Long-Term Advances
Amortizing Advance
Match the amortization characteristics of your fixed-rate mortgage portfolio
Advantages:
- Enhance match funding of long-term assets
- Borrow fixed-rate funds with the option of customizing the amortization schedule to match a selected prepayment profile
- Maturities and amortization schedule from 1 to 30 years
Callable Fixed-Rate Advance
An advance with built-in prepayment options that can help members reduce interest rate risk and prepayment risk at minimal added cost
Advantages:
- More closely fund fixed-rate mortgages
- Take advantage of downward movements in interest rates and steep yield curves
- No prepayment fee when called on specified date
- Good hedging tool against mortgage loan prepayment risk
Convertible Advance
A wide array of maturities and lockouts for medium- to long-term funding where the HLB owns an option to terminate the advance at specified times
Advantages:
- Competitive pricing
- Customize maturities from 2 to 10 years and lockout periods from
3 months to 7 years - One-time or quarterly option exercise
- Customized strikes are available
Fixed-Rate Advance
Achieve a wide variety of financial management goals, with maturities ranging from
2 days to 30 years
Advantages:
- Meet liquidity needs
- Fund long-term assets
- Lock in rates for future funding purposes
- Forward start dates are available
Principal-Deferred Advance ("PDA")
The HLB has created the perfect blend - a hybrid advance combining elements of the Fixed-Rate and Amortizing Advance. The PDA begins as a Fixed-Rate Advance, allowing members to choose a specific amount of time they would like to defer the principal payment of the advance up to 5 years. When the lockout or principal-deferred period ends, the advance becomes an Amortizing Advance, where the member makes principal and interest payments on the loan up to another 30 years.
Advantages:
- Valuable asset/liability management tool
- Fully amortizing backend with a choice of varying balloon terms
- Mirrors characteristics of a typical construction deal with a permanent take-out
- No embedded options in the advance
For more information on how our new PDA can help meet your institution’s funding needs please visit our PDA Page.
Repo Advance
Obtain competitively priced funds when using Treasury or Agency issued Mortgage-Backed, or CMO securities collateral
Advantages:
- Effectively utilize your portfolio as collateral
- No penalties for pledging smaller blocks of securities
- The same securities are returned at the end of the repo
- Maturities from 2 days to 5 years