Farm Credit Board to Aid Mississippi Bank
The financially troubled Federal Land Bank of Jackson, Miss., will receive $25 million in stop-gap assistance until a long-term solution to its problems is devised, officials announced Monday.
The Jackson bank is the first Farm Credit System unit to get help from the Farm Credit System Assistance Board, the entity created by farm credit legislation that President Reagan signed into law Jan. 6.
The board said its agreement reached with the Jackson bank on Friday enables the bank to refinance almost $225 million in bonds and discount notes that will mature during March.
The $25 million assistance will be sufficient collateral to back up the refinancing, the board said.
Assistance will be in the form of preferred stock in the bank issued to the newly created Financial Assistance Corp., which is empowered to sell up to $4 billion in bonds to bail out Farm Credit System banks.
A promissory note will back up the assistance until bonds are sold later this year.
“This agreement is a short-term remedy arrived at by the Assistance Board,” said Eric Thor, the president and chief executive officer of the new board. Members of the board are Treasury Secretary James A. Baker III, Agriculture Secretary Richard Lyng and a farmer, yet to be nominated for the post.
“It will keep the bank serving farmers and ranchers in Alabama, Louisiana and Mississippi,” Thor said.
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