FHLBank consolidated bonds (bonds) offer investors a wide variety of sizes, structures and maturities to meet numerous portfolio objectives. All bonds are rated by Moody's (Aaa) and S&P (AA+), and for domestic investors, are exempt from state and local income tax. Investors and dealers can rely on the FHLBank System for continuous, innovative bond issuance, even during periods of market turmoil. In addition, customized debt products tailored for specific investors/markets are actively considered, subject to the System's funding requirements. Such flexibility is a key feature for buyers of FHLBank securities.
Bonds can be negotiated individually or auctioned competitively through a network of authorized dealers. Bonds offered daily via auction include fixed-rate bullets (through the TAP Issue Program), and American-style callables.
The TAP Issue Program uses an auction platform to issue fixed-rate bullet bonds of standardized terms and maturities over a three-month period. Individual issues can grow to multi-billion dollar size, enhancing their liquidity and utility.
American-style callable bonds are auctioned daily through the callable bidding group of dealers.
Structures and Terms
Bonds are available in maturities ranging from less than one year to 30 years, with the majority of issues between one and five years. Issue sizes can vary depending on investor demand and FHLBank funding needs and individual bonds may be reopened to meet additional demand. Because the FHLBanks employ conservative asset and liability risk management strategies and actively use swap transactions to reduce interest-rate risk, there is considerable flexibility in the structures and terms of issues brought to market. The FHLBanks issue bullets, fixed-rate callables, floating-rate notes, step-ups/downs, zeros, and other strucures. Minimum denominations range from $10,000 to $500,000 or more, depending on complexity and associated risk. Real-time data on bonds offered at auction can be found using the Auctions link under both the Callable Bonds and TAP Issues sections of this website, on Bloomberg, Tradeweb, and other financial news services. Details on negotiated bonds can be found in the New Bond Issues section.
Purchase
Dealers may contact the Office of the Finance if there is a structure/dollar target they need to meet investor demand, although many times they negotiate directly with the regional FHLBanks. In either case, dealers receive rapid response to their inquiries, as well as fast execution. Competitively bid transactions are generally initiated by an FHLBank funding need of a particular structure and size. Dealers are invited to bid and the bonds are awarded, usually within 30 minutes.
Settlement and Delivery
Bonds come with a variety of settlement options. When issued in the U.S., bonds are transferred through the Fedwire in book-entry form. Bonds issued under the Global Debt Program (GDP) may be delivered through the Fedwire, Euroclear, Clearstream and/or DTC.
Disclosure
Bonds are issued pursuant to and are subject to the Information Memorandum, as supplemented or amended from time to time and in effect at the time of the relevant offering and sale. Bonds are also subject to the terms and conditions in the applicable Offering Notice or Pricing Supplement for the specific issue. The dealer should provide these documents to investors prior to or at settlement.
After the settlement date, you can find the Offering Notice or Pricing Supplement by visiting the Offering Notices/Pricing Supplements page and searching for the bond by CUSIP.
The Information Memorandum dated March 19, 2012, as supplemented or amended, the Offering Circular dated July 1, 2009, as supplemented or amended, and the Global Debt Program Information Memorandum dated March 1, 2006, as supplemented or amended, are available on our Archived Offering Documents page.
We may issue additional bonds with the same terms as previously issued bonds (other than the issue date, the interest commencement date, the offering price and other underwriting terms, which may vary) from time to time, without notice to or the consent of any holder, so as to form a single issue with outstanding bonds.