{"data":{"id":"sw_620d7a4cacd45a0fe4f7","slug":"farmer-mac-s-newest-preferred-shares-trade-well-below-par-just-months-after-issu","title":"Farmer Mac's Newest Preferred Shares Trade Well Below Par Just Months After Issuance","subheadline":"AGM'I, sold in May 2026, and 2025-vintage AGM'H are both trading in the mid-teens percentage discount to their $25 face value.","summary":"Farmer Mac's Series I preferred, issued in May 2026, trades near $21.26, nearly 15% below its $25 par value, while 2025-vintage Series H is down about 17%, highlighting how quickly new fixed-rate agency preferred issuance can reprice.","body":"Shares of a preferred stock issued by Federal Agricultural Mortgage Corporation, the government-sponsored enterprise known as Farmer Mac, are trading well below the price at which they were sold to investors just five months ago. Farmer Mac's Series I preferred, listed under the ticker AGM'I, carries a 6.875% coupon and a $25 liquidation preference, but closed at $21.26 on October 28, 2026, a discount of nearly 15% to its face value. The security was issued on May 19, 2026. A companion issue from the prior year, Series H (AGM'H), has fared even worse, down roughly 17% from its own par value, according to the story angle under review.\n\nThe gap between issue price and current market price means investors who bought AGM'I at $25 near issuance and held it would be sitting on an unrealized loss on the share price itself, even as they continue to collect the stated quarterly dividend. At the October 28 close, the current yield on AGM'I works out to 8.08%, well above its 6.875% coupon rate, a mathematical result of the price decline rather than any change in the dividend payment, which remains fixed at $1.7188 annually under the terms of the issue. The security is callable starting July 17, 2031, and the yield to call, assuming Farmer Mac exercises that option at the earliest date, works out to 10.86%.\n\nUnder the mechanics of fixed-rate perpetual preferred stock, when prevailing yields demanded by investors for comparable securities rise after an issue comes to market, a coupon fixed at issuance becomes less attractive relative to newer alternatives, and the secondary-market price adjusts downward to bring the effective yield back in line. That dynamic offers one explanation, consistent with how fixed-rate perpetual preferreds are structured, for why both AGM'I and AGM'H are trading below the $25 price at which they were sold: both coupons were locked in at issuance, and if the yields investors require from agency-sector preferred stock have moved higher since, prices have to fall to compensate new buyers. Because the shares are non-cumulative, any missed dividend would not accrue to be paid later, a structural feature that can weigh on how such securities are priced relative to cumulative preferred stock.\n\nThe pattern was first flagged in data tracked on Preferred Stock AI, a Madison Labs research site, which also shows that among six Farmer Mac preferred issues carrying a current yield, the average discount to par across the group is roughly 26%, steeper than the 15% discount on AGM'I specifically. That comparison suggests the repricing is not confined to the newest series alone. Farmer Mac has several other preferred issues outstanding with coupons ranging from 4.875% to 6.500%, and the broader pattern points toward conditions affecting the agency preferred sector generally rather than factors specific to the Series I offering.\n\nFor income-focused investors, the situation illustrates a basic risk embedded in perpetual, fixed-rate preferred securities: because there is no maturity date forcing a return to par, a buyer's only way to recover the $25 face value through price appreciation is a call by the issuer or a shift in market yields back toward levels favorable to existing coupons. Farmer Mac, chartered by Congress in 1988 to support agricultural and rural credit markets, reported total business volume of approximately $31 billion as of late 2025, with farm and ranch loans as its largest segment.\n\nThe discounts on AGM'I and AGM'H are emerging against a broader backdrop in which fixed-income investors have been recalibrating expectations for interest-rate policy, with commentary this month focused on how the Federal Reserve's leadership will wield its influence on rates going forward. Preferred stock prices across sectors tend to move inversely with shifts in broader yield expectations, since their fixed dividends compete directly with newly available yields elsewhere in the market.\n\nInvestors tracking the securities are likely to watch Farmer Mac's next scheduled earnings report, due November 5, 2026, for any update on capital plans or commentary relevant to its preferred stock program. Also in view will be whether the discount on AGM'I and AGM'H narrows or widens as quarterly ex-dividend dates pass, with the next AGM'I dividend history showing payments of $0.429688 and $0.276910 per share in recent periods, and whether other Farmer Mac preferred series, carrying older and lower coupons, continue to trade at steeper discounts than the newly issued stock.","source":{"name":"Preferred Stock AI","slug":"preferredstock-ai"},"category":"Preferred Stocks","article_type":"News","license":"Free to republish, in full or in part, with attribution to Capital Data Wire and a link to the original article. No fees, registration, or permission required.","quality_score":83,"human_reviewed":false,"original_url":"https://preferredstock.ai/symbol/AGM-P-I","featured_image":null,"published_at":"2026-10-29T11:25:24.508676+00:00","updated_at":"2026-10-29T11:25:24.508676+00:00","is_demo":false,"attribution":"Via Capital Data Wire. Discovered via Preferred Stock AI.","attribution_html":"Via Capital Data Wire. Discovered via Preferred Stock AI."},"meta":{"demo_data":false}}