Cobank's Loan Sales: What You Need To Know

CoBank is a cooperative bank that serves agribusinesses, rural infrastructure providers, and Farm Credit associations throughout the United States. It is one of the largest private creditors to the U.S. rural economy, delivering loans, leases, and other financial services to its customers in all 50 states. CoBank offers a wide range of competitively priced and flexible loan programs, including its first sustainability-linked loan in partnership with Heartland Co-op. While there is no explicit mention of CoBank selling its loans, the bank operates as a cooperative lender, providing financial support to its customers in the form of loans, leases, and other services.

CoBank's first sustainability-linked loan

CoBank, a cooperative bank that serves agribusinesses, rural infrastructure providers, and Farm Credit associations across the United States, is one of the largest private creditors to the US rural economy. The bank provides a wide range of competitively priced, flexible loan programs, leasing services, and other financial services to meet the changing business needs of its customers.

CoBank recently announced the launch of its first sustainability-linked loan in partnership with its customer, Heartland Co-op. Heartland Co-op, a farmer-owned cooperative, will receive a slight interest rate reduction on its operating line of credit with CoBank if it achieves ambitious goals related to water quality conservation practices and farmer engagement. The Environmental Defense Fund (EDF) supported the development of the loan and advised on the water quality targets.

Through this partnership, Heartland Co-op will be able to leverage the loan to expand its conservation programs, enhancing Iowa communities' water quality. Tom Hauschel, Heartland Co-op's chief executive officer, stated that the "cost savings from the sustainability-linked loan with CoBank will help us expand our successful conservation agronomy program, provide more benefits to farmers, and improve Iowa's water quality."

The annual targets set by the loan include a 33% increase in annual cover crop acres sold, reaching a total of 98,000 acres, and a 39% increase in farmer engagement by Heartland's Conservation Agronomy team by 2028. These targets represent an important investment in soil health and resilience, while also supporting the installation of more than 200 new edge-of-field structures, such as saturated buffers and bioreactors, that filter water and reduce nutrients reaching Iowa streams.

CoBank's relationship with RUS and other government programs

As one of the largest private providers of credit to the U.S. rural economy, CoBank offers a wide variety of competitively priced and flexible loan programs, leasing services, and other financial services to meet the changing business needs of its customers. CoBank's customers form the backbone of the economy in rural America, including agribusinesses, rural power, water, and telecommunications providers.

CoBank is a cooperative that is governed by a board of directors elected by the customers it serves. As a mission-based cooperative lender and member of the Farm Credit System, CoBank is committed to serving as a good corporate citizen. The bank maintains a variety of corporate social responsibility programs primarily focused on rural America and the vitality of rural communities and industries.

CoBank's relationship with the Rural Utilities Service (RUS) and other government programs is an important aspect of its business. The bank works closely with RUS and other government agencies to provide financial support for rural development projects, such as filling financing gaps and providing long-term debt capacity through reinstatable term loans. CoBank's partnership with RUS and other government programs helps to ensure that rural communities have access to the resources they need to thrive.

In addition to its work with RUS and other government programs, CoBank has also demonstrated its commitment to sustainability and social responsibility through its first sustainability-linked loan with Heartland Co-op, a farmer-owned cooperative. With support from the Environmental Defense Fund, CoBank offered Heartland Co-op a slight interest rate reduction on its operating line of credit if it achieved ambitious goals related to water quality conservation practices and farmer engagement. This loan demonstrates CoBank's willingness to promote the business value of agricultural conservation and support its customers in integrating conservation services into their operations.

CoBank's role in the Farm Credit System

CoBank is a cooperative lender and a member of the Farm Credit System. It is one of the largest private providers of credit to the U.S. rural economy, delivering loans, leases, and other financial services to agribusinesses, rural infrastructure, and Farm Credit customers in all 50 states.

CoBank offers a wide range of competitively priced, flexible loan programs, leasing services, and other financial services to meet the changing business needs of its customers. It serves agribusinesses, rural power, water, and communications providers. As a member-owned cooperative lender, CoBank offers qualified borrowers patronage based on their loan volume, bank performance, and board decision.

CoBank is one of four regional wholesale banks that are part of the Farm Credit System. This system is a national network of cooperatively owned financial service providers dedicated to supporting rural communities and agriculture throughout America and Puerto Rico. The Farm Credit System was formed in 1916 and today includes more than 50 local and regional lending organizations.

CoBank, as an agricultural credit bank, has the authority to make loans to agricultural, aquatic, and public utility cooperatives. It can also finance U.S. agricultural exports and provide international banking services for farmer-owned cooperatives. The bank is committed to serving as a good corporate citizen and maintains a variety of corporate social responsibility programs focused on rural America and the vitality of rural communities and industries.

CoBank's history of mergers and restructuring

CoBank is a cooperative lender and a member of the Farm Credit System, which was formed by Congress in 1916 to provide long-term agricultural credit. CoBank was created in 1989 through the merger of 11 Banks for Cooperatives, starting operations with $12 billion in assets, $9 billion in loans, and $807 million in capital.

The Farm Credit Act of 1987 allowed for greater flexibility in the System's structure, enabling the consolidation of long- and short-term loan services under Agricultural Credit Associations. This led to the merger of 11 out of 13 Banks for Cooperatives to form CoBank, with the remaining two continuing as separate entities.

In 2012, CoBank merged with U.S. AgBank, further expanding its presence in the agricultural credit sector.

CoBank has a strong commitment to corporate social responsibility, with various programs focused on supporting rural America and the vitality of its communities and industries. The bank provides financial services to agribusinesses, rural power and water providers, and communications providers across all 50 states.

CoBank's board of directors approved a governance restructuring process in 2019, reducing the number of elected directors from 24 to 14 by the end of that year. This move was made to streamline decision-making and improve the bank's operational efficiency.

CoBank's leasing services

CoBank is one of the largest private providers of credit to the U.S. rural economy. It delivers vital support to the U.S. rural economy by providing financial services to agribusinesses and rural power, water, and communications providers in all 50 states.

CoBank offers a wide variety of competitively priced and flexible loan programs, leasing services, and other financial services to meet the changing business needs of its customers. The bank's leasing services are provided under the name of Farm Credit Leasing Services Corporation, a wholly-owned subsidiary of CoBank ACB.

CoBank Farm Credit Leasing offers flexible leasing options for vehicles, equipment, and facilities that can benefit rural agricultural and utility businesses. They acquire vehicles directly from the manufacturer with the exact options needed at a deeper discount than purchasing from a dealership. These vehicles are then leased to customers with a fixed rate, low payment, stated purchase options, and without mileage restrictions. At the end of the lease, customers have the option to purchase the vehicle, sell it to another party, or trade it at a dealership.

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