Fitch Revises Rating Outlook on the Farm Credit System to Negative

NEW YORK--(BUSINESS WIRE)--Fitch Ratings has affirmed the 'AAA' long-term Issuer Default Rating (IDR) and Support Floor of the Farm Credit System (FCS) and revised the Rating Outlook to Negative from Stable. This action follows Fitch having affirmed the 'AAA' IDR on the U.S. government earlier today and revising the Rating Outlook to Negative. A complete list of ratings affected by this action follows at the end of this release.

As a government sponsored entity (GSE), the ratings of the FCS are linked to the U.S. Sovereign rating. This is articulated in Fitch's report 'Rating Linkages to the U.S. Sovereign Rating', dated July 18, 2011. The FCS has historically benefited from their affiliation with the U.S. government, and their current ratings benefit from the implicit support that they receive. Fitch noted in its affirmation of FCS on Aug. 3, 2011 that the ratings of FCS would remain equalized with those of the U.S. Sovereign rating.

Fitch anticipates resolution of the Negative Outlook will coincide with Fitch's resolution of the Negative Outlook on the U.S. Sovereign.

The FCS was created by Congress in 1916 to provide a reliable source of credit and liquidity to the U.S. agricultural community. Today, the FCS operates through 84 Associations (lenders to farmers, ranchers and other qualified borrowers), which are cooperatively owned and are organized within five Farm Credit District Banks (the Banks).

The Banks (CoBank, ACB, AgFirst FCB, U.S. AgBank, FCB, AgriBank, FCB and Farm Credit Bank of Texas) jointly own the Federal Farm Credit Banks Funding Corporation (Funding Corp.), which acts as their agent in the issuance of Federal Farm Credit Banks Consolidated Systemwide debt. The five Banks are jointly and severally liable for the securities issued by the Funding Corp. on their behalf.

Fitch has affirmed the following ratings:

Farm Credit System

--Long-term IDR at 'AAA'; Rating Outlook revised to Negative from Stable;

--Short-term IDR at 'F1+';

--Support at '1';

--Support Floor at 'AAA'.

Federal Farm Credit Banks

--Senior Debt at 'AAA'.

Additional information is available at www.fitchratings.com. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.

Applicable Criteria and Related Research:

--'Global Financial Institutions Rating Criteria' (Aug. 16, 2011);

--'Rating Criteria for Banking Structures Backed by Mutual Support Mechanisms' (Apr. 11, 2011)

--'Rating Linkages to the U.S. Sovereign Rating' (July 18, 2011)

--'Fitch Affirms Farm Credit System; Outlook Stable' (August 3, 2011)

--'Fitch Affirms United States at 'AAA'; Outlook Negative (Nov. 28, 2011).

Applicable Criteria and Related Research:

Rating Linkages to the U.S. Sovereign Rating

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=646469

Global Financial Institutions Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=649171

Rating Criteria for Banking Structures Backed by Mutual Support Mechanisms

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=591785

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