Letters of Credit
The Federal Home Loan Bank of Chicago offers irrevocable letters of credit that provide members a low-cost and effective way to attract and secure agreements with third parties. Using a letter of credit from FHLBank Chicago allows members to leverage our Aa1 credit rating at a competitive price.
| Public Unit Deposits | Performance Guarantee | Bond Credit Enhancement | ||
|---|---|---|---|---|
| Use | Collateralize Public Unit Deposits above the FDIC limit | • | ||
| Secure performance obligations such as: construction projects, insurance payments (e.g. workers’ comp), lease payments, working capital guarantees | • | |||
| Credit enhancement for bonds issued to finance housing development projects and taxable community economic development projects | • | |||
| Secure | Leverage FHLBank Chicago Aa1 rating | • | • | • |
| Irrevocable | • | • | • | |
| Payout | Pays out promptly in event of draw request | • | • | • |
| Confirming option | • | • | ||
| Convenient | Eliminates the need to monitor securities collateral | • | • | |
| Can issue within 24 hours | • | • | ||
| Annual auto-renewal option | • | • | • | |
| Low Cost | Competitively priced | • | • | • |
| Community Investment reduced rate available | • | • |
Terms and conditions are subject to change.
Letters of Credit Resources
Secure Transactions, Strengthen Relationships
FHLBank Chicago can help your institution support public unit deposits and facilitate low-cost financing with the backing of our irrevocable credit. Discover the benefits, eligibility, and application process—all in one convenient resource.
Letters of Credit Product Sheet