Yes, you read that correctly. CoBank, a Farm Credit System (FCS) affiliate worth over $100 billion, wants to finance a failing, foreign company with tax-exempt, taxpayer-backed dollars.
Rayonier Inc., worth over $2.5 billion, is just the latest beneficiary of CoBank’s reckless largesse. According to a statement released by Rayonier on August 5, CoBank, as well as a number of other FCS institutions, are providing “$550 million of new credit facilities, including a five-year $200 million revolving credit facility and a nine-year $350 million term loan facility. The new credit facilities will be used to refinance the company’s existing revolving credit facility … as well as fund an anticipated capital infusion into the company’s New Zealand joint venture (the “Matariki JV” or the “JV”) for repayment of JV indebtedness.”
The statement continues, “The company intends to use approximately $160 million of proceeds from the term loan facility to fund a capital infusion into the Matariki JV, which the JV will in turn use for repayment of all outstanding amounts under its existing NZ$235 million credit facility plus NZ$7 million of related fees and expenses.”
Bailing out a foreign subsidiary is bad enough, but the FCS likes to go the extra mile. This time, it’s bailing out a company that is loose with its money while it’s under a high profile investigation for securities fraud.
Why is the FCS, established to provide America’s farmers with credit “to develop and expand farms,” bailing out a foreign subsidiary of a huge, publicly-traded, multinational corporation? Why should taxpayers have to foot the bill for the mismanagement of a company on the other side of the world? Why isn’t Congress investigating a deal as dubious as this? When it comes to this lumber company, we’re just as stumped as you.