Convertible Advance

Convertible (putable) advances are (i) an advance that the Bank may, at its discretion, terminate and require the member to repay at predetermined dates prior to the stated maturity date of the advance, or (ii) an advance with a strike, which is a fixed-rate advance that requires the member to repay the advance when the three-month London Interbank Offered Rate reaches or exceeds an agreed-upon level. If the Bank terminates a convertible (putable) advance prior to the stated maturity date the Bank offers replacement funding to the member provided the member is able to satisfy the normal credit and collateral requirements of the Bank for the replacement funding request.

 Back