Announcing the New Symmetrical Prepayment Advance (SPA) Feature
The Federal Home Loan Bank of New York (FHLBNY) is pleased to announce members now have the ability, at the time of the trade, to add symmetry to certain advances with maturities of one year or greater. The SPA feature allows members to receive compensation for favorable changes in the Fair Value of an advance and adds flexibility to the suite of eligible advance products in a rising rate environment.
The Symmetry feature will be available at the time of booking an advance transaction at a rate of an additional two basis points over an advance without symmetry.
Why Use a SPA Feature?
Market conditions today demand flexibility. The SPA feature was developed to provide an advance alternative for members looking for funding tools which offer greater flexibility in a rising rate environment. Members can use the SPA feature to meet their liquidity needs, and will retain the ability to prepay the advance. However, unlike all other advance products, changes in Fair Value of the advance which are favorable to the member may be captured at prepayment. In all cases, the member is still required to pay a minimum prepayment fee to ensure the FHLBNY’s financial indifference to the prepayment of the advance. A portion of the prepayment fee may be eligible for the FHLBNY’s Advance Rebate Program.
Available SPA Advance Structures
Symmetrical Prepayment Advance Feature
One year up to 30 Years (term dictated by individual product parameters)
|Minimum Transaction Size||$3 Million|
|Minimum Partial Prepayment Size||$3 Million|
|Advance Types with Symmetrical
|Exclusions||Amortizing, Putable, Callable, Adjustable-Rate Credit and Community Lending Program Advances|
*Note:Prepayment above $1 billion per member per month will require review and approval from the FHLBNY.
If you would like more information on adding symmetry to your next qualified Fixed-Rate Advance, contact a Relationship Manager at (212) 441-6700.
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