Rally Advance

Description
The RPB advance combines a fixed rate bullet advance with an embedded (purchased) Floor position. The Floor is tied to 3 Month LIBOR. If 3 Month LIBOR is below the embedded floor on a quarterly reset date, the RPB rate adjusts down. The RPB allows members the protection of a fixed rate with the benefit of an adjustable rate should a bond rally occur and 3 Month LIBOR falls below the strike rate on the floor. The amount of protection and associated cost is determined by the strike rate on the floor and the term of the advance. 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.

Term
Maturities typically range from 2 years to 10 years with various strike levels available. Call the FHLBI to determine what structures are currently available.

Rate
Call the FHLBI to obtain current terms and rates available. The actual fixed rate and strike level will be set at the time of rate commitment.

Index
3 Month LIBOR.

Strike/Floor
Determined at the time of commitment. If the index moves below the embedded floor on a reset date, the interest rate will be adjusted accordingly.

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 5 business days of the rate commitment and the member must take funding by the FHLBI's debt settlement date. The FHLBI may require next-day funding in certain rate environments.

Commitment fee
None.

Application
Call the FHLBI by 10:00 a.m. Indianapolis time for same business day funding.

Prepayment
May prepay subject to applicable prepayment fees. The FHLBI shall calculate a reasonable termination amount (prepayment fee) which would leave the FHLBI economically indifferent. Notify the FHLBI before 2 p.m. Indianapolis time for next-day prepayment.

Updated: February 25, 2008