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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
  • $10 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 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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