Putable Advance

Description
Putable advances offer a low fixed rate of interest in exchange for the borrower's selling the FHLBI the option to put the advance before maturity on any given exercise date. If put by the FHLBI, the member has the option to request to convert the advance to an adjustable rate advance of predetermined index for the remaining term to maturity, at the FHLBI's discretion. Due to the complexities of funding this product, the FHLBI must receive a total of at least $5 million in requests to execute these offerings. Members must sign and return a Putable Advance Disclosure Statement prior to locking a rate.

Term
Maturities typically range from 2 years to 10 years with a variety of lockout periods and LIBOR strike rates available. Call the FHLBI to determine what structures are currently available.

Application
Call the FHLBI by 4:00 p.m. Indianapolis time. Execution is subject to market conditions at the time of issuance.

Rate
Call the FHLBI to obtain current terms and rates available. Actual rates will be set at the time of rate commitment.

Commitment
Once a rate commitment is made, the member must take funding by the FHLBI's debt settlement date

Takedown
Once a rate commitment has been issued, takedown becomes mandatory. Typically, takedown must occur within 2 business days of the rate commitment and the member must take funding by the FHLBI's debt settlement date.

Commitment fee
None.

Put option
The FHLBI shall have the option to put the entire advance on the lock-out date or on any exercise date thereafter with at least 4 business days' prior notice. Typically lock-out terms range from 3 months to 5 years, with quarterly or one-time options. Other terms are also available.

Prepayment
If the FHLBI exercises its option to put the advance , the advance will be prepayable without a fee at the member's option on the exercise date. If the member requests to convert the advance to an adjustable after the FHLBI has put the advance, then the member may prepay the advance without a fee on any subsequent quarterly reset date with at least 3 business days' prior written notice. The member may elect, with at least 2 business days' prior written notice to the FHLBI, to terminate in whole this transaction. The FHLBI shall calculate a reasonable termination amount (prepayment fee) which would leave the FHLBI economically indifferent. Upon payment of that amount, the rights and obligations of each party shall cease.

Updated: February 25, 2008