form8k.htm
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM 8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date of
Report (Date of earliest event reported): December 24, 2008
FEDERAL
AGRICULTURAL MORTGAGE CORPORATION
(Exact
Name of Registrant as Specified in Charter)
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Federally
chartered instrumentality
of
the United States
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001-14951
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52-1578738
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(State
or Other Jurisdiction
of
Incorporation)
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(Commission
File
Number)
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(IRS
Employer Identification No.)
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1133
Twenty-First Street, N.W., Suite 600, Washington D.C.
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20036
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(Address
of Principal Executive Offices)
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(Zip
Code)
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Registrant's
telephone number, including area code (202) 872-7700
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General
Instruction A.2. below):
o
Written communications pursuant to Rule 425 under the
Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under the
Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to
Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o
Pre-commencement communications pursuant to
Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item
3.02 Unregistered Sales of Equity Securities.
On
December 24, 2008, Farmer Mac sold 9,200 shares of its newly issued Series C
non-voting cumulative preferred stock (“Series C”) to National Rural Utilities
Cooperative Finance Corporation (“National Rural”). Series C has a
par value of $1,000 per share, an initial liquidation preference of $1,000 per
share (subject to adjustment of such fixed dollar amount for any stock splits,
stock dividends, combinations, recapitalizations or similar transactions) and
shall consist of up to 75,000 shares. Farmer Mac sold the 9,200
shares of Series C to National Rural without registration under the Securities
Act of 1933, as amended, in reliance upon the exemption provided by Section
3(a)(2) for an aggregate purchase price of $9.2 million, or $1,000 per
share. The 9,200 shares sold to National Rural are the only shares of
Series C outstanding as of the date of this report.
The
Series C certificate of designation provides holders of Series C with the
following rights:
Seniority. With
respect to dividends and distributions upon a liquidation, dissolution or
winding up of Farmer Mac, Series C ranks senior to Farmer Mac’s outstanding
Class A voting common stock, Class B voting common stock, Class C non-voting
common stock and any other common stock of Farmer Mac issued in the
future. Series C ranks junior to Farmer Mac’s outstanding Series B-1
senior cumulative perpetual preferred stock (“Series B-1”), Series B-2 senior
cumulative perpetual preferred stock and Series B-3 senior cumulative perpetual
preferred stock.
Dividends. Dividends
on Series C will compound quarterly at an annual rate of 5% of the
then-applicable Liquidation Preference (as defined below) per
share. The annual rate will increase to (i) 7% from and after
the period beginning on the January 1st
following the fifth anniversary of the applicable issue date (January 1, 2014 in
the case of the 9,200 shares of Series C sold to National Rural) and (ii)
9% from and after the period beginning on the January 1st
following the tenth anniversary of the applicable issue
date. Dividends on Series C will accrue and cumulate from the
applicable issue date whether or not declared by Farmer Mac’s Board of Directors
(the “Board”) and will be payable quarterly in arrears out of legally available
funds when and as declared by the Board on each dividend payment date—March 31,
June 30, September 30 and December 31 of each year, beginning March 31, 2009 in
the case of the 9,200 shares of Series C sold to National
Rural. Farmer Mac may pay dividends on Series C without paying
dividends on any outstanding class or series of stock that ranks junior to
Series C.
Redemption. Farmer
Mac has the right, but not the obligation, to redeem some or all of the issued
and outstanding shares of Series C at a price equal to the then-applicable
Liquidation Preference beginning on the first anniversary of the applicable
issue date (December 24, 2009 in the case of the 9,200 shares of Series C
sold to National Rural) and on each subsequent dividend payment
date. Farmer Mac’s redemption right with respect to Series C is
subject to receipt of the prior written approval of the Farm Credit
Administration, if required, and the consent of at least two-thirds of the
then-outstanding shares of Series B-1, if any. The redemption price
for any shares of Series C redeemed by Farmer Mac will be payable in cash equal
to the original issue price of Series C ($1,000 per share), subject to
adjustment of such fixed dollar amount for any stock splits, stock dividends,
combinations, recapitalizations or similar transactions, plus all accrued but
unpaid dividends (the “Liquidation Preference”).
Voting
Rights. Except as required by applicable law, the holders of
Series C are not entitled to any voting rights.
In
conjunction with the issuance and sale of the 9,200 shares of Series C to
National Rural, Farmer Mac guaranteed, and Farmer Mac Mortgage Securities
Corporation (Farmer Mac’s wholly-owned subsidiary) purchased, an aggregate of
$230 million of fixed-rate notes representing general obligations of National
Rural and secured by eligible rural utilities loans in an amount at least equal
to the total principal amount of notes outstanding. The $230 million
of notes were the first advances under a $500 million borrowing facility
with National Rural described in more detail in Farmer Mac’s Current Report on
Form 8-K filed on December 19, 2008. In connection with each
advance made under the facility, National Rural is required to purchase shares
of Series C in an amount sufficient to maintain a balance at all times that is
at least equal to 4% of the principal amount of the notes outstanding under the
facility. This feature is part of a program Farmer Mac has developed
under which a participant utilizing Farmer Mac for guarantee and purchase
transactions involving portfolios of qualified loans will be required to
purchase an equity interest in Farmer Mac in the form of shares of Series C,
thereby enabling Farmer Mac to raise additional capital to support its mission
of providing liquidity and lending capacity to agricultural and rural utilities
lenders.
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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FEDERAL
AGRICULTURAL MORTGAGE CORPORATION
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Date:
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December
30, 2008
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/s/
Jerome G. Oslick
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Name:
Jerome G. Oslick
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Title:
Vice President – General Counsel
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