Bulletin No.: 2018-14
August 2, 2018
SUBJECT: Introducing the Latest in the MAC Family of Advances
The Federal Home Loan Bank of Dallas (Bank) is pleased to announce two additions to the Bank’s Maximum Advantage with Convenience (MAC) advance family – the MAC-Term (MAC-T) and MAC-Term Plus (MAC-T Plus) advances. The MAC family of advances offers members the lowest-cost advance funding available.
The original MAC advance is a fixed-rate, non-amortizing advance that offers favorable pricing indexed to a sub-LIBOR rate plus a small spread. The advance is available in 8-, 13- or 26-week terms. This short-term advance was the first of this family of advances to be introduced. Additionally, MAC advances offer the added convenience of Bank staff notifying members prior to an upcoming maturity date.
Now, with the MAC-T and MAC-T Plus, the Bank is offering long-term advance options with reset dates, and one of the advances – the MAC-T Plus – gives members the option to wholly or partially prepay the advance, without penalty, on any of the reset dates.
MAC-Term Advance (MAC-T)
A MAC-T advance is a fixed-term, adjustable-rate, non-amortizing advance that can be used to fund adjustable-rate assets. The advance rate is indexed to discount notes making it the lowest-cost, long-term advance available from the Bank. By structuring the advance based on discount note securities, the Bank can provide members access to longer-term liquidity indexed to the Bank’s lowest cost of funding plus a nominal spread. MAC-T advances are available in 1- to 10-year terms with reset dates at 8, 13 or 26 weeks. The advances are prepayable, in full or in part, at any time,
with a fee.
MAC-Term Plus (MAC-T Plus)
A MAC-T Plus advance is also a fixed-term, adjustable-rate, non-amortizing advance. The advance has similar characteristics and terms to the MAC-T advance, and it is the Bank’s lowest cost, long-term advance that allows prepayment without a fee. Members may wholly or partially repay the principal amount of the advance without a fee on
any of the reset dates.
Benefits of Using MAC-T and MAC-T Plus Advances
- Favorable pricing
- Manage liquidity needs (MAC-T Plus only)
- Fund adjustable-rate mortgage loan portfolios and other assets
- Long-term funding commitment at short-term rates
Other characteristics of the MAC family of advances are as follows:
*MAC advances include an email notification of the maturity date with a reminder to rebook.
For more information, please see the white paper and associated product sheets at fhlb.com/resourcecenter. Contact Member Services at 844.FHL.BANK (844.345.2265) for pricing. Thank you for your valued partnership.
Sanjay K. Bhasin
President and Chief Executive Officer