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Credit Products – Libor-Indexed Advance

Fixed-term advance with an interest rate that adjusts periodically according to changes in LIBOR.


 Key Features
  • Adjustable rate
  • Fixed term
  • Nonamortizing
Common Uses
  • Fund adjustable-rate assets.
  • Manage liquidity needs.
  • Manage exposure to declining interest rates.
  • Long-term funding commitment at short-term interest rates.
Maturities
  • Available out to 20 years.
Index
  • LIBOR
    (LIBOR is the London Interbank Offered Rate, which refers to the rates that most major international banks dealing in Eurodollar currency charge each other for large loans)
Minimum
  • $2 million minimum but smaller requests may be accommodated in special offerings.
Disbursement
  • Funds are available two business days after the trade date.
Risks
  • The Federal Home Loan Bank of Boston does not act as a financial adviser, and members should independently evaluate the suitability and risks of these advances. Please see the LIBOR-Indexed Advance Primer Adobe PDF icon for a discussion of the risks and other considerations associated with the LIBOR-Indexed advance.
Rate-Reset Frequency
  • Rate adjustment is typically every three months based on a spread to LIBOR, which is locked in for the full term of the advance.

  • Monthly and semiannual rate resets are also available.
Payment of Principal and Interest
  • Principal due at maturity.
  • Interest due on rate-adjustment date.
  • Interest is calculated on an actual/360-day basis.
Prepayment
  • Prepayable in full or in part on reset date without fee, or at any other time, subject to a fee. Partial prepayments may be in amounts as small as $100,000 and in intervals of $100,000 thereafter.
Forward Rate Commitments
  • Lock in a guaranteed rate up to two years before disbursement.

  • Our forward rate commitment adds a premium to the current rate.
More Information
 
 
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