Farmer Mac Rescued by Lenders

Wall Street Journal (10/02/08) P. A2; Kilman, Scott
The Farm Credit System, a network of lenders created by Congress in 1916 to lend to farmers, has rescued Farmer Mac from a glut of souring investments with a $65 million infusion of new capital. Farmer Mac got into trouble when it began recording losses in its investment portfolio--which included 1 million preferred shares of Fannie Mae, whose value evaporated when the U.S. government took the federally chartered firm into conservatorship early last month. A week later, Farmer Mac was hit hard again when Lehman Brothers Holdings Inc. filed for Chapter 11 bankruptcy production. The combined losses threatened to lower Farmer Mac's capital to below the minimum required by federal regulators.