Notes from the Funding Desk: The Early Bird Gets the Worm
March 4, 2021
Earn a Higher Discount the More You Borrow
A reminder that the Federal Home Loan Bank of Chicago (FHLBank Chicago) has been offering an early bird discount of 2 basis points (bps) pricing discount from our regular advance rate for certain advances executed before 10 a.m.:
- Short Term Advances (A120)
- Fixed Rate, Fixed Term Advances with 1- and 3-month maturities (A121)
Now you can earn additional pricing discounts when your A120 advance borrowing amounts are higher than $250 million. This additional pricing discount results in a negative cost of funds, factoring in the dividend and discount on advance rate!
The spread of 7-year fixed term, fixed rate advances over treasury yields reached a historically low level of 20 basis points (bps) in February 2021. The 10-year term hit a record low of 27 bps as well this month.
Other Pricing Special Reminders
5 bps pricing discount from our regular advance rate is still available for qualified long-term funding until March 31, 2021. You can review the details in our Notes from the Funding Desk from January 4, 2021.
Some of these advances can be executed on eBanking. Pricing specials on advances greater than $250M must be called in. These rates and pricing discounts can change daily - please contact me or our Member Transaction Desk (MTD) for the most current rates. For questions regarding the pricing discounts, please contact me, email firstname.lastname@example.org, or call 855.345.2244, option 1.