Ag Services of America Inc. is increasing its commercial paper securitization program to $350 million, and will increasingly look at the term market as its collateral grows, said a company spokesman last week.
The farming lender completed an industry first by publicly placing a $75 million portion of its last asset-backed commercial paper financing with various investors earlier in the year, and looks to do more of the same in the future.
"We will continue to look at the term market for opportunity," said the spokesman.
The next transaction is expected to total $350 million, which would represent a $75 million spike from the previous deal. This increase will mark a steady climb in Ag Services' CP program, as deal volume would jump $125 million over two transactions, and would follow a $50 million increase from the company in March.
The program is structured and guaranteed by MBIA Insurance Corp., the spokesman said, and is primarily responsible for funding the continued growth of the company's "Agriflex Credit" program, in which farmers apply for operating supplies like seed, fertilizer, agricultural chemicals, and crop insurance, and seek to obtain cash advances for land rent, fuel, and irrigation.
Recently, the company launched "Powerfarm.com," an online store that will offer supplies, product data and flexible financing options to interested customers on the Internet.