Other Credit Products
Letters of Credit ("L/C")
Supports liquidity, asset/liability management, and housing and economic development activities
Advantages:
- Triple-A-rated
- Efficient and low-cost way to collateralize state and local government deposits
- Provide credit support in the sale of whole loan portfolios
- Maturities from 2 weeks to 10 years
- Receive a discount rate if used to support eligible transactions that promotes home financing, housing activity or economic development
Interest Rate Swaps
Reduce risk in your balance sheet caused by the fluctuations in interest rates with these instruments, which normally involve an exchange of a fixed payment for a payment that is not fixed, such as LIBOR, based on a specified principal amount
Advantages:
- Lower the cost of funding
- Hedge interest rate exposure or increase the certainty of future funding costs
- Achieve asset/liability management goals
Interest Rate Caps, Collars & Floors
Reduces income fluctuations caused by interest rate volatility
Advantages:
- Caps - can protect you against a rise in interest rates and limit the interest cost on a floating-rate liability
- Floors - can limit the impact to earnings from significant declines in interest rates
- Collars - gives you protection against both rising and falling interest rates