Welcome to FHLBank Indianapolis’ centralized COVID-19 blog to keep our Michigan and Indiana members apprised of crucial business information, regulatory requirements, or other important updates during the COVID-19 Pandemic. We are open for business as always, and are committed to serving your needs during this time.

Don’t hesitate to contact us at memberservices@fhlbi.com with any questions or concerns.

Cindy Konich,
President and CEO 

FHLBank Indianapolis Resumes Offering Putable Advances

FHLBank Indianapolis is pleased to announce that we will resume offering our putable advances product. In late March, we had to temporarily suspend these products due to volatility in fixed income and swap markets.

With a putable advance, the member is selling a single cancellation option (European structure) or a series of cancellation options (Bermudan structure) to FHLBank Indianapolis in exchange for a lower fixed rate than a standard fixed rate bullet advance.

Putable advances are not included in a current special. The minimum trade size for these products is $5M.  

Example:
• A 7-year, no put 3-year (Euro) putable advance would have a fixed rate for 7 years, but FHLBank Indianapolis would own a one-time cancellation option after 3 years. 
• A 7-year, no put 3-year (Bermudan) putable advance would also have a fixed rate for 7 years, but FHLBank Indianapolis would own quarterly cancellation options after 3 years. 

There are risks with using putable advances. In a rising rate environment, FHLBank Indianapolis may exercise the cancellation option, or “put” the advance. In that case, the member pays principal and accrued interest to the FHLBank on the put date. If the member still needs this funding, they may replace this liability at then-current Advance rates. Conversely, if rates fall, the putable advance may appear more expensive as time passes (albeit at a lower cost than a standard fixed rate advance). There are prepayment penalties if the member decides to prepay a putable advance.   

Reminder: Members must have an Option Embedded Advance Disclosure form on file 
with the Advances Desk in order to take down any structured advance product.  

If you have further questions regarding structured advances, particularly putable advances, start a conversation with your Account Manager or visit our credit products web page: Putable Advances


Putable advances are not included in a current special. The minimum trade size for these products is $5M.
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YOUR SOURCE OF RELIABLE LIQUIDITY

Rest assured that FHLBank Indianapolis is ready and able to meet our members' liquidity needs as the coronavirus spreads.

But are you prepared from your end? 

Please review this Coronavirus Preparedness letter from FHLBank President and CEO Cindy Konich to ensure your financial institution has everything it needs to access FHLBank Indianapolis liquidity during this time.