Letters of Credit

The FHLB Chicago offers irrevocable letters of credit (LCs) that provide members a low-cost and efficient way to attract and secure agreements with third parties. Using a Letter of Credit from the FHLB Chicago allows members to leverage our Aaa/AA+ credit rating at a competitive price. In addition, LCs:

  • Provide liquidity by serving as an alternative form of collateral;

  • Help members manage asset/liability positions;

  • Improve bond-related transaction costs;

  • Allow smaller members to compete with larger, rated banks and grow fee income; and

  • Provide project financing opportunities that support community economic development and affordable housing projects.