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BUYING CORPORATE BOND: FEDERAL FARM CREDIT SYSTEM

January 14, 2014

SPY 1825.00  Go to “Investments Core Portfolio” for current holdings.

FFCS is offering individual corporate bonds at 4.0%.  Cusip is 3133FXFF9.  This bond offers a reasonable but not spectacular rate of return.  You will want to hold this to maturity which is 2029….a long time!!!  So this is really a parking spot for your cash allocation money that is safe and also provides a decent return….these bonds are not really suited for the younger investor with smaller portfolios-who are trying to grow their money.  Each bond is priced at $1000.00 and you are guaranteed your money back at maturity.  Corporate bonds CAN be sold at any time before maturity but the price could be higher or lower than the price you paid.

From Investopedia:  “Definition of Federal Farm Credit System.  In the United States, a network of federally chartered financial institutions designed to provide credit-related services to the agricultural and farming sectors of the economy. In total, this government-sponsored enterprise comprises approximately 100 financial institutions that serve all 50 states and Puerto Rico.
Unlike commercial banks, the banks in this system do not take deposits, nor do they usually borrow from other banks. Instead, these banks raise funds by issuing farm credit debt securities on a worldwide basis in the domestic and global capital markets. Although the debt securities are not guaranteed by the U.S. government, the FFCS possesses a farm credit insurance fund, which would supply principal and interest payments should a system bank go bankrupt. System institutions are federally chartered under the Farm Credit Act and are subject to supervision, examination and regulation by a federal agency, the Farm Credit Administration.”

Go to “HOME” (top of page) for the most current posts.  Go To “+FOLLOW” (top of page) to follow this blog.  Go to “INVESTMENTS” (top of this page) for core holdings. 

This blog discusses dividend paying investments that I find appropriate for myself…..and for investors seeking dividends and income.  I am not an investment professional.  You must do your own research before buying any position.  All gains or losses that you realize are based on your choices.

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