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Credit Products – Slider Advance

Fixed-term advance with an interest rate that adjusts periodically to changes in LIBOR and an embedded interest-rate floor position.


 Key Features
  • Fixed term, floating rate, nonamortizing.

  • Similar to our LIBOR Floating-Rate advance, but with an embedded LIBOR-indexed interest-rate floor feature.

  • The premium cost of the embedded floor feature is included in the advance rate on an annualized basis.
Key Advantages
  • Depending on the embedded floor feature strike rate, the advance may provide accelerated relief from sharp declines in short-term interest rates.

  • The interest rate can reset at a rate less than zero.
Common Uses
  • Manage exposure to declining short-term interest rates.

  • Fund adjustable rate assets.
Maturities
  • Out to 20 years.
Index
  • One- or three-month LIBOR; must be the same for the advance and the floor feature.
Minimum
  • $2 million minimum but smaller requests may be accommodated in special offerings.
Disbursement
  • Two Boston business days.
Rate-Reset Frequency
  • One or three months.
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 with prior notice at rate-reset dates with no penalty for the advance component. Partial prepayments may be in amounts as small as $100,000 and in intervals of $100,000 thereafter.

  • Member will be charged for the remaining premium cost of the embedded floor feature net of the actual unwind value on the Bank's underlying floor.
Forward-Rate Commitments
  • Not available.
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 Slider Advance Primer Adobe PDF icon for a discussion of the risks and other considerations associated with the Slider advance.
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