The Federal Home Loan Bank of New York (FHLBNY) is pleased to announce an enhancement to our Callable Adjustable Rate Credit Advance (Callable ARC). The Callable ARC features a one-time call option to extinguish funding early through two distinct option structures, giving members the flexibility to meet the demands of a fluctuating balance sheet. To better meet our members’ needs, the minimum term for the Callable ARC has been lowered to 2 years (from the previous 3-year term) for our 1-year-left-to-maturity call option.
The Callable ARC gives members the latitude to either keep the advance funding to full contractual life or terminate it earlier on the predetermined call date. Members can use the call feature to strategically extinguish (and potentially rebook) the advance when the remaining term reaches either a 1-month-left-to-maturity or 1-year-left-to-maturity window, affording greater control in managing liquidity needs with no additional prepayment fees.
Some key benefits of the Callable ARC advance are:
- Respond to changes in liquidity profile: If you no longer require floating-rate funding, the Callable ARC provides the flexibility to extinguish the advance at no cost on its call date. Should you require liquidity of a longer-term, you can extinguish at the call date and rebook an advance of a longer tenor.
- Manage Balance Sheet and Capital Levels: Affords you with the ability to manage your balance sheet and capital levels more tightly.
- Match Fund Floating Rate Assets: The Callable ARC can be linked to the SOFR index, which can enable you to match the interest rate characteristics of floating-rate assets.
- Capitalize on Market Volatility: Should the rate on the ARC advance improve or worsen with market volatility, members have the flexibility of either extinguishing the advance and rebooking at more advantageous levels or maintaining the advance to its original contractual maturity.
Callable ARC Advance: 1-Month Call at the End |
|
|---|---|
| Terms | 4-month minimum term with a 1-month-left-to-maturity call option |
| Available Index | SOFR - Simple Daily Average or Compounded |
| Maturities | 10-year maximum term* |
| Option Structure | One-time European (Euro) call option |
| Example | 4 months Non-Call 3 months (4mNC3m) (Euro) |
Callable ARC Advance: 1-Year Call at the End |
|
|---|---|
| Terms | 2-year minimum term with a 1-year-left-to-maturity call option |
| Available Index | SOFR - Simple Daily Average or Compounded |
| Maturities | 10-year is the maximum term* |
| Option Structure | One-time European (Euro) call option |
| Example | 2 year Non-Call 1 year 2yNC1y (Euro) |
*Availability beyond 10 years is subject to market liquidity conditions and approval.