Types of Advances We Offer
We offer flexible advance products designed to meet your specific needs. FHLBank Atlanta advances provide an excellent source for liquidity and are effective tools for managing interest-rate risk and supporting asset / liability management strategies.
Different types of advance products can help you solve specific challenges.
Daily Rate Credit
Provides overnight or short-term funding and the ability to prepay without a fee. Many of our members use Daily Rate Credit advances to provide liquidity and manage daily funding needs.
Fixed Rate Credit
Fixed Rate Credit advances help you meet short-term liquidity needs, manage your balance sheet, and mitigate interest-rate risk.
Principal Reducing Credit
Principal Reducing Credit advances allow you to match-fund loans (or pool of loans) as well as investments that have periodic repayment of principal.
Adjustable Rate Credit (ARC)
Adjustable Rate Credit advances provide intermediate and long-term funding with rate resets at periodic intervals, usually tied to one-month or three-month LIBOR. ARC advances are great for managing interest-rate risk and funding adjustable-rate loans.
With the Floating-to-Fixed advance, the initial rate can be tied to three-month LIBOR for a set period. After the initial period, the interest changes to a fixed rate for the remainder of the term. The member can also set either the fixed or floating rate to align the advance structure to their assets.
Forward Starting advances let members lock in a fixed interest rate now while delaying funding on the advance to a specific date in the future.
Callable Adjustable Rate Credit
The Callable Adjustable Rate Credit advance provides intermediate funding at a variable rate, tied to one-month or three-month LIBOR, with the option to repay the advance on specified dates with no prepayment fee. The interest rate resets at periodic intervals, so pricing adjusts automatically to changing market conditions. Members can choose the advance term and rate reset period.
The Expander advance offers fixed-rate borrowing for a fixed maturity with an option for the borrower to increase the original principal amount at some future fixed date. It's useful for replacing deposit runoff in a rising interest-rate environment.
Embedded Interest Rate Swaps, Caps, and Floors
Exchange interest payments for cash flow today with competitively priced swaps. Consider an interest rate cap or floor with highly customizable terms to protect against rising or falling interest rates.
Convertible advances offer members the flexibility to convert from floating to fixed interest rates and vice versa in order to meet their funding needs. Flipper and Knockout options offer even further customization.
Community Investment Program
Community Investment Program advances allow members to fund affordable housing while maintaining profit margins and minimizing risk. Members can obtain discounted advances that are priced up to 10 basis points below regular advances to support qualified affordable housing development.
Economic Development Program
Economic Development Program advances are priced up to 10 basis points below regular advance rates to help financial institutions and developers obtain funding for local economic development. The advance allows members to offer loans at lower rates, and with less interest-rate risk, to support projects that benefit low- to moderate-income communities.
Stand-Alone Interest Rate Swap
Interest Rate Swaps are another way we help our members manage interest-rate risk. Exchange interest payments for cash flow today with competitively priced swaps and maturities of up to 20 years.
Article: Pricing Trends Point to Benefits of Longer Maturities
Short-term funding prices remain attractive, but the continued weakness in longer-term rates and corresponding flattening of the yield curve have driven the pricing differences between one-year and three-year Fixed Rate Credit (FRC) advances to near zero.