Farm Credit System lender CoBank has overstepped its lending authority under the Farm Credit Act with a recent extension of credit to CyrusOne, Inc., a real estate investment trust, ABA said today. In a letter to the Farm Credit Administration, ABA called on FCA to direct CoBank to divest its participation in a $1.55 billion unsecured credit facility that was recently granted to CyrusOne, noting that the company “is not engaged in any form of agriculture or agribusiness activity, nor is it a cooperatively owned organization.”
ABA pointed out that CyrusOne (which leases out space to companies to house computer data centers) is neither a public utility nor a “similar entity” eligible to receive FCS funding. In addition, all of the company’s 35 data centers are located in major metropolitan areas, and its business activities do not include a rural component. “Essentially, investor-owned CyrusOne intends to use its taxpayer-subsidized borrowing from CoBank to provide taxpayer-subsidized funding to other large, investor-owned companies, none of which are entitled to receive taxpayer-subsidized credit,” the association said.