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Credit Products – Capped Floater Advance

Adjustable rate reset quarterly and capped at a strike level you choose.


 Key Features
  • Adjustable rate
  • Fixed term
  • Nonamortizing
Common Uses
  • Manage interest-rate risk.
  • Fund loans held in portfolio.
  • Meet asset/liability objectives.
Maturities
  • Out to 20 years.
Indexes
  • One- or three-month LIBOR.
    (LIBOR is the London Interbank Offered Rate, which refers to the rates that most major international banks dealing in Eurodollar currency charge each other for large loans.)
Rate-Reset Frequency
  • Quarterly or monthly, depending on the index. However, the rate is capped at a predetermined strike level.
Strike Level
  • A wide range of strike levels is available, subject to feasibility restrictions.
Minimum
  • $2 million minimum but smaller requests may be accommodated in special offerings.
Disbursement
  • For LIBOR-indexed Capped Floaters:

    —Two business days after the trade date
Payment of
Principal and Interest
  • Principal due at maturity.
  • Interest due on rate-adjustment dates.
  • Interest is calculated on an actual/360-day basis.
Prepayment
  • Prepayable in full or in part on any rate-reset date with two business-days notice, subject to a fee. Partial prepayments may be in amounts as small as $100,000 and in intervals of $100,000 thereafter.

  • If the cap has any remaining value, you receive a credit against the prepayment fee. Any unwind fees associated with the cap will be included in the prepayment fees.
Risks
  • The Federal Home Loan Bank of Boston does not act as a financial adviser, and members should independently evaluate the suitability and risks of these advances. Please see the Capped Floater Advance Primer Adobe PDF icon for a discussion of the risks and other considerations associated with the Capped Floater advance.
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