| Transaction Type: |
Member will purchase investment security/securities in the open market and fund the purchases with FHLBC advances with the purchased security/securities being pledged as collateral for the advance. |
| Process: |
Member will contact the Member Transaction Desk with details of the security being purchased, including: security type, term, and CUSIP. The member will also indicate which advance type will be used to fund the security. Member then will provide the broker/dealer with the dollar amount and the Delivery Versus Payment instructions to deliver the securities for safekeeping to the FHLBC. The FHLBC pays the broker/dealer for the security/securities being purchased, receives the security/securities into custody through the custodian, and transfers the advance proceeds internally to cover the amount of the payment to the broker/dealer. |
| Loan Eligibility: |
All U.S. Treasury securities, MBS issued or guaranteed by the Federal Home Loan Mortgage Corporation (FHLMC), the Federal National Mortgage Association (FNMA), and the Government National Mortgage Association (GNMA), and FNMA/FHLMC notes and bonds. |
| Advance Type Eligibility: |
All FHLBC advances products are eligible. |
| Minimum Size: |
None |
| Safekeeping Eligibility: |
Member must have an active safekeeping account at the FHLBC. |
| Collateral Treatment: |
FHLBC collateral haircut guidelines apply. The loan value of the security to be pledged will be reduced by the amount of the haircut applied to the security as determined by the FHLBC Collateral Department. The shortage must be made up with other funding sources and pledged to the FHLBC to make up the difference between the loan value of the security and the amount of the advance. |
| Capital Stock Treatment: |
FHLBC standard capital stock requirements for advances apply. |
| Availability : |
Same-day funding is available for transactions initiated prior to 10 a.m. (CST). |
| CICA : |
Available. |
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