Products and Solutions Guide - Federal Home Loan Bank of Boston

Letters of Credit Pricing and FeesLetters of Credit Pricing and FeesLegal fees and operational expenses incurred on a letter ofcredit may be passed through to the member as a processingfee.LOC fees are calculated and billed on an actual/360 basis.See the letter of credit pricing schedule.Fees upon draws on a letter of credit made by a beneficiarytake into account all direct and indirect costs in satisfying thedraw. Fees reflect the imputed rate of return that would havebeen earned and the taxes that would have been paid if theBank were a private corporation. They are calculated byapplying a cost-of-capital adjustment factor to the assetsused in satisfying the draw.Fixed-balance letter of credit fees are based on the facevalue of the letter of credit and are the greater of (a) aminimum dollar fee or (b) a fee based on the face value ofthe letter of credit multiplied by a basis points amount perannum determined by the maturity of the letter of credit. Inthe case of a confirming letter of credit supporting a bondtransaction, a one-time processing fee will be added to thefee described previously under (b), and a minimum dollarfee will not apply.Refundable-balance letter of credit fees are calculated in thesame manner as fixed-balance letter of credit fees. However,if during the term of the letter of credit the average dailybalance in the account throughout the term of the LOC isbelow the original face amount of the Refundable BalanceLOC, a portion of the fee is eligible for a refund to themember when the LOC matures (or annually, whicheveroccurs first).Variable-balance letter of credit fees are based on thequarterly average outstanding balance of deposits that arecollateralized by the letter of credit and reported to the Bankby the member multiplied by a basis points amount perannum determined by the maturity of the letter of credit plusa processing fee. Deposit balances must be reported within15 days following the reporting quarter-end. Average depositbalances that exceed the face value of the letter of credit arenot guaranteed by the letter of credit.Members should contact their relationship manager at1-888-424-3863, or the Money Desk at 1-800-357-3452,or moneydesk@fhlbboston.com for information regardingcollateral requirements and pricing for letters of credit.Letters of CreditMain Telephone: 617-292-9600 • Customer Service: 1-800-358-9709 • Money Desk: 1-800-357-3452 • Relationship Managers, MPF, and Housing & Community Investment: 1-888-424-3863 32