Product Brochures - Federal Home Loan Bank of Des Moines

Capped LIBOR AdvancesPRODUCTOverviewCapped LIBOR Advances are fixed term, non-amortizing advances with interest rates that adjustevery 30 or 90 days based on a predetermined spread to one- or three-month LIBOR. The advancerate is “capped” at the strike level chosen by the member plus the initial spread on the advance.Advance TypeCapped LIBORFunds AvailabilitySame dayTerm LimitationsRepricing every oneorthree- months for aterm of one year to 10yearsFEATURES• Capped LIBOR Advances are indexed to either one- or three- month LIBOR with terms upto 10 years and $100,000 minimum advance• Interest rate adjusts at the same frequency as the LIBOR Index• Maximum interest rate on the Capped LIBOR Advance is the LIBOR cap rate plus orminus the spread to LIBOR quoted at advance origination• Matches the return on many variable rate mortgage backed security products• Repricing will occur two New York and London business days prior to the actual reset date• Community Investment Advance pricing available with approved application• Subject to prepayment fee if repaid prior to maturity dateMinimumRequirementMinimum $100,000Interest BillingAt reset dateAvailable for CIAYes, with approvedapplicationExampleA member displays a liability sensitive interest rate risk position. The short term nature of theinstitution’s liability portfolio leads to balance sheet underperformance in rising rate environmentsas the volume of maturing/repricing liabilities is larger than the volume of maturing/repricing assets.The member could use a Capped LIBOR Advance to manage the interest rate risk associated withtheir extended asset base duration created by originating and holding fixed rate loans. Shouldinterest rates rise for an extended period of time, the member will benefit as the rate on the CappedLIBOR Advance can not escalate above the cap rate plus the initial spread.Certain restrictions apply. Please reference the Bank’s Member Products Policy and Collateral Procedures.Rates Variable/FixedVariableQUESTIONSPlease call the MoneyDesk at 800.544.3452,ext. 1013 or emailmoneydesk@fhlbdm.com6/1/12