Pub. 11 2016-2017 Issue 5

www.nebankers.org Extraordinary Service for Extraordinary Members. Bert Ely’s FARM CREDIT WATCH ® Shedding Light on the Farm Credit System, America’s Least Known GSE © 2017 Bert Ely ABA Protests Illegal CoBank Loan O N DEC. 1, 2016, THE AMERICAN BANKERS ASSOCIATION sent a letter to Farm Credit Administration Chair- man Dallas Tonsager registering its strong objec- tion to CoBank’s participation in a $1.55 billion credit facility recently extended to CyrusOne LP, the operating partnership of CyrusOne Inc., a NASDAQ-listed Real Estate Investment Trust, or REIT. CoBank’s portion of the loan par- ticipation was not disclosed, but could easily fall in the $50 million to $100 million range. CyrusOne is in the business of leasing buildings used to house computer data centers to a va- riety of businesses. It is highly unlikely that any of CyrusOne’s lessees are engaged in agriculture. All of CyrusOne’s 35 data centers are located in major metropolitan areas, so there is absolutely nothing rural about its activities. Worse, there is no way CoBank can cite lending to a “similar entity” to justify buying this loan participation, a justification it cited in buying participations in loans to Verizon, AT&T, and other investor- owned utilities that compete against cooperatively owned rural utilities that CoBank can and does lend to. Further, since REITs already enjoy substantial tax advantages, they are hardly in need of taxpayer-subsidized financing. To date, the Farm Credit Administration (FCA) has not responded to the American Bankers Association (ABA). Read the ABA’s letter at http://bit.ly/ABALtrCyrusOne. CoBank Lends to Yet Another Ineligible FCS Borrower According to a Nov. 15, 2016, BusinessWire article, Co- Bank participated in a $434 million “tax equity investment