And Now, For An Oldie But A Goodie

S&P REVISES NATL RURAL COOP OUTLOOK TO NEG, AFFIRMS 'A/A-1' CCR

• Although CFC remains one of the premier lenders to rural utilities, it
  still relies heavily on short-term wholesale funding, long-term leverage
  has increased significantly, and it is exposed to interest rate risk.
• We are revising the outlook to negative from stable, while affirming our
  'A/A-1' counterparty credit ratings on the company.
• We could revise the outlook to stable if the company meaningfully reduces
  its leverage and dependence on short-term funding.
• Outlook

The outlook is negative.

We believe that CFC's continued high exposure to
short-term wholesale funding, increased leverage, potential credit quality
problems with its limited existing loan loss reserves, and potential exposure
to interest rate movements could lead us to lower the ratings. The outlook
could be reviewed for a revision to stable if management succeeds in reducing
leverage and the company's dependence on short-term funding.

For our thoughts on the matter, please check here.

Comments

[Anonymous]

Swine Flu May Cause 90,000 U.S. Deaths, Report Says

http://www.bloomberg.com/apps/news?pid=20601087&sid=a8_2nrwYD1kM

and from the archives

Terror Alert raised to level 4 (approval rating for President Bush increases)

[Anonymous]

I don't believe that any of the three rating agencies act independently. that coop either ran a foul with s&p or its lenders wanted to juice up their return a bit. Nothing has changed from the hay days triple AAAs generosity,and that is what makes me think that. It is all a game between Wall st.and the rating agencies. I don't know what is the operating profit for those rating agencies,but if they put me as a ceo I can increase that manyfolds. I will just hire phone operators working in a boiler room(or better yet somwhere outside the us for cheaper labor)and get the rating from wall st. and publish it. And I will even ask for a cut from the rebate they get out o trading the partiular company's debt or equity. This way we achieve the same result,everybody is happy,and my rating company will achieve much better profit..................

[Deficient Market]

Only a month and a half after Fitch. They qualify for one of the "special" prizes in this race to downgrade everyone to common sense levels. Well at least they're doing something in between twiddling their thumbs.

[Anonymous]

Farmer Mac(AGM) has agreed to lend them $2b, of which 1.4b has already been drawn down including 425m last week.

[Gilgamesh]

I want to thank you for the writeup earlier this year on Nat'l Rural.  Reading all of that detail resulted in my not offering their debt to clients (with the stated ratings).  While they generally didn't understand why all of it meant that they shouldn't still buy it - the issue of low yield vs. ratings sunk in.  The comparison of it to CIT (but in a much less dire situation) at the time didn't go over well since no one believed/understood that CIT was a zombie starting 1.5 yr ago and toxic before that.

Somewhat ironically, previous buyers of Nat'l Rural debt were prompted to go into Gov't Agency debt at similar rates.  They - unknowingly - should appreciate the March piece more than most; even if there ends up being no problem with the former.

[sweet8612]

FarmerMac's (AGM) recent 8-K, "In conjunction with the issuance and sale of the 17,000 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 $425 million of 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. "

Farmer Mac's 10-q also caught my eye.  (Page 66) Interesting that 7% of their loans made in 2009 are non performing.  Also so little of it is in livestock.  Dairy and swine are getting destroyed yet supposedly none are non-performing.

[mcgowanmc]

And coal fired plants are not getting built.

Two on Google's Radar:

Wolverine Michigan and Surry Virginia

[Anonymous]

Wasn't CFC Countrywide's ticket??

Anyway, I picked this subject as it had not many topics.

TYLER, FOR THE LOVE OF CHRIST, WOULD YOU PRINT UP SOME T-SHIRTS THAT HEAD YOUR BLOG TITLE

ZERO HEDGE

IN PROMINENT FUCKING LETTERING, and not the goofy Greek symbol. Dude, do the shirt with ZERO HEDGE and on the other side say "I am Tyler Durden". I would buy that shit in a heart beat.

We're proud to be readers of your blog, would you stop deemphasizing what the fuck drew us in the first place. I used to smile every day at work as I saw that huge ZERO HEDGE come on the computer.

Thanks man.

[Anonymous]

Yo, where's my comment? Is Marla at a DUI victim's group or what? The Marla that wrote that DK reply is unbelievable and I'm glad it's a chick. Plus, although Tyler's minions may be reading this, the offer continues to be open. I have connections with class action lawyers and I am looking for some of the things you have been presenting in earnest, such as Goldman's "special tips". The guys I know represent pension funds, which, if you know anything in securities litigation, has become key. [e-mail].

otherwise, please print the t-shirts as I will be a big buyer. thanks