Federal Agricultural Mortgage Corp, the government sponsored enterprise known as Farmer Mac, has a stack of preferred stock series, E, F and G, that share an unusual trait: all three are now past their call dates, meaning the company could redeem them at $25 par at any time, yet all three continue to trade well under that par value in the open market.
The most recent example is Series G, a 4.875% non-cumulative perpetual preferred with a $25 liquidation preference. It last traded at $17.06 on September 25, 2026, a discount of 31.76%, or $7.94 per share, to its par value. That gap produces a current yield of 7.14% on the fixed $1.2188 annual dividend, well above the stated 4.875% coupon rate, precisely because the market price sits so far under face value. The security has been callable since July 17, 2026, and the pattern was first flagged in data tracked on Preferred Stock AI, a Madison Labs research site, which shows Farmer Mac's Series E, F and G preferreds all trading between roughly 20% and 32% below their $25 par values even though each is now callable.
For income focused investors, a discount of this size on a callable instrument is a specific kind of signal, one that the market is pricing in a low probability of near term redemption rather than betting on an imminent call at $25. If Farmer Mac does eventually call any of these series at par, holders who bought below $25 would capture the difference as capital appreciation, on top of dividends already collected. On Series G specifically, that would mean $7.94 of price appreciation, or roughly 46.5% above the last traded price, if redemption happened at par. That arithmetic is a feature of the security's terms, not a forecast, since Farmer Mac has discretion over whether and when to call any series, and non-cumulative preferred dividends are not guaranteed to continue if the company chose to suspend them.
Why this discount pattern persists across an entire family of related securities, rather than being isolated to one issue, is a fair question for anyone following preferred markets tied to government sponsored enterprises. Farmer Mac's other preferred series carry coupons ranging from 5.25% to 6.875%, and the broader group's average discount to par, based on current yield comparisons across the company's outstanding preferred issues, runs narrower than the 31.8% seen on Series G alone, according to the same data set. That spread between the discounted post call issues and the company's average suggests investors are treating each series somewhat differently depending on coupon size and issue date, rather than uniformly.
Farmer Mac itself was established by Congress in 1988 to build a secondary market for agricultural real estate and rural housing loans, and it now operates across farm and ranch lending, USDA guarantees, rural utilities, and institutional credit, with total business volume near $31 billion as of late 2025. Its common stock, which trades under the ticker AGM, closed at $214.01 on the same September 25 session, down 2.18% on the day, alongside a 52 week range of $136.57 to $248.28. Simply Wall St reported on September 24 that a potential stock index addition could be a significant moment for Farmer Mac shares, a separate storyline from the preferred stock discounts but one that speaks to renewed attention on the company.
Broader markets that day showed a mixed tone across sectors unrelated to Farmer Mac directly, with megacap technology names such as Microsoft Corporation and Analog Devices posting gains while Meta Platforms and Intel declined, a reminder that fixed income adjacent instruments like non-cumulative preferred stock often move on different drivers than the equity indexes that dominate daily headlines.
What investors and analysts covering GSE adjacent credit are likely to watch next includes whether Farmer Mac takes any action on its callable series, how the company's dividend history, which has been paid quarterly and without interruption according to the security's disclosed payment record, continues, and whether the discount to par across Series E, F and G narrows or widens as the broader preferred market reprices callable but un-called securities. None of these outcomes is guaranteed, and any decision to redeem, suspend, or maintain the preferred dividends rests with Farmer Mac's board, not with market expectations reflected in the current trading discount.