did not reprice as quickly.

The system added that as interest rates increase and as assets prepay or reprice in a manner more consistent with historical experience, the positive impact on the net interest spread that Farm Credit has experienced over the last several years from calling systemwide debt securities will likely diminish.

In addition, the federally chartered network of borrower-owned lending institutions said that cash and investments increased $4.061 billion to $46.282 billion at Dec. 31, compared with $42.221 billion at year-end 2009.

The system's liquidity position was 173 days at the end of last year, and Farm Credit noted that its liquidity management objectives are designed to, among other things, meet maturing debt obligations.

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