SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported)
January 28, 1998
Farmer Mac Mortgage Securities Corporation
(Exact Name of Registrant as Specified in its Charter)
Delaware 333-26073 52-1779791
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
919 18th Street, N.W. 20006
Washington, D.C. (Zip Code)
(Address of Principal
Executive Offices)
Registrant's telephone number, including area code (202) 872-7700
No Change
(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
Item 5. Other Events
A. The Registrant registered issuances of Guaranteed Agricultural
Mortgage-Backed Securities on a delayed or continuous basis pursuant to Rule 415
under the Securities Act of 1933, as amended (the "Act"), by a Registration
Statement on Form S-3 (Registration File No. 333-26073)(the "Registration
Statement"). Pursuant to the Registration Statement, the Registrant issued
approximately $21,663,508 in aggregate principal amount of its Guaranteed
Agricultural Mortgage-Backed Securities, Series 1/28/98 (the "Certificates") on
January 28, 1998. This Current Report on Form 8-K is being filed to satisfy an
undertaking, in connection with the Prospectus dated May 22, 1997 and the
Prospectus Supplement dated January 23, 1998, to file a copy of the Issue
Supplement, attached hereto as Exhibit 4.3.6 , and a copy of the Terms
Agreement, attached hereto as Exhibit 1.1.5. In addition, the Registrant is
filing, as Exhibit 23.3.6 attached hereto, a consent by KPMG Peat Marwick LLP to
the use of their report incorporated into the Registration Statement by
reference and to the reference to KPMG Peat Marwick LLP as experts on page S-3
of the Prospectus Supplement.
The Certificates were issued pursuant to a Trust Agreement (filed as
Exhibit 4.3 to the Registration Statement), dated as of June 1, 1996 among
Farmer Mac Mortgage Securities Corporation, as Depositor, Federal Agricultural
Mortgage Corporation, as Guarantor, and First Trust National Association, N.A.,
as Trustee, as supplemented by an Issue Supplement, dated
as of January 1, 1998.
<PAGE>
Item 7. Financial Statements; Pro Forma Financial Information and
Exhibits
(a) Not applicable.
(b) Not applicable.
(c) Exhibits:
1.1.5. Terms Agreement, dated as of January 23, 1998,
among Farmer Mac Mortgage Securities Corporation,
Federal Agricultural Mortgage Corporation and
Bear, Stearns & Co., Inc.
4.3.6. Issue Supplement, dated as of January 1, 1998,
among Farmer Mac Mortgage Securities Corporation,
as Depositor, Federal Agricultural Mortgage
Corporation, as Guarantor, and First Trust
National Association, N.A., as Trustee.
23.3.6. Consent of KPMG Peat Marwick LLP.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
FARMER MAC MORTGAGE SECURITIES
CORPORATION
By: /s/ Christopher A. Dunn
Name: Christopher Dunn
Title: Vice President
Dated: January 28, 1998
<PAGE>
EXHIBIT INDEX
<PAGE>
Exhibit No. Description Page No.
1.1.5. Terms Agreement.
4.3.6. Issue Supplement.
23.3.6. Consent of KPMG Peat Marwick LLP
<PAGE>
EXHIBIT 1.1.5
Terms Agreement
<PAGE>
EXECUTION
FARMER MAC MORTGAGE SECURITIES CORPORATION
Guaranteed Agricultural Mortgage-Backed Securities
Series 1/28/98
Guaranteed by the Federal Agricultural Mortgage Corporation
TERMS AGREEMENT
(to Underwriting Agreement,
dated June 26, 1996,
among the Company, Farmer Mac and the Underwriter)
Farmer Mac Mortgage Securities Corporation January 23, 1998
919 18th Street, N.W.
Washington D.C. 20006
Federal Agricultural Mortgage Corporation
919 18th Street, N.W.
Washington D.C. 20006
Bear, Stearns & Co. Inc. (the "Underwriter") agrees, subject to the
terms and provisions herein and of the captioned Underwriting Agreement (the
"Underwriting Agreement"), to purchase the Classes of Series 1/28/98
Certificates specified in Section 1(a) hereof (the "Offered Certificates"). This
Terms Agreement supplements and modifies the Underwriting Agreement solely as it
relates to the purchase and sale of the Offered Certificates described below.
The Series 1/28/98 Certificates are registered with the Securities and Exchange
Commission by means of an effective Registration Statement (No. 333-26073).
Capitalized terms used and not defined herein have the meanings given them in
the Underwriting Agreement or Trust Agreement, as applicable.
Section 1. The Qualified Loan Pools: The Qualified Loan Pools
shall have the characteristics described in the Prospectus Supplement.
Section 2. The Certificates: The Offered Certificates shall be
issued as follows:
(a) Classes: The Offered Certificates shall be issued with the
following Class designations, interest rates and principal balances,
subject in the aggregate to the variance referred to in the Prospectus
Supplement:
<PAGE>
<TABLE>
<CAPTION>
Class Purchase
Class Original Principal Pass-Through Price Percentage
Amount Rate (net of Underwriting fees)
<S> <C> <C> <C>
Pool AS1020 $15,689,508 (1) 101.296875
Pool CS1016 5,974,000 (1) 100.453125
</TABLE>
(1) On each applicable Distribution Date, the Pass-Through Rate for each Class
of Certificates will be a rate per annum equal to the weighted average of
the Net Mortgage Rates for the Qualified Loans in the related Pool. It is
expected that the Pass-Through Rates for the initial Interest Accrual
Periods for each Class of Certificates will be as follows: Pool AS1020,
7.080%; and Pool CS1016, 6.726% per annum.
(b) The Offered Certificates shall have such other characteristics
as described in the related Final Prospectus.
Section 3. Purchase Price: The Purchase Price for each Class of the
Offered Certificates shall be the Class Purchase Price Percentage therefor (as
set forth in Section 2(a) above) plus accrued interest at the applicable initial
Pass-Through Rate per annum of each such Class from and including the Cut-off
Date up to, but not including, September 24, 1997 (the "Closing Date").
In the event that proceeds to the Underwriter from its distribution of any
Class of Certificates exceed the applicable Class Purchase Price Percentage
shown above, the Purchase Price for the applicable Class of Certificates shall
be increased according to the following formula:
(a) With respect to Pool AS1020, the Purchase Price will equal (i)
the applicable Class Purchase Price Percentage set forth in Section 2(a)
above, plus (ii) the difference between (x) the actual price of the
applicable Class of Certificates calculated at the spread to the then
current interpolated Treasury security yield having a remaining term to
maturity of 11.93 years and (y) the price of such Class of Certificates
calculated at a spread of 0.75% over such interpolated Treasury security
yield, less (iii) an underwriting spread of 0.375%; and
(b) With respect to Pool CS1016, the Purchase Price will equal (i)
the applicable Class Purchase Price Percentage set forth in Section 2(a)
above, plus (ii) the difference between (x) the actual price of the
applicable Class of Certificates calculated at the spread to the then
current interpolated Treasury security yield having a remaining term to
maturity of 4.69 years and (y) the price of such Class of Certificates
calculated at a spread of 0.55% over such interpolated Treasury security
yield, less (iii) an underwriting spread of 0.250%.
Section 4. Tax Treatment: No election will be made to treat
the Trust Fund, or any portion thereof, as a REMIC.
* * * * *
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the undersigned a counterpart hereof,
whereupon this letter and your acceptance shall represent a binding agreement
among the Underwriter, Farmer Mac and the Company.
Very truly yours,
BEAR, STEARNS & CO. INC.
By:
Name:
Title:
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
FEDERAL AGRICULTURAL MORTGAGE CORPORATION
FARMER MAC MORTGAGE SECURITIES CORPORATION
By: /s/ Christopher A. Dunn
Name: Christopher A. Dunn
Title: Vice President
<PAGE>
EX-4
Issue Supplement
EXHIBIT 4.3.6
Issue Supplement
<PAGE>
FEDERAL AGRICULTURAL MORTGAGE CORPORATION
ISSUE SUPPLEMENT
Dated as of January 1, 1998
TO TRUST AGREEMENT
FOR GRANTOR TRUSTS
Dated as of June 1, 1996
for
GUARANTEED AGRICULTURAL MORTGAGE-BACKED SECURITIES
Series Designation Issue Date
Series 1/28/98 January 28, 1998
THIS ISSUE SUPPLEMENT accompanies and supplements a certain Trust
Agreement for Grantor Trusts, dated as of June 1, 1996 (the "Trust Agreement"),
among the Federal Agricultural Mortgage Corporation, a federally chartered
instrumentality of the United States ("Farmer Mac"), Farmer Mac Mortgage
Securities Corporation, a corporation organized and existing under the laws of
the State of Delaware (the "Depositor") and First Trust National Association, a
national banking association (the "Trustee"). Unless otherwise specified,
certain capitalized terms are defined in such Trust Agreement and shall have the
meanings so defined.
The collective terms of such Trust Agreement and this Issue Supplement
shall govern the composition of the Trust Fund, the beneficial ownership of
which is evidenced by the Series of Certificates having the above designation,
and have no applicability to any other Trust Fund. If any provision of this
Issue Supplement conflicts with or contradicts a provision of the Trust
Agreement, the provisions of this Issue Supplement shall control.
The Depositor, does hereby transfer, assign, set over and otherwise convey
to the Trustee for the Holders of Certificates evidencing beneficial ownership
interests in the Trust Fund established hereby (i) all of the Depositor's right,
title and interest in and to the Qualified Loans identified in the Qualified
Loan Schedule attached as Schedule I hereto, including all payments of principal
and interest thereon received after January 1, 1998 (the "Cut-Off Date") other
than payments of principal due and interest accruing on or before the Cut-off
Date and (ii) all of the Depositor's rights, as assignee of Farmer Mac, under
each Loan Sale Agreement providing for the sale of the Qualified Loans
identified in the Qualified Loan Schedule attached as Schedule I hereto,
including, but not limited to, the right to enforce the representations and
warranties therein against the related Seller.
Section 1. Certain Defined Terms Inapplicable. The following terms defined
in Section 1.01 of the Trust Agreement shall have no applicability to the Series
of Certificates authorized hereby: "Class Notional Principal Balance," "Interest
Only Certificates," "Interest Only Class," "Notional Principal Balance",
"Participation Certificate", "Special Distribution Date" and "Special Record
Date."
Section 2. Certain Defined Terms Redefined. The following terms defined in
Section 1.01 of the Trust Agreement are modified to have the following meanings
for the Series of Certificates authorized hereby:
Certificate: A Guaranteed Agricultural Mortgage-Backed Security, which, in
the case of all Classes of Certificates, shall be issued in book-entry form and
maintained in the name of a record owner as an entry on the books of a Reserve
Bank under a designation specifying the Series, Class and denomination thereof.
Certificate Distribution Amount: With respect to each Class and
Distribution Date, the sum of
(a) all interest accrued at the related Certificate Interest Rate
during the preceding Interest Accrual Period for such Class on the Class
Certificate Principal Balance thereof immediately preceding such
Distribution Date; and
(b) the Principal Distribution Amount on such date for the Qualified
Loan Pool bearing the same alpha-numerical designation as such Class.
Certificate Interest Rate: For each Class and Distribution Date, a
variable rate per annum equal to the weighted average (by Scheduled Principal
Balance) carried to three decimal places, rounded down, of the Net Mortgage
Rates of the Qualified Loans in the Qualified Loan Pool bearing the same
alpha-numerical designation as such Class.
Certificate Principal Balance: As to any Certificate, prior to the related
initial Distribution Date, the Denomination thereof and, subsequent to such
initial Distribution Date, the Denomination thereof multiplied by the then
applicable Certificate Principal Factor.
Certificate Principal Factor: As to any date of determination and as to
any Class of Certificates, a fraction the numerator of which is (i) the
aggregate of the Denominations of all Certificates of such Class minus (ii) the
aggregate amount of all Principal Distribution Amounts, if any, distributed
thereto prior to such date of determination and the denominator of which is the
aggregate of the Denominations of all Certificates of such Class.
Certificateholder or Holder: As to any Certificates, the record owner on
the appropriate Reserve Bank's books.
Class Certificate Principal Balance: With respect to any Class of
Certificates, at any time, the aggregate of the Certificate Principal Balances
of all Certificates of such Class.
Distribution Date: As to each Class, the 25th day of each month specified
in the table below (or if such 25th day is not a Business Day, the Business Day
immediately following), commencing on the date specified:
<TABLE>
<CAPTION>
Month of Each
Class Distribution Date Initial Distribution Date
<S> <C> <C>
AS1020 January and July July 25, 1998
CS1016 January and July July 25, 1998
</TABLE>
Due Period: With respect to any Qualified Loan Pool and Distribution Date,
the period beginning immediately following the preceding Due Period (or the day
immediately following the Cut-Off Date in the case of the initial Distribution
Date) and ending on and including the first day of the month of such
Distribution Date.
Final Distribution Date: As to any Class, the Distribution Date specified
as such for such Class in Section 4 hereof.
Prepayment Period: As to each Qualified Loan Pool and Distribution Date,
the preceding Due Period for such Qualified Loan Pool.
Principal Distribution Amount: With respect to each Qualified Loan Pool and
Distribution Date, the sum of
(a) all Curtailments received with respect to the Qualified Loans in
such Qualified Loan Pool during the preceding Prepayment Period for such
Qualified Loan Pool;
(b) the Scheduled Principal Balance of each Qualified Loan in such
Qualified Loan Pool which was the subject of a Principal Prepayment in
Full during the preceding Prepayment Period or which became a Liquidated
Qualified Loan (or which was repurchased from the Trust Fund as permitted
or required pursuant to the Trust Agreement) during such preceding
Prepayment Period for such Qualified Loan Pool;
(c) the principal component of each Installment Payment (including
any Balloon Payment) due in respect of each Qualified Loan included in
such Qualified Loan Pool during the preceding Due Period for such
Qualified Loan Pool; and
(d) if such Distribution Date is the Final Distribution Date for the
related Class of Certificates, any amount by which the Class Certificate
Principal Balance therefor would be greater than zero after distribution
of the amounts specified in (a) - (c) above.
Qualified Loan Schedule: As of any date of determination, the schedule of
Qualified Loans included in the Trust Fund, separately identifying each
Qualified Loan Pool, the Field Servicer's Fee and Administrative Fee for each
Qualified Loan. The initial schedule is attached as Schedule I hereto.
Section 3. Defined Terms Applicable to Issue Supplement. Whenever used in
this Issue Supplement, the following words and phrases shall have the following
meanings:
Administrative Fee: The per annum rate identified as such for each
Qualified Loan set forth in the Qualified Loan Schedule.
Central Servicer: With respect to any Qualified Loan either Equitable
Agri-Business, Inc., a Delaware corporation, or Zions First National bank, a
national bank, as identified in the Qualified Loan Schedule.
Central Servicing Fee Rate: An amount as described in the supplement to the
Servicing Contract between Farmer Mac and the applicable Central Servicer.
Closing Date: January 28, 1998.
Collected Prepayment Premiums: With respect to each Class of Certificates
and Distribution Date, the aggregate of Prepayment Premiums received during the
preceding Due Period by the Central Servicer, in each case, in respect of the
Qualified Loan Pool bearing the same alpha-numerical designation as such Class.
Cut-Off Date: January 1, 1998.
Field Servicer's Fee: The per annum rate identified as such for each
Qualified Loan set forth in the Qualified Loan Schedule.
Guarantee Fee: 0.50% per annum.
Interest Accrual Period: As to each Class and Distribution Date, the
period from the first day of the month of the preceding Distribution Date (or in
the case of the initial Distribution Date for a Class, from the Cut-off Date) to
and including the last day of the month preceding the month of such Distribution
Date.
Liquidated Qualified Loan: Any defaulted Qualified Loan as to which Farmer
Mac has determined that all amounts it expects to recover from or on account of
such Qualified Loan have been recovered.
Net Mortgage Rate: As to each Qualified Loan, the Mortgage Rate thereon
less the sum of (i) the Administrative Fee and (ii) the Field Servicer's Fee for
such loan.
Net Prepayment Premium: As to each Qualified Loan and each Collected
Prepayment Premium recovered thereon, the amount of the related prepayment
premium or yield maintenance charge calculated on the basis of the Net Mortgage
Rate rather than the Mortgage Interest Rate of the related Qualified Loan.
Qualified Loan Pool: Each of the two groups of Qualified Loans identified
in the Qualified Loan Schedule.
Termination Percentage: One percent.
Termination Price: The sum of 100% of the unpaid principal balance of each
outstanding Qualified Loan and any REO Qualified Loan plus accrued and unpaid
interest thereon at the applicable Mortgage Rate (less any amounts constituting
previously unreimbursed advances).
Section 4. Classes of Certificates; Distributions on Certificates. The
Series of Certificates authorized by the Trust Agreement and this Issue
Supplement shall be divided into two Classes of Certificates having the terms
and provisions hereinafter set forth. The Class designations, original Class
Certificate Principal Balances and Final Distribution Dates shall be as follows:
<TABLE>
<CAPTION>
Original Class
Designation Certificate Final Distribution
Principal Balance Date
<S> <C> <C>
Class AS1020 $15,689,508 January 25, 2013
Class CS1016 5,974,000 January 25, 2003
</TABLE>
On each Distribution Date for a Class of Certificates, Farmer Mac shall
distribute the related Certificate Distribution Amount and any Net Prepayment
Premiums for such Class to the Certificateholders of such Class as of the
related Record Date. Amounts distributed in respect of clause (b) of the
definition of Certificate Distribution Amount shall be applied in reduction of
the Certificate Principal Balances of the Certificates. All distributions of the
Certificate Distribution Amount and any Net Prepayment Premiums for a Class
shall be applied on a pro rata basis among the Certificates of such Class. Net
Prepayment Premiums shall not be applied to accrued certificate interest on or
to reduce the Certificate Principal Balance of any Certificate.
Section 5. Form and Denominations. The Certificates shall be issued in
book-entry form as provided in Section 3.02(a) of the Trust Agreement; interests
therein shall be held in minimum Denominations of $1,000 and integral multiples
of $1 in excess thereof.
Section 6. Servicing Compensation. For any Distribution Date, as
compensation for its activities and obligations under the Trust Agreement and
hereunder, the Master Servicer shall be entitled to retain the excess of (i) any
Collected Prepayment Premium for such Distribution over (ii) any Net Prepayment
Premium for such Distribution Date.
Section 7. Collection of Certain Qualified Loan Payments. Section 4.05 of
the Trust Agreement is amended by restating clause (v) thereof in its entirety
as follows:
"(v) Any Net Prepayment Premiums collected on the Qualified Loans."
Section 8. Termination of the Trust Fund. Section 9.01 of the Trust
Agreement is restated in its entirety as follows:
"The respective obligations and responsibilities of Farmer Mac and
the Trustee created hereby shall terminate upon the distribution to all
Holders of all amounts required to be distributed hereunder upon (i) the
repurchase by Farmer Mac of all Qualified Loans and REO Property remaining
in the Trust Fund at the Termination Price, (ii) the final payment of the
last Qualified Loan and/or REO Property remaining in the Trust Fund; or
(iii) distribution by Farmer Mac pursuant to the Farmer Mac Guarantee on
the Final Distribution Date for the Class of Certificates having the
latest Final Distribution Date of an amount sufficient to reduce the Class
Certificate Principal Balance of such Class to zero; provided, however,
that in no event shall any trust created hereby continue beyond the
expiration of 21 years from the death of the survivor of the descendants
of Joseph P. Kennedy, the late ambassador of the United States of America
to the Court of St. James's, living on the Cut-Off Date.
The right of Farmer Mac to repurchase all Qualified Loans and REO
Property in the Trust Fund pursuant to clause (i) above shall be subject
to the aggregate Scheduled Principal Balances of the Qualified Loans being
less than the Termination Percentage of the Scheduled Principal Balances
thereof as of the Cut-Off Date. Any such repurchase shall take place on a
Distribution Date for any then outstanding Class (regardless of whether
such Distribution Date constitutes a Distribution Date for all such
Classes of Certificates), and the proceeds of any such repurchase shall be
distributed to Holders of the applicable Classes of Certificates on such
Distribution Date, pro rata, in the first instance in respect of accrued
interest and then, as a distribution of principal.
In connection with any such termination, Farmer Mac shall make
available to financial publications and electronic services notice for the
benefit of Holders of Certificates to the effect that the final
distribution will be made on the Distribution Date therein specified to
Certificateholders of record on the applicable Record Date."
Section 9. Intended Classification. A new Section 11.06 is added to the
Trust Agreement as follows:
"Section 11.06. Intended Classification. It is intended that the Trust Fund
be classified for federal income tax purposes as an `investment trust' within
the meaning of Treasury Regulation 301.7701-4(c), and notwithstanding anything
to the contrary herein, the provisions of this Agreement shall be applied and
interpreted in a manner consistent with such intention, including, without
limitation, so as to circumscribe any right to exercise discretion granted to
Farmer Mac herein as to matters relating to the Qualified Loans."
* * * * * * * * * * *
<PAGE>
IN WITNESS WHEREOF, the parties hereto hereby execute this Issue
Supplement, as of the day and year first above written.
FEDERAL AGRICULTURAL
MORTGAGE CORPORATION
FARMER MAC MORTGAGE
SECURITIES CORPORATION
[SEAL]
By: /s/ Christopher A. Dunn
Christopher A. Dunn
Attest: Jerome G. Oslick Vice President
FIRST TRUST NATIONAL
ASSOCIATION, as Trustee
[SEAL]
By: /s/ Eve D. Kaplan
Eve D. Kaplan
Attest: Mark E. LeMay Vice President
<PAGE>
EXHIBIT 23.3.6
Consent of KPMG Peat Marwick LLP
<PAGE>
The Board of Directors
Federal Agricultural Mortgage Corporation
We consent to the use of our report incorporated herein by reference and to the
reference to our firm as experts on page S-3 of the Prospectus Supplement dated
January 23, 1998.
/s/ KPMG Peat Marwick
Washington, D.C.
January 23, 1998
