The FHLBank System knows the value of international investors and as a result has had a successful global debt facility since July 1994. The Global Debt Program greatly expands the System's pool of investors, while diversifying its funding sources.
FHLBank Global Debt Program bonds are known for their flexibility; all can be investor-customized with different structures, terms and currencies. The most common Global Debt Program bond structures are bullets, floaters (both callable and non-callable) and fixed-rate callable bonds, with maturities of 18 months through five years.
Like all FHLBank debt, bonds issued through the Global Debt Program are rated by Moody's (Aaa) and Standard & Poor's (AA+), and receive a 20% BIS risk-weighting in most countries. Superior credit quality combined with an excellent distribution network and fast execution, have made FHLBank Global Debt Program bonds a top choice of investors worldwide.
Syndicated Global Bonds
Over the last several years, FHLBanks have issued 4-10 syndicated Global bonds of $2 billion or greater annually, along with non-syndicated reopening of Global bonds exceeding $1 billion. Since 2009, monthly FHLBank syndicated Global bond issue dates have been scheduled and published on a Global Calendar.
Structures and Terms
Global Debt Program bonds are available in maturities ranging from one to 30 years. Issue sizes can range from $10 million to more than $7 billion and individual bonds can be reopened to meet additional demand. The FHLBank System runs a conservative matched-book of assets and liabilities, and actively uses swaps to reduce risk, which results in greater flexibility of terms and structures available. Bullets are the most common Global Debt Program issues, particularly in sizes greater than $1 billion, but the System can effectively place floaters, step-ups/downs, zeros, and many others. Global Debt Program bonds can be denominated in any currency with a country rating of AA- or better. Previous Global Debt Program bonds have been issued in Japanese Yen, Australian Dollars, British Pounds, and German Marks. Minimum denominations will vary from $10,000 to $500,000 or more, depending on the complexity and associated risk. Secondary price information can be viewed on Bloomberg, TradeWeb, and other financial data services.
Purchase
Generally, dealers contact the Office of the Finance if there is a structure/dollar target they need to meet demand. They may also negotiate directly with the regional FHLBanks. Dealers must be specifically approved for the Global Debt Program to bring these issues to market, although a dealer already underwriting domestic bond issues for the FHLBanks may be approved for specific Global Debt Program issues. Global Debt Program bonds may be syndicated, or sold by a single dealer. In all cases, the FHLBanks provide rapid response to dealer inquiries and complete execution can be handled very quickly.
Settlement and Delivery
Global Debt Program bonds come with a variety of settlement options. They may be delivered through the Federal Book-Entry System, Euroclear, Clearstream, and/or DTC. The specific clearing and settlement options offered for a particular bond will depend on the expected distribution, currency denomination, and other factors.
Disclosure
Bonds offered under the Global Debt Program 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 and are also subject to the terms and conditions in the applicable 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 applicable Pricing Supplement by searching by CUSIP number on the Offering Notices/Pricing Supplements page of our website.