FCA Info Memo - Corporate Restructuring Applications

Informational Memorandum
Subject:	Corporate Restructuring Applications
Date of Memorandum:	07/29/1999
Expiration Date:
Office:	OPA
Signed By:	Martin, Marsha
FCA Contact Person:	Donnelly, Robert
Contact Phone:	703 893-4450
List of Attachments:	Attachment 1 - Expedited Processing of ACA Restructuring Applications Attachment 2 - Seminar on Restructuring - Agricultural Credit Associations

INFORMATIONAL MEMORANDUM

July 29, 1999

To: Chairman, Board of Directors
The Chief Executive Officer
All Farm Credit System Associations

From: Marsha Pyle Martin
Chairman and Chief Executive Officer

Subject: Corporate Restructuring Applications

On July 8, 1999, the FCA Board granted preliminary approval to an ACA to form a new corporate structure. Presuming the ACA obtains final approval, the FCA will charter two wholly owned operating subsidiaries, a production credit association (PCA) and a Federal land credit association (FLCA). The FCA Board views its preliminary approval of this request as being consistent with its philosophy statement and its continuing support for actions that benefit System borrowers.

We are now reviewing two additional applications from associations wanting to restructure their organizations. We are also aware that a number of other associations are either preparing or evaluating whether to file similar applications. Our goal is to process these types of applications in the most efficient and timely manner possible. Therefore, we will process applications that meet certain criteria under expedited procedures (see attachment). Our criteria focus on features contained in the ACA restructuring request approved by the FCA Board and on necessary safety and soundness considerations.

We will provide a checklist and sample model application to those associations interested in filing applications to form an ACA with PCA and FLCA operating subsidiaries. The checklist will be similar to the ones we currently use for other types of corporate applications, such as mergers and transfers of direct lending authority.

Some institutions may choose to submit restructuring applications to the FCA that are different from the model application. While these applications will require a full review and analysis by the FCA staff, we will process them as quickly as possible. To the extent possible, we will make appropriate updates to the Agency's expedited procedures (as well as the related checklist and sample model application) as these other types of restructuring applications receive FCA Board consideration.

Associations interested in filing applications to charter PCA and FLCA operating subsidiaries of an ACA are invited to attend one of our seminars on corporate restructuring applications. We plan to schedule three 1-day seminars in mid-September and again in October. The objective of these seminars is to familiarize associations with the FCA's requirements before submission of their restructuring applications, which should, in turn, expedite their processing.

Associations interested in having their staff attend one of these seminars should complete the attached Attendance Information Form and either fax it to (703) 883-4477 or forward the information by electronic mail to corporate_applications@fca.gov. Associations can also obtain a copy of the checklist and sample model application by requesting them directly from us.

For further information, please call C. Edward Harshbarger, Director, Risk Analysis Division, Office of Policy and Analysis at (703) 883-4067, or Elna J. Luopa, Senior Corporate Analyst, Risk Analysis Division, Office of Policy and Analysis at (703) 883-4431.

Formal applications for restructurings are to be sent to Vivian L. Portis, Secretary to the Board, Farm Credit Administration, 1501 Farm Credit Drive, McLean, Virginia 22102-5090.

Attachments

Copy to: Chief Executive Officer
General Counsel
Each Farm Credit Bank
CoBank, ACB
Federal Farm Credit Banks Funding Corporation

cc: Central Files/RAD Subject File/RAD Chron/RPD Chron/OD Chron/OPA Electronic Chron/Donnelly/7/28/99