FFCB calls $7.1 billion debt during Q1, $60.2 billion since March 2010

By Jennifer Chiou

New York, May 3 - Federal Farm Credit Banks Funding Corp. announced in its report for the quarter ended March 31 that it has redeemed $60.2 billion of debt securities since March 31, 2010, including $7.1 billion during the first quarter of this year.

FFCB was able to lower its cost of funds relative to assets, which did not reprice as quickly, the agency release said.

The Farm Credit System also reported that combined net income increased by $202 million, or 25.2%, to $1 billion for the same period.

The agency added that cash and investments stood at $46.01 billion at March 31, compared with $46.28 billion at the end of 2010.

As widely reported in April, Standard & Poor's revised its outlook on the senior debt ratings of several U.S. government-sponsored enterprises, including the Farm Credit System. The agency said in its release that its increase in nonaccrual loans was primarily due to a decline in the credit quality of loans to borrowers in certain agricultural sectors, such as livestock and poultry, as well as those sectors affected by the overall downturn in the general U.S. economy.

The report added that net interest income was $1.57 billion for the first quarter, compared with $1.41 billion for the first quarter of the prior year. The increase in net interest income between the periods primarily resulted from a higher level of average earning assets and lower debt costs, FFCB stated.

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